10-K

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United States
Securities and Exchange Commission
Washington, DC 20549

FORM 10-K

(Mark One)

ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2001

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                      to                                     

Commission file numbers:    United Stationers Inc.: 0-10653
United Stationers Supply Co.: 33-59811

UNITED STATIONERS INC.
UNITED STATIONERS SUPPLY CO.
(Exact Name of Registrant as Specified in its Charter)

United Stationers Inc.: Delaware	United Stationers Inc.: 36-3141189
United Stationers Supply Co.: Illinois	United Stationers Supply Co.: 36-2431718
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)

2200 East Golf Road
Des Plaines, Illinois 60016-1267
(847) 699-5000
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrants'
Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
United Stationers Inc.: Common Stock, par value $0.10 per share
(Title of Class)

Indicate by check mark whether each registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that each registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

United Stationers Inc.:    Yes  ý    No  o
United Stationers Supply Co.:    Yes  ý    No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of each registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    o

Aggregate market value of the Common Stock held by non-affiliates of United Stationers Inc. as of March 14, 2002, was $1,370,564,143 based on the last sale price of the Common Stock as quoted by the Nasdaq National Market System on such date. United Stationers Supply Co. has no shares of Common Stock outstanding held by non-affiliates.

On March 14, 2002, United Stationers Inc. had outstanding 33,786,071 shares of Common Stock, par value $0.10 per share. On March 14, 2002, United Stationers Supply Co. had 880,000 shares of Common Stock, $1.00 par value per share outstanding.

The registrant United Stationers Supply Co. meets the conditions set forth in General Instructions (I)(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced disclosure format with respect to United Stationers Supply Co.

Documents Incorporated by Reference:

Portions of United Stationers Inc.'s Annual Report to Stockholders for 2001 are incorporated herein by reference into Parts II and IV where indicated.

Portions of United Stationers Inc.'s definitive Proxy Statement relating to its 2002 Annual Meeting of Stockholders, to be filed within 120 days after the end of United Stationers Inc.'s fiscal year, are incorporated herein by reference into Part III where indicated.

UNITED STATIONERS INC.
UNITED STATIONERS SUPPLY CO.

FORM 10-K
For The Year Ended December 31, 2001

TABLE OF CONTENTS

		Page No.
Part I
Item 1.	Business	1
Item 2.	Properties	5
Item 3.	Legal Proceedings	5
Item 4.	Submission of Matters to a Vote of Security Holders	5
Item 4A.	Executive Officers of the Registrant	6
Part II
Item 5.	Market for Registrant's Common Equity and Related Stockholder Matters	8
Item 6.	Selected Financial Data	8
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	8
Item 8.	Financial Statements and Supplementary Data	8
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8
Part III
Item 10.	Directors and Executive Officers of the Registrant	9
Item 11.	Executive Compensation	9
Item 12.	Security Ownership of Certain Beneficial Owners and Management	9
Item 13.	Certain Relationships and Related Transactions	9
Part IV
Item 14.	Exhibits, Financial Statement Schedules, and Reports on Form 8-K	10
	Signatures	11
	Exhibit Index	12

PART I

Explanatory Note

This integrated Form 10-K is filed pursuant to the Securities Exchange Act of 1934, as amended, for each of United Stationers Inc., a Delaware corporation, and its wholly owned subsidiary, United Stationers Supply Co., an Illinois corporation (collectively, the "Company"). United Stationers Inc. is a holding company with no operations separate from those of its operating subsidiary, United Stationers Supply Co. and its subsidiaries. No separate financial information for United Stationers Supply Co. and its subsidiaries has been provided herein because management for the Company believes such information would not be meaningful because (i) United Stationers Supply Co. is the only direct subsidiary of United Stationers Inc., which has no operations other than those of United Stationers Supply Co. and (ii) all assets and liabilities of United Stationers Inc. are recorded on the books of United Stationers Supply Co. There is no material difference between United Stationers Inc. and United Stationers Supply Co. for the disclosures required by the instructions to Form 10-K and therefore, unless otherwise indicated, the responses set forth herein apply to each of United Stationers Inc. and United Stationers Supply Co.

ITEM 1. BUSINESS

General

        United Stationers Inc. ("United") is a holding company incorporated in 1981 under the laws of the State of Delaware. United is the parent company of its direct wholly owned subsidiary, United Stationers Supply Co. ("USSC"), incorporated in 1922 under the laws of the State of Illinois. Except where the context otherwise requires, the term "Company" refers to the combination of United and USSC and its subsidiaries. The Company, with 2001 net sales of $3.9 billion, is North America's largest wholesale distributor of business products, and a provider of marketing and logistics services to resellers.

        In April 1998, USSC acquired all of the capital stock of Azerty Incorporated, Azerty de Mexico, S.A. de C.V., Positive ID Wholesale Inc., and AP Support Services Incorporated (the "Azerty Acquisition"). These businesses represented the United States and Mexican operations of the Office Products Division of Abitibi-Consolidated Inc. (collectively, the "Azerty Business"). The Azerty Business is primarily a specialty wholesaler of computer consumables, peripherals and accessories in the U.S. and Mexico. The Positive ID division was sold in July 2001.

        In July 2000, USSC acquired all of the capital stock of CallCenter Services, Inc. from Corporate Express, a Buhrmann Company. CallCenter Services was a customer relationship management outsourcing service company. The Wilkes-Barre, Pennsylvania, portion of CallCenter Services was sold to Customer Satisfaction First in November 2001 and the Salisbury, Maryland, portion to 1-800-BARNONE, a Financial Corporation, Inc., in February 2002.

        In July 2000, USSC purchased the net assets of the wholesale business of Azerty Canada from MCSi, Inc. Azerty Canada is a specialty distributor of computer consumables, peripherals and accessories. United/Azerty Canada operates as a division of USSC.

        In July 2000, USSC established The Order People to operate as a third-party logistics and fulfillment service provider for product categories beyond office products.

        In January 2001, Lagasse Bros., Inc. ("Lagasse"), a wholly owned subsidiary of USSC, purchased Peerless Paper Mills, Inc., a wholesale distributor of janitorial/sanitation, paper, and food service products. Peerless was immediately merged into Lagasse. USSC had acquired Lagasse, a wholesaler of janitorial and sanitary supplies, in 1996.

Products

        The Company offers more than 40,000 stockkeeping units ("SKUs"), which can be grouped into five primary categories:

        Traditional Office Products.    The Company's core business continues to be traditional office products, which represents approximately 32% of the Company's net sales. This has made the Company the largest North American wholesale provider of a broad line of office supplies. The Company offers more than 25,000 brand-name products and its own private brand products, including writing instruments, paper products, organizers, calendars and general office accessories.

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        Computer Consumables.    The Company is the largest wholesale provider of computer supplies and peripherals in North America. It offers more than 10,000 items to value-added computer resellers and office products dealers. Computer consumables represents approximately 35% of the Company's net sales.

        Office Furniture.    The Company is the nation's largest office furniture wholesaler. It currently offers more than 5,500 items—such as leather chairs, wooden and steel desks and computer furniture—from more than 60 different manufacturers. This product group represents approximately 13% of the Company's net sales.

        Facilities Supplies.    The Company is the largest wholesaler of janitorial and sanitation supplies in North America. It offers more than 7,000 items in these major categories: janitorial and sanitation supplies, safety and security items, and shipping and mailing supplies. Facilities supplies account for approximately 11% of the Company's net sales.

        Business Machines and Presentation Products.    The Company is a leading wholesale provider of business machines—from calculators to telephones—as well as presentation products and supplies. This product class accounts for approximately 9% of the Company's net sales.

Customers

        The Company's more than 20,000 customers include office products dealers, mega-dealers, office products superstores, computer products resellers, office furniture dealers, mass merchandisers, mail order companies, sanitary supply distributors, and e-commerce merchants. Corporate Express, a Buhrmann Company, accounted for approximately 10% of the Company's net sales in 2001.

        Independent commercial dealers and contract stationers are the Company's most significant reseller channel for office products, contributing about 50% of its revenues in 2001. These companies typically serve medium to large businesses, institutions and government agencies.

        The Company maintains and builds its business with commercial dealers, contract stationers (including the contract stationer divisions of national office product superstores) and retail dealers. It also has relationships with most major office products superstore chains.

Marketing and Customer Support

        The products distributed by the Company generally are available at similar prices from multiple sources, and most customers purchase their products from more than one source. To differentiate itself from competitors, the Company concentrates its marketing efforts on providing value-added service to resellers. These include a broader product offering, a higher degree of product availability, a variety of high quality customer services, integrated systems and national distribution capabilities that allow for overnight delivery. United's marketing programs have emphasized two other major components. First, the Company produces an extensive array of catalogs for commercial dealers, contract stationers and retail dealers. The catalogs usually are custom printed with each reseller's name and then sold to these resellers who, in turn, distribute the catalogs to their customers. Second, the Company provides its resellers with a variety of dealer support and marketing services, including electronic commerce options, and promotional programs. These services are designed to help the reseller differentiate itself from its competitors by addressing the needs of the end-user's procurement process.

        Nearly all of the Company's 40,000 SKUs are sold through its comprehensive general line catalog, promotional pieces and specialty catalogs for the office products, computer supplies, office furniture, facilities management supplies and other specialty markets. The following is a list of the annual catalogs produced by the Company during 2001:

1.

General Line Catalog, which is also available in an electronic version;



2.

Office Furniture Catalog featuring furniture and accessories;



3.

Market Development Catalog promoting the Company's private-brand merchandise and other office supplies;



4.

Computer Products Catalog offering computer-related supplies, accessories, hardware and peripheral products;



5.

Facility Supplies Catalog featuring cleaning supplies, food service, warehouse, mailroom and presentation products and supplies;



6.

Lagasse Catalog offering janitorial and sanitation supplies;



7.

F1000 Catalog promoting commodity furniture and accessory products; and

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8.

A/V2000 Catalog featuring audio-visual equipment and supplies.

In addition, the Company produced the following quarterly promotional catalogs during 2001:

1.

Action 2000, featuring nearly 2,000 high-volume commodity items;



2.

Price Buster promoting special promotional pricing and graphics on approximately 2,000 items; and



3.

C1000 offering computer supplies, peripherals, accessories and furniture.

        The Company also produces separate quarterly flyers covering general office supplies, office furniture, facility supplies and Universal® products. Commercial dealers, contract stationers and retail dealers typically distribute only one wholesaler's catalogs, so they can streamline and concentrate order entry. To address this, the Company tries to maximize its catalog distribution by offering advertising credits to resellers, which can be used to offset the cost of the catalogs.

        The Company offers resellers a variety of electronic order entry systems and business management and marketing programs. For example, the Company maintains electronic data interchange and interactive order systems that link to selected resellers. In addition, the Company's electronic order entry systems allow the reseller to forward its customers' orders directly to the Company, resulting in the delivery of pre-sold products to the reseller. In 2001, the Company received approximately 90% of its orders electronically.

        In addition to marketing its products and services through the use of its catalogs, the Company employs a sales force of approximately 250 field salespeople and a telemarketing and telesales staff of approximately 350. The sales force is responsible for sales to current reseller customers, as well as for establishing relationships with additional resellers.

Distribution

        The Company has a network of 36 business products regional distribution centers located in 35 metropolitan areas in 25 states, most of which carry a full line of business products. In addition, the Company operates a mega-center that supports the businesses of USSC, Azerty, Lagasse and The Order People. The Company maintains 24 dedicated Lagasse distribution centers with a complete line of janitorial and sanitation supplies, four Azerty distribution centers in the U.S. and two in Mexico that serve computer supply resellers and two United/Azerty distribution centers that serve the Canadian marketplace. During the second quarter of 2002, the Company intends to integrate Azerty's computer systems and product offerings with those of USSC and to close the four Azerty distribution centers. Following the integration, the Company intends to continue marketing computer consumables using the Azerty name.

        The Company supplements its regional distribution centers with 20 local distribution points throughout the U.S. that serve as reshipment points for orders filled at the regional distribution centers. The Company uses more than 400 trucks, most of which are contracted for by the Company, to enable direct delivery from the regional distribution centers and local distribution points to resellers.

        The Company enhances its distribution capabilities through a proprietary computerized inventory locator system. If a reseller places an order for an item that is out of stock at the location that usually serves the reseller, the system automatically searches for it at other distribution centers. If the item is available at another location, the system automatically forwards the order there. The alternate location coordinates shipping with the primary facility and, for the majority of resellers, provides a single on-time delivery of all items. The system effectively gives the Company added inventory support. This means the Company can provide higher service levels to the reseller, reduce back orders and minimize time spent searching for merchandise substitutes, all of which contribute to a high order fill rate and efficient levels of inventory. In order to meet the Company's delivery commitments and to maintain a high order fill rate, the Company carries a significant amount of inventory.

        The "wrap and label" program is another service the Company offers to its resellers. This gives them the option to receive individually packaged orders customized to meet the needs of specific end users. For example, when a reseller receives orders for several individual end users, the Company can group and wrap the items separately, identifying each specific end user, so that the reseller need only deliver the already individualized packages. Resellers like the "wrap and label" program because it eliminates the need to break down bulk shipments and repackage orders before delivering them to the end user.

Purchasing and Merchandising

        As the largest wholesale business products distributor in North America, the Company qualifies for substantial volume allowances and can realize significant economies of scale. The Company obtains products from approximately 500 manufacturers and is a significant customer for most of them. In 2001, no supplier accounted

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for more than 18% of the Company's aggregate purchases. The Company's centralized Merchandising Department interviews and selects suppliers and products to be included in the catalogs. Selection is based upon end-user acceptance, demand for the product and the manufacturer's total service, price and product quality offering.

Competition

        The Company competes with office products manufacturers and with other national, regional and specialty wholesalers of office products, office furniture, computer supplies and related items, and facility management supplies. Competition is based primarily upon net pricing, minimum order quantity and speed of delivery.

        The Company believes it competes with manufacturers, which may offer lower prices to resellers, through the following combination of value-added services: 1) marketing and catalog programs, 2) speed of delivery, 3) broad line of business products from multiple manufacturers on a "one-stop shop" basis, and 4) lower minimum order quantities. Manufacturers typically sell their products through a variety of distribution channels, which includes wholesalers and resellers.

        Competition with other wholesalers is based primarily on breadth of product lines, availability of products, speed of delivery to resellers, order fill rates, net pricing to resellers, and quality of marketing and other value-added services. Management believes it is competitive in each of these areas. Most wholesale distributors of office products have local and regional operations, sometimes with limited product lines, such as writing instruments or computer products. The Company's two major competitors are S.P. Richards, a national wholesaler of office products, which is a division of Genuine Parts Co., and Daisytek International Corporation, a wholesaler of computer consumables.

        Increased competition in the office products industry, plus increased advertising by competing companies, have heightened price awareness among end users. As a result, purchasers of commodity office products have become extremely price sensitive. The Company has addressed this by emphasizing to resellers the continuing advantages of its value-added services and competitive strengths, compared with those of manufacturers and other wholesalers.

        The Order People competes with other outsourcing alternatives for logistics and order fulfillment.

Employees

        As of March 11, 2002, the Company employed approximately 6,300 people.

        Management considers its relations with employees to be good. Approximately 1,000 of the shipping, warehouse and maintenance employees at certain of the Company's Detroit, Philadelphia, Baltimore, Los Angeles, Minneapolis and New York City facilities are covered by collective bargaining agreements. Agreements with employees in New York City and Detroit will expire in April 2002 and June 2002, respectively. The other agreements expire at various times during the next three years. The Company has not experienced any work stoppages during the past five years.

Forward-Looking Information

        The preceding business description and other parts of this Annual Report on Form 10-K contain or incorporate by reference "forward-looking statements," including references to plans, strategies, objectives, projected costs or savings, anticipated future performance or events and other statements that are not strictly historical in nature. These include, without limitation, statements using forward-looking terminology such as "may," "will," "future," "expect," "intend," "anticipate," "believe," "estimate," "project," "forecast" or "continue" or other comparable terminology. These forward-looking statements, which are based on current management expectations, forecasts and assumptions, are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, those relating to: the Company's restructuring plan, including its ability to realize expected cost savings from facility rationalization, systems integration and other initiatives and the timing of any such savings; the Company's ability to streamline its organization and operations, successfully integrate the Azerty Business and implement general cost-reduction initiatives; the Company's reliance on key suppliers and the impact of fluctuations in their pricing and variability in vendor allowances based on sales volume; the Company's ability to anticipate and respond to changes in end-user demand; competitive activity and the resulting impact on the Company's pricing, margin and product offerings and mix; reliance on key management personnel; and economic conditions and changes affecting the business products industry and the general economy.

        Readers are cautioned not to place undue reliance on forward-looking statements contained in or incorporated by reference into this Annual Report on Form 10-K, which are made only as of the date this report

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is filed. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances or otherwise.

ITEM 2. PROPERTIES

        The Company considers its properties to be suitable and adequate for their intended uses. The Company periodically evaluates its facilities for potential efficiency enhancements to maximize customer satisfaction and economies of scale. Substantially all owned facilities are subject to liens under USSC's Credit Agreement with its lenders. As of December 31, 2001, these properties consisted of the following:

        Executive Offices.    The Company's office space in Illinois totals 228,800 square feet of office and storage space, including owned office space of 135,800 square feet in Des Plaines and leased office space of 25,000 square feet in Des Plaines, 50,000 square feet in Mt. Prospect, and 18,000 square feet in Elk Grove. In addition, the Company leases 11,000 square feet and owns approximately 48,000 square feet of office space in Orchard Park, New York, and leases approximately 22,000 square feet in Harahan, Louisiana.

        Distribution Centers.    The Company utilizes approximately 12.7 million square feet of warehouse space in 36 business products distribution centers, 24 janitorial and sanitation supply distribution centers, four information technology distribution centers, two distribution centers that serve Canada, two distribution centers that serve Mexico, and a mega-distribution center shared by various Company businesses. Of the 12.7 million square feet of distribution center space, 3.8 million square feet was owned and 8.9 million square feet was leased as of December 31, 2001. During the second quarter of 2002, the Company intends to integrate the four information technology distribution centers into the 36 business products distribution centers.

ITEM 3. LEGAL PROCEEDINGS

        The Company is involved in legal proceedings arising in the ordinary course of or incidental to its business. The Company is not involved in any legal proceedings that it believes will result, individually or in the aggregate, in a material adverse effect upon its financial condition or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of 2001.

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ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

        The name, age, current position and term of office of each of United's executive officers as of December 31, 2001, as well as the principal business experience of each for at least the last five years, are as follows:

RANDALL W. LARRIMORE

        Randall W. Larrimore (54) was elected to the Company's Board of Directors and became its President and Chief Executive Officer in May 1997. From February 1988 to May 1997, Mr. Larrimore had been President and Chief Executive Officer of MasterBrand Industries, Inc., a manufacturer of leading brands, including Master Lock® padlocks and Moen® faucets, and a subsidiary of Fortune Brands, Inc. (formerly American Brands, Inc.). Prior to that time, Mr. Larrimore was President and Chief Executive Officer of Twentieth Century Companies, a manufacturer of plumbing repair parts and a division of Beatrice Companies, Inc. Prior thereto, he was Vice President of Marketing for Beatrice Home Specialties, the operating parent of Twentieth Century Companies. Fortune Brands, Inc. acquired Twentieth Century Companies and other Beatrice divisions and subsidiaries in 1988. Before joining Beatrice in 1983, Mr. Larrimore was with Richardson-Vicks, Inc., McKinsey & Company and then with PepsiCo, Inc. Mr. Larrimore serves as a director of Olin Corporation, a diversified manufacturer of chemicals, metals and sporting ammunition. He also serves as a director of Evanston Northwestern Healthcare, a healthcare organization, S.I.F.E. (Students in Free Enterprise) and Lake Forest Academy, a private secondary school.

STEVEN M. CAPPAERT

        Steven M. Cappaert (40) became Senior Vice President and Controller of the Company in March 2001. Before joining the Company, he spent seven years at Ernst & Young, an accounting and professional services firm, where he held the position of Senior Manager from July 1994. Prior thereto, Mr. Cappaert held various internal audit and accounting positions with Fortune Brands, Inc. and Deloitte & Touche.

BRIAN S. COOPER

        Brian S. Cooper (45) became Senior Vice President and Treasurer of the Company in February 2001. Before joining the Company, Mr. Cooper was Treasurer of Burns International Services Corporation, a provider of physical security systems and services, from December 1996. Prior to this, he spent twelve years in various U.S. and International finance assignments with Amoco Corporation, a global petroleum and chemicals company, including that of Chief Financial Officer for Amoco's operations in Norway.

KATHLEEN S. DVORAK

        Kathleen S. Dvorak (45) became Senior Vice President and Chief Financial Officer in October 2001. Prior to her election as Chief Financial Officer, Ms. Dvorak held various financial management positions from which she served as the primary liaison to the financial community, including: Senior Vice President, Investor Relations and Financial Administration, from October 2000; Vice President, Investor Relations and Financial Administration, from May 2000 until October 2000; and Vice President, Investor Relations, from July 1997 until May 2000. Ms. Dvorak has been with the Company for the past 20 years, having held various finance positions at the Company since 1982.

DEIDRA D. GOLD

        Deidra D. Gold (47) joined the Company in November 2001 as Senior Vice President, General Counsel and Secretary. Before joining the Company, Ms. Gold served as Vice President and General Counsel of eLoyalty Corporation, a customer relationship management consulting services and solutions company, from mid-2000 through October 2001, and as Counsel and Corporate Secretary of Ameritech Corporation, a communications company, from March 1998 through December 1999. Her former positions include: Partner, Goldberg, Kohn et al, a Chicago, Illinois law firm, from August 1997 until March 1998; Vice President and General Counsel of Premier Industrial (renamed Premier Farnell) Corporation, an electronics and industrial products distribution company, from December 1991 through June 1997; and Partner, Jones, Day, Reavis & Pogue, an international law firm, from January 1988 through November 1991.

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MARK J. HAMPTON

        Mark J. Hampton (48) was named Senior Vice President, Marketing and Field Support Services, in October 2001. Beginning in early 2001, Mr. Hampton served as Senior Vice President, Marketing, of the Company and President and Chief Operating Officer of The Order People Company. Prior thereto, he served as Vice President, Marketing, of the Company from September 1994. In 1980, Mr. Hampton joined the Company and left in 1991 to work in the dealer community. He rejoined the Company in September 1992 as Midwest Regional Vice President and thereafter became Vice President and General Manager of the Company's Micro United division.

JEFFREY G. HOWARD

        Jeffrey G. Howard (47) was named Senior Vice President, Sales and Customer Support Services, in October 2001. Previously, Mr. Howard served as its Senior Vice President, National Accounts, from October 2000, and as its Vice President, National Accounts, from 1994. Mr. Howard joined the Company in 1990 as General Manager of its Los Angeles distribution center and was promoted to Western Region Vice President in 1992. He began his career in the office products industry in 1973 with Boorum & Pease Company, which was acquired by Esselte Pendaflex in 1985.

JOHN T. SLOAN

        John T. Sloan (50) became Senior Vice President, Human Resources in January 2002. Before joining the Company, Mr. Sloan served in human resources management positions with Sears, Roebuck and Co., a retailer of apparel, home and automotive products and services, including as its Executive Vice President, Human Resources, from April 1998 through December 2000 and as its Vice President, Human Resources, Full-Line Mall Stores, from September 1996 through March 1998. Prior to 1996, he held various senior human resources and administration management positions with The Tribune Company, a media company, during a ten-year period and with a number of divisions within Philip Morris Incorporated, including The Seven-Up Company, over a period of thirteen years.

JOSEPH R. TEMPLET

        Joseph R. Templet (55) was named Senior Vice President, Field Sales and Operations, in October 2001. Before such time, he served as the Company's Senior Vice President, South Region, from October 2000 and as its Vice President, South Region, from 1992. Mr. Templet joined the Company in 1985 and has held various other positions during his tenure with the Company, including Vice President, Central Region, and Vice President, Marketing and Corporate Sales. Prior to joining the Company, Mr. Templet held various sales and sales management positions with the Parker Pen Company, Polaroid Corporation and Procter & Gamble.

ERGIN USKUP

        Ergin Uskup (64) has served as the Company's Senior Vice President and Chief Information Officer since December 2000. From February 1994 until then, he was Vice President, Management Information Systems, and Chief Information Officer. Before he joined the Company in 1994, Mr. Uskup was Vice President, Corporate Information Services, for Baxter International Inc., a global manufacturer and distributor of health care products. In addition, he served as an adjunct professor at Lake Forest Graduate School of Management from 1993 until 2000.

        Except as required by individual employment agreements between executive officers and the Company, there exists no arrangement or understanding between any executive officer and any other person pursuant to which such executive officer was elected. Mr. Larrimore's employment agreement with the Company contemplates that he will continue to serve as a director of the Company throughout his employment term. Each executive officer serves until his or her successor is elected and qualifies or until his or her earlier removal or resignation.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

        The information under the heading "Quarterly Stock Price Data" on page 24 of the Company's 2001 Annual Report to Stockholders is incorporated herein by reference in response to this item. United issued 11,500 shares of its Common Stock in a restricted stock grant, made during 2000, to an officer who is no longer with the Company, Eileen Kamerick, without registration under the Securities Act of 1933, as amended, because no "sale" was involved within the meaning of Section 2(a)(3) of such Act.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

        The information for the years 1997 through 2001 contained in "Selected Consolidated Financial Data" on pages 22 and 23 of the Company's 2001 Annual Report to Stockholders is incorporated herein by reference in response to this item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 13 through 21 of the Company's 2001 Annual Report to Stockholders is incorporated herein by reference in response to this item.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

        The information under the subcaption "Quantitative and Qualitative Disclosure about Market Risk" on page 21 of the Company's 2001 Annual Report to Stockholders is incorporated herein by reference in response to this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The Report of Independent Auditors, Consolidated Statements of Income, Consolidated Statements of Cash Flows, Consolidated Balance Sheets, Consolidated Statements of Changes in Stockholders' Equity and Notes to Consolidated Financial Statements on pages 25 through 48 of the Company's 2001 Annual Report to Stockholders are incorporated herein by reference in response to this item.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        Not applicable.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        For information about United's executive officers, see "Executive Officers of the Registrant" included as Item 4A of Part 1 of this report. In addition, the information contained under the captions "Election of Directors—Director Nominees," "Election of Directors—Continuing Directors," and "Voting Securities and Principal Holders—Secton 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement to be filed by United for its 2002 Annual Meeting of Stockholders is incorporated herein by reference in response to this item. The directors of USSC are Randall W. Larrimore and Kathleen S. Dvorak, and background biographical information about them is included in Item 4A of this report.

ITEM 11. EXECUTIVE COMPENSATION

        The information contained under "Election of Directors—Compensation of Directors" and under all subcaptions to the heading "Executive Compensation" in the Proxy Statement to be filed by United for its 2002 Annual Meeting of Stockholders is incorporated herein by reference in response to this item.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The information contained in "Voting Securities and Principal Holders—Security Ownership of Certain Beneficial Owners" and "Voting Securities and Principal Holders—Security Ownership of Management" in the Proxy Statement to be filed by United for its 2002 Annual Meeting of Stockholders is incorporated herein by reference in response to this item.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Not applicable.

9

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON

FORM 8-K

(a)

The following documents are filed as part of this report:

        (1)  Financial Statements. The following financial statements are located in our 2001 Annual Report to Stockholders at pages 25 through 48, inclusive, and incorporated herein by reference:

        Report of Independent Auditors

        Consolidated Statements of Income

        Consolidated Statements of Cash Flows

        Consolidated Balance Sheets

        Consolidated Statements of Changes in Stockholders' Equity

        Notes to Consolidated Financial Statements

        (2)  Financial Statement Schedules. We have omitted financial statement schedules because such schedules are not required or not applicable.

        (3)  Exhibits. The list of exhibits filed with or incorporated by reference into this report is contained in the Exhibit Index to this report on page 12, which is incorporated herein by reference.

(b)

The Company filed the following Current Reports on Form 8-K during the fourth quarter of 2001:

(1)

The Company filed a Current Report on Form 8-K on October 5, 2001, reporting under Item 5 preliminary sales and earnings information for the three months ended September 30, 2001. The Company also announced the approval of the restructuring plan by United's board of directors and the promotion of Kathleen S. Dvorak to Senior Vice President and Chief Financial Officer of United.

(2)

The Company filed a Current Report on Form 8-K on November 1, 2001, reporting under Item 5 the Company's unaudited financial results for the quarter ended September 30, 2001 as announced in the press release included as an exhibit thereto.

10

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNITED STATIONERS INC. UNITED STATIONERS SUPPLY CO.
By:	/s/  KATHLEEN S. DVORAK Kathleen S. Dvorak Senior Vice President and Chief Financial Officer

        Dated: March 28, 2002

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Capacity	Date
/s/  FREDERICK B. HEGI, JR. Frederick B. Hegi, Jr.	Chairman of the Board of Directors	March 28, 2002
/s/  RANDALL W. LARRIMORE Randall W. Larrimore	President, Chief Executive Officer and a Director	March 28, 2002
/s/  DANIEL J. GOOD Daniel J. Good	Director	March 28, 2002
/s/  ILENE S. GORDON Ilene S. Gordon	Director	March 28, 2002
/s/  ROY W. HALEY Roy W. Haley	Director	March 28, 2002
/s/  MAX D. HOPPER Max D. Hopper	Director	March 28, 2002
/s/  BENSON P. SHAPIRO Benson P. Shapiro	Director	March 28, 2002
/s/  ALEX D. ZOGHLIN Alex D. Zoghlin	Director	March 28, 2002

11

EXHIBIT INDEX

        The Company is including as exhibits to this Annual Report on Form 10-K certain documents that it has previously filed with the SEC as exhibits, and it is incorporating such documents as exhibits herein by reference from the respective filings identified in parentheses at the end of the exhibit descriptions. Except where otherwise indicated, the identified SEC filings from which such exhibits are incorporated by reference were made by the Company under United's file number of 0-10653 and USSC's registration number of 33-59811. The management contracts and compensatory plans or arrangements required to be included as exhibits to this Annual Report on Form 10-K pursuant to Item 14(c) are listed below as Exhibits 10.17 through 10.36, inclusive, and each of them is marked with a double asterisk at the end of the related exhibit description.

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of February 13, 1995, between Associated Stationers, Inc. and United (Exhibit 2 to United's Schedule 14D-9 filed on February 21, 1995)
2.2	Stock Purchase Agreement, dated as of October 1, 1996, among USSC, Lagasse Bros., Inc. and the shareholders of Lagasse Bros., Inc. (Exhibit 99.1 to the Company's Current Report on Form 8-K filed on November 5, 1996)
2.3	Stock Purchase Agreement, dated as of February 10, 1998, among United, USSC, Abitibi-Consolidated Inc., Abitibi-Consolidated Sales Corporation, Azerty Incorporated, Azerty de Mexico, S.A. de C.V., AP Support Services Incorporated and Positive I.D. Wholesale Inc. (Exhibit 2.1 to the Company's Current Report on Form 8-K filed on April 20, 1998)
2.4	Stock Purchase Agreement, dated as of July 1, 2000, among USSC, Corporate Express, Inc. and Corporate Express CallCenter Services, Inc. (Exhibit 2.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 2000, filed on March 29, 2001 (the "2000 Form 10-K"))
2.5	Asset Purchase Agreement, dated June 14, 2000, among USSC, Axidata (1998) Inc. and Miami Computer Supply Corporation (Exhibit 2.5 to the Company's 2000 Form 10-K)
2.6	Stock Purchase Agreement, dated as of December 19, 2000, among Lagasse Bros., Inc., The Peerless Paper Mills and the shareholders of The Peerless Paper Mills (Exhibit 2.6 to the Company's 2000 Form 10-K)
3.1*	Second Restated Certificate of Incorporation of United, dated as of March 19, 2002
3.2*	Amended and Restated Bylaws of United, dated as of March 19, 2002
3.3	Restated Articles of Incorporation of USSC (Exhibit 3.1 to the Company's Registration Statement on Form S-1 (Registration No. 33-59811), initially filed on June 12, 1995, as amended (the "1995 S-1"))
3.4*	Amended and Restated Bylaws of USSC, dated as of August 30, 2001
4.1*	Rights Agreement, dated as of July 27, 1999, by and between United and BankBoston, N.A., as Rights Agent
4.2	Indenture, dated as of April 15, 1998, among United, USSC as issuer, Lagasse Bros., Inc., Azerty Incorporated, Positive ID Wholesale Inc., AP Support Services Incorporated, as guarantors, and The Bank of New York, as trustee (Exhibit 4.1 to the Company's Current Report on Form 8-K filed on April 20, 1998)

12

4.3*	First Supplemental Indenture, dated as of June 30, 2000, by and between USSC and The Order People Company in favor of The Bank of New York, as trustee
4.4*	Second Supplemental Indenture, dated as of July 1, 2000, by and between USSC and United CallCenter Services, Inc. in favor of The Bank of New York, as trustee
4.5*	Third Supplemental Indenture, dated as of May 1, 2001, by and between USSC and United Stationers Financial Services LLC ("USFS") in favor of The Bank of New York, as trustee
4.6*	Fourth Supplemental Indenture, dated as of July 1, 2001, by and between USSC and United Stationers Technology Services LLC ("USTS") in favor of The Bank of New York, as trustee
4.7	Third Amended and Restated Credit Agreement, dated as of June 29, 2000, among USSC as borrower, United as guarantor, the lenders that are signatories thereto (the "Lenders") and The Chase Manhattan Bank, as swingline lender and administrative agent (Exhibit 10.99 to the Company's Quarterly Report on Form 10-Q ("Form 10-Q") for the quarter ended June 30, 2000, filed on August 14, 2000)
4.8	Third Amended and Restated Security Agreement, dated as of June 29, 2000, between USSC and The Chase Manhattan Bank, as administrative agent for the Lenders ("Administrative Agent") (Exhibit 10.990 to the Company's Form 10-Q filed August 14, 2000)
4.9	Amended and Restated Subsidiary Guaranty and Security Agreement, dated as of June 29, 2000, between Lagasse Bros., Inc. and Azerty Incorporated, each as a subsidiary guarantor, and The Chase Manhattan Bank, as Administrative Agent for the Lenders (Exhibit 10.991 to the Company's Form 10-Q filed August 14, 2000)
4.10*	Guaranty Assumption Agreement, dated as of May 1, 2001, by USFS in favor of The Chase Manhattan Bank, as Administrative Agent, and Guaranty Assumption Agreement, dated as of July 1, 2001, by USTS in favor of the same Administrative Agent
4.11	Second Amended and Restated Pledge Agreement, dated as of June 29, 2000, between United and The Chase Manhattan Bank, as Administrative Agent (Exhibit 10.992 to the Company's Form 10-Q filed August 14, 2000)
10.1*	Amended and Restated Receivables Sale Agreement, dated as of May 1, 2001, among USSC, as seller, USFS, as purchaser, and USFS, as servicer
10.2*	USFS Receivables Sale Agreement, dated as of May 1, 2001, among USFS, as seller, USS Receivables Company, Ltd. ("USSR"), as purchaser, and USFS in its capacity as servicer
10.3*	Amended and Restated Servicing Agreement, dated as of May 1, 2001, among USSR, USFS, as servicer, USSC, as support provider, and The Chase Manhattan Bank, as trustee
10.4*	Amended and Restated Pooling Agreement, dated as of May 1, 2001, among USSR, USFS, as servicer, and The Chase Manhattan Bank, as trustee and securities intermediary
10.5*	Second Amended and Restated Series 1998-1 Supplement, dated as of May 1, 2001, to the Amended and Restated Pooling Agreement, dated as of May 1, 2001, by and among USSR, USFS, as servicer, Park Avenue Receivables Corporation, as initial purchaser, the other banks or financial institutions parties thereto, The Chase Manhattan Bank, as funding agent, and The Chase Manhattan Bank as trustee and securities intermediary

13

10.6*	Amended and Restated Series 2000-2 Supplement, dated as of May 1, 2001, to the Amended and Restated Pooling Agreement, dated as of May 1, 2001, by and among USSR, USFS, as servicer, Market Street Funding Corporation, as committed purchaser, PNC Bank, National Association, as administrator, and The Chase Manhattan Bank, as trustee and securities intermediary
10.7	Lease Agreement, dated as of January 12, 1993, as amended, among Stationers Antelope Joint Venture, AVP Trust, Adon V. Panattoni, Yolanda M. Panattoni and USSC (Exhibit 10.32 to the Company's 1995 S-1)
10.8*	Lease Agreement, dated as of December 1, 2001, between Panattoni Investments, LLC and USSC
10.9	Lease Agreement, dated as of October 12, 1998, between Corum Carol Stream Associates, LLC and USSC (Exhibit 10.94 to the Company's Annual Report on Form 10-K for the year ended December 31, 1998, filed on March 29, 1999 (the "1998 Form 10-K"))
10.10	Standard Industrial Lease, dated March 2, 1992, between Carol Point Builders I and Associated Stationers, Inc. (Exhibit 10.34 to the Company's 1995 S-1)
10.11	First Amendment to Industrial Lease dated January 23, 1997 between ERI-CP, Inc. (successor to Carol Point Builders I) and USSC (successor to Associated Stationers, Inc.) (Exhibit 10.56 to United's Registration Statement on Form S-2 (Registration No. 333-34937) as amended (the "1997 S-2"))
10.12	Lease Agreement, dated April 19, 2000, between Corporate Estates, Inc., Mitchell Investments, LLC and USSC (Exhibit 10.39 to the Company's 2000 Form 10-K)
10.13	Lease Agreement, dated July 30,1999, between Valley View Business Center, Ltd. and USSC (Exhibit 10.36 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999, filed on March 8, 2000)
10.14	Lease, dated as of April 17,1989, between Isaac Heller and USSC, as amended (Exhibit 10.39 to the Company's 1995 S-1)
10.15	Lease Agreement, dated March 15, 2000, between Troy Hill I LLC and USSC (Exhibit 10.42 to the Company's 2000 Form 10-K)
10.16*	Industrial Lease Agreement, executed as of October 21, 2001, by and between Duke Construction Limited Partnership and USSC
10.17	United Stationers Inc. Management Equity Plan (composite restated version as of November 5, 1998) (Exhibit 10.96 to the Company's 1998 Form 10-K)**
10.18	United Stationers Inc. 2000 Management Equity Plan (Appendix A to United's definitive Proxy Statement/Schedule 14A filed on March 31, 2000)**
10.19	First Amendment to United Stationers Inc. 2000 Management Equity Plan (Exhibit 10.47 to the Company's 2000 Form 10-K)**
10.20*	United Stationers Inc. Retention Grant Plan**
10.21	United Stationers Inc. Nonemployee Directors' Deferred Stock Compensation Plan (Exhibit 10.85 to the Company's Annual Report on Form 10-K for the year ended December 31, 1997, filed on March 12, 1998)**
10.22*	United Stationers Inc. Directors Grant Plan**

14

10.23	United Stationers Supply Co. and Subisidiaries Management Incentive Plan (Appendix B to United's definitive Proxy Statement/Schedule 14A filed on March 31, 2000)**
10.24	United Stationers Supply Co. Deferred Compensation Plan (Exhibit 10.48 to the Company's 2000 Form 10-K) **
10.25*	First Amendment to the United Stationers Supply Co. Deferred Compensation Plan, effective as of November 30, 2001**
10.26*	Employment Agreement, dated as of June 19, 2001, among United, USSC and Randall W. Larrimore, amending and restating the Employment Agreement, dated as of May 23, 1997, among the same parties**
10.27	Employment Agreement, dated as of July 31, 2000, among United, USSC and Eileen Kamerick (Exhibit 10.26 to the Company's 2000 Form 10-K)**
10.28*	Agreement, effective as of August 10, 2001, among Eileen Kamerick, Victor J. Heckler, United and USSC**
10.29	Employment Agreement, dated as of June 1, 1997, by and among Steven Schwarz, United and USSC (Exhibit 10.97 to the Company's 1997 S-2)**
10.30*	Agreement, effective as of September 1, 2001, among Steven R. Schwarz, Vicki Schwarz, United and USSC**
10.31*	Employment Agreement, dated as of June 19, 2001, by and between USSC and R. Thomas Helton, amending and restating the Employment Agreement, dated as of February 1, 1998, between the same parties**
10.32*	Letter agreement, dated February 13, 1995, between Ergin Uskup and USSC, together with letter or letter agreement amendments or supplements thereto**
10.33*	Letter agreement, dated August 29, 2001, between Ergin Uskup and USSC**
10.34*	Letter agreement, dated May 10, 2001, between Susan Maloney Meyer and the Company**
10.35*	Officer Medical Reimbursement Plan, as in effect as of March 28, 2002**
10.36*	Form of Indemnification Agreement entered into between the Company and United's directors and various executive officers**
13*	Excerpted portions of United's 2002 Annual Report to Stockholders, which are incorporated in response to various items of this Annual Report on Form 10-K
21*	Subsidiaries of United
23*	Consent of Ernst & Young LLP, independent auditors

*

Filed herewith

**

Represents a management contract or compensatory plan or arrangement

15

QuickLinks

UNITED STATIONERS INC. UNITED STATIONERS SUPPLY CO.
FORM 10-K For The Year Ended December 31, 2001 TABLE OF CONTENTS
PART I

ITEM 1. BUSINESS
ITEM 2. PROPERTIES
ITEM 3. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON

SIGNATURES
EXHIBIT INDEX

EX-3.1

Exhibit 3.1

                  SECOND RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                             UNITED STATIONERS INC.

  -  United Stationers Inc., a corporation organized and existing under the
     General Corporation Law of the State of Delaware (the "Corporation"), does
     hereby certify as follows:

  -  The Corporation's original certificate of incorporation was filed under the
     name United Stationers Inc. in the office of the Secretary of State of
     Delaware on August 18, 1981.

  -  This Second Restated Certificate of Incorporation restates and integrates
     and does not further amend the Certificate of Incorporation of the
     Corporation as heretofore amended and supplemented, and there is no
     discrepancy between those provisions and the provisions of this Second
     Restated Certificate of Incorporation.

  -  This Second Restated Certificate of Incorporation was duly adopted by the
     Board of Directors of the Corporation in accordance with Section 245 of the
     General Corporation Law of the State of Delaware.

  -  The text of the Second Restated Certificate of Incorporation is as follows:

  -  The name of the corporation is:

                             UNITED STATIONERS INC.

     FIRST: The address of its registered office in the State of Delaware is
1209 Orange Street, in the City of Wilmington 19801, County of New Castle. The
name of its registered agent at such address is The Corporation Trust Company.

     SECOND: The nature of the business or purposes to be conducted or promoted
by the Corporation are:

     1.   To acquire by purchase, subscription or otherwise, and to own, hold,
sell, negotiate, assign, hypothecate, deal in, exchange, transfer, mortgage,
pledge or otherwise dispose of, alone or in syndicate or otherwise in
conjunction with others, any shares of the capital stock, scrip, rights,
participating certificates, certificates of interest, or any voting trust
certificates in respect of the shares of capital stock of, or any bonds,
mortgages, securities, evidences of indebtedness, acceptances, commercial paper,
choses in action, and obligations of every kind and description (all of the
foregoing being hereinafter sometimes called "securities") issued or created by
any public, quasi-public or private corporation, joint stock company,
association, partnership, common law trust, firm or individual, or of any
combinations, organizations or entities whatsoever, irrespective of their forms
or the names by which they may be described, or of the Government of the United
States of America, or any foreign government, or of any state, territory,
municipality or other political subdivision, or of any government agency; and to



issue in exchange therefor, in the manner permitted by law, shares of the
capital stock, bonds or other obligations of the Corporation; and while the
holder or owner of any such securities, to possess and exercise in respect
thereof any and all rights, powers and privileges of ownership, including the
right to vote thereon; and, to the extent now or hereafter permitted by law, to
aid by loan, guarantee or otherwise those issuing, creating or responsible for
any such securities; and to do any and all lawful things designed to protect,
preserve, improve or enhance the value of any such securities.

     2.   To carry on and conduct any and every kind of manufacturing,
distribution and service business; to manufacture, process, fabricate, rebuild,
service, purchase or otherwise acquire, to design, invent or develop, to import
or export, and to distribute, lease, sell, assign or otherwise dispose of and
generally deal in and with raw materials, products, goods, wares, merchandise
and real and personal property of every kind and character; and to provide
services of every kind and character.

     3.   To conduct any lawful business, to exercise any lawful purpose and
power, and to engage in any lawful act or activity for which corporations may be
organized under the Delaware General Corporation Law.

     4.   In general, to possess and exercise all the powers and privileges
granted by the Delaware General Corporation Law or by any other law of Delaware
or by this Certificate of Incorporation together with any powers incidental
thereto, so far as such powers and privileges are necessary or convenient to the
conduct, promotion or attainment of the business or purposes of the Corporation.

     THIRD: The total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is 120,000,000 shares, consisting of
(a) 15,000,000 shares of a class designated as Preferred Stock, par value $0.01
per share (the "Preferred Stock"), (b) 100,000,000 shares of a class designated
as Common Stock, par value $0.10 per share (the "Common Stock"), and (c)
5,000,000 shares of a class designated as Nonvoting Common Stock, par value
$0.01 per share (the "Nonvoting Common Stock").

     The designations and the powers, preferences, rights, qualifications,
limitations, and restrictions of the Preferred Stock, Common Stock and Nonvoting
Common Stock are as follows:

     1.   PROVISIONS RELATING TO THE PREFERRED STOCK.

          (a)  The Preferred Stock may be issued from time to time in one or
     more classes or series, the shares of each class or series to have such
     designations and powers, preferences, and rights, and qualifications,
     limitations, and restrictions thereof, as are stated and expressed herein
     and in the resolution or resolutions providing for the issue of such class
     or series adopted by the board of directors of the Corporation as hereafter
     prescribed.

          (b)  Authority is hereby expressly granted to and vested in the board
     of directors of the Corporation to authorize the issuance of the Preferred
     Stock from

                                        2


     time to time in one or more classes or series, and with respect to each
     class or series of the Preferred Stock, to fix and state by the resolution
     or resolutions from time to time adopted providing for the issuance thereof
     the following:

               (i)    whether or not the class or series is to have voting
          rights, full, special, or limited, or is to be without voting rights,
          and whether or not such class or series is to be entitled to vote as a
          separate class either alone or together with the holders of one or
          more other classes or series of stock;

               (ii)   the number of shares to constitute the class or series and
          the designations thereof;

               (iii)  the preferences, and relative, participating, optional, or
          other special rights, if any, and the qualifications, limitations, or
          restrictions thereof, if any, with respect to any class or series;

               (iv)   whether or not the shares of any class or series shall be
          redeemable at the option of the Corporation or the holders thereof or
          upon the happening of any specified event, and, if redeemable, the
          redemption price or prices (which may be payable in the form of cash,
          notes, securities, or other property), and the time or times at which,
          and the terms and conditions upon which, such shares shall be
          redeemable and the manner of redemption;

               (v)    whether or not the shares of a class or series shall be
          subject to the operation of retirement or sinking funds to be applied
          to the purchase or redemption of such shares for retirement, and, if
          such retirement or sinking fund or funds are to be established, the
          annual amount thereof, and the terms and provisions relative to the
          operation thereof;

               (vi)   the dividend rate, whether dividends are payable in cash,
          stock of the Corporation, or other property, the conditions upon which
          and the times when such dividends are payable, the preference to or
          the relation to the payment of dividends payable on any other class or
          classes or series of stock, whether or not such dividends shall be
          cumulative or noncumulative, and if cumulative, the date or dates from
          which such dividends shall accumulate;

               (vii)  the preferences, if any, and the amounts thereof which the
          holders of any class or series thereof shall be entitled to receive
          upon the voluntary or involuntary dissolution of, or upon any
          distribution of the assets of, the Corporation;

               (viii) whether or not the shares of any class or series, at the
          option of the Corporation or the holder thereof or upon the happening
          of any specified event, shall be convertible into or exchangeable for,
          the

                                        3


          shares of any other class or classes or of any other series of the
          same or any other class or classes of stock, securities, or other
          property of the Corporation and the conversion price or prices or
          ratio or ratios or the rate or rates at which such exchange may be
          made, with such adjustments, if any, as shall be stated and expressed
          or provided for in such resolution or resolutions; and

               (ix)   such other special rights and protective provisions with
          respect to any class or series as may to the board of directors of the
          Corporation seem advisable.

          (c)  The shares of each class or series of the Preferred Stock may
     vary from the shares of any other class or series thereof in any or all of
     the foregoing respects. The board of directors of the Corporation may
     increase the number of shares of the Preferred Stock designated for any
     existing class or series by a resolution adding to such class or series
     authorized and unissued shares of the Preferred Stock not designated for
     any other class or series. The board of directors of the Corporation may
     decrease the number of shares of the Preferred Stock designated for any
     existing class or series by a resolution subtracting from such class or
     series authorized and unissued shares of the Preferred Stock designated for
     such existing class or series, and the shares so subtracted shall become
     authorized, unissued, and undesignated shares of the Preferred Stock.

          (d)  The certificate of designations for the Series A Junior Preferred
     Stock of the Corporation is set forth on ANNEX A attached hereto.

     2. PROVISIONS RELATING TO THE COMMON STOCK AND NONVOTING COMMON STOCK.

          (a)  IDENTICAL RIGHTS. Except as otherwise provided in this Article
     Fourth, all shares of Common Stock and Nonvoting Common Stock shall be
     identical and shall entitle the holder thereof to the same rights and
     privileges.

          (b)  DIVIDENDS. From and after the date of issuance, the holders of
     outstanding shares of Common Stock and Nonvoting Common Stock shall be
     entitled to receive dividends on the shares of Common Stock and Nonvoting
     Common Stock when, as, and if declared by the board of directors, out of
     funds legally available for such purpose. All holders of shares of Common
     Stock and Nonvoting Common Stock shall share ratably, in accordance with
     the numbers of shares held by each such holder, in all dividends or
     distributions on shares of Common Stock payable in cash, in property or in
     securities of the Corporation (other than shares of Common Stock). All
     dividends or distributions declared on shares of Common Stock and Nonvoting
     Common Stock which are payable in shares of Common Stock or Nonvoting
     Common Stock shall be declared on both classes of shares at the same rate,
     provided that any such dividend or distribution shall be payable in shares
     of the class of Common Stock or Nonvoting Common Stock held by the
     stockholder to whom the dividend or distribution is payable.

                                        4


          (c)  STOCK SPLITS, ETC. The Corporation shall not in any manner
     subdivide (by stock split, stock dividend, or otherwise), or combine (by
     reverse stock split, or otherwise) the outstanding shares of Common Stock
     or Nonvoting Common Stock unless the outstanding shares of the other class
     shall be proportionately subdivided or combined. No reclassification or any
     other adjustment or modification of the rights or preferences shall be
     effected (including without limitation pursuant to a merger, consolidation
     or liquidation involving the Corporation) with respect to either the Common
     Stock or the Nonvoting Common Stock unless both the Common Stock and
     Nonvoting Common Stock are reclassified or the rights or preferences are
     adjusted or modified in exactly the same manner and at the same time. In
     this regard, and without limiting the generality of the foregoing, in the
     case of any consolidation or merger of the Corporation with or into any
     other entity (other than a merger which does not result in any
     reclassification, conversion, exchange or cancellation of the Common
     Stock), or in case of any sale or transfer of all or substantially all the
     assets of the Corporation, or the reclassification of the Common Stock into
     any other form of capital stock of the Corporation, whether in whole or in
     part, each share of Nonvoting Common Stock shall, after such consolidation,
     merger, sale, or transfer or reclassification, be converted into the kind
     and amount of shares of stock and other securities and property which such
     holder would have been entitled to receive upon such consolidation, merger,
     sale, or transfer or reclassification if such holder had held such Common
     Stock issuable upon the conversion of such share of Nonvoting Common Stock
     immediately prior to such consolidation, merger, sale, or transfer or
     reclassification; provided, however, that no such shares of stock or other
     securities into which shares of Nonvoting Common Stock are so converted
     shall have any voting rights whatsoever.

          (d)  LIQUIDATION. In the event of any voluntary or involuntary
     liquidation, dissolution, or winding up of the affairs of the Corporation,
     the holders of shares of Common Stock and Nonvoting Common Stock shall be
     entitled to share ratably, in accordance with the number of shares held by
     each such holder, in all of the assets of the Corporation available for
     distribution to the holders of shares of Common Stock.

          (e)  VOTING RIGHTS. Except as otherwise provided herein or by law, the
     entire voting power of the Corporation shall be vested in the holders of
     shares of Common Stock and each holder of shares of Common Stock shall be
     entitled to one vote for each share of Common Stock held of record by such
     holder; PROVIDED that, without the consent of the holders of record of at
     least 5l% of Nonvoting Common Stock at the time outstanding
     (assuming, for the purposes of this provision, that the holders of rights
     to acquire shares of Nonvoting Common Stock shall be deemed to be the
     holders of the shares of Nonvoting Common Stock which are at the time
     issuable upon the full exercise thereof whether or not such holders are
     then entitled to exercise such rights pursuant to the terms thereof), given
     in writing or by the vote at any regular or special meeting of stockholders
     of the Corporation, the Corporation shall not:

                                        5


               (i)   amend, alter, modify, or repeal any provision of this
          Certificate of Incorporation or the By-Laws of the Corporation in any
          manner which adversely affects the relative rights, preferences,
          qualifications, powers, limitations or restrictions of the Nonvoting
          Common Stock, or amend, alter, modify, or repeal this Section 2(e);

               (ii)  increase or decrease the authorized number of shares of any
          class of capital stock of the Corporation or authorize, issue, or
          otherwise create securities convertible into or exercisable for any
          shares of capital stock of the Corporation other than the shares of
          Common Stock and Nonvoting Common Stock authorized hereunder and the
          shares of Series A, Series B, and Series C Preferred Stock designated
          in that certain Certificate of the Powers, Designations, Preferences,
          and Rights of the Series A Preferred Stock, Series B Preferred Stock
          and Series C Preferred Stock dated March 30, 1995;

               (iii) voluntarily effect an exchange or reclassification of
          shares of Nonvoting Common Stock into shares of another class of
          capital stock of the Corporation; or

               (iv)  effect a merger or consolidation of the Corporation with
          another corporation, unless the certificate or articles of
          incorporation of the surviving corporation shall provide that the
          shares of the capital stock of such surviving corporation into which
          the shares of Nonvoting Common Stock hereunder shall be converted
          shall have the identical rights and privileges as the shares of
          capital stock of such surviving corporation into which the shares of
          Common Stock hereunder shall be converted, other than the voting
          rights in this Section 2(e) and the conversion and other rights in
          Section 3 below which shall not be adversely affected by such merger
          or consolidation.

     3. CONVERSION.

          (a)  RIGHT TO CONVERSION. Subject to and upon compliance with the
     provisions of this Section 3, any holder of shares of Nonvoting Common
     Stock shall be entitled at any time and from time to time to convert each
     share of Nonvoting Common Stock held by such holder into a share of Common
     Stock at the conversion rate of one share of Common Stock for one share of
     Nonvoting Common Stock.

          (b)  PROCEDURE. The conversion of any shares of Nonvoting Common Stock
     into shares of Common Stock shall be effected by the holder of the shares
     of Nonvoting Common Stock to be converted surrendering the certificate
     therefor, duly endorsed, at the office of the Corporation or of any
     transfer agent for the shares of Common Stock or at such other place as the
     Corporation is willing to accept such surrender accompanied by written
     notice to the Corporation at such office or other place that it elects to
     so convert and stating the number of shares of

                                        6


     Nonvoting Common Stock being converted. Thereupon the Corporation shall
     promptly issue and deliver at such office or other place to such holder a
     certificate or certificates for the number of shares of Common Stock to
     which such holder is entitled, registered in the name of such holder or a
     designee of such holder as specified in such notice. Such conversion shall
     be deemed to have been made at the close of business on the date of such
     surrender of the shares to be converted in accordance with the procedure
     set forth in the first sentence of this Section 3(b) and the Person
     entitled to receive the shares issuable upon such conversion shall be
     treated for all purposes as having become the record holder of such shares
     at such time. In the event of the conversion of less than all of the shares
     of Nonvoting Common Stock into shares of Common Stock evidenced by the
     certificate so surrendered, the Corporation shall execute and deliver to or
     upon the written order of such holder, without charge to such holder, a new
     certificate evidencing the shares of Nonvoting Common Stock not converted.

          (c)  RESERVATION. The Corporation shall at all times reserve and keep
     available out of its authorized but unissued shares of Common Stock, or any
     shares of Common Stock held in its treasury, solely for the purpose of
     issue upon conversion of the shares of Nonvoting Common Stock as provided
     herein, such number of shares of Common Stock as shall then be issuable
     upon the conversion of all outstanding shares of Nonvoting Common Stock.
     The shares of Common Stock so issuable shall when so issued be duly and
     validly issued, fully paid, and nonassessable.


          (d)  CERTAIN LEGAL REQUIREMENTS. No person subject to the provisions
     of Regulation Y shall, and no such Person shall permit any of its Bank
     Holding Company Affiliates to, convert any shares of Nonvoting Common Stock
     held by it into shares of Common Stock, and the Corporation shall not be
     required to convert any such shares of Nonvoting Common Stock, if after
     giving effect to such conversion, (i) such Person and its Bank Holding
     Company Affiliates would own more than 5% of the total issued and
     outstanding shares of Common Stock or (ii) such Person would Control the
     Corporation (and, for purposes of this clause (ii), a reasoned opinion of
     counsel to such Person (which is based on facts and circumstances deemed
     appropriate by such counsel) to the effect that such Person does not
     control the Corporation shall be conclusive).

     4.   DEFINITIONS.

     As used in this Article Fourth, the terms indicated below shall have the
following respective meanings:

          (a)  "BANK HOLDING COMPANY AFFILIATE" shall mean, with respect to any
     person subject to the provisions of Regulation Y, (i) if such Person is a
     bank holding company, any company directly or indirectly controlled by such
     bank holding company, and (ii) otherwise, the bank holding company that
     controls such Person and any company (other than such Person) directly or
     indirectly controlled by such bank holding company.

                                        7


          (b)  "CONTROL" (including, with its correlative meanings, "CONTROLLED
     BY" and "UNDER COMMON CONTROL WITH") shall mean, with respect to any
     Person, the possession, direct or indirect, of the power to direct or cause
     the direction of the management and policies of such Person, whether
     through the ownership of voting securities, by contract, or otherwise.

          (c)  "PERSON" means an individual, partnership, association, joint
     venture, corporation, business, trust, estate, unincorporated organization,
     or government or any department, agency or subdivision thereof.

          (d)  "REGULATION Y" shall mean Regulation Y promulgated by the Board
     of Governors of the Federal Reserve System (12 C.F.R.section 225) or any
     successor regulation.

     FOURTH: In furtherance and not in limitation of the power conferred by
statute, the board of directors is expressly authorized:

     1.   To make, alter or repeal the by-laws of the Corporation.

     2.   To authorize and cause the mortgage or pledge of the property and
     assets of the Corporation.

     3.   To set apart out of any of the funds of the Corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any such
reserve in the manner in which it was created.

     FIFTH: All power of the Corporation shall be exercised by or under the
direction of the board of directors except as otherwise provided herein or
required by law. For the management of the business and for the conduct of the
affairs of the Corporation, and in further creation, definition, limitation and
regulation of the power of the Corporation and of its directors and of its
stockholders, it is further provided as follows:

     1.   ELECTION OF DIRECTORS. Election of directors need not be by written
ballot unless the by-laws of the Corporation shall so provide.

     2.   NUMBER, TENURE AND QUALIFICATIONS. The total number of directors which
shall constitute the whole board shall be nine (9), but this number may be
increased or decreased from time to time by amendment of the by-laws by the
directors or the stockholders from time to time, provided that in no case shall
the number of directors constituting the whole board be less than three (3). The
directors shall be divided into three (3) classes with respect to their term of
office, class I, class II, and class III, as nearly equal in number as possible,
to be determined by the board of directors. The directors shall be elected at
the annual meetings of the stockholders, except as provided in Section 4 of this
Article Sixth. At the 1987 annual meeting of stockholders, the class I directors
shall be elected to a term of office expiring at the 1988 annual meeting of
stockholders, the class II directors shall be elected to a term of office
expiring at the 1989 annual meeting of stockholders and the class III directors
shall be elected to a term of office expiring at the 1990 annual meeting of
stockholders; and, in each case, each

                                        8


director shall hold office until his respective successor shall have been
elected and qualified. At each annual election of directors held after the 1987
annual meeting of stockholders, the directors elected to succeed those directors
whose terms then expire shall be elected to a term of office expiring at the
third succeeding annual meeting of stockholders and shall hold office until
their respective successors are elected and qualified. In the event of any
change in the number of directors, any resultant increase or decrease in the
number of directorships shall be apportioned among the three classes of
directors so as to maintain all classes as nearly equal in number of directors
as possible, as shall be determined by the whole board of directors at the time
of such increase or decrease. Directors need not be stockholders or residents of
Delaware.

     3.   BUSINESS AT ANNUAL MEETINGS; NOMINATIONS TO BOARD OF DIRECTORS.

          (a)  At any annual meeting of the stockholders, only such business
     shall be conducted as shall have been properly brought before the meeting.
     To be properly brought before an annual meeting, business must be:
     (i) specified in the notice of meeting (or any supplement thereto) given by
     or at the direction of the board of directors; (ii) otherwise properly
     brought before the meeting by or at the direction of the board of
     directors; or (iii) otherwise properly brought before the meeting by a
     stockholder. For business to be properly brought before an annual meeting
     by a stockholder, the stockholder must have given timely notice thereof in
     writing to the secretary of the Corporation. To be timely, a stockholder's
     notice must be delivered to or mailed and received at the principal
     executive offices of the corporation not later than the close of business
     on the tenth (10th) day following the date on which notice of such annual
     meeting is first given to stockholders. A stockholder's notice to the
     secretary shall set forth as to each matter the stockholder proposes to
     bring before the annual meeting: (A) a brief description of the business
     desired to be brought before the annual meeting; (B) the name and address
     (which shall be the same as they appear in the Corporation's records if the
     stockholder is a record holder) of the stockholder proposing such business;
     (C) the class and number of shares of the Corporation which are
     beneficially owned by the stockholder; and (D) any material interest of the
     stockholder in such business. The presiding officer of an annual meeting
     shall, if the facts warrant, determine and declare to the meeting that
     business was not properly brought before the meeting in accordance with the
     provisions of this Section 3(a), and if he should so determine, he shall so
     declare to the meeting and any such business not properly brought before
     the meeting shall not be transacted.

          (b)  NOMINATIONS. Subject to the rights of holders of any class or
     series of stock having a preference over the Common Stock as to dividends
     or upon liquidation, nominations for the election of directors may be made
     by the board of directors or a committee appointed by the board of
     directors or by any stockholder entitled to vote in the election of
     directors generally. However, any stockholder entitled to vote in the
     election of directors generally may nominate one or more persons for
     election as directors at a meeting only if written notice of such
     stockholder's intent to make such nomination or nominations has been given,
     either by personal delivery or by United States mail, postage prepaid, to
     the

                                        9


     secretary of the Corporation not later than (i) with respect to an election
     to be held at an annual meeting of stockholders, ninety (90) days prior to
     the anniversary date of the immediately preceding annual meeting, and
     (ii) with respect to an election to be held at a special meeting of
     stockholders for the election of directors, the close of business on the
     seventh (7th) day following the date on which notice of such meeting is
     first given to stockholders. Each such notice shall set forth: (a) the name
     and address of the stockholder who intends to make the nomination and of
     the person or persons to be nominated; (b) a representation that the
     stockholder is a record owner of stock of the Corporation entitled to vote
     at such meeting and intends to appear in person or by proxy at the meeting
     to nominate the person or persons specified in the notice; (c) a
     description of all arrangements or understandings between the stockholder
     and each nominee and any other person or persons (naming such person or
     persons) pursuant to which the nomination or nominations are to be made by
     the stockholder; (d) such other information regarding each nominee proposed
     by such stockholder as would be required to be included in a proxy
     statement filed pursuant to the proxy rules of the United States Securities
     and Exchange Commission; and (e) the consent of each such nominee to serve
     as a director of the Corporation if so elected. The presiding officer of
     the meeting may refuse to acknowledge the nomination of any person not made
     in compliance with the foregoing procedure.

     4.   NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as otherwise fixed
pursuant to the provisions of Article Fourth hereof relating to the rights of
the holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation or the right to elect directors under
specified circumstances, newly created directorships resulting from any increase
in the number of directors and any vacancies on the board of directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of a majority of the remaining directors
then in office, even though less than a quorum of the board of directors. Any
director elected in accordance with the preceding sentence shall hold office for
the remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified. No decrease in the number of
directors constituting the board of directors shall shorten the term of any
incumbent director.

     5.   REMOVAL OF DIRECTORS. Subject to the rights of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation or the right to elect directors under specified circumstances, any
director may be removed by the holders of a majority of the voting power of the
then outstanding shares of the "Voting Stock" (defined in Article Seventh),
voting together as a single class, but only for cause. Except as may otherwise
be provided by law, cause for removal shall be construed to exist only if:

          (a)  the director whose removal is proposed has been convicted of a
     felony by a court of competent jurisdiction and such conviction is no
     longer subject to direct appeal, or

                                       10


          (b)  the director whose removal is proposed has been adjudged by a
     court of competent jurisdiction to be liable for (i) any breach of the
     director's duty of loyalty to the Corporation or its stockholders or
     (ii) acts or omissions not in good faith or which involve intentional
     misconduct or a knowing violation of law.

     6.   STOCKHOLDER ACTION. Except as otherwise required by law and subject to
the rights of the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation:

          (a)  special meetings of stockholders of the Corporation may be called
     only by the chairman of the board, the president, the board of directors
     pursuant to a resolution approved by a majority of the entire board of
     directors, or at the written request of the holders of at least eighty
     percent (80%) of the voting power of the then outstanding Voting Stock
     acting together as a single class. Such request shall state the purpose or
     purposes of the proposed meeting. The notice of any such special meeting
     shall be issued within sixty (60) days after the Corporation's receipt of
     such request. Written notice of a special meeting stating the time, place
     and object thereof shall be given to each stockholder entitled to vote
     thereat, at least fifty (50) days before the date fixed for the meeting.
     Business transacted at any special meeting of stockholders shall be limited
     to the purposes stated in the notice; and

          (b)  any action required or permitted to be taken at any annual or
     special meeting of the stockholders of the Corporation may be taken without
     a meeting, without prior notice and without a vote, only if a consent in
     writing setting forth the actions so taken shall be signed by the holders
     of at least eighty percent (80%) of the voting power of the then
     outstanding Voting Stock acting together as a single class. All such
     consents must be executed and delivered to the secretary of the corporation
     not less than thirty (30) days nor more than sixty (60) days prior to the
     action to be taken pursuant to such consent.


     7.   BY-LAW AMENDMENTS. The board of directors shall have power to make,
alter, amend and repeal the by-laws (except to the extent that any by-laws
adopted by the stockholders may expressly prohibit amendment by the board of
directors). Any by-laws made by the directors under the powers conferred hereby
may be altered, amended or repealed by the directors or by the stockholders.
Anything to the contrary herein contained notwithstanding, no by-law shall be
adopted or amended by the board of directors or the stockholders which shall be
inconsistent with any of the terms and provisions of this certificate of
incorporation

     8.   ADDITIONAL POWERS OF DIRECTORS. In addition to the powers and
authority hereinbefore or by statute expressly conferred upon them, the
directors are hereby empowered to exercise all such powers and do all such acts
and things as may be exercised or done by the corporation; subject,
nevertheless, to the provisions of the statutes of Delaware, of this certificate
of incorporation, and to any by-laws from time to time made by the stockholders;
provided, however, that no by-laws so made shall

                                       11


invalidate any prior act of the directors which would have been valid if such
by-laws had not been made.

     SIXTH: VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS.

     1.   HIGHER VOTE FOR CERTAIN BUSINESS COMBINATIONS.


          (a)  In addition to any affirmative vote required by law or this
     certificate of incorporation, and except as otherwise expressly provided in
     Section 2 of this Article Seventh:

               (i)   any merger or consolidation of the Corporation or any
          "Subsidiary" (as herein defined) with (a) any "Interested Stockholder"
          (as herein defined) or (b) any other corporation (whether or not
          itself an Interested Stockholder) which is, or after such merger or
          consolidation would be, an "Affiliate" (as herein defined) of an
          Interested Stockholder; or

               (ii)  any sale, lease, exchange, mortgage, pledge, transfer or
          other disposition (in one transaction or a series of transactions) to
          or with any Interested Stockholder or any Affiliate of any Interested
          Stockholder of the assets of the Corporation or any Subsidiary having
          a Fair Market Value equal to ten percent (10%) or more of the total
          assets reflected on the Corporation's most recently published
          consolidated balance sheet; or

               (iii) the issuance or transfer by the Corporation or any
          Subsidiary (in one transaction or a series of transactions) of any
          securities of the Corporation or any Subsidiary to any Interested
          Stockholder or any Affiliate of any Interested Stockholder in exchange
          for securities or other property (or a combination thereof), other
          than solely cash, having a Fair Market Value equal to ten percent
          (10%) or more of the total assets reflected on the corporation's most
          recently published consolidated balance sheet; or

               (iv)  the adoption of any plan or proposal for the liquidation or
          dissolution of the Corporation proposed by or on behalf of an
          Interested Stockholder or any Affiliate of any Interested Stockholder;
          or

               (v)   any reclassification of securities (including any reverse
          stock split), or recapitalization of the Corporation, or any merger or
          consolidation of the Corporation with any of its Subsidiaries or any
          other transaction (whether or not with or into or otherwise involving
          an Interested Stockholder) which has the effect, directly or
          indirectly, of increasing the proportionate share of the outstanding
          shares of any class of equity or convertible securities of the
          Corporation or any Subsidiary which is directly or indirectly owned by
          any Interested Stockholder or any Affiliate of any Interested
          Stockholder;

                                       12


     shall, in the case of each of clauses (i) through (v) above, require the
     affirmative vote of the holders of at least eighty percent (80%) of the
     voting power of the then outstanding shares of "Voting Stock" (as herein
     defined) of the Corporation voting together as a single class (it being
     understood that for purposes of this Article Seventh, each share of the
     Voting Stock shall have the number of votes granted to it pursuant to
     Article Fourth of this certificate of incorporation).

          (b)  OTHER VOTE REQUIREMENTS NOT CONTROLLING. Such affirmative vote
     shall be required notwithstanding the fact that no vote may be required, or
     that a lesser percentage may be specified, by law or in any agreement with
     any national securities exchange or otherwise.

     2.   WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of Section 1 of this
Article Seventh shall not be applicable to any particular "Business Combination"
(as herein defined), and such Business Combination shall require only such
affirmative vote as is required by law and any other provision of this
certificate of incorporation, if all of the conditions specified in either of
the following paragraphs (a) and (b) are met:

          (a)  APPROVAL BY DISINTERESTED DIRECTORS. The Business Combination
     shall have been approved by a majority of the "Disinterested Directors" (as
     herein defined); or

          (b)  PRICE AND PROCEDURAL REQUIREMENTS. All of the following
     conditions shall have been met:

               (i)   The aggregate amount of the cash and the "Fair Market
          Value" (as hereinafter defined) as of the date of the consummation of
          the Business Combination of consideration other than cash to be
          received per share by holders of Common Stock in such Business
          Combination shall be at least equal to the higher of the following:

                    (A) (if applicable) the highest per share price (including
               any brokerage commissions, transfer taxes and soliciting dealers'
               fees) paid by the Interested Stockholder for any shares of Common
               Stock acquired by it (1) within the two-year period immediately
               prior to the first public announcement of the proposal of the
               Business Combination (the "Announcement Date") or (2) in the
               transaction in which it became an Interested Stockholder,
               whichever is higher; and

                    (B) the Fair Market Value per share of Common Stock on the
               Announcement Date or on the date on which the Interested
               Stockholder became an Interested Stockholder (such latter date
               being referred to in this Article Seventh as the "Determination
               Date"), whichever is higher.

               (ii)  The aggregate amount of the cash and the Fair Market Value
          as of the date of the consummation of the Business Combination of

                                       13


          consideration other than cash to be received per share by holders of
          shares of any other class of outstanding Voting Stock shall be at
          least equal to the highest of the following (it being intended that
          the requirements of this paragraph (b)(ii) shall be required to be met
          with respect to every class of outstanding Voting Stock, whether or
          not the Interested Stockholder has previously acquired any shares of a
          particular class of Voting Stock);

                    (A) (if applicable) the highest per share price (including
               any brokerage commissions, transfer taxes and soliciting dealers'
               fees) paid by the Interested Stockholder for any shares of such
               class of Voting Stock acquired by it (1) within the two-year
               period immediately prior to the Announcement Date or (2) in the
               transaction in which it became an Interested Stockholder,
               whichever is higher;

                    (B) (if applicable) the highest preferential amount per
               share to which the holders of shares of such class of Voting
               Stock are entitled in the event of any voluntary or involuntary
               liquidation, dissolution or winding up of the corporation; and

                    (C) the Fair Market Value per share of such class of Voting
               Stock on the Announcement Date or on the Determination Date,
               whichever is higher.

               (iii) The consideration to be received by holders of a particular
          class of outstanding Voting Stock (including Common Stock) shall be in
          cash or in the same form as the Interested Stockholder has previously
          paid for shares of such class of Voting Stock. If the Interested
          Stockholder has paid for shares of any class of Voting Stock with
          varying forms of consideration, the form of consideration for such
          class of Voting Stock shall be either cash or the form used to acquire
          the largest number of shares of such class of Voting Stock previously
          acquired by it. The price determined in accordance with paragraphs
          (b)(i) and (b)(ii) of this Section 2 shall be subject to appropriate
          adjustment in the event of any stock dividend, stock split,
          combination of shares or similar event.

               (iv)  After such Interested Stockholder has become an Interested
          Stockholder and prior to the consummation of such Business
          Combination: (a) except as approved by a majority of the Disinterested
          Directors, there shall have been no failure to declare and pay at the
          regular date therefor any full quarterly dividends (whether or not
          cumulative) on the outstanding Preferred Stock; (b) there shall have
          been (1) no reduction in the annual rate of dividends paid on the
          Common Stock (except as necessary to reflect any subdivision of the
          Common Stock), except as approved by a majority of the Disinterested
          Directors, and (2) an increase in such annual rate of dividends as
          necessary to reflect any reclassification (including any reverse stock
          split), recapitalization, reorganization or any

                                       14


          similar transaction which has the effect of reducing the number of
          outstanding shares of the Common Stock, unless the failure so to
          increase such annual rate is approved by a majority of the
          Disinterested Directors; and (c) such Interested Stockholder shall
          have not become the beneficial owner of any additional shares of
          Voting Stock except as part of the transaction which results in such
          Interested Stockholder becoming an Interested Stockholder.

               (v)   After such Interested Stockholder has become an Interested
          Stockholder, such Interested Stockholder shall not have received the
          benefit, directly or indirectly (except proportionately as a
          stockholder), of any loans, advances guarantees pledges or other
          financial assistance or any tax credits or other tax advantages
          provided by the Corporation, whether in anticipation of or in
          connection with such Business Combination or otherwise.

               (vi)  A proxy or information statement describing the proposed
          Business Combination and complying with the requirements of the
          Securities Exchange Act of 1934 and the rules and regulations
          thereunder (or any subsequent provisions replacing such Act, rules or
          regulations) shall be mailed to public stockholders of the Corporation
          at least thirty (30) days prior to the consummation of such Business
          Combination (whether or not such proxy or information statement is
          required to be mailed pursuant to such Act or subsequent provisions).

     3.   CERTAIN DEFINITIONS. For the purposes of this Article Seventh:


          (a)  The term "PERSON" means any individual, firm, corporation or
     other entity.

          (b)  The term "INTERESTED STOCKHOLDER" means any person (other than
     the Corporation or any Subsidiary) who or which:

               (i)   is the beneficial owner, directly or indirectly, of twenty
          percent (20%) or more of the voting power of the outstanding Voting
          Stock; or

               (ii)  is an Affiliate of the Corporation and at any time within
          the two-year period immediately prior to the date in question was the
          beneficial owner, directly or indirectly, of twenty percent (20%) or
          more of the voting power of the then outstanding Voting Stock; or

               (iii) is an assignee of or has otherwise succeeded to any shares
          of Voting Stock which were at any time within the two-year period
          immediately prior to the date in question beneficially owned by any
          Interested Stockholder, if such assignment or succession shall have
          occurred in the course of a transaction or series of transactions not

                                       15


          involving a public offering within the meaning of the Securities Act
          of 1933.

     Anything in this Section 3(b) to the contrary notwithstanding, the term
     "Interested Stockholder" shall not include (A) the Corporation, or (B) any
     person or entity which, at the date of adoption of this certificate of
     incorporation by the Board of Directors (the "Adoption Date") and at all
     times (except during one or more periods not exceeding seven (7) days in
     length) between the Adoption Date and the date of the proposed Business
     Combination, holds at least one of the capacities listed below:

               (1)   is a Subsidiary;

               (2)   is an employee benefit plan of the Corporation or any
          Subsidiary;

               (3)   is a member of the Executive Committee of the Board of
          Directors of the Corporation;

               (4)   is a beneficial owner of fifteen percent (15%) or more of
          the outstanding common stock of the Corporation; or

               (5)   is any entity in which one or more of the persons or
          entities referred to in clauses (B)(1), (B)(2), (B)(3) or (B)(4) of
          this Section 3(b) owns or holds more than fifty percent (50%) of the
          equity interest or voting power.

          (c)  The term "BUSINESS COMBINATION" as used in this Article Seventh
     means any transaction which is referred to in any one or more of clauses
     (i) through (v) of paragraph (a) of Section 1 of this Article Seventh.

          (d)  A person shall be a "BENEFICIAL OWNER" of any Voting Stock:

               (i)   which such person or any of its "Affiliates" or
          "Associates" (as herein defined) beneficially owns, directly or
          indirectly; or

               (ii)  which such person or any of its Affiliates or Associates
          has (a) the right to acquire (whether such right is exercisable
          immediately or only after the passage of time), pursuant to any
          agreement, arrangement or understanding or upon the exercise of
          conversion rights, exchange rights, warrants or options, or otherwise,
          or (b) the right to vote pursuant to any agreement, arrangement or
          understanding; or

               (iii) which is beneficially owned, directly or indirectly, by any
          other person with which such person or any of its Affiliates or
          Associates has any agreement, arrangement or understanding for the
          purpose of acquiring, holding, voting or disposing of any shares of
          Voting Stock.

                                       16


               (e)   For the purposes of determining whether a person is an
          Interested Stockholder pursuant to paragraph (b) of this Section 3,
          the number of shares of Voting Stock deemed to be outstanding shall
          include shares deemed owned through application of Paragraph (d) of
          this Section 3 but shall not include any other shares of Voting Stock
          which may be issuable pursuant to any agreement, arrangement or
          understanding, or upon exercise of conversion rights, warrants or
          options, or otherwise.

               (f)   The term "AFFILIATE" of, or a person "AFFILIATED" with, a
          specific person, means a person that directly, or indirectly through
          one or more intermediaries, controls, or is controlled by, or is under
          common control with, the person specified.

               (g)   The term "ASSOCIATE" used to indicate a relationship with
          any person, means (1) any corporation or organization (other than this
          Corporation or a majority-owned subsidiary of this Corporation) of
          which such person is an officer or partner or is, directly or
          indirectly, the beneficial owner of ten percent (10%) or more of any
          class of equity securities, (2) any trust or other estate in which
          such person has a substantial beneficial interest or as to which such
          person serves as trustee or in a similar fiduciary capacity, (3) any
          relative or spouse of such person, or any relative of such spouse, who
          has the same home as such person, or (4) any investment company
          registered under the Investment Company Act of 1940 for which such
          person or any affiliate of such person serves as investment adviser.

               (h)   The term "SUBSIDIARY" means any corporation of which a
          majority of any class of equity security is owned, directly or
          indirectly, by the Corporation; provided, however, that for the
          purposes of the definitions of Interested Stockholder set forth in
          paragraph (b) of this Section 3, the term "Subsidiary" shall mean only
          a corporation of which a majority of each class of equity security is
          owned, directly or indirectly, by the Corporation.

               (i)   The term "DISINTERESTED DIRECTOR" means any member of the
          Board of Directors who is unaffiliated with the Interested Stockholder
          and was a member of the Board of Directors prior to the time that the
          Interested Stockholder became an Interested Stockholder, and any
          successor of a Disinterested Director who is unaffiliated with the
          Interested Stockholder and is recommended to succeed a Disinterested
          Director by a majority of Disinterested Directors then on the Board of
          Directors.

               (j)   The term "FAIR MARKET VALUE" means: (i) in the case of
          stock, the highest closing sale price during the 30-day period
          immediately preceding the date in question of a share of such stock on
          the Composite Tape for New York Stock Exchange-Listed Stocks, or, if
          such stock is not quoted on the Composite Tape, on the New York Stock
          Exchange, or, if such stock is not listed on such Exchange, on the
          principal United States securities exchange registered under the
          Securities Exchange Act of 1934 on which such stock is

                                       17


          not listed, or, if such stock is not listed on any such exchange, the
          highest closing last sale price or closing bid quotation with respect
          to a share of such stock during the 30-day period preceding the date
          in question on the National Association of Securities Dealers, Inc.
          Automated Quotations System or any system then in use, or if no such
          quotations are available, the fair market value on the date in
          question of a share of such stock as determined by the Board of
          Directors in good faith; and (ii) in the case of property other than
          cash or stock, the fair market value of such property on the date in
          question as determined by the Board of Directors in good faith.

               (k)   The term "VOTING STOCK" means all outstanding shares of
          capital stock of the Corporation or another corporation entitled to
          vote generally in the election of directors, and each reference to a
          proportion of shares of Voting Stock shall refer to such proportion of
          the votes entitled to be cast by such shares.

               (l)   In the event of any Business Combination in which the
          Corporation survives, the phrase "consideration other than cash to be
          received" as used in paragraphs (b)(i) and (b)(ii) of Section 2 of
          this Article Seventh shall include the shares of Common Stock and/or
          the shares of any other class of outstanding Voting Stock retained by
          the holders of such shares.

               (m)   The term "ANNOUNCEMENT DATE" shall have the meaning
          specified in Section 2(b)(i)(A).

               (n)   The term "DETERMINATION DATE" shall have the meaning
          specified in Section 2(b)(i)(B).

          4.   POWERS OF THE BOARD OF DIRECTORS. A majority of the Directors
     shall have the power and duty to determine for the purposes of this Article
     Seventh, on the basis of information known to them after reasonable
     inquiry: (a) whether a person is an Interested Stockholder, (b) the number
     of shares of Voting Stock beneficially owned by any person, (c) whether a
     person is an Affiliate or Associate of another, and (d) the Fair Market
     Value of any assets which are the subject of any Business Combination. A
     majority of the Directors shall have the further power to interpret all of
     the terms and provisions of this Article Seventh.

          5.   NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED STOCKHOLDERS.
     Nothing contained in this Article Seventh shall be construed to relieve any
     Interested Stockholder from any fiduciary obligation imposed by law.

          SEVENTH: The Corporation shall indemnify any person who was, is, or is
     threatened to be made a party to a proceeding (as hereinafter defined) by
     reason of the fact that he or she (i) is or was a director or officer of
     the Corporation or (ii) while a director or officer of the Corporation, is
     or was serving at the request of the Corporation as a director, officer,
     partner, venturer, proprietor, trustee, employee, agent, or similar
     functionary of another foreign or domestic corporation, partnership, joint
     venture, sole proprietorship, trust, employee benefit plan, or other
     enterprise, to the fullest extent permitted under the Delaware General
     Corporation Law, as the same exists or may

                                       18


hereafter be amended. Such right shall be a contract right and as
such shall run to the benefit of any director or officer who is elected and
accepts the position of director or officer of the Corporation or elects to
continue to serve as a director or officer of the Corporation while this Article
Eighth is in effect. Any repeal or amendment of this Article Eighth shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the Corporation with respect to any claim arising from or
related to the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article Eighth. Such
right shall include the right to be paid by the Corporation expenses incurred in
investigating or defending any such proceeding in advance of its final
disposition to the maximum extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense is not permitted under the
Delaware General Corporation Law, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
board of directors or any committee thereof, independent legal counsel, or
stockholders) to have made its determination prior to the commencement of such
action that indemnification of, or advancement of costs of defense to, the
claimant is permissible in the circumstances nor an actual determination by the
Corporation (including its board of directors or any committee thereof,
independent legal counsel, or stockholders) that such indemnification or
advancement is not permissible shall be a defense to the action or create a
presumption that such indemnification or advancement is not permissible. In the
event of the death of any person having a right of indemnification under the
foregoing provisions, such right shall inure to the benefit of his or her heirs,
executors, administrators, and personal representatives. The rights conferred
above shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, by-law, resolution of stockholders or
directors, agreement, or otherwise.

     The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.

     Without limiting the generality of the foregoing, to the extent permitted
by then applicable law, the grant of mandatory indemnification pursuant to this
Article Eighth shall extend to proceedings involving the negligence of such
person.

     As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.

     EIGHTH: A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the

                                       19


Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit. Any repeal or
amendment of this Article Ninth by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation arising from an act or omission
occurring prior to the time of such repeal or amendment. In addition to the
circumstances in which a director of the Corporation is not personally liable as
set forth in the foregoing provisions of this Article Ninth, a director shall
not be liable to the Corporation or its stockholders to such further extent as
permitted by any law hereafter enacted, including without limitation any
subsequent amendment to the Delaware General Corporation Law.

     NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

     TENTH: Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the Corporation.

     ELEVENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation. The foregoing and
anything contained elsewhere in this certificate of incorporation to the
contrary notwithstanding, the affirmative vote of the holders of at least eighty
percent (80%) of the voting power of the then outstanding Voting Stock, voting
together as a single class, shall be required to alter, amend, repeal,

                                       20


or adopt any provision inconsistent with Article Sixth, Section 2; Article
Sixth, Section 3; Article Sixth, Section 4; Article Sixth, Section 6; and
Article Seventh.

                                       21


          IN WITNESS WHEREOF, the undersigned has duly executed this Second
     Restated Certificate of Incorporation on behalf of the Corporation as of
     the 19th day of March, 2002.

                                    UNITED STATIONERS INC.

                     By:
                        ------------------------------------------
                     Name:    Deidra D. Gold
                     Title: Senior Vice President, General Counsel and Secretary

                                       22




                           CERTIFICATE OF DESIGNATIONS
                                       OF
                         SERIES A JUNIOR PREFERRED STOCK
                                       OF
                             UNITED STATIONERS INC.

                     Pursuant to Section 151 of the Delaware
                             General Corporation Law

         I, Susan Maloney Meyer, the Vice President, General Counsel and
Secretary of United Stationers Inc., a corporation organized and existing under
the Delaware General Corporation Law (the "Company"), in accordance with the
provisions of Section 151 of such law, DO HEREBY CERTIFY that pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the Board of Directors on July 27, 1999 adopted
the following resolution which creates a series of shares of Preferred Stock
designated as Series A Junior Preferred Stock, as follows:

         RESOLVED, that pursuant to Section 151(g) of the Delaware General
Corporation Law and the authority vested in the Board of Directors of the
Company in accordance with the provisions of the Certificate of Incorporation of
the Company, a series of Preferred Stock of the Company be, and hereby is,
created, and the powers, designations, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, be, and hereby are, as
follows:



         Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Preferred Stock" (the "Series A Preferred Stock")
and the number of shares constituting such series shall be 68,000.

         Section 2. DIVIDENDS AND DISTRIBUTIONS.

         (A) Subject to the provisions for adjustment hereinafter set forth, and
subject to the rights of the holders of any shares of any series of Preferred
Stock ranking prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per share
(rounded to the nearest cent) equal to 1,000 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, $0.10 par
value per share, of the Company (the "Common Stock") and (ii) a preferential
cash dividend (the "Preferential Dividends"), if any, in preference to the
holders of Common Stock, on the first day of each fiscal quarter of the Company
(each a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, payable in an amount (except in the case of the
first Quarterly Dividend Payment if the date of the first issuance of Series A
Preferred Stock is a date other than a Quarterly Dividend Payment date, in which
case such payment shall be a prorated amount of such amount) equal to $0.001 per
share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or, with

                                        2


respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the event
the Company shall, at any time after the issuance of any share or fraction of a
share of Series A Preferred Stock, make any distribution on the shares of Common
Stock of the Company, whether by way of a dividend or a reclassification of
stock, a recapitalization, reorganization or partial liquidation of the Company
or otherwise, which is payable in cash or any debt security, debt instrument,
real or personal property or any other property (other than cash dividends
subject to the immediately preceding sentence, a distribution of shares of
Common Stock or other capital stock of the Company or a distribution of rights
or warrants to acquire any such share, including any debt security convertible
into or exchangeable for any such share, at a price less than the Fair Market
Value (as hereinafter defined) of such share), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind, of 1,000 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the Series
A Preferred Stock to which holders thereof are entitled pursuant to clause
(i) of the first sentence of this paragraph and pursuant to the second sentence
of this paragraph are hereinafter referred to as "Dividends" and the multiple of
such cash and non-cash dividends on the Common Stock applicable to the
determination of the Dividends, which shall be 1,000 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple". In the event the Company shall at any time after
August 16, 1999 declare or pay any dividend or

                                        3


make any distribution on Common Stock payable in shares of Common Stock, or
effect a subdivision or split or a combination, consolidation or reverse split
of the outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, then in each such case the Dividend Multiple thereafter
applicable to the determination of the amount of Dividends which holders of
shares of Series A Preferred Stock shall be entitled to receive shall be the
Dividend Multiple applicable immediately prior to such event multiplied by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

         (B) The Company shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series A Preferred
Stock.

         (C) Preferential Dividends shall begin to accrue on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series A Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total amount of

                                        4


such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.

         Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

         (A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the holders of the Common Stock. The
number of votes which a holder of Series A Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". In the event the Company shall
at any time after August 16, 1999 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Vote Multiple thereafter applicable to the determination of the
number of votes per share to which holders of shares of Series A Preferred Stock
shall be entitled after such event shall be the Vote Multiple immediately prior
to such event multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         (B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock and
the holders

                                        5


of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.

         (C) In the event that the Preferential Dividends accrued on the Series
A Preferred Stock for four or more quarterly dividend periods, whether
consecutive or not, shall not have been declared and paid or irrevocably set
aside for payment, the holders of record of Preferred Stock of the Company of
all series (including the Series A Preferred Stock), other than any series in
respect of which such right is expressly withheld by the Certificate of
Incorporation or the authorizing resolutions included in any Certificate of
Designations therefor, shall have the right, at the next meeting of stockholders
called for the election of directors, to elect two members to the Board of
Directors, which directors shall be in addition to the number required prior to
such event, to serve until the next Annual Meeting and until their successors
are elected and qualified or their earlier resignation, removal or incapacity or
until such earlier time as all accrued and unpaid Preferential Dividends upon
the outstanding shares of Series A Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series A
Preferred Stock shall continue to have the right to elect directors as provided
by the immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted

                                        6


by law; provided, however, that any such action by stockholders shall be taken
at a meeting of stockholders and shall not be taken by written consent thereto.

         (D) Except as otherwise required by the Certificate of Incorporation or
by law or set forth herein, holders of Series A Preferred Stock shall have no
other special voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action.

         Section 4. CERTAIN RESTRICTIONS.

         (A) Whenever Preferential Dividends or Dividends are in arrears or the
Company shall be in default of payment thereof, thereafter and until all accrued
and unpaid Preferential Dividends and Dividends, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid or set
irrevocably aside for payment in full, and in addition to any and all other
rights which any holder of shares of Series A Preferred Stock may have in such
circumstances, the Company shall not:

          (i)  declare or pay dividends on, make any other distributions on, or
     redeem or purchase or otherwise acquire for consideration, any shares of
     stock ranking junior (either as to dividends or upon liquidation,
     dissolution or winding up) to the Series A Preferred Stock;

          (ii) declare or pay dividends on or make any other distributions on
     any shares of stock ranking on a parity as to dividends with the Series A
     Preferred Stock, unless dividends are paid ratably on the Series A
     Preferred Stock and all such parity stock on which dividends are payable

                                        7


     or in arrears in proportion to the total amounts to which the holders of
     all such shares are then entitled if the full dividends accrued thereon
     were to be paid;

          (iii) except as permitted by subparagraph (iv) of this paragraph 4(A),
     redeem or purchase or otherwise acquire for consideration shares of any
     stock ranking on a parity (either as to dividends or upon liquidation,
     dissolution or winding up) with the Series A Preferred Stock, provided that
     the Company may at any time redeem, purchase or otherwise acquire shares of
     any such parity stock in exchange for shares of any stock of the Company
     ranking junior (both as to dividends and upon liquidation, dissolution or
     winding up) to the Series A Preferred Stock; or

          (iv) purchase or otherwise acquire for consideration any shares of
     Series A Preferred Stock, or any shares of stock ranking on a parity with
     the Series A Preferred Stock (either as to dividends or upon liquidation,
     dissolution or winding up), except in accordance with a purchase offer made
     to all holders of such shares upon such terms as the Board of Directors,
     after consideration of the respective annual dividend rates and other
     relative rights and preferences of the respective series and classes, shall
     determine in good faith will result in fair and equitable treatment among
     the respective series or classes.

         (B) The Company shall not permit any Subsidiary (as hereinafter
defined) of the Company to purchase or otherwise acquire for consideration any
shares of

                                        8


stock of the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner. A "Subsidiary" of the Company shall mean any corporation or other entity
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors of such corporation or
other entity or other persons performing similar functions are beneficially
owned, directly or indirectly, by the Company or by any corporation or other
entity that is otherwise controlled by the Company.

         (C) The Company shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights Agreement
dated as of July 27, 1999 between the Company and BANKBOSTON, N.A. as Rights
Agent, as it may be amended from time to time, a copy of which is on file with
the Secretary of the Company at its principal executive office and shall be made
available to stockholders of record without charge upon written request therefor
addressed to said Secretary. Notwithstanding the foregoing sentence, nothing
contained in the provisions hereof shall prohibit or restrict the Company from
issuing for any purpose any series of Preferred Stock with rights and privileges
similar to, different from, or greater than, those of the Series A Preferred
Stock.

         Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred

                                        9


Stock, without designation as to series, and such shares may be reissued as part
of a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors.

         Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless the holders of shares of Series A Preferred
Stock shall have received for each share of Series A Preferred Stock, subject to
adjustment as hereinafter provided, (A) $1,000 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment or, (B) if greater than the amount specified in clause
(i)(A) of this sentence, an amount equal to 1,000 times the aggregate amount to
be distributed per share to holders of Common Stock, as the same may be adjusted
as hereinafter provided and (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as

                                       10


the "Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to said clause to
the determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple". In the event the Company shall at any time
after August 16, 1999 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then, in each such case, the
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series A Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple applicable
immediately prior to such event multiplied by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

         Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.

         (A) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
share of capital stock of the Company (other than any share of Common Stock of
the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the

                                       11


dividend rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Company of the shares of Series A Preferred Stock shall be
adjusted so that after such event the holders of Series A Preferred Stock shall
be entitled, in respect of each share of Series A Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such adjustment, to (i) such additional dividends as equal
the Dividend Multiple in effect immediately prior to such Transaction multiplied
by the additional dividends which the holder of a share of Common Stock shall be
entitled to receive by virtue of the receipt in the Transaction of such capital
stock, (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such Transaction multiplied by the additional voting rights
which the holder of a share of Common Stock shall be entitled to receive by
virtue of the receipt in the Transaction of such capital stock and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company by virtue of the receipt in the Transaction of such
capital stock, as the case may be, all as provided by the terms of such capital
stock.

         (B) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Fair Market Value of a
share of Common Stock on

                                       12


the date of issuance of such right or warrant, then and in each such event the
dividend rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Company of the shares of Series A Preferred Stock shall each
be adjusted so that after such event the Dividend Multiple, the Vote Multiple
and the Liquidation Multiple shall each be the product of the Dividend Multiple,
the Vote Multiple and the Liquidation Multiple, as the case may be, in effect
immediately prior to such event multiplied by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the maximum number of shares of Common
Stock which could be acquired upon exercise in full of all such rights or
warrants and the denominator of which shall be the number of shares of Common
Stock outstanding immediately before such issuance of rights or warrants plus
the number of shares of Common Stock which could be purchased, at the Fair
Market Value of the Common Stock at the time of such issuance, by the maximum
aggregate consideration payable upon exercise in full of all such rights or
warrants.

         (C) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
right or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of

                                       13


the Company of the shares of Series A Preferred Stock shall each be adjusted so
that after such event each holder of a share of Series A Preferred Stock shall
be entitled, in respect of each share of Series A Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such event, to receive (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to such event
multiplied, first, by the additional dividends to which the holder of a share of
Common Stock shall be entitled upon exercise of such right or warrant by virtue
of the capital stock which could be acquired upon such exercise and multiplied
again by the Discount Fraction (as hereinafter defined) and (ii) such additional
voting rights as equal the Vote Multiple in effect immediately prior to such
event multiplied, first, by the additional voting rights to which the holder of
a share of Common Stock shall be entitled upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction and (iii) such additional
distributions upon liquidation, dissolution or winding up of the Company as
equal the Liquidation Multiple in effect immediately prior to such event
multiplied, first, by the additional amount which the holder of a share of
Common Stock shall be entitled to receive upon liquidation, dissolution or
winding up of the Company upon exercise of such right or warrant by virtue of
the capital stock which could be acquired upon such exercise and multiplied
again by the Discount Fraction. For purposes of this paragraph, the "Discount
Fraction" shall be a fraction the numerator of which shall be the difference
between the Fair Market Value of a share of the capital stock subject to a right
or warrant distributed to holders of shares of Common Stock of the Company as
contemplated by

                                       14


this paragraph immediately after the distribution thereof and the purchase price
per share for such share of capital stock pursuant to such right or warrant and
the denominator of which shall be the Fair Market Value of a share of such
capital stock immediately after the distribution of such right or warrant.

         (D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Company to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be the last
sale price, regular way, or, in case, no such sale takes place on such day, the
average of the closing bid and asked prices, regular way (in either case, as
reported in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the Nasdaq National Market), or, if
the shares are not listed or admitted to trading on the Nasdaq National Market,
as reported in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange or

                                       15


Nasdaq market on which the shares are listed or admitted to trading or, if the
shares are not listed or admitted to trading on any national securities exchange
or Nasdaq market, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or if on any such date the shares
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
shares selected by the Board of Directors of the Company. The term "Trading Day"
shall mean a day on which the principal national securities exchange or Nasdaq
market on which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to trading
on any national securities exchange or Nasdaq market, on which the Nasdaq
National Market or such other national securities exchange as may be selected by
the Board of Directors of the Company is open. If the shares are not publicly
held or not so listed or traded on any day within the period of 30 Trading Days
applicable to the determination of Fair Market Value thereof as aforesaid, "Fair
Market Value" shall mean the fair market value thereof per share as determined
in good faith by the Board of Directors of the Company. In either case referred
to in the foregoing sentence, the determination of Fair Market Value shall be
described in a statement filed with the Secretary of the Company.

         Section 8. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or

                                       16


any other property, then in any such case each outstanding share of Series A
Preferred Stock shall at the same time be similarly exchanged for or changed
into the aggregate amount of stock, securities, cash and/or other property
(payable in like kind), as the case may be, for which or into which each share
of Common Stock is changed or exchanged multiplied by the highest of the Vote
Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.

         Section 9. EFFECTIVE TIME OF ADJUSTMENTS.

         (A) Adjustments to the Series A Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event requiring
such adjustments occurs.

         (B) The Company shall give prompt written notice to each holder of a
share of Series A Preferred Stock of the effect of any adjustment to the voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the Company of such shares required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.

         Section 10. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
provisions hereof and the Certificate of Incorporation of the Company.

                                       17


         Section 11. RANKING. Unless otherwise provided in the Certificate of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's Preferred Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.

         Section 12. AMENDMENT. The provisions hereof and the Certificate of
Incorporation of the Company shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series A Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series A Preferred Stock, voting together as a single class.

                                       18

EX-3.2

Exhibit 3.2

                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                             UNITED STATIONERS INC.

                             A Delaware Corporation

                              As of March 19, 2002



                                TABLE OF CONTENTS



                                                                                                      PAGE
                                                                                                 
Article I         OFFICES...............................................................................1

        1.1       Registered Office and Agent.......................................................... 1

        1.2       Other Offices.........................................................................1

Article II        MEETINGS OF STOCKHOLDERS..............................................................1

        2.1       Annual Meeting....................................................................... 1

        2.2       Special Meeting...................................................................... 2

        2.3       Place of Meetings.................................................................... 2

        2.4       Notice of Meeting.................................................................... 2

        2.5       Business at Annual Meetings...........................................................3

        2.6       Voting List...........................................................................3

        2.7       Quorum................................................................................3

        2.8       Required Vote; Withdrawal of Quorum...................................................4

        2.9       Method of Voting; Proxies; Meeting by Remote Communication............................4

        2.10      Record Date...........................................................................5

        2.11      Conduct of Meetings...................................................................6

        2.12      Inspectors............................................................................7

        2.13      Adjournments..........................................................................8

        2.14      Action Without a Meeting..............................................................8

Article III       DIRECTORS.............................................................................9

        3.1       Management............................................................................9

        3.2       Number; Qualification; Election; Term.................................................9

        3.3       Chairman..............................................................................9

        3.4       Change in Number.....................................................................10

        3.5       Removal; Resignation.................................................................10

        3.6       Newly Created Directorships and Vacancies............................................10

        3.7       Nomination of Director Candidates....................................................10

        3.8       Meetings of Directors, Corporate Officers; Books and Records.........................10

        3.9       First Meeting........................................................................10

        3.10      Election of Officers.................................................................10

        3.11      Regular Meetings.....................................................................10


                                        i


                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                                      PAGE
                                                                                                 
        3.12      Special Meetings.....................................................................11

        3.13      Notice...............................................................................11

        3.14      Quorum; Majority Vote................................................................11

        3.15      Procedure............................................................................11

        3.16      Compensation.........................................................................12

        3.17      Action by Written Consent............................................................12

        3.18      Telephonic Meetings Permitted........................................................12

        3.19      Reliance upon Records................................................................12

        3.20      Interested Directors.................................................................13

Article IV        COMMITTEES...........................................................................13

        4.1       Designation..........................................................................13

        4.2       Number; Qualification; Term..........................................................13

        4.3       Authority............................................................................14

        4.4       Committee Changes....................................................................14

        4.5       Alternate Members of Committees......................................................14

        4.6       Regular Meetings.....................................................................14

        4.7       Special Meetings.....................................................................15

        4.8       Quorum; Majority Vote................................................................15

        4.9       Minutes..............................................................................15

        4.10      Responsibility.......................................................................15

        4.11      Action Telephonically or Without Meeting.............................................15

Article V         NOTICE...............................................................................15

        5.1       Method...............................................................................15

        5.2       Waiver...............................................................................16

Article VI        OFFICERS.............................................................................16

        6.1       Number; Titles; Term of Office.......................................................16

        6.2       Removal; Resignation.................................................................16

        6.3       Vacancies............................................................................17

        6.4       Authority............................................................................17

        6.5       Compensation.........................................................................17


                                       ii


                                                TABLE OF CONTENTS
                                                    (CONTINUED)



                                                                                                      PAGE
                                                                                                 
        6.6       The President........................................................................17

        6.7       The Vice Presidents..................................................................17

        6.8       The Secretary........................................................................18

        6.9       Assistant Secretaries................................................................18

        6.10      The Treasurer........................................................................18

        6.11      Subordinate Officers; Delegated Authority to Appoint Subordinate Officers............18

        6.12      Bond.................................................................................19

        6.13      Assistant Treasurers.................................................................19

Article VII       CERTIFICATES AND STOCKHOLDERS........................................................19

        7.1       Certificates for Shares..............................................................19

        7.2       Replacement of Lost or Destroyed Certificates........................................19

        7.3       Transfer of Shares...................................................................20

        7.4       Registered Stockholders..............................................................20

        7.5       Regulations..........................................................................20

        7.6       Legends..............................................................................20

Article VIII      INDEMNIFICATION......................................................................20

        8.1       Right to Indemnification of Directors and Officers...................................20

        8.2       Advancement of Expenses of Directors and Officers....................................21

        8.3       Claims by Officers or Directors......................................................21

        8.4       Indemnification of Employees.........................................................21

        8.5       Advancement of Expenses of Employees.................................................22

        8.6       Non-Exclusivity of Rights............................................................22

        8.7       Other Indemnification................................................................22

        8.8       Insurance............................................................................22

        8.9       Amendment or Repeal..................................................................22

Article IX        MISCELLANEOUS PROVISIONS.............................................................22

        9.1       Dividends............................................................................22

        9.2       Reserves.............................................................................22

        9.3       Books and Records....................................................................23


                                       iii


                                                TABLE OF CONTENTS
                                                    (CONTINUED)



                                                                                                      PAGE
                                                                                                 
        9.4       Fiscal Year..........................................................................23

        9.5       Seal.................................................................................23

        9.6       Resignations.........................................................................23

        9.7       Securities of Other Corporations.....................................................23

        9.8       Invalid Provisions...................................................................23

        9.9       Mortgages, etc.......................................................................23

        9.10      Checks...............................................................................24

        9.11      Headings.............................................................................24

        9.12      References...........................................................................24

        9.13      Amendments...........................................................................24


                                       iv




                           AMENDED AND RESTATED BYLAWS

                                       OF

                             UNITED STATIONERS INC.

                             A Delaware Corporation

                                    PREAMBLE

          These bylaws have been amended and restated as of March 19, 2002.
These bylaws are subject to, and governed by, the General Corporation Law of the
State of Delaware (the "DGCL") and the certificate of incorporation, as it may
be amended and in effect from time to time (the "CERTIFICATE OF INCORPORATION")
of United Stationers Inc., a Delaware corporation (the "CORPORATION"). In the
event of a direct conflict between the provisions of these bylaws and the
mandatory provisions of the DGCL or the provisions of the Certificate of
Incorporation, such provisions of the DGCL or the Certificate of Incorporation,
as the case may be, will be controlling.

                                    ARTICLE I

                                     OFFICES

     1.1  REGISTERED OFFICE AND AGENT. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware or
as otherwise designated from time to time by the appropriate filing by the
Corporation in the office of the Secretary of State of the State of Delaware.
The name and address of the registered agent of the Corporation is The
Corporation Trust Company or as otherwise designated from time to time by the
appropriate filing by the Corporation in the office of the Secretary of State of
the State of Delaware.

     1.2  OTHER OFFICES. The Corporation may also have offices at such other
places, both within and without the State of Delaware, as the board of directors
may from time to time determine or as the business of the Corporation may
require.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

     2.1  ANNUAL MEETING. An annual meeting of stockholders of the Corporation
shall be held each calendar year on such date and at such time as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting. At such meeting, the stockholders shall elect directors and
transact such other business as may properly be brought before the meeting. If
the election of directors shall not be held on the day designated herein for any
annual meeting, or at any adjournment thereof, the

                                        1



board of directors shall cause the election to be held at a special meeting of
the stockholders as soon thereafter as may be convenient.

     2.2  SPECIAL MEETING. A special meeting of the stockholders shall be held
as provided in the Certificate of Incorporation and in Article V hereof.

     2.3  PLACE OF MEETINGS. An annual meeting of stockholders may be held at
any place within or without the State of Delaware designated by the board of
directors. A special meeting of stockholders may be held at any place within or
without the State of Delaware designated in the notice of the meeting.
Notwithstanding the foregoing, the board of directors may, in its sole
discretion, determine that the meeting shall not be held at any place, but shall
be held solely by means of remote communication, subject to such guidelines and
procedures as the board of directors may adopt, as permitted by applicable law.

     2.4  NOTICE OF MEETING.

     (a)  Written or printed notice stating the place, day, and time of an
annual meeting of the stockholders and the means of remote communications, if
any, by which stockholders and proxy holders may be deemed to be present in
person and vote at such meeting shall be delivered not less than ten nor more
than 60 days before the date of the meeting, either personally or by mail, by or
at the direction of the President, the Secretary, or the officer or person(s)
calling the meeting, to each stockholder of record entitled to vote at such
meeting. If such notice is to be sent by mail, it shall be directed to such
stockholder at his address as it appears on the records of the Corporation,
unless he shall have filed with the Secretary of the Corporation a written
request that notices to him be mailed to some other address, in which case it
shall be directed to him at such other address. Notice of any annual meeting of
stockholders shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy and shall not, at the beginning of
such annual meeting, object to the transaction of any business because the
annual meeting is not lawfully called or convened, or who shall, either before
or after the annual meeting, submit a signed waiver of notice, in person or by
proxy.

     (b)  Notices of special meetings of the stockholders shall be issued as
provided in the Certificate of Incorporation and in Article V hereof.

     (c)  Without limiting the foregoing paragraphs of this Section 2.4, any
notice to stockholders of a meeting given by the Corporation pursuant to this
Section 2.4 or the Certificate of Incorporation, shall be effective if given by
a form of electronic transmission consented to by the stockholder to whom the
notice is given. Any such consent shall be revocable by the stockholder by
written notice to the Corporation and shall also be deemed revoked if (1) the
Corporation is unable to deliver by electronic transmission two consecutive
notices given by the Corporation in accordance with such consent and (2) such
inability becomes known to the Secretary or Assistant Secretary of the
Corporation, the transfer agent or other person responsible for the giving of
notice;

                                        2



provided, however, the inadvertent failure to treat such inability as a
revocation shall not invalidate any meeting or other action. Notice given by a
form of electronic transmission in accordance with these bylaws shall be deemed
given: (i) if by facsimile telecommunication, when directed to a number at which
the stockholder has consent to receive notice; (ii) if by electronic mail, when
directed to an electronic mail address at which the stockholder has consented to
receive notice; (iii) if by a posting on an electronic network, together with
separate notice to the stockholder of such specific posting, upon the later of
such posting and the giving of such separate notice; and (iv) if by another form
of electronic transmission, when directed to the stockholder.

     (d)  For purposes of these bylaws, "ELECTRONIC TRANSMISSION" means any form
of communication, not directly involving the physical transmission of paper,
that creates a record that may be retained, retrieved and reviewed by a
recipient thereof, and that may be directly reproduced in paper form by such a
recipient through an automated process.

     2.5  BUSINESS AT ANNUAL MEETINGS. The business to be conducted at annual
meetings of the Corporation shall be as provided in the Certificate of
Incorporation.

     2.6  VOTING LIST. At least ten days before each meeting of stockholders,
the Secretary or other officer of the Corporation who has charge of the
Corporation's stock ledger, either directly or through another officer appointed
by him or through a transfer agent appointed by the board of directors, shall
prepare a complete list of record holders of each class and series of shares of
stock entitled to vote thereat, arranged in alphabetical order and showing the
address of each record holder and number of shares registered in the name of
each record holder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, for a period of at least
ten days prior to the meeting: (i) on a reasonably accessible electronic
network, provided that the information required to gain access to such list is
provided with the notice of the meeting or (ii) during ordinary business hours,
at the principal place of business of the Corporation. If the meeting is to be
held at a place, the list shall also be produced and kept at the time and place
of the meeting during the whole time thereof and may be inspected by any
stockholder who is present. If the meeting is to be held solely by means of
remote communication, the list shall also be open to the examination of any
stockholder during the whole time thereof on a reasonably accessible electronic
network and the information required to access such list shall be provided with
the notice of the meeting. The stock ledger shall be the only evidence as to who
are the stockholders entitled to examine the stock ledger, the list of record
holders or the books of the Corporation, or to vote in person or by proxy at any
meeting of stockholders.

     2.7  QUORUM. The holders of a majority of the outstanding shares of each
class and/or series of capital stock entitled to vote on a matter present in
person or by proxy shall constitute a quorum at any meeting of stockholders,
except as otherwise provided by law, the Certificate of Incorporation, or these
bylaws. If, however, the holders of any two or more classes or series of stock
are entitled, or required, pursuant to the terms of the

                                        3



Certificate of Incorporation, to vote together as a single class on any matter
coming before such stockholders, the holders of a majority in the aggregate of
the outstanding shares of such classes and/or series (except as otherwise
provided in the Certificate of Incorporation) present in person or by proxy,
shall constitute a quorum for purposes of voting on any matter that may be put
before such stockholders in accordance with law, the Certificate of
Incorporation or these bylaws. Shares of its own stock belonging to the
Corporation shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that the foregoing shall not limit the right of the
Corporation to vote stock, including but not limited to its own stock, held by
it in a fiduciary capacity. If a quorum shall not be present, in person or by
proxy, at any meeting of stockholders, the stockholders entitled to vote thereat
who are present, in person or by proxy, or the chairman of the meeting may
adjourn the meeting from time to time in accordance with Section 2.13 hereof.

     2.8  REQUIRED VOTE; WITHDRAWAL OF QUORUM. When a quorum is present at any
meeting, the vote of the holders of at least a majority of the outstanding
shares having voting power and entitled to vote on a matter who are present, in
person or by proxy, shall decide any such matter brought before such meeting,
unless such matter is one on which, by express provision of statute, the
Certificate of Incorporation, or these bylaws, a different vote is required, in
which case such express provision shall govern and control the decision of such
matter. The stockholders present at a duly constituted meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.

     2.9  METHOD OF VOTING; PROXIES; MEETING BY REMOTE COMMUNICATION.

     (a)  Except as otherwise provided in the Certificate of Incorporation or
these bylaws, each outstanding share of capital stock which has voting power on
the subject matter submitted to a vote by stockholders shall be entitled to one
vote on each such matter. Elections of directors need not be by written ballot.
At any meeting of stockholders, every stockholder having the right to vote may
vote either in person or by a proxy.

     (b)  At all meetings of stockholders, a stockholder may authorize another
person to act for such stockholder by proxy (i) executed in writing by the
stockholder or such stockholder's duly authorized officer, director or
attorney-in-fact or (ii) transmitted by the stockholder or such stockholder's
duly authorized officer, director or attorney-in-fact by telegram, cablegram or
other means of electronic transmission to the proxy holder or to a proxy
solicitation firm, proxy support service or like agent duly authorized by the
proxy holder to receive such transmission, provided that any such telegram,
cablegram or other means of electronic transmission sets forth or is submitted
with information from which it can be determined that the telegram, cablegram or
other electronic transmission was duly authorized by the stockholder. Such proxy
must be filed with the Secretary of the Corporation or the inspectors of
election at or before the time of

                                        4



the meeting. No such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable and if, and only as
long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A stockholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing with the Secretary an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date.

     (c)  If expressly authorized by the board of directors in accordance with
these bylaws and applicable law, and subject to such guidelines and procedures
as the board of directors may adopt, stockholders and proxy holders not
physically present at a meeting of stockholders may, by means of remote
communication (including, without limitation, by means of conference telephone
or other communications equipment by means of which persons participating in the
meeting can hear each other), (a) participate in a meeting of stockholders and
(b) be deemed present in person and vote at a meeting of stockholders, whether
such meeting is to be held at a designated place or solely by means of remote
communication, provided that (i) the Corporation shall implement reasonable
measures to verify that each person deemed present and permitted to vote at the
meeting by means of remote communication is a stockholder or proxy holder, (ii)
the Corporation shall implement reasonable measures to provide such stockholders
and proxy holders a reasonable opportunity to participate in the meeting and to
vote on matters submitted to the stockholders, including an opportunity to read
or hear the proceedings of the meeting substantially concurrently with such
proceedings, and (iii) if any stockholder or proxy holder votes or takes other
action at the meeting by means of remote communication, a record of such vote or
other action shall be maintained by the Corporation.

     2.10 RECORD DATE.

     (a)  For the purpose of determining stockholders entitled to notice of or
to vote at any meeting of stockholders, or any adjournment thereof, or entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion,
or exchange of stock or for the purpose of any other lawful action, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors. Such date in any case shall not be more than 60 days or less than ten
days prior to any such meeting nor more than 60 days prior to any other action.
If no record date is fixed:

          (i)   The record date for determining stockholders entitled to notice
of or to vote at a meeting of stockholders shall be at the close of business on
the day next preceding the day on which notice is given or, if notice is waived,
at the close of business on the day next preceding the day on which the meeting
is held.

                                        5



          (ii)  The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.

          (iii) A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.

     (b)  In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the board of
directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the board of
directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the board of
directors. If no record date has been fixed by the board of directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the board of directors is
required by law or these bylaws, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
in the State of Delaware, principal place of business, or such officer or agent
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the board of directors and prior action by
the board of directors is required by law or these bylaws, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
board of directors adopts the resolution taking such prior action.

     2.11 CONDUCT OF MEETINGS. The Chairman, if such position has been filled,
shall preside at all meetings of stockholders as the chairman of the meeting. In
the absence or inability to act of the Chairman at any meeting of the
stockholders, a chairman of the meeting shall be appointed to preside at such
meeting of the stockholders by a majority of the board of directors present at
such meeting. The board of directors of the Corporation may adopt by resolution
such rules or regulations for the conduct of meetings of stockholders as it
shall deem appropriate. Except to the extent inconsistent with such rules and
regulations as adopted by the board of directors, the chair of any meeting of
stockholders shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chair, are appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the board of directors or
prescribed by the chair of the meeting, may, but shall not be required to,
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on

                                        6



attendance at or participation in the meeting, to stockholders of record of the
Corporation, their duly authorized and constituted proxies or such other persons
as the chair shall permit; (iv) restrictions on entry to the meeting after the
time fixed for the commencement thereof, and (v) limitations on the time
allotted to questions or comments by participants. Unless, and to the extent
determined by the board of directors or the chair of the meeting, meetings of
stockholders shall not be required to be held in accordance with rules of
parliamentary procedure. The Secretary shall keep the records of each meeting of
stockholders. In the absence or inability to act of any such officer, such
officer's duties shall be performed by the officer given the authority to act
for such absent or non-acting officer under these bylaws or by some other
officer appointed by the board of directors.

     2.12 INSPECTORS.

     (a)  The board of directors may, in advance of any meeting of stockholders,
appoint one or more inspectors to act at such meeting or any adjournment
thereof. If any of the inspectors so appointed shall fail to appear or act, the
chairman of the meeting shall, or if inspectors shall not have been appointed,
the chairman of the meeting may, appoint one or more inspectors. No director or
candidate for the office of director shall act as an inspector of an election of
directors. Inspectors need not be stockholders. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector at such meeting with strict impartiality and
according to the best of his ability.

     (b)  The inspectors shall (i) ascertain the number of shares outstanding
and the voting power of each, (ii) determine the number of shares present in
person or by proxy at such meeting and the validity of proxies and ballots,
(iii) count all votes and ballots, (iv) determine and retain for a reasonable
period a record of the disposition of any challenges made to any determination
by the inspectors and (v) certify their determination of the number of such
shares present in person or by proxy at such meeting and their count of all
votes and ballots. In addition, at the time the inspectors make their
certification pursuant to this paragraph (b), the inspectors shall specify any
information provided in accordance with SECTION 2.9(b) of these bylaws and any
other information permitted by applicable law upon which they relied in
determining the validity and counting of proxies and ballots. The inspectors may
appoint or retain other persons or entities to assist them in the performance of
their duties. On request of the chairman of the meeting, the inspectors shall
make a report in writing of any challenge, request, or matter determined by them
and shall execute a certificate of any fact found by them.

     (c)  The chairman of the meeting shall announce at the meeting the date and
time of the opening and the closing of the polls for each matter upon which the
stockholders will vote at a meeting. No ballots, proxies or votes, nor any
revocations thereof or changes thereto, shall be accepted by the inspectors
after the closing of the

                                        7



polls unless the Court of Chancery of the State of Delaware upon application by
any stockholder shall determine otherwise.

     2.13 ADJOURNMENTS. Any meeting of stockholders, annual or special, may
adjourn from time to time to reconvene at the same or some other date, time
and/or place, and notice need not be given of any such adjourned meeting if the
date, time, place, if any, thereof and the means of remote communications, if
any, by which stockholders and proxy holders may be deemed to be present in
person and vote at such meeting are announced at the meeting at which the
adjournment is taken. At any adjourned meeting at which a quorum shall be
present, in person or by proxy, any business may be transacted which may have
been transacted at the original meeting had a quorum been present; provided
that, if the adjournment is for more than 30 days or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
adjourned meeting.

     2.14 ACTION WITHOUT A MEETING.

     (a)  Any action required or permitted to be taken by the stockholders of
the Corporation at any annual or special meeting of the stockholders may be
taken without a meeting only as provided in the Certificate of Incorporation.

     (b)  A telegram, cablegram or other electronic transmission consenting to
an action to be taken and transmitted by a stockholder or proxy holder, or by a
person or persons authorized to act for a stockholder or proxy holder, shall be
deemed to be written, signed and dated for the purposes of Section 228(d)(1) of
the DGCL and the Certificate of Incorporation, provided that any such telegram,
cablegram or other electronic transmission sets forth or is delivered with
information from which the Corporation can determine (A) that the telegram,
cablegram or other electronic transmission was transmitted by the stockholder or
proxy holder or by a person or persons authorized to act for the stockholder or
proxy holder and (b) the date on which such stockholder or proxy holder or
authorized person or persons transmitted such telegram, cablegram or electronic
transmission. The date on which such telegram, cablegram or electronic
transmission is transmitted shall be deemed to be the date on which such consent
was signed. No consent given by telegram, cablegram or other electronic
transmission shall be deemed to have been delivered until such consent is
reproduced in paper form and until such paper form shall be delivered to the
Corporation by delivery to its registered office, its principal place of
business or any officer or agent of the Corporation having custody of the books
in which proceedings of meetings of stockholders are recorded. Delivery made to
a Corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested. Notwithstanding the forgoing
limitations on delivery, consents given by telegram, cablegram or other
electronic transmission may be otherwise delivered to the principal place of
business of the Corporation or to an officer or agent of the Corporation having
custody of the books in which proceedings of meetings of

                                        8



stockholders are recorded if, to the extent and in the manner provided by
resolution of the board of directors or governing body of the Corporation.

                                   ARTICLE III

                                    DIRECTORS

     3.1  MANAGEMENT. The business and property of the Corporation shall be
managed by the board of directors. Subject to the restrictions imposed by law,
the Certificate of Incorporation, or these bylaws, the board of directors may
exercise all the powers of the Corporation.

     3.2  NUMBER; QUALIFICATION; ELECTION; TERM.

     (a)  The number of directors which shall constitute the entire board of
directors shall be eight; provided, that, unless otherwise provided in the
Certificate of Incorporation, the number of directors constituting the entire
board of directors may be increased or decreased from time to time exclusively
by resolution adopted by the board of directors and shall consist of no less
than three and no more than fifteen members. The tenure and qualifications of
directors on the board of directors of the Corporation shall be as provided
herein and in the Certificate of Incorporation. Each director shall hold office
until such director's successor is elected and qualified or until such
director's earlier death, resignation or removal.

     (b)  Except as otherwise required by law, the Certificate of Incorporation,
or these bylaws, the directors shall be elected at an annual meeting of the
stockholders at which a quorum is present. Directors shall be elected by a
plurality of the votes of the shares present in person or represented by proxy
and entitled to vote on the election of directors. None of the directors need be
a stockholder of the Corporation or a resident of Delaware. Each director must
have attained the age of majority.

     (c)  Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the Certificate of Incorporation or the resolution or resolutions
adopted by the board of directors pursuant to the Certificate of Incorporation
and applicable thereto, and such directors so elected shall not be divided into
classes pursuant to this bylaw unless expressly provided by such terms.

     3.3  CHAIRMAN. The board of directors shall elect one of its members as
Chairman. The Chairman, if present, shall preside at all meetings of the board
of directors. The Chairman shall have the powers and duties usually and
customarily associated with the position of a non-executive Chairman and shall
have such other powers and duties as may be assigned to him by the board of
directors. In his capacity as

                                        9



Chairman, he shall not necessarily be an officer of the Corporation, but he
shall be eligible to serve, in addition, as an officer pursuant to Article VI of
these bylaws; PROVIDED, HOWEVER, that under no circumstances shall the Chairman
also serve as the President or chief executive officer of the Corporation.

     3.4  CHANGE IN NUMBER. No decrease in the number of directors constituting
the entire board of directors shall have the effect of shortening the term of
any incumbent director.

     3.5  REMOVAL; RESIGNATION. A director may be removed from the board of
directors in accordance with the Certificate of Incorporation. A director may
resign from the board of directors as provided in Section 9.6 hereof.

     3.6  NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Newly created directorships
resulting from any increase in the number of directors and any vacancies
occurring in the board of directors resulting from death, resignation,
disqualification, removal or other cause shall be filled as provided in the
Certificate of Incorporation.

     3.7  NOMINATION OF DIRECTOR CANDIDATES. Nominations for election to the
board of directors shall be as provided in the Certificate of Incorporation.

     3.8  MEETINGS OF DIRECTORS, CORPORATE OFFICERS; BOOKS AND RECORDS. The
directors may hold their meetings and may have an office or offices and keep the
books of the Corporation, except as otherwise provided by statute, in such place
or places within or without the State of Delaware as the board of directors may
from time to time determine or as shall be specified in the notice of such
meeting.

     3.9  FIRST MEETING. Each newly elected board of directors may hold its
first meeting for the purpose of organization and the transaction of business,
if a quorum is present, on the same day and at the same place as the annual
meeting of stockholders, and no notice of such meeting shall be necessary. If a
newly elected board of directors fails to hold its first meeting on the same day
at the same place as the annual meeting of stockholders, the first meeting of
the newly elected board of directors after each election of new directors
thereto shall be held at such time and place as shall be specified in a notice
given as provided in these bylaws for special meetings of the board of
directors, or as shall be specified in a written waiver of notice signed by all
of the directors.

     3.10 ELECTION OF OFFICERS. At the first meeting of the board of directors
held in conjunction with each annual meeting of stockholders as described in
Section 3.9 hereof at which a quorum shall be present, the board of directors
shall elect the officers of the Corporation.

     3.11 REGULAR MEETINGS. Regular meetings of the board of directors shall be
held at such times and places as shall be designated from time to time by the
board of directors. Notice of such regular meetings shall not be required.

                                       10



     3.12 SPECIAL MEETINGS. Special meetings of the board of directors shall be
held whenever called by the Chairman, the President, or, upon the request in
writing of two or more directors, by any other officer of the Corporation.

     3.13 NOTICE. The Secretary or, in the absence or inability to act of the
Secretary, any person designated by the Chairman or President, shall give notice
of each special meeting to each director at least 24 hours before the meeting;
provided, however, that if a special meeting of the board of directors is called
by the Chairman such meeting may be called upon such notice as the Chairman
deems appropriate. Notice of any such meeting need not be given to any director
who shall, either before or after the meeting, submit a signed waiver of notice
or who shall attend such meeting without protesting, prior to or at its
commencement, the lack of notice to him. Neither the business to be transacted
at, nor the purpose of, any regular or special meeting of the board of directors
need be specified in the notice or waiver of notice of such meeting. Notice may
be given by telephone to the director personally or to any person reasonably
believed to be accepting messages for such director, or by electronic
transmission, as defined in Section 2.4(d), or otherwise in writing in
accordance with Section 5.1 hereof.

     3.14 QUORUM; MAJORITY VOTE. At all meetings of the board of directors, a
majority of the directors elected or appointed in the manner provided in these
bylaws and the Certificate of Incorporation shall constitute a quorum for the
transaction of business. If at any meeting of the board of directors there be
less than a quorum present, a majority of those present or any director solely
present may adjourn the meeting from time to time without further notice. Unless
the act of a greater number is required by law, the Certificate of Incorporation
or these bylaws, the act of a majority of the directors present at a meeting at
which a quorum is in attendance shall be the act of the board of directors. At
any time that the Certificate of Incorporation provides that directors elected
by the holders of a class or series of stock shall have more or less than one
vote per director on any matter, every reference in these bylaws to a majority
or other proportion of directors shall refer to a majority or other proportion
of the votes of such directors.

     3.15 PROCEDURE. At meetings of the board of directors, business shall be
transacted in such order as from time to time the board of directors may
determine. The Chairman, if such position has been filled, shall preside at all
meetings of the board of directors. In the absence or inability to act of the
Chairman at any meeting of the board of directors, a chairman of the meeting
shall be chosen by a majority of the board of directors present at such meeting
from among the directors present to preside at such meeting of the board of
directors. The Secretary of the Corporation shall act as the secretary of each
meeting of the board of directors unless the board of directors appoints another
person to act as secretary of the meeting. The board of directors shall keep
regular minutes of its proceedings which shall be placed in the minute book of
the Corporation.

                                       11



     3.16 COMPENSATION. The board of directors shall have the authority to fix
the compensation, including any stated retainer, fees and reimbursement of
expenses, paid to directors for their services as such, including without
limitation for attendance at regular or special meetings of the board of
directors; provided, that nothing contained herein shall be construed to
preclude any director from serving the Corporation in any other capacity or
receiving compensation therefor. No additional compensation shall be paid to a
director for serving as Chairman, nor shall any additional compensation for
serving as a director or committee member be paid to any employee of the
Corporation or any subsidiary thereof, other than the reimbursement of expenses.
Otherwise, committee members may, by resolution of the board of directors, be
allowed a fixed sum and expenses of attendance, if any, for attending any
committee meeting.

     3.17 ACTION BY WRITTEN CONSENT. Unless otherwise restricted by the
Certificate of Incorporation or by these bylaws, any action required or
permitted to be taken at a meeting of the board of directors, or of any
committee of the board of directors, may be taken without a meeting if all the
directors or all the committee members, as the case may be, entitled to vote
with respect to the subject matter thereof, consent or consents thereto in
writing or by electronic transmission, and such writing or writings or
electronic transmission or transmissions shall have the same force and effect as
a vote of such directors or committee members, as the case may be, and may be
stated as such in any certificate or document filed with the Secretary of State
of the State of Delaware or in any certificate delivered to any person. Such
writing or writings or electronic transmission or transmissions shall be filed
with the minutes of proceedings of the board or committee, as the case may be.
Such filing shall be in paper form if the minutes are maintained in paper form
and shall be in electronic form if the minutes are maintained in electronic
form.

     3.18 TELEPHONIC MEETINGS PERMITTED. Members of the board of directors, or
any committee designated by the board, may participate in a meeting of such
board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this bylaw shall
constitute presence in person at such meeting.

     3.19 RELIANCE UPON RECORDS. Every director, and every member of any
committee of the board of directors, shall, in the performance of his duties, be
fully protected in relying in good faith upon the records of the Corporation and
upon such information, opinions, reports or statements presented to the
Corporation by any of its officers or employees, or committees of the board of
directors, or by any other person as to matters the director or member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Corporation, including, but not limited to, such records, information, opinions,
reports or statements as to the value and amount of the assets, liabilities
and/or net profits of the Corporation, or any other facts pertinent to the
existence and amount of

                                       12



surplus or other funds from which dividends might properly be declared and paid,
or with which the Corporation's capital stock might properly be purchased or
redeemed.

     3.20 INTERESTED DIRECTORS.

          Subject to any other requirements under the U.S. Internal Revenue Code
of 1986, as it may be amended from time to time, the federal securities laws, or
any other applicable laws or regulations relating to the subject matter in this
Section 3.20 (as used in this Section 3.20, "applicable laws or regulations"),
no contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers, are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the board of
directors or committee which authorizes the contract or transaction, or solely
because any such director's or officer's votes are counted for such purpose, if:
(a) the material facts as to such director's or officer's relationship or
interest and as to the contract or transaction are disclosed or are known to the
board of directors or the committee, and the board of directors or committee in
good faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
are less than a quorum; (b) the material facts as to such director's or
officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders having voting power as to such
subject matter pursuant to the Certificate of Incorporation, and entitled to
vote as to such subject matter, and the contract or transaction is specifically
approved in good faith by the vote of such stockholders having such voting power
and entitled to vote on such subject matter; or (c) the contract or transaction
is fair as to the Corporation as of the time it is authorized, approved or
ratified, by the board of directors, a committee or the stockholders. Except as
otherwise provided in applicable law or regulation, common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the board of directors or of a committee which authorizes the contract or
transaction.

                                   ARTICLE IV

                                   COMMITTEES

     4.1  DESIGNATION. The board of directors may, by resolution adopted by a
majority of the entire board of directors, designate one or more committees.

     4.2  NUMBER; QUALIFICATION; TERM. Each committee shall consist of one or
more directors appointed by resolution adopted by a majority of the entire board
of directors. The number of committee members may be increased or decreased from
time to time by resolution adopted by a majority of the entire board of
directors. Each committee member shall serve as such until the earliest of (i)
the expiration of his term as director, (ii) his resignation as a committee
member or as a director, or (iii) his death or

                                       13



removal as a committee member or as a director. A committee member may resign
from such committee as provided in Section 9.6 hereof.

     4.3  AUTHORITY. Each committee, to the extent expressly provided in the
resolution establishing such committee, shall have and may exercise all of the
authority of the board of directors in the management of the business and
affairs of the Corporation and may authorize the seal of the Corporation to be
affixed to all papers which may require it except to the extent expressly
restricted by law, the Certificate of Incorporation, or these bylaws.
Notwithstanding the foregoing, no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation under Sections 251, 252, 254, 255, 256,
257, 258, 263 or 264 of the DGCL, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or adopting, amending or repealing the bylaws of
the Corporation. Notwithstanding the foregoing, a committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the board of directors as provided in subsection (a) of
Section 151 of the DGCL, fix the designations, preferences, and relative,
participating, optional or other special rights, and qualifications,
limitations, or restrictions of such shares, including, without limitation, as
to dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series.
Unless a resolution of the board, the Certificate of Incorporation or any
provision of these bylaws expressly so provides, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock or to adopt a certificate of ownership and merger pursuant to Section 253
of the DGCL.

     4.4  COMMITTEE CHANGES. The board of directors shall have the power at any
time to fill vacancies in, to change the membership of, and to discharge any
committee.

     4.5  ALTERNATE MEMBERS OF COMMITTEES. The board of directors may designate
one or more directors as alternate members of any committee. Any such alternate
member may replace any absent or disqualified member at any meeting of the
committee. If no alternate committee members have been so appointed to a
committee or each such alternate committee member is absent or disqualified, the
member or members of such committee present at any meeting and not disqualified
from voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the board of directors to act at the meeting in the
place of any such absent or disqualified member.

     4.6  REGULAR MEETINGS. Regular meetings of any committee may be held
without notice at such time and place as may be designated from time to time by
the committee and communicated to all members thereof.

                                       14



     4.7  SPECIAL MEETINGS. Special meetings of any committee may be held
whenever called by any committee member. The committee member calling any
special meeting shall cause notice of such special meeting, including therein
the time and place of such special meeting, to be given to each committee member
at least 24 hours before such special meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting of any committee need be
specified in the notice or waiver of notice of any special meeting.

     4.8  QUORUM; MAJORITY VOTE. At meetings of any committee, a majority of the
number of members designated by the board of directors shall constitute a quorum
for the transaction of business. If a quorum is not present at a meeting of any
committee, a majority of the members present may adjourn the meeting from time
to time, without notice other than an announcement at the meeting, until a
quorum is present. The act of a majority of the members present at any meeting
at which a quorum is in attendance shall be the act of a committee, unless the
act of a greater number is required by law, the Certificate of Incorporation, or
these bylaws.

     4.9  MINUTES. Each committee shall cause minutes of its proceedings to be
prepared and shall report the same to the board of directors upon the request of
the board of directors. The minutes of the proceedings of each committee shall
be delivered to the Secretary of the Corporation for placement in the minute
books of the Corporation.

     4.10 RESPONSIBILITY. The designation of any committee and the delegation of
authority to it shall not operate to relieve the board of directors or any
director of any responsibility imposed upon it or such director by law.

     4.11 ACTION TELEPHONICALLY OR WITHOUT MEETING. Committee members may act by
telephonic or other communications equipment or by written consent as provided
in Sections 3.17 and 3.18 hereof.

                                    ARTICLE V

                                     NOTICE

     5.1  METHOD. Whenever by statute, the Certificate of Incorporation, or
these bylaws, notice is required to be given to any committee member, director,
or stockholder and no provision is made as to how such notice shall be given,
personal notice shall not be required and any such notice may be given (a) in
writing, by mail, postage prepaid, addressed to such committee member, director,
or stockholder at his address as it appears on the books or (in the case of a
stockholder) the stock transfer records of the Corporation, or (b) by any other
method permitted by law (including but not limited to electronic transmission
(as defined in Section 2.4(d)) or overnight courier service). Any notice
required or permitted to be given by mail shall be deemed to be delivered and
given at the time when the same is deposited in the United States mail as
aforesaid. Any notice required or permitted to be given by overnight courier
service shall be deemed to

                                       15



be delivered and given at the time delivered to such service with all charges
prepaid and addressed as aforesaid. Any notice required or permitted to be given
by electronic transmission shall be deemed to be delivered and given at the time
transmitted with all charges prepaid and addressed as aforesaid.

     5.2  WAIVER. Whenever any notice is required to be given to any
stockholder, director, or committee member of the Corporation by statute, the
Certificate of Incorporation, or these bylaws, a waiver thereof in writing
signed by the person or persons entitled to such notice, or a waiver by
electronic transmission (as defined in Section 2.4(d)) by the person entitled to
notice, whether before or after the time stated therein, shall be equivalent to
the giving of such notice. Attendance of a stockholder, director, or committee
member at a meeting shall constitute a waiver of notice of such meeting, except
where such person attends for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.

                                   ARTICLE VI

                                    OFFICERS

     6.1  NUMBER; TITLES; TERM OF OFFICE. The officers of the Corporation shall
be a President, a Secretary, a Treasurer, and such other officers as the board
of directors may from time to time elect. Elected officers may include, without
limitation, one or more Vice Presidents, Senior Vice Presidents or Executive
Vice Presidents. Unless any such officer's title is expressly set forth below,
such officer shall have such descriptive title as the board of directors shall
determine. Unless a description of such officer's services is expressly set
forth below, such officer shall perform such services as requested by the board
of directors or the President. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified, until his
death, or until he shall resign or shall have been removed in the manner
hereinafter provided. Any two or more offices may be held by the same person.
None of the officers need be a stockholder or a director of the Corporation or a
resident of the State of Delaware.

     6.2  REMOVAL; RESIGNATION. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interest of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer shall not of itself create contract
rights. The chief executive officer, or, in the absence of a chief executive
officer, the President, may suspend the powers, authority, responsibilities and
compensation of any elected officer or appointed subordinate officer for a
period of time sufficient to permit the board or the appropriate committee of
the board a reasonable opportunity to consider and act upon a resolution
relating to the reinstatement, further suspension or removal of such person. In
addition, an officer may resign from office as provided in Section 9.6 hereof.

                                       16



     6.3  VACANCIES. Any vacancy occurring in any office of the Corporation (by
death, resignation, removal, or otherwise) may be filled by the board of
directors, a committee of the board of directors, and/or the chief executive
officer (or, in the absence of such officer, the President) in the same manner
as provided in the election or appointment of such person.

     6.4  AUTHORITY. Officers shall have such authority and perform such duties
in the management of the Corporation as are provided in these bylaws or as may
be determined by resolution of the board of directors not inconsistent with
these bylaws.

     6.5  COMPENSATION. The compensation, if any, of officers shall be fixed
from time to time by the board of directors; provided, however, that the board
of directors may delegate the power to determine the compensation of any officer
(other than the officer to whom such power is delegated) to the President and/or
chief executive officer.

     6.6  THE PRESIDENT. The President may be the chief executive officer and/or
the chief operating officer of the Corporation. If so designated as chief
executive officer by the board of directors, he shall have the general direction
of the affairs of the Corporation and, if so designated as chief operating
officer of the Corporation, he shall have the general direction of the
operations of the Corporation. In addition to, or in lieu of, the President
acting as chief executive officer and/or chief operating officer, the President
shall, unless otherwise directed by the board of directors, have general
executive responsibility for the conduct of the business and affairs of the
Corporation and shall assume such other duties as the board of directors may
assign from time to time. The President may sign certificates for shares of the
Corporation, and may sign any policies, deeds, mortgages, bonds, contracts, or
other instruments on behalf of the Corporation, unless the board of directors
has expressly reserved authority to approve any such documents or instruments
for the Board's approval, and except in cases where the signing and execution
thereof shall be expressly delegated by the board of directors or by these
bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed. The President shall appoint and
discharge agents and employees of the Corporation, and in general, shall perform
all duties incident to the office of President. Notwithstanding anything to the
contrary in these bylaws, during occasions that the President is absent, has
vacated his office, or otherwise is unable or refuses to perform the duties of
the President, those duties will be performed by the Vice President (in order of
their seniority as determined by the board of directors, or, in the absence of
such determination, as determined by the length of time they have held the
office of Vice President) until such time as the board of directors either makes
a determination that another person should act in that capacity or elects a new
President. Under no circumstances shall the President serve as Chairman of the
corporation.

     6.7  THE VICE PRESIDENTS. The Vice Presidents, including any Executive Vice
President or Senior Vice President, shall perform such duties and have such
powers as the board of directors or the President may from time to time
prescribe.

                                       17



     6.8  THE SECRETARY. Except as otherwise provided in the Certificate of
Incorporation or these bylaws, the Secretary shall attend all meetings of the
board of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the Corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required; shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the board of directors;
shall perform such other duties as may be prescribed by the board of directors
or the President; and shall keep in safe custody the corporate seal of the
Corporation and when authorized by the board of directors, shall affix the same
to any instrument requiring it and when so affixed, it shall be attested by the
signature of the Secretary or by the signature of an Assistant Secretary.

     6.9  ASSISTANT SECRETARIES. The Assistant Secretaries in the order of their
seniority shall, in the event that the Secretary is absent, or has vacated his
office, or is unable or unwilling to act, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the board of directors or the President may from time to time
prescribe.

     6.10 THE TREASURER. The Treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the board of directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the board of
directors taking proper vouchers for such disbursements, and shall render to the
President and the board of directors, at its regular meetings or when the
President or board of directors so requires, an account of all transactions of
the Corporation performed under his supervision as Treasurer. The Treasurer
shall perform such other duties as may be prescribed by the board of directors
or the President.

     6.11 SUBORDINATE OFFICERS; DELEGATED AUTHORITY TO APPOINT SUBORDINATE
OFFICERS. In addition to officers elected by the board of directors, the board
of directors may from time to time appoint one or more vice presidents
(including any executive and/or senior vice presidents), assistant vice
presidents, assistant secretaries, assistant treasurers, assistant comptrollers,
and such other subordinate officers as the board of directors may deem
advisable. The board of directors may grant to any committee of the board, the
chief executive officer, or, in the absence of a chief executive officer, the
President, the power and authority to appoint such subordinate officers and to
prescribe their respective terms of office, powers, authority and
responsibilities. Each subordinate officer shall hold his position at the
pleasure of the board of directors, the committee of the board appointing him,
the chief executive officer, the President and any other officer to whom such
subordinate officer reports.

                                       18



     6.12 BOND. If required by the board of directors, the Treasurer and any
other officer identified by the board of directors shall give the Corporation a
bond (which shall be renewed as required from time to time) or such other
security as the board may request in such sum and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful performance
of the duties of the office and for the restoration to the Corporation, in case
of the death, resignation, retirement or removal from office of the Treasurer,
of all books, papers, vouchers, money and other property of whatever kind in the
possession or under the control of the Treasurer belonging to the Corporation.

     6.13 ASSISTANT TREASURERS. The Assistant Treasurers, in the order of their
seniority, unless otherwise determined by the board of directors, shall in the
event the Treasurer is absent, or has vacated his office, or is unable or
refuses to act, perform the duties and exercise the powers of the Treasurer.
They shall perform such other duties and have such other powers as the board of
directors or the President may from time to time prescribe.

                                   ARTICLE VII

                          CERTIFICATES AND STOCKHOLDERS

     7.1  CERTIFICATES FOR SHARES. Certificates for shares of stock of the
Corporation shall be in such form as shall be approved by the board of
directors. The certificates shall be signed by any authorized officer of the
Corporation. Any and all signatures on the certificate may be a facsimile and
may be affixed or imprinted with the seal of the Corporation or a facsimile
thereof. If any officer, transfer agent, or registrar who has signed, or whose
facsimile signature has been placed upon, a certificate has ceased to be such
officer, transfer agent, or registrar before such certificate is issued, such
certificate may be issued by the Corporation with the same effect as if he were
such officer, transfer agent, or registrar at the date of issue. The
certificates shall be consecutively numbered and shall be entered in the books
of the Corporation (which shall include the books of any transfer agent
appointed by the board of directors) as they are issued and shall exhibit the
registered owner's name and the number of shares.

     7.2  REPLACEMENT OF LOST OR DESTROYED CERTIFICATES. The Corporation may
direct the issuance of a new certificate or certificates to be issued in place
of a certificate or certificates theretofore issued by the Corporation and
alleged to have been lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate or certificates representing shares
to be lost or destroyed. In addition, the Corporation may, in its discretion and
as a condition precedent to the issuance thereof, require the owner of such lost
or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond with a surety or sureties satisfactory to the Corporation in
such sum as it may direct as indemnity against any claim, or expense resulting
from a claim, that

                                       19



may be made against the Corporation with respect to the certificate or
certificates alleged to have been lost or destroyed.

     7.3  TRANSFER OF SHARES. Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized attorneys or legal representatives. Upon
surrender to the Corporation or the transfer agent of the Corporation of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment, or authority to transfer, the Corporation or its
transfer agent shall issue a new certificate to the person entitled thereto,
cancel the old certificate, and record the transaction upon its books.
Notwithstanding the foregoing, no new certificate shall be issued unless and
until the surrendering stockholder provides a written opinion of counsel
reasonably acceptable to the Corporation or other evidence acceptable to the
Corporation of compliance with all applicable federal, state and foreign
securities laws.

     7.4  REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by law.

     7.5  REGULATIONS. The board of directors shall have the power and authority
to make all such rules and regulations as they may deem expedient concerning the
issue, transfer, and registration or the replacement of certificates for shares
of stock of the Corporation, including compliance with applicable law.

     7.6  LEGENDS. The Corporation shall have the power and authority to provide
that certificates representing shares of stock bear such legends as the
Corporation deems appropriate to assure that the Corporation does not become
liable for violations of federal or state securities laws or other applicable
law.

                                  ARTICLE VIII

                                 INDEMNIFICATION

    8.1   RIGHT TO INDEMNIFICATION OF DIRECTORS AND OFFICERS. Subject to the
other provisions of this article, the Corporation shall indemnify and advance
expenses to every director and officer (and to such person's heirs, executors,
administrators or other legal representatives) in the manner and to the full
extent permitted by applicable law as it presently exists, or may hereafter be
amended, against any and all amounts (including, but not limited to, judgments,
fines, payments in settlements, costs of investigation, attorneys' fees and
other expenses) reasonably incurred by or on behalf of such person in connection
with any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "PROCEEDING"), in which such
director or officer was or is made or is threatened to be made a party or is
otherwise involved by

                                       20



reason of the fact that such person is or was a director or officer of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or member of any other corporation,
partnership, joint venture, trust, organization or other enterprise. The
Corporation shall not be required to indemnify a person in connection with a
Proceeding initiated by such person if the Proceeding was not authorized by the
board of directors of the Corporation.

     8.2  ADVANCEMENT OF EXPENSES OF DIRECTORS AND OFFICERS. The Corporation
shall pay the expenses of directors and officers incurred in defending any
Proceeding in advance of its final disposition ("ADVANCEMENT OF EXPENSES");
provided, however, that the payment of expenses incurred by a director or
officer in advance of the final disposition of the Proceeding shall be made only
upon receipt of an undertaking by the director or officer to repay all amounts
advanced if it should be ultimately determined that the director or officer is
not entitled to be indemnified under this article or otherwise; provided, that
no bond or other security shall be required to secure such undertaking.

     8.3  CLAIMS BY OFFICERS OR DIRECTORS. If a claim for indemnification or
Advancement of Expenses by an officer or director under this article is not paid
in full within ninety days after a written claim therefor has been received by
the Corporation, the claimant may file suit to recover the unpaid amount of such
claim and, if successful in whole or in part, shall be entitled to be paid the
expense of prosecuting such claim. In any such action the Corporation shall have
the burden of proving that the claimant was not entitled to the requested
indemnification or Advancement of Expenses under applicable law.

     8.4  INDEMNIFICATION OF EMPLOYEES. Subject to the other provisions of this
article, the Corporation may indemnify and advance expenses to every employee
who is not a director or officer (and to such person's heirs, executors,
administrators or other legal representatives) in the manner and to the full
extent permitted by applicable law as it presently exists, or may hereafter be
amended, against any and all amounts (including judgments, fines, payments in
settlement, costs of investigation, attorneys' fees and other expenses)
reasonably incurred by or on behalf of such person in connection with any
threatened, pending or completed action, suit or Proceeding in which such
employee was or is made or is threatened to be made a party or is otherwise
involved by reason of the fact that such person is or was an employee of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or member of any other corporation,
partnership, joint venture, trust, organization or other enterprise. The
ultimate determination of entitlement to indemnification of employees who are
not officers and directors shall be made in such manner as is provided by
applicable law. The Corporation shall not be required to indemnify a person in
connection with a Proceeding initiated by such person if the Proceeding was not
authorized by the board of directors of the Corporation.

                                       21



     8.5  ADVANCEMENT OF EXPENSES OF EMPLOYEES. The advancement of expenses of
an employee who is not an officer or director shall be made by or in the manner
provided by resolution of the board of directors or by a committee of the board
of directors of the Corporation.

     8.6  NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by this
Article VIII shall not be exclusive of any other rights which such person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, these bylaws, agreement, vote of stockholders or disinterested
directors or otherwise.

     8.7  OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director, officer
or employee of another corporation, partnership, joint venture, trust,
organization or other enterprise shall be reduced by any amount such person may
collect as indemnification from such other corporation, partnership, joint
venture, trust, organization or other enterprise.

     8.8  INSURANCE. The board of directors may, to the full extent permitted by
applicable law as it presently exists, or may hereafter be amended from time to
time, authorize an appropriate officer or officers to purchase and maintain at
the Corporation's expense insurance: (i) to indemnify the Corporation for any
obligation which it incurs as a result of the indemnification of directors,
officers, and employees under the provisions of this Article VIII; and (ii) to
indemnify or insure directors, officers and employees against liability in
instances in which they may not otherwise be indemnified by the Corporation
under the provisions of this Article VIII.

     8.9  AMENDMENT OR REPEAL. Any repeal or modification of the foregoing
provisions of this Article VIII shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.

                                   ARTICLE IX

                            MISCELLANEOUS PROVISIONS

     9.1  DIVIDENDS. Subject to provisions of law and the Certificate of
Incorporation, dividends may be declared by the board of directors at any
regular or special meeting and may be paid in cash, in property, or in shares of
stock of the Corporation. Such declaration and payment shall be at the
discretion of the board of directors and in compliance with the DGCL.

     9.2  RESERVES. There may be created by the board of directors out of funds
of the Corporation legally available therefor such reserve or reserves as the
directors from time to time, in their discretion, consider proper to provide for
contingencies, to equalize dividends, or to repair or maintain any property of
the Corporation, or for such other purpose as the board of directors shall
consider beneficial to the Corporation, and the

                                       22



board of directors may modify or abolish any such reserve in the manner in which
it was created.

     9.3  BOOKS AND RECORDS. The Corporation shall keep correct and complete
books and records of account, shall keep minutes of the proceedings of its
stockholders and board of directors and shall keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.

     9.4  FISCAL YEAR. The fiscal year of the Corporation shall end on December
31 of each year, provided that the fiscal year may be changed from time to time
by resolution of the board of directors.

     9.5  SEAL. The corporate seal shall have inscribed thereon the name of the
Corporation and the words "Corporate Seal Delaware." The seal of the Corporation
may be changed from time to time by the board of directors. The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or otherwise
reproduced.

     9.6  RESIGNATIONS. Any director or committee member may resign by giving
notice in writing or by electronic transmission to the board of directors, the
Chairman, the President, or the Secretary. Any officer may resign by giving
written notice to the board of directors, the Chairman, the President or the
Secretary. Such resignation shall take effect at the time specified therein or,
if no time is specified therein, immediately upon its receipt. Unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.

     9.7  SECURITIES OF OTHER CORPORATIONS. The President or any Vice President
(including any Executive or Senior Vice President) of the Corporation shall have
the power and authority to transfer, endorse for transfer, vote, consent, or
take any other action with respect to any securities of another issuer which may
be held or owned by the Corporation and to make, execute, and deliver any
waiver, proxy, or consent with respect to any such securities.

     9.8 INVALID PROVISIONS. If any part of these bylaws shall be held invalid
or inoperative for any reason, the remaining parts, so far as it is possible and
reasonable, shall remain valid and operative.

     9.9  MORTGAGES, ETC. With respect to any deed, deed of trust, mortgage, or
other instrument executed by the Corporation through its duly authorized officer
or officers, the attestation to such execution by the Secretary of the
Corporation shall not be necessary to constitute such deed, deed of trust,
mortgage, or other instrument a valid and binding obligation against the
Corporation unless the resolutions, if any, of the board of directors
authorizing such execution expressly state that such attestation is necessary.

                                       23



     9.10 CHECKS. All checks or demands for money and notes of the Corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.

     9.11 HEADINGS. The headings used in these bylaws have been inserted for
administrative convenience only and do not constitute matter to be construed in
interpretation.

     9.12 REFERENCES. Whenever herein the singular number is used, the same
shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.

     9.13 AMENDMENTS. Subject to the provisions of the Certificate of
Incorporation, these bylaws may be altered, amended or repealed at any regular
meeting of the stockholders (or at any special meeting thereof duly called for
that purpose) by a majority vote of the shares represented and entitled to vote
at such meeting; provided that in the notice of such special meeting notice of
such purpose shall be given. Subject to the laws of the State of Delaware, the
Certificate of Incorporation and these bylaws, the board of directors may by
majority vote of those present at any meeting at which a quorum is present
alter, amend or repeal these bylaws, or enact such other bylaws as in their
judgment may be advisable for the regulation of the conduct of the affairs of
the Corporation.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       24



          The undersigned, being the Secretary of the Corporation, hereby
certifies that the foregoing bylaws were amended and restated by the board of
directors of the Corporation as of March 19, 2002.


                                                 ------------------------------
                                                 Deidra D. Gold, Secretary

                                       25

EX-3.4

                                                                   EXHIBIT 3.4

                              RESTATED AND AMENDED

                                     BY-LAWS
                                       OF
                          UNITED STATIONERS SUPPLY CO.

                                 AUGUST 30, 2001

                                TABLE OF CONTENTS

                                                                            
ARTICLE I.       OFFICES                                                       3

ARTICLE II.      SHAREHOLDERS                                                  3

     Section 1.  Annual Meeting                                                3
     Section 2.  Special Meetings                                              3
     Section 3.  Place of Meeting                                              3
     Section 4.  Notice of Meetings                                            4
     Section 5.  Meeting of All Shareholders                                   4
     Section 6.  Closing of Transfer Books or Fixing of Record Date            4
     Section 7.  Voting Lists                                                  4
     Section 8.  Quorum                                                        5
     Section 9.  Proxies                                                       5
     Section 10. Voting of Shares                                              5
     Section 11. Voting of Shares By Certain Holders                           5
     Section 12. Cumulative Voting                                             6
     Section 13. Informal Action By Shareholders                               6
     Section 14. Voting By Ballot                                              6

ARTICLE III.     DIRECTORS                                                     6

     Section 1.  General Powers                                                6
     Section 2.  Number, Tenure, and Qualifications                            6
     Section 3.  Regular Meetings                                              6
     Section 4.  Special Meetings                                              6
     Section 5.  Notice                                                        7
     Section 6.  Quorum                                                        7





                                                                           
     Section 7.  Manner of Acting                                              7
     Section 8.  Vacancies                                                     7
     Section 9.  Compensation                                                  7
     Section 10. Presumption of Assent                                         7
     Section 11. Communications Equipment Constituting Presence                8

ARTICLE IV.      COMMITTEES OF DIRECTORS                                       8

     Section 12. Designation of Committees                                     8
     Section 13. Committee Minutes                                             8

ARTICLE V.       OFFICERS                                                      9

     Section 1.  Number and Title                                              9
     Section 2.  Election and Term of Office                                   9
     Section 3.  Removal                                                       9
     Section 4.  Vacancies                                                     9
     Section 5.  The Chairman of the Board of Directors                        9
     Section 5a. The Vice Chairman of the Board                                9
     Section 6.  President                                                    10
     Section 7.  The Vice-Presidents                                          10
     Section 8.  The Treasurer                                                10
     Section 9.  The Secretary                                                10
     Section 10. Assistant Treasurers and Assistant Secretaries               11
     Section 11. Salaries                                                     11

ARTICLE VI.      CONTRACTS, LOANS, CHECKS, AND DEPOSITS                       11

     Section 1.  Contracts                                                    11
     Section 2.  Loans                                                        11
     Section 3.  Checks, Drafts, Etc.                                         11
     Section 4.  Deposits                                                     12



                                       2


                                                                           
ARTICLE VII.     CERTIFICATES FOR SHARES AND THEIR TRANSFER                   12

     Section 1.  Certificates For Shares                                      12
     Section 2.  Transfers of Shares                                          12

ARTICLE VIII.    FISCAL YEAR                                                  12

ARTICLE IX.      DIVIDENDS                                                    12

ARTICLE X.       SEAL                                                         13

ARTICLE XI.      WAIVER OF NOTICE                                             13

ARTICLE XII.     AMENDMENTS                                                   13

ARTICLE XIII.    INDEMNIFICATION                                              13



                                   ARTICLE I.

                                     OFFICES

     The principal office of the corporation in the State of Illinois shall be
located in the Chicago Metropolitan area. The corporation may have such other
offices, either within or without the State of Illinois, as the business of the
corporation may require from time to time.

     The registered office of the corporation required by The Business
Corporation Act to be maintained in the State of Illinois may be identical with
the principal office in the State of Illinois, and the address of the registered
office may be changed from time to time by the board of directors.

                                        3


                                   ARTICLE II.

                                  SHAREHOLDERS

     SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders shall be
held in May, in each year, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday, such meeting shall be
held on the next succeeding business day. If the election of directors shall not
be held on the day designated herein for any annual meeting, or at any
adjournment thereof, the board of directors shall cause the election to be held
at a meeting of the shareholders as soon thereafter as conveniently may be.

     SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders may be
called by the chairman of the board, president, by the board of directors or by
the holders of not less than one-fifth of all the outstanding shares of the
corporation.

     SECTION 3. PLACE OF MEETING. The board of directors may designate any
place, either within or without the State of Illinois, as the place of meeting
for any annual meeting or for any special meeting called by the board of
directors. A waiver of notice signed by a majority of the board of directors may
designate any place, either within or without the State of Illinois, as the
place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the
registered office of the corporation in the State of Illinois, except as
otherwise provided in Section 5 of this article.

     SECTION 4. NOTICE OF MEETINGS. Written or printed notice stating the place,
day and hour of the meeting, and in the case of a special meeting, the purpose
or purposes for which the meeting is called, or in the case of a merger or
consolidation not less than twenty nor more than forty days before the meeting,
either personally or by mail, by or at the direction of the chairman of the
board, president, or the secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail, addressed to the shareholder at his address as it appears on the
records of the corporation, with postage thereon prepaid.

     SECTION 5. MEETING 0F ALL SHAREHOLDERS. If all of the shareholders shall
meet at any time and place, either within or without the State of Illinois, and
consent to the holding of a meeting at such time and place,

                                       4


such meeting shall be valid without call or notice, and at such meeting any
corporate action may be taken.

     SECTION 6. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the board of directors of the corporation may provide that the
share transfer books shall be closed for a stated period but not to exceed, in
any case, sixty days. If the share transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least ten days, or in
the case of a merger or consolidation, at least twenty days, immediately
preceding such meeting. In lieu of closing the share transfer books, the board
of directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than sixty
days and, for a meeting of shareholders, not less than ten days, or in the case
of a merger or consolidation not less than twenty days, immediately preceding
such meeting. If the share transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of or to vote at
a meeting of shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on which
the resolution of the board of directors declaring such dividend is adopted, as
the case may be, shall be the record date for such determination of
shareholders.

     When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof.

     SECTION 7. VOTING LISTS. The officer or agent having charge of the transfer
books for shares of the corporation shall made, at least ten days before each
meeting of share-holders, a complete list of the shareholders entitled to vote
at such meeting, arranged in alphabetical order, with the address of and the
number of shares held by each, which list, for a period of ten days prior to
such meeting, shall be kept on file at the registered office of the corporation
and shall be subject to inspection by any shareholder at any time during usual
business hours. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original share ledger or transfer
book, or a duplicate thereof kept in this State, shall be prima facie evidence
as to who are the shareholders entitled to examine such list or share ledger or
transfer book or to vote at any meeting of shareholders.

     SECTION 8. QUORUM. A majority of the outstanding shares of the corporation,
represented in person or by proxy, shall constitute a quorum at any

                                       5


meeting of shareholders; provided, that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. If
a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting shall be the act of the shareholders, unless the vote
of a greater number or voting by classes is required by The Business Corporation
Act, the articles of incorporation or these by-laws.

     SECTION 9. PROXIES. At all meetings of shareholders, a shareholder may vote
by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy.

     SECTION 10. VOTING OF SHARES. Subject to the provisions of Section 12 of
this article, each outstanding share, regardless of class, shall be entitled to
one vote upon each matter submitted to vote at a meeting of shareholders.

     SECTION 11. VOTING 0F SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as the by-laws of such corporation may prescribe, or, in the
absence of such provision, as the board of directors of such corporation may
determine.

     Shares standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy. Shares standing in the
name of a guardian, conservator, or trustee may be voted by such fiduciary,
either in person or by proxy, but not guardian, conservator, or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a transfer of
such shares into his name.

     Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.

     A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

     Shares of its own stock belonging to this corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any given time, but shares of its own

                                       6


stock held by it in a fiduciary capacity may be voted and shall be counted in
determining the total number of outstanding shares at any given time.

     SECTION 12. CUMULATIVE VOTING. In all elections for directors, every
shareholder shall have the right to vote, in person or by proxy, the number of
shares owned by him, for as many persons as there are directors to be elected,
or to cumulate said shares, and give one candidate as many votes as the number
of directors multiplied by the number of his shares shall equal, or to
distribute them on the same principle among as many candidates as he shall see
fit.

     SECTION 13. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action to taken, shall be signed by all of the
shareholders entitled to vote with respect to the subject matter thereof.

     SECTION 14. VOTING BY BALLOT. Voting on any question or in any election may
be viva voce unless the presiding officer shall order or any shareholder shall
demand that voting be by ballot.

                                  ARTICLE III.

                                    DIRECTORS

     SECTION 1. GENERAL POWERS. The business and affairs of the corporation
shall be managed by its board of directors.

     SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors of
the corporation shall be one or more. Each director shall hold office until the
next annual meeting of shareholders or until his successor shall have been
elected and qualified. Directors need not be residents of Illinois or
shareholders of the corporation.

     SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held without other notice than this by-law, immediately after, and at
the same place as, the annual meeting of shareholders. The board of directors
may provide, by resolution, the time and place, either within or without the
State of Illinois, for the holding of additional regular meetings without other
notice than such resolution.

     SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors may
be called by or at the request of the president or any two directors. The person
or persons authorized to call special meetings of the board of directors may fix
any place, either within or without the State of Illinois, as the place for
holding any special meeting of the board of directors called by them.

                                       7


     SECTION 5. NOTICE. Notice of any special meeting shall be given at least
five (5) days previously thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail
so addressed, with postage thereon prepaid. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. Any director may waive notice of any meeting. The attendance
of a director at any meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.

     SECTION 6. QUORUM. A majority of the number of directors fixed by these
by-laws shall constitute a quorum for transaction of business at any meeting of
the board of directors, provided, that if less than a majority of such number of
directors are present at said meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.

     SECTION 7. MANNER 0F ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors.

     SECTION 8. VACANCIES. Any vacancy occurring in the board of directors and
any directorship to be filled by reason of an increase in the number of
directors, may be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose.

     SECTION 9. COMPENSATION. The board of directors, by the affirmative vote of
a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers or otherwise. By resolution of the board of directors the directors may
be paid their expenses, if any, of attendance at each meeting of the board.

     SECTION 10. PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the board of directors at which action on any corporate
matter is taken shall be conclusively presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the secretary of the corporation

                                       8


immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.

     SECTION 11. COMMUNICATIONS EQUIPMENT CONSTITUTING PRESENCE. Unless
otherwise restricted by the articles of incorporation or these by-laws, members
of the board of directors, or any committee designated by the board of
directors, may participate in a meeting of the board of directors, or any
committee, by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and such participation in a meeting shall constitute presence in person at the
meeting.

                                   ARTICLE IV.

                             COMMITTEES OF DIRECTORS

     SECTION 12. DESIGNATION OF COMMITTEES. The board of directors may, by
resolution passed by a majority of the whole board of directors, designate one
or more committees, each committee to consist of two or more of the directors of
the corporation. The board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee.

     In the absence or disqualification of any member of a committee or
committees or in the event that any such member is unable or refuses to act, the
member of members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such member.

     Any such committee, to the extent provided in the resolution of the board
of directors, shall have and may exercise all the powers and authority of the
board of directors in the management of the business and affairs of the
corporation and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provides,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the

                                       9


board of directors.

     SECTION 13. COMMITTEE MINUTES. Each committee shall keep regular minutes of
its proceedings and report the same to the board of directors when required.

                                   ARTICLE V.

                                    OFFICERS

     SECTION 1. NUMBER AND TITLE. The officers of the corporation shall be
chosen by the board of directors and shall be a chairman of the board, a
president, a vice president, a secretary and a treasurer. The board of directors
may also choose a vice chairman of the board, additional vice presidents and one
or more assistant secretaries and assistant treasurers. Any two or more offices
may be held by the same person.

     SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the corporation
shall be elected annually by the board of directors at the first meeting of the
board of directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices filled at any meeting of the board of directors. Each officer shall hold
office until his successor shall have been duly elected and shall have qualified
or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Election or appointment of an officer or agent
shall not of itself create contract rights.

     SECTION 3. REMOVAL. Any officer or agent elected or appointed by the board
of directors may be removed by the board of directors whenever in its judgment
the best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.

     SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term.

     SECTION 5. THE CHAIRMAN OF THE BOARD OF DIRECTORS. The chairman of the
board may be the chief executive officer of the corporation and, if so
designated by the board of directors, shall have the general direction of the

                                       10


affairs of the corporation, except as otherwise prescribed by the board of
directors. The chairman shall preside at all meetings of the shareholders, of
the board of directors and of the executive committee, if any, and shall
designate the acting secretary for such meetings to take the minutes thereof for
delivery to the secretary. The chairman may execute contracts in the name of the
corporation and appoint and discharge agents and employees of the corporation;
and shall be ex-officio a member of all committees.

     Section 5A. THE VICE CHAIRMAN OF THE BOARD. The vice chairman of the board
may be the chief executive officer of the corporation and, if so designated by
the board of directors, shall have the general direction of the affairs of the
corporation, except as otherwise prescribed by the board of directors. The vice
chairman shall in the event that the chairman of the board is absent or has
allowed the office of chairman of the board to be vacated, or is unable or
refuses to act, perform the duties of the chairman of the board. The vice
chairman may execute contracts in the name of the corporation and appoint and
discharge agents and employees of the corporation and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe. The vice chairman shall be ex-officio a member of all
committees.

     SECTION 6. PRESIDENT. The president shall be the chief operating officer of
the corporation, and as such shall direct the operations of the corporation. The
president shall assume such other duties as the board of directors may assign
from time to time. In the event that the chairman of the board and the vice
chairman of the board each are one of the following: absent, or has allowed the
office of chairman or vice chairman to be vacated, or is unable or refuses to
act; the president shall perform all duties and functions of the chairman of the
board. The president may sign, with the secretary, assistant secretary,
treasurer or assistant treasurer, certificates for shares of the corporation,
and may sign any policies, deeds, mortgages, bonds, contracts, or other
instruments which the board of directors have authorized to be executed except
in cases where the signing and execution thereof shall be expressly delegated by
the board of directors or by these by-laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or executed;
appoint and discharge agents and employees of the corporation, and in general,
shall perform all duties incident to the office of president. The president
shall be ex-officio a member of all committees.

     SECTION 7. THE VICE-PRESIDENTS. In the absence of the president or in the
event of his inability or refusal to act, the vice-president (or in the event
there be more than one vice-president, the vice-presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president.

                                       11


Any vice-president may sign, with the secretary or an assistant secretary,
certificates for shares of the corporation; and shall perform such other duties
as from time to time may be assigned to him by the president or by the board of
directors.

     SECTION 8. THE TREASURER. If required by the board of directors, the
treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the board of directors shall determine. He
shall: (a) have charge and custody of and be responsible for all funds and
securities of the corporation; receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, and deposit all such
moneys in the name of the corporation in such banks, trust companies or other
depositories as shall be selected in accordance with the provisions of Article V
of these by-laws; (b) in general perform all the duties incident to the office
of treasurer and such other duties as from time to time may be assigned to him
by the president or by the board of directors.

     SECTION 9. THE SECRETARY. The secretary shall: (a) keep the minutes of the
shareholders' and of the board of directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these by-laws or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation and see that the seal
of the corporation is affixed to all certificates for shares prior to the issue
thereof and to all documents, the execution of which on behalf of the
corporation under its seal is duly authorized in accordance with the provisions
of these by-laws; (d) keep a register of the post-office address of each
shareholder which shall be furnished to the secretary by such shareholder; (e)
sign with the president, or a vice-president, certificates for shares of the
corporation, the issue of which shall have been authorized by resolution of the
board of directors; (f) have general charge of the stock transfer books of the
corporation; (g) in general perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to him by
the president or by the board of directors.

     SECTION 10. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The assistant
treasurers shall respectively, if required by the board of directors, give bonds
for the faithful discharge of their duties in such sums and with such sureties
as the board of directors shall determine. The assistant secretaries as
thereunto authorized by the board of directors may sign with the president or a
vice-president certificates for shares of the corporation, the issue of which
shall have been authorized by a resolution of the board of directors. The
assistant treasurers and assistant secretaries, in general, shall perform such
duties as shall be assigned to them by the treasurer or the secretary,
respectively, or by the president or the board of directors.

                                       12


     SECTION 11. SALARIES. The salaries of the officers shall be fixed from time
to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.

                                   ARTICLE VI.

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

     SECTION 1. CONTRACTS. The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.

     SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the board of directors. Such authority may be general or
confined to specific instances.

     SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation and in such manner as shall from time to time be determined by
resolution of the board of directors.

     SECTION 4. DEPOSITS. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositaries as the board of directors may
select.

                                  ARTICLE VII.

                   CERTIFICATES FOR SHARES AND THEIR TRANSFER

     SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of the
corporation shall be in such form as may be determined by the board of
directors. Such certificates shall be signed by the president and by the
secretary or an assistant secretary and shall be sealed with the seal of the
corporation. All certificates for shares shall be consecutively numbered or
otherwise identified. The name of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have been

                                       13


surrendered and canceled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and indemnity to
the corporation as the board of directors may prescribe.

     SECTION 2. TRANSFERS OF SHARES. Transfers of shares of the corporation
shall be made only on the books of the corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed the
owner thereof for all purposes as regards the corporation.

                                  ARTICLE VIII.

                                   FISCAL YEAR

     The fiscal year of the corporation shall end on December 31 in each year,
commencing with the first taxable year beginning after the corporation's 1986
fiscal year.

                                   ARTICLE IX.

                                    DIVIDENDS

     The board of directors may from time to time, declare, and the corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles of Incorporation.

                                   ARTICLE X.

                                      SEAL

     The board of directors shall provide a corporate seal which shall be in the
form of a circle and shall have inscribed thereon the name of the corporation
and the words "Corporate Seal, Illinois."

                                       14


                                   ARTICLE XI.

                                WAIVER OF NOTICE

     Whenever any notice whatever is required to be given under the provisions
of these by-laws or under the provisions of the Articles of Incorporation or
under the provisions of The Business Corporation Act of the State of Illinois, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.

                                  ARTICLE XII.

                                   AMENDMENTS

     These by-laws may be altered, amended or repealed and new by-laws may be
adopted at any meeting of the board of directors of the corporation by a
majority vote of the directors present at the meeting.

                                  ARTICLE XIII.

                                 INDEMNIFICATION

     SECTION 1. The corporation shall indemnify any person who was or is a
party, or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or who is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding, if he acted
in good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

     SECTION 2. The corporation shall indemnify any person who was or is a
party, or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer,

                                       15


employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partner-ship, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted in
good faith and in a manner he reasonably believed to be in, or not opposed to
the best interests of the corporation, and except that no indemnification shall
be made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the performance
of his duty to the corporation, unless, and only to the extent that, the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper.

     SECTION 3. To the extent that a director, officer, employee or agent of the
corporation has been successful, on the merits or otherwise, in the defense of
any action, suit or proceeding referred to in Sections 1 and 2 of this Article
XII, or in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

     SECTION 4. Any indemnification under Sections 1 and 2 of this Article XII
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case, upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Sections 1 or 2 of this Article XII.
Such determination shall be made (1) by the Board of Directors by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the shareholders.

     SECTION 5. Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding, as authorized by the Board of Directors in
the specific case, upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Article.

     SECTION 6. The indemnification provided by this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled under any by-law, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his official capacity and as to
action

                                       16


in another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent, and shall inure to
the benefit of the heirs, executors and administrators of such a person.

     SECTION 7. The corporation may purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the
corporation, or who is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partner-ship, joint
venture, trust or other enterprise, against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this Article.

     SECTION 8. For purposes of this Article, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.

                                       17

EX-4.1

                                                                  Exhibit 4.1
===============================================================================

                                    AGREEMENT

                                 by and between

                             UNITED STATIONERS INC.

                                       and

                                BANKBOSTON, N.A.,

                                 as Rights Agent

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

                                   Dated as of

                                  July 27, 1999

===============================================================================





                                TABLE OF CONTENTS
SECTION                                                                                               PAGE
                                                                                                 
Section 1.        Certain Definitions.................................................................. 2

Section 2.        Appointment of Rights Agent.......................................................... 9

Section 3.        Issuance of Right Certificates.......................................................10

Section 4.        Form of Right Certificates...........................................................13

Section 5.        Countersignature and Registration....................................................13

Section 6.        Transfer, Split Up, Combination and Exchange of Right
                    Certificates; Mutilated, Destroyed, Lost or Stolen Right
                    Certificates.......................................................................14

Section 7.        Exercise of Rights; Exercise Price; Expiration Date of Rights........................16

Section 8.        Cancellation and Destruction of Right Certificates...................................20

Section 9.        Reservation and Availability of Shares of Preferred Stock............................21

Section 10.       Preferred Stock Record Date..........................................................23

Section 11.       Adjustment of Exercise Price or Number of Shares.....................................23

Section 12.       Certification of Adjusted Exercise Price or Number of Shares.........................33

Section 13.       Consolidation, Merger or Sale or Transfer of Assets or Earning

                    Power..............................................................................34

Section 14.       Fractional Rights and Fractional Shares..............................................41

Section 15.       Rights of Action.....................................................................42

Section 16.       Agreement of Right Holders...........................................................43

Section 17.       Right Certificate Holder Not Deemed a Stockholder....................................44

Section 18.       Concerning the Rights Agent..........................................................45

Section 19.       Merger or Consolidation of, or Change in Name of, the Rights
                    Agent..............................................................................45

Section 20.       Duties of Rights Agent...............................................................47

Section 21.       Change of Rights Agent...............................................................50

Section 22.       Issuance of New Right Certificates...................................................52

Section 23.       Redemption...........................................................................53

Section 24.       Notice of Proposed Actions...........................................................54

Section 25.       Notices..............................................................................55

Section 26.       Supplements and Amendments...........................................................56

Section 27.       Exchange.............................................................................57


                                       i

                                TABLE OF CONTENTS
                                  (Continued)



SECTION                                                                                                PAGE
                                                                                                 
Section 28.       Successors...........................................................................59

Section 29.       Benefits of this Agreement...........................................................59

Section 30.       Delaware Contract....................................................................60

Section 31.       Counterparts.........................................................................60

Section 32.       Descriptive Headings.................................................................60

Section 33.       Severability.........................................................................60

Section 34.       Determinations and Actions by the Board of Directors.................................60


Exhibit A   --    Summary of Rights

Exhibit B   --    Form of Right Certificate

Exhibit C   --    Form of Certificate of Designations
                  of Series A Junior Preferred Stock


                                       ii




                                    AGREEMENT

     Agreement, dated as of July 27, 1999, by and between United Stationers
Inc., a Delaware corporation (the "Company"), and BANKBOSTON, N.A., a national
banking association (the "Rights Agent").

                              W I T N E S S E T H :

     WHEREAS, on July 27, 1999, the Board of Directors of the Company authorized
the issuance of, and declared a dividend payable in, one right (a "Right") for
each share of Common Stock, $0.10 par value per share, of the Company
outstanding as of the close of business on August 16, 1999 (the "Record Date"),
each such Right representing the right to purchase one one-thousandth of a share
of Series A Junior Preferred Stock of the Company ("Preferred Stock") having the
rights and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit C authorized by the Board of Directors on July 27,
1999, upon the terms and subject to the conditions hereinafter set forth; and

     WHEREAS, the Board of Directors of the Company further authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock which may be issued between the Record Date and the earlier to
occur of the Distribution Date, the Expiration Date or the Final Expiration Date
(as such terms are hereinafter defined); PROVIDED, HOWEVER, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the Expiration Date in accordance with
Section 22.



     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

     Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:

     (a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the Voting Stock (as such term is hereinafter defined) of the Company
then outstanding; provided, that, an Acquiring Person shall not include (i) an
Exempt Person (as such term is hereinafter defined) or (ii) any Person who or
which, together with all Affiliates and Associates of such Person, would be an
Acquiring Person solely by reason of (A) being the Beneficial Owner of shares of
Voting Stock of the Company, the Beneficial Ownership of which was acquired by
such Person (together with all Affiliates and Associates of such Person)
pursuant to any action or transaction or series of related actions or
transactions approved by the Board of Directors before such Person (together
with all Affiliates and Associates of such Person) otherwise became an Acquiring
Person or (B) a reduction in the number of issued and outstanding shares of
Voting Stock of the Company pursuant to a transaction or a series of related
transactions approved by the Board of Directors of the Company; provided,
further, that in the event such Person described in this clause (ii) does not
become an Acquiring Person by reason of subclause (A) or (B) of this clause
(ii), such Person nonetheless shall become an Acquiring Person in the event such
Person (together with all Affiliates and Associates of such Person) thereafter
acquires Beneficial Ownership

                                       2


of an additional 1% of the Voting Stock of the Company, unless the acquisition
of such additional Voting Stock would not result in such Person becoming an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii).
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a)
has become such inadvertently, and such Person divests as promptly as
practicable (as determined in good faith by the Board of Directors) a sufficient
number of shares of Common Stock so that such Person would no longer be an
"Acquiring Person" as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed an "Acquiring Person" for
any purposes of this Agreement.

     (b) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), as in effect on the date of this Agreement.

     (c) "Associate" of a Person shall mean (i) with respect to a corporation,
any officer or director thereof or of any Subsidiary (as such term is
hereinafter defined) thereof, or any Beneficial Owner of 10% or more of any
class of equity security thereof, (ii) with respect to an association, any
officer or director thereof or of a Subsidiary thereof, (iii) with respect to a
partnership, any general partner thereof or any limited partner thereof who is,
directly or indirectly, the Beneficial Owner of a 10% ownership interest
therein, (iv) with respect to a business trust, any officer or trustee thereof
or of any Subsidiary thereof, (v) with respect to any other trust or an estate,
any trustee, executor or similar fiduciary or any Person who has a 15% or
greater interest as a beneficiary in the income from or principal of such trust
or estate, (vi) with respect to a natural person, any relative

                                       3


or spouse of such person, or any relative of such spouse, who has the same home
as such person, and (vii) any Affiliate of such Person.

     (d) A person shall be deemed the "Beneficial Owner" of, or to "Beneficially
Own," any securities (and correlative terms shall have correlative meanings):

          (i) which such Person or any of such Person's Affiliates or Associates
     beneficially owns, directly or indirectly, for purposes of Section 13(d) of
     the Exchange Act and Regulations 13D and 13G thereunder (or any comparable
     or successor law or regulation), in each case as in effect on the date
     hereof; or

          (ii) which such Person or any of such Person's Affiliates or
     Associates has (A) the right to acquire (whether such right is exercisable
     immediately or only after the passage of time or the fulfillment of a
     condition or both) pursuant to any agreement, arrangement or understanding,
     or upon the exercise of conversion rights, exchange rights, other rights
     (other than the Rights), warrants or options, or otherwise; PROVIDED,
     HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of, or to
     "Beneficially Own," securities tendered pursuant to a tender or exchange
     offer made by such Person or any of such Person's Affiliates or Associates
     until such tendered securities are accepted for purchase or exchange or (B)
     the right to vote, alone or in concert with others, pursuant to any
     agreement, arrangement or understanding (whether or not in writing);
     PROVIDED, HOWEVER, that a Person shall not be deemed the "Beneficial Owner"
     of, or to "Beneficially Own," any securities if the

                                       4


     agreement, arrangement or understanding to vote such security (1) arises
     solely from a revocable proxy or consent given in response to a proxy or
     consent solicitation made pursuant to, and in accordance with, the
     applicable rules and regulations under the Exchange Act and (2) is not at
     the time reportable by such Person on a Schedule 13D or Schedule 13G report
     under the Exchange Act (or any comparable or successor report), other than
     by reference to a proxy or consent solicitation being conducted by such
     Person; or

          (iii) which are beneficially owned, directly or indirectly, by any
     other Person with which such Person or any of such Person's Affiliates or
     Associates has any agreement, arrangement or understanding (whether or not
     in writing) for the purpose of acquiring, holding, voting (except as
     described in clause (B) of subparagraph (ii) of this paragraph (d)) or
     disposing of any securities of the Company; PROVIDED, HOWEVER, that for
     purposes of determining Beneficial Ownership of securities under this
     Agreement, officers and directors of the Company solely by reason of their
     status as such shall not constitute a group (notwithstanding that they may
     be Associates of one another or may be deemed to constitute a group for
     purposes of Section 13(d) the Exchange Act) and shall not be deemed to own
     shares owned by another officer or director of the Company.

     Notwithstanding anything in this paragraph (d) to the contrary, a Person
engaged in the business of underwriting securities shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any securities acquired or
otherwise beneficially

                                       5


owned in good faith in a firm commitment underwriting until the expiration of
forty (40) days after the date of the sale of securities to the public pursuant
to such firm commitment underwriting.

     (e) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in The Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.

     (f) "Close of Business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 P.M., Eastern time, on the next succeeding Business Day.

     (g) "Common Stock" when used with reference to the Company shall
collectively mean the Common Stock, $0.10 par value, of the Company. "Common
Stock" when used with reference to any Person other than the Company which shall
be organized in corporate form shall mean the capital stock or other equity
security with the greatest per share voting power of such Person. "Common Stock"
when used with reference to any Person other than the Company which shall not be
organized in corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and credits of
such Person and which shall be entitled to exercise the greatest voting power
per unit of such Person.

     (h) "Distribution Date" shall have the meaning set forth in Section 3(b)
hereof.

     (i) "Exchange Act" shall have the meaning set forth in Section 1(b) hereof.

                                       6


     (j) "Exchange Consideration" shall have the meaning set forth in Section 27
hereof.

     (k) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company, or (iii) any employee benefit plan or employee stock plan of the
Company or any Subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Voting Stock for or pursuant to the
terms of any such plan.

     (l) "Exercise Price" shall have the meaning set forth in Section 4 hereof.

     (m) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.

     (n) "Fair Market Value" of any property shall mean the fair market value of
such property as determined in accordance with Section 11(b) hereof.

     (o) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.

     (p) "Person" shall mean any individual, firm, corporation or other entity.

     (q) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.

     (r) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.

     (s) "Right Certificate" shall have the meaning set forth in Section 3(d)
hereof.

                                       7


     (t) "Spread" shall mean the excess of (1) the value of the shares of
Preferred Stock issuable upon the exercise of a Right in accordance with Section
11(a)(ii) over (2) the Exercise Price in effect at the time of determination of
the Spread.

     (u) "Stock Acquisition Date" shall mean the first date on which there shall
be a public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) or such earlier date as a majority of the Board of Directors of the Company
shall become aware of the existence of an Acquiring Person.

     (v) "Subsidiary" of a Person shall mean any corporation or other entity of
which securities or other ownership interests having voting power sufficient to
elect a majority of the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled by such Person.

     (w) "Summary of Rights" shall have the meaning set forth in Section 3(a)
hereof.

     (x) "Trading Day" shall have the meaning set forth in Section 11(b) hereof.

     (y) "Transfer Tax" shall mean any tax or charge, including any documentary
stamp tax, imposed or collected by any governmental or regulatory authority in
respect of any transfer of any security, instrument or right, including the
Rights, shares of the Common Stock and shares of the Preferred Stock.

                                       8


     (z) "Voting Stock" shall mean (i) the Common Stock of the Company and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of directors or entitled to vote together with the Common Stock in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. For purposes of this
Agreement, a stated percentage of the Voting Stock shall mean a number of shares
of the Voting Stock as shall equal in voting power that stated percentage of the
total voting power of the then outstanding shares of Voting Stock in the
election of a majority of the Board of Directors of the Company or in respect of
any merger, consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding up.

Any determination required to be made by the Board of Directors of the Company
for purposes of applying the definitions contained in this Section 1 shall be
made by a majority of the Board of Directors in its good faith judgment, which
determination shall be binding on the Rights Agent and the holders of the
Rights.

     Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date be the
holders of Common Stock) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable, upon
ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.

                                       9


     Section 3. ISSUANCE OF RIGHT CERTIFICATES.

     (a) On the Record Date (or as soon as practicable thereafter), the Company
or the Rights Agent shall send a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit A (the "Summary of Rights"), by first class
mail, postage prepaid, to each record holder of the Common Stock as of the close
of business on the Record Date, at the address of such holder shown on the
records of the Company.

     (b) Until the close of business on the day which is the earlier of (i) the
tenth day after the Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person would be the Beneficial Owner of 15% or more of the then outstanding
shares of Voting Stock of the Company (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution Date"), (x) the
Rights shall be evidenced by the certificates for Common Stock registered in the
name of the holders of Common Stock (together with, in the case of certificates
for Common Stock outstanding as of the Record Date, the Summary of Rights) and
not by separate Right certificates and the record holders of such certificates
for Common Stock shall be the record holders of the Rights represented thereby
and (y) each Right shall be transferable only simultaneously and together with
the transfer of a share of Common Stock (subject to adjustment as hereinafter
provided). Until the Distribution Date (or, if earlier, the

                                       10


Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby, whether or
not accompanied by a copy of the Summary of Rights.

     (c) Rights shall be issued in respect of all shares of Common Stock that
become outstanding after the Record Date but prior to the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Company's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final Expiration
Date shall have impressed, printed, written or stamped thereon or otherwise
affixed thereto the following legend:

          This certificate also evidences and entitles the holder hereof to the
     same number of Rights (subject to adjustment) as the number of shares of
     Common Stock represented by this certificate, such Rights being on the
     terms provided under the Rights Agreement between United Stationers Inc.
     and BANKBOSTON, N.A. (the "Rights Agent"), dated as of July 27, 1999, as it
     may be amended from time to time (the "Agreement"), the terms of which are
     incorporated herein by reference and a copy of which is on file at the
     principal executive offices of United Stationers Inc. Under certain
     circumstances, as set forth in the Agreement, such Rights shall be
     evidenced by separate certificates and shall no longer be evidenced by this
     certificate. United Stationers Inc. shall mail to the registered holder of
     this certificate a copy of the Agreement without charge within five (5)
     days after receipt of a written request therefor. AS PROVIDED IN SECTION
     7(E) OF THE AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
     PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
     AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID
     AND MAY NOT BE EXERCISED BY OR TRANSFERRED TO ANY PERSON.

          With respect to such certificates containing the foregoing legend,
until the Distribution Date the Rights associated with the Common Stock
represented by such

                                       11


certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any such certificate, except as otherwise provided herein, shall
also constitute the transfer of the Rights associated with the Common Stock
represented thereby. In the event that the Company purchases or otherwise
acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding.

     Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.

     (d) As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send), by
first class mail, postage prepaid, to each record holder of the Common Stock as
of the close of business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a certificate
in the form provided by Section 4 hereof (a "Right Certificate"), evidencing one
Right (subject to adjustment as provided herein) for each share of Common Stock
so held. As of and after the Distribution Date, the Rights shall be evidenced
solely by Right Certificates and may be transferred by the transfer of the Right
Certificate as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.

                                       12


     Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase shares, certificate and assignment to be printed
on the reverse thereof), when, as and if issued, shall be substantially in the
form set forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Common
Stock or the Rights may from time to time be listed or as the Company may deem
appropriate to conform to usage or otherwise and as are not inconsistent with
the provisions of this Agreement. Subject to the provisions of Section 22
hereof, Right Certificates evidencing Rights whenever issued, (i) shall be dated
as of the date of issuance of the Rights they represent and (ii) subject to
adjustment from time to time as provided herein, on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a share
(including fractional shares which are integral multiples of one-thousandth of a
share) of Preferred Stock as shall be set forth thereon at the price per one
one-thousandth of a share of Preferred Stock payable upon exercise of a Right
provided by Section 7(b) hereof, as the same may from time to time be adjusted
as provided herein (the "Exercise Price").

     Section 5. COUNTERSIGNATURE AND REGISTRATION.

     (a) Each Right Certificate shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President, either manually or
by facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. Each Right
Certificate shall be countersigned by the

                                       13


Rights Agent either manually or by facsimile signature and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any Right Certificate shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery of
the certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be signed on
behalf of the Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.

     (b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or one or more offices designated as the
appropriate place for surrender of Right Certificates upon exercise or transfer,
and in such other locations as may be required by law, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.

     Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.

     (a) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Expiration Date or the Final
Expiration Date, any Right

                                       14


Certificate may be (i) transferred or (ii) split up, combined or
exchanged for one or more other Right Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a share of Preferred
Stock as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall surrender the Right Certificate
at the office of the Rights Agent designated for the surrender of Right
Certificates with the form of certificate and assignment on the reverse side
thereof duly endorsed (or enclose with such Right Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated therefor. Thereupon, the Rights Agent shall countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.

     (b) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof, at any
time after the Distribution Date and prior to the Expiration Date, upon receipt
by the Company and the Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them and, if requested by

                                       15


the Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, or upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company shall cause a
new Right Certificate of like tenor to be issued and delivered to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.

     Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS.

     (a) The Rights shall not be exercisable until, and shall become exercisable
on, the Distribution Date (unless otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Sections 7(e) and
27(b) hereof). Except as otherwise provided herein, the Rights may be exercised,
in whole or in part, at any time commencing with the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed (with signatures duly
guaranteed), to the Rights Agent at the principal office of the Rights Agent in
New York, New York, together with payment of the Exercise Price for each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
Close of Business on the earlier of (i) July 26, 2009 (the "Final Expiration
Date") or (ii) the date on which the Rights are redeemed as provided in Section
23 hereof or the date on which the Rights are exchanged as provided in Section
27 hereof (such earlier date being herein referred to as the "Expiration Date").

     (b) The Exercise Price shall initially be one hundred dollars ($100) for
each one one-thousandth (1/1,000) of a share of Preferred Stock issued pursuant
to the exercise of a Right. The Exercise Price and the number of one
one-thousandths of a

                                       16


share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof. The Exercise Price shall be payable in lawful
money of the United States of America, in accordance with paragraph (c) below.

     (c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment by certified
check, cashier's check, bank draft or money order payable to the Company or the
Rights Agent of the Exercise Price for the shares of Preferred Stock to be
purchased and an amount equal to any applicable Transfer Tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Preferred Stock of the Company one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Company hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b), at the election of the
Company, cause depositary receipts to be issued in lieu of fractional shares of
Preferred Stock, (iii) if the election provided for in the immediately preceding
clause (ii) has not been made, requisition from the Company the amount of cash
to be paid in lieu of the issuance of fractional shares (other than fractions
that are integral multiples of one one-thousandth of a share) in accordance with
Section 14(b) hereof, (iv) after receipt of such Preferred Stock certificates
and, if applicable, depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (v) when appropriate,
after receipt, promptly deliver such

                                       17


cash to or upon the order of the registered holder of such Right Certificate;
PROVIDED, HOWEVER, that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly
take the appropriate actions corresponding in such case to that referred to in
the foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of shares of Preferred Stock and other securities upon exercise of a Right for a
reasonable period, not in excess of ninety (90) days, during which the Company
seeks to register under the Securities Act of 1933, as amended (the "Act"), and
any applicable securities law of any other jurisdiction, the shares of Preferred
Stock or other securities to be issued pursuant to the Rights; PROVIDED,
HOWEVER, that nothing contained in this Section 7(c) shall relieve the Company
of its obligations under Section 9(d) hereof. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect.

     (d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or his assign,
subject to the provisions of Section 14(b) hereof.

     (e) Notwithstanding any provision of this Agreement to the contrary, from
and after the time (the "invalidation time") when any Person first becomes an
Acquiring Person, any Rights that are Beneficially Owned by (x) such Acquiring
Person (or any Associate or Affiliate of such Acquiring Person), (y) a
transferee of such Acquiring

                                       18


Person (or any such Associate or Affiliate) who becomes a transferee after the
invalidation time or (z) a transferee of such Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the invalidation time pursuant to either (I) a transfer from the Acquiring
Person (or any such Associate or Affiliate) to holders of its equity securities
or to any Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
Section 7(e), and subsequent transferees of such Persons referred to in clause
(y) and (z) above, shall be null and void without any further action and any
holder of such Rights shall thereafter have no rights whatsoever with respect to
such Rights under any provision of this Agreement. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person as a result of its failure to make any determination with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to Section 3 hereof
that represents Rights beneficially owned by an Acquiring Person or any
Affiliate or Associate thereof whose Rights would be null and void pursuant to
the provisions of this Section 7(e); no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person (or an Affiliate or
Associate of such Acquiring Person) whose Rights would be null and void pursuant
to the provisions of this Section 7(e) or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate

                                       19


delivered to the Rights Agent for transfer to an Acquiring Person (or an
Associate or Affiliate of such Acquiring Person) whose Rights would be void
pursuant to the provisions of this Section 7(e) shall be cancelled.

     (f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate following the form of election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.

     Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall cancel and
retire, any Right Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.

                                       20


     Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK.

     (a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
out of authorized and issued shares of Preferred Stock held in its treasury,
such number of shares of Preferred Stock as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.

     (b) The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Preferred Stock issued or
reserved for issuance in accordance with this Agreement to be listed, upon
official notice of issuance, upon the principal national securities exchange, if
any, upon which the Common Stock is listed or, if the principal market for the
Common Stock is not on any national securities exchange, to be eligible for
quotation in the National Association of Securities Dealers' Automated Quotation
System or any successor thereto or other comparable quotation system.

     (c) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares.

     (d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon

                                       21


exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (a) the
date as of which the Rights are no longer exercisable for Preferred Stock, and
(b) the earlier of the Expiration Date and the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed ninety (90)
days, the issuance of shares of Preferred Stock upon exercise of a Right in
order to prepare and file a registration statement under the Act and permit it
to become effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Act (if required) shall have been declared effective.

     (e) The Company covenants and agrees that it will pay when due and payable
any and all federal and state Transfer Taxes which may be payable in respect of
the issuance or delivery of the Right Certificates or of any shares of Preferred
Stock issued or delivered upon the exercise of Rights. The Company shall not,
however, be required to pay any Transfer Tax which may be payable in respect of
any transfer or delivery of a Right Certificate to a Person other than, or the
issuance or delivery of certificates for Preferred Stock upon exercise of Rights
in a name other than that of, the registered holder of the Right Certificate,
and the Company shall not be required to issue or deliver a Right Certificate or
certificate for Preferred Stock to a Person other than such registered holder

                                       22


until any such Transfer Tax shall have been paid (any such Transfer Tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such
Transfer Tax is due.

     Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; PROVIDED, HOWEVER, that, if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated as of, the next succeeding
Business Day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Stock for which the Rights shall be exercisable, including, without limitation,
the right to vote or to receive dividends or other distributions, and shall not
be entitled to receive any notice of any proceedings of the Company, except as
provided herein.

     Section 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES. The Exercise
Price and the number of shares of Preferred Stock which may be purchased upon
exercise of a Right are subject to adjustment from time to time as provided in
this Section 11.

                                       23


          (a) (i) In the event the Company shall at any time after the date of
     this Agreement (A) declare or pay any dividend on Common Stock payable in
     shares of Common Stock, (B) subdivide or split the outstanding shares of
     Common Stock into a greater number of shares or (C) combine or consolidate
     the outstanding shares of Common Stock into a smaller number of shares or
     effect a reverse split of the outstanding shares of Common Stock, then and
     in each such event the number of one one-thousandth of a share of Preferred
     Stock issuable upon the Exercise of a Right after the record date for such
     event (if one shall have been established or, if not, after the date of
     such event) shall be the number of one one-thousandth of a share of
     Preferred Stock issuable immediately prior to such event multiplied by a
     fraction, the numerator of which is the number of shares of Common Stock
     outstanding immediately prior to such event and the denominator of which is
     the number of shares of Common Stock outstanding immediately after such
     event and the Exercise Price to be in effect after the record date for such
     event (if one shall have been established or, if not, after the date of
     such event) shall be determined by multiplying the Exercise Price in effect
     immediately prior to such event by such fraction. If an event occurs which
     would require an adjustment under both this Section 11(a)(i) and Section
     11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
     shall be in addition to, and shall be made prior to, any adjustment
     required pursuant to Section 11(a)(ii).

                                       24


          (ii) Subject to Section 27 of this Agreement, in the event that any
     Person shall become an Acquiring Person, then, except as otherwise provided
     in this Section 11, each holder of a Right, except as provided in Section
     7(e) hereof, shall thereafter have the right to receive upon exercise of
     such Right in accordance with the terms of this Agreement and payment of
     the Exercise Price, such number of one one-thousandth of a share of
     Preferred Stock as shall equal the result obtained by (1) multiplying the
     then current Exercise Price by the number of one one-thousandth of a share
     of Preferred Stock for which a Right is then exercisable and dividing the
     product by (2) 50% of the Fair Market Value of one one-thousandth of a
     share of Preferred Stock (determined pursuant to Section 11(b) hereof) on
     the date of such occurrence.

          (iii) In the event that the Company does not have available sufficient
     authorized but unissued Preferred Stock to permit the exercise in full of
     the Rights in accordance with the foregoing subparagraph (ii), the Company
     shall take all such action as may be necessary to authorize and reserve for
     issuance such number of additional shares of Preferred Stock as may from
     time to time be required to be issued upon the exercise in full of all
     Rights from time to time outstanding and, if necessary, shall use its best
     efforts to obtain stockholder approval thereof. In lieu of issuing shares
     of Preferred Stock in accordance with the foregoing subparagraph (ii), the
     Company may, if the Board of Directors determines that such action is
     necessary or appropriate and not contrary to the interests of holders of

                                       25


     Rights, elect to issue or pay, upon the exercise of the Rights, cash,
     property, shares of Preferred or Common Stock, or any combination thereof,
     having an aggregate Fair Market Value equal to the Fair Market Value of the
     shares of Preferred Stock which otherwise would have been issuable pursuant
     to Section 11(a)(ii), which Fair Market Value shall be determined by an
     investment banking firm selected by the Board of Directors. For purposes of
     the preceding sentence, the Fair Market Value of the Preferred Stock shall
     be as determined pursuant to Section 11(b). Subject to Section 23 hereof,
     any such election by the Board of Directors of the Company must be made and
     publicly announced within thirty (30) days after the date on which the
     event described in Section 11(a)(ii) occurs.

     (b) For the purpose of this Agreement, the "Fair Market Value" of any share
of Preferred Stock, Common Stock or any other stock or any Right or other
security or any other property on any date shall be determined as provided in
this Section 11(b). In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the thirty (30) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within thirty (30) Trading Days after (i)
the ex-dividend date for a dividend or distribution on such stock payable in
shares of Common Stock or securities convertible into shares of Common Stock, or
(ii) the effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of

                                       26


such stock, then, and in each such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of the Company to take into
account ex-dividend or post-effective date trading. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way
(in either case, as reported in the applicable transaction reporting system with
respect to securities listed or admitted to trading on the Nasdaq National
Market), or, if the securities are not listed or admitted to trading on the
Nasdaq National Market, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange or Nasdaq market on which such security is listed or admitted to
trading; or, if not listed or admitted to trading on any national securities
exchange or Nasdaq market, the last quoted price (or, if not so quoted, the
average of the high bid and low asked prices) in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use; or, if no bids for
such security are quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in such security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national securities
exchange or Nasdaq market on which such security is listed or admitted to
trading is open for the transaction of business or, if such security is not
listed or admitted to trading on any national securities exchange or Nasdaq
market, a Business Day. If a security is not publicly held or not so listed or
traded, "Fair Market Value" shall mean the fair value per share of stock or per
other unit of such other security, as determined by an independent investment
banking firm experienced in the valuation of

                                       27


securities selected in good faith by the Board of Directors of the Company, or,
if no such investment banking firm is, in the good faith judgment of the Board
of Directors, available to make such determination, in good faith by the Board
of Directors of the Company; PROVIDED, HOWEVER, that for purposes of making the
adjustment provided for by Section 11(a)(ii) hereof, the Fair Market Value of a
share of Preferred Stock shall not be less than 100% of the product of the Fair
Market Value of a share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred Stock (as defined
in the Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent.

     (c) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock entitling them (for a period
expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share (or having a conversion price per share, if a
security convertible into Common Stock) less than the then current per share
Fair Market Value of the Common Stock on such record

                                       28


date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current Fair
Market Value and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Common Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed and in the event
that such rights, options or warrants are not so issued, the Exercise Price
shall be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.

     (d) In case the Company shall fix a record date for the making of a
distribution to all holders of the Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular quarterly

                                       29


cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in shares of Common Stock) or subscription rights
or warrants (excluding those referred to in Section 11(c) hereof), the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Fair Market Value of the shares of
Common Stock on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants and the denominator of which shall be such current Fair
Market Value of the shares of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed and in the event that such
distribution is not so made, the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect if such record date had not
been fixed.

     (e) Unless the Company shall have exercised its election as provided in
Section 11(f), upon each adjustment of the Exercise Price as a result of the
calculations made in Section (c) and (d), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of one one-thousandths of
a share of Preferred Stock obtained by (i) multiplying (x) the number of one
one-thousandths of a share of Preferred Stock covered by a Right immediately
prior to the adjustment pursuant to this Section 11(e) by (y) the Exercise Price
in effect immediately prior to such adjustment of the Exercise Price and (ii)

                                       30


dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.

     (f) The Company may elect on or after the date of any adjustment of the
Exercise Price pursuant to Sections 11(c) and 11(d) to adjust the number of
Rights in substitution for any adjustment pursuant to Section 11(e) in the
number of one one-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Exercise Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If the Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(e), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights, if
any, to which such holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for

                                       31


the Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.

     (g) All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-thousandth of a share, as the case may be.

     (h) Irrespective of any adjustment or change in the Exercise Price or the
number of shares of Preferred Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Exercise Price and the number of shares to be issued upon exercise of the
Rights as in the initial Right Certificates issued hereunder but, nevertheless,
shall represent the Rights as so adjusted.

     (i) Before taking any action that would cause an adjustment reducing the
purchase price per whole share of Preferred Stock upon exercise of the Rights
below the then par value, if any, of the shares of Preferred Stock, the Company
shall use its best efforts to take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and non-assessable shares of such Preferred Stock at
such adjusted purchase price per share.

     (j) Anything in this Section 11 to the contrary notwithstanding, in the
event of any reclassification of stock of the Company or any recapitalization,
reorganization or partial liquidation of the Company or similar transaction, the
Company shall be entitled to make such further adjustments in the number of
shares of Preferred

                                       32


Stock which may be acquired upon exercise of the Rights, and such adjustments in
the Exercise Price therefor, in addition to those adjustments expressly required
by the other paragraphs of this Section 11, as the Board of Directors of the
Company shall determine to be necessary or appropriate in order for the holders
of the Rights in such event to be treated equitably and in accordance with the
purpose and intent of this Agreement or in order that any such event shall not,
but for such adjustment, in the opinion of counsel to the Company, result in the
stockholders of the Company being subject to any United States federal income
tax liability by reason thereof.

     (k) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than the Preferred Stock,
thereafter the Exercise Price and the number of such other shares so receivable
upon exercise of a Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), 11(c), 11(d) 11(e),
11(f) and 11(j) hereof, as applicable, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.

     Section 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11, 13, 23 or 27, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Stock
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with

                                       33


Section 25. Notwithstanding the foregoing sentence, the failure of the Company
to make such certification or give such notice shall not affect the validity of
or the force or effect of the requirement for such adjustment. Any adjustment to
be made pursuant to Section 11, 13 or 23(c) of this Agreement shall be effective
as of the date of the event giving rise to such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.

     Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.

     (a) In the event that, at any time after the time that any Person becomes
an Acquiring Person, (x) the Company shall, directly or indirectly, consolidate
with, or merge with and into, any other Person or Persons (other than an Exempt
Person) and the Company shall not be the surviving or continuing corporation of
such consolidation or merger, or (y) any Person or Persons (other than an Exempt
Person) shall, directly or indirectly, consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (other than
an Exempt Person) or of the Company or cash or any other property, or (z) the
Company or one or more of its Subsidiaries shall, directly or indirectly, sell
or otherwise transfer to any other Person, in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the first occurrence
of any such event, proper

                                       34


provision shall be made so that (i) each holder of record of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the then current Exercise Price
multiplied by the number of one one-thousandths of a share of Preferred Stock
for which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of shares of Preferred Stock, such number of shares of
validly issued, fully paid, non-assessable and freely tradeable Common Stock of
the Principal Party (as defined herein), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the result
obtained by (1) multiplying the then current Exercise Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (2) 50% of the then per share Fair
Market Value of the Common Stock of the Principal Party on the date of the
consummation, merger, sale or transfer; PROVIDED, HOWEVER, that the Exercise
Price (as adjusted) and the number of shares of Common Stock of such Principal
Party so receivable upon exercise of a Right shall be subject to further
adjustment as appropriate in accordance with Section 11 hereof to reflect any
events occurring in respect of the Common Stock of such Principal Party after
the occurrence of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" for all
purposes of this Agreement shall thereafter be deemed to refer to such Principal
Party; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
in accordance with the provisions of Section 9 hereof applicable to the
reservation of

                                       35


Preferred Stock) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; PROVIDED, HOWEVER, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or substantially
all of the assets, recapitalization, reclassification of shares, reorganization
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Exercise Price, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had it, at
the time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause (x), (y) or (z)
above of this Section 13(a).

     (b) "Principal Party" shall mean

          (i) in the case of any transaction described in (x) or (y) of the
     first sentence of Section 13(a) hereof: (A) the Person that is the issuer
     of the securities into which shares of Common Stock of the Company are
     changed or otherwise exchanged or converted in such merger or
     consolidation, or, if there is more than one such issuer, the issuer of the
     Common Stock of which has the greatest market value or (B) if no

                                       36


     securities are so issued, (x) the Person that is the other party to the
     merger or consolidation and that survives such merger or consolidation, or,
     if there is more than one such Person, the Person the Common Stock of which
     has the greatest market value or (y) if the Person that is the other party
     to the merger or consolidation does not survive the merger or
     consolidation, the Person that does survive the merger or consolidation
     (including the Company if it survives); and

          (ii) in the case of any transaction described in (z) of the first
     sentence in Section 13(a), the Person that is the party receiving the
     greatest portion of the assets or earning power transferred pursuant to
     such transaction or transactions, or, if each Person that is a party to
     such transaction or transactions receives the same portion of the assets or
     earning power so transferred or if the Person receiving the greatest
     portion of the assets or earning power cannot be determined, whichever of
     such Persons as is the issuer of Common Stock having the greatest market
     value of shares outstanding; PROVIDED, HOWEVER, that in any such case, if
     the Common Stock of such Person is not at such time and has not been
     continuously over the preceding 12-month period registered under Section 12
     of the Exchange Act, then (i) if such Person is a direct or indirect
     Subsidiary of another Person the Common Stock of which is and has been so
     registered, the term "Principal

                                       37


     Party" shall refer to such other Person, or (2) if such Person is a
     Subsidiary, directly or indirectly, of more than one Person, the Common
     Stocks of all of which are and have been so registered, the term "Principal
     Party" shall refer to whichever of such Persons is the issuer of the Common
     Stock having the greatest market value of shares outstanding, or (3) if
     such Person is owned, directly or indirectly, by a joint venture formed by
     two or more Persons that are not owned, directly or indirectly, by the same
     Person, the rules set forth in clauses (1) and (2) above shall apply to
     each of the owners having an interest in the venture as if the Person owned
     by the joint venture was a Subsidiary of both or all of such joint
     venturers, and the Principal Party in each such case shall bear the
     obligations set forth in this Section 13 in the same ratio as its interest
     in such Person bears to the total of such interests.

     (c) The Company shall not consummate any consolidation, merger or sale or
transfer of assets or earning power referred to in Section 13(a) unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Agreement in accordance with
Section 13(a) hereof and that all rights of first refusal or preemptive rights
in respect of the issuance of shares of Common Stock of the Principal Party upon
exercise of outstanding Rights have been waived and that such transaction shall
not result in a default by the Principal Party under this Agreement, and further
providing that, as soon as

                                       38


practicable after the date of any consolidation, merger or sale or transfer of
assets or earning power referred to in Section 13(a) hereof, the Principal Party
will:

          (i) prepare and file a registration statement under the Act with
     respect to the Rights and the securities purchasable upon exercise of the
     Rights on an appropriate form, use its best efforts to cause such
     registration statement to become effective as soon as practicable after
     such filing and use its best efforts to cause such registration statement
     to remain effective (with a prospectus at all times meeting the
     requirements of the Act) until the date of expiration of the Rights, and
     similarly comply with applicable state securities laws;

          (ii) use its best efforts to list (or continue the listing of) the
     Rights and the securities purchasable upon exercise of the Rights on a
     national securities exchange or to meet the eligibility requirements for
     quotation on NASDAQ;

          (iii) deliver to holders of the Rights historical financial statements
     for the Principal Party which comply in all respects with the requirements
     for registration on Form 10 (or any successor form) under the Exchange Act.
     In the event that any of the transactions described in Section 13(a) hereof
     shall occur at any time after the occurrence of a transaction described in
     Section 11(a)(ii) hereof, the Rights which have not theretofore been
     exercised shall, subject to the provisions of Section 7(e) hereof,
     thereafter be exercisable in the manner described in Section 13(a); and

                                       39


          (iv) obtain waivers of any rights of first refusal or preemptive
     rights in respect of the Common Stock of the Principal Party subject to
     purchase upon exercise of outstanding Rights.

     (d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

     (e) The Company covenants and agrees that it shall not, at any time after
any Person becomes an Acquiring Person, enter into any transaction of the type
described in clauses (x) through (z) of Section 13(a) hereof if (i) at the time
of or

                                       40


immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (ii)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (iii) the form or nature
of organization of the Principal Party would preclude or limit the
exercisability of the Rights.

     Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

     (a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights (I.E., Rights to
acquire less than one one-thousandth of a share of Preferred Stock), unless such
fractional Rights result from a transaction referred to in Section 11(a)(i)
hereof. If the Company shall determine not to issue such fractional Rights,
then, in lieu of such fractional Rights, there shall be paid to the holders of
record of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
Fair Market Value of a whole Right.

     (b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of one
one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions that are
integral multiples of one one-thousandth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election,

                                       41


issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Company and a depositary selected by it,
PROVIDED, that such agreement shall provide that the holders of such depositary
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as owners of the Preferred Stock. With respect to fractional
shares that are not integral multiples of one one-thousandth of a share, if the
Company does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the Fair Market Value of a share of Preferred
Stock.

     (c) The holder of a Right by the acceptance of a Right expressly waives his
right to receive any fractional Right or any fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
of a share) upon exercise of a Right.

     Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent in Section 18
hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and

                                       42


in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.

     Section 16. AGREEMENT OF RIGHT HOLDERS. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

     (a) prior to the Distribution Date, the Rights shall be evidenced by the
certificates for Common Stock registered in the name of the holders of Common
Stock (together, as applicable, with the Summary of Rights), which certificates
for Common Stock shall also constitute certificates for Rights, and not by
separate Right Certificates, and each Right shall be transferable only
simultaneously and together with the transfer of shares of Common Stock;

     (b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer; and

     (c) the Company and the Rights Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Stock certificate made by
anyone other than the

                                       43


Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary.

     Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Preferred Stock or any other
securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.

     Section 18. CONCERNING THE RIGHTS AGENT.

     (a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything

                                       44


done or omitted to be done by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the cost and expenses of
defending against any claim of liability relating to the Rights or this
Agreement.

     (b) The Rights Agent shall be protected against, and shall incur no
liability for or in respect of, any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper person or persons.

     Section 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF, THE RIGHTS
AGENT.

     (a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, PROVIDED that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been

                                       45


countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.

     (b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; in case at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.

     Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates by
their acceptance thereof shall be bound:

     (a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.

                                       46


     (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer or the Secretary or an Assistant
Secretary of the Company and delivered to the Rights Agent. Any such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

     (c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct. Anything to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage.

     (d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

     (e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in

                                       47


any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate describing any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Preferred
Stock will, when issued, be validly authorized and issued, fully paid and
nonassessable.

     (f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of the Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President or any Vice President or the Treasurer or
the Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on

                                       48


and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.

     (h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.

     (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.

     (j) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the

                                       49


form of election to purchase set forth on the reverse thereof, as the case may
be, has not been completed to certify the holder is not an Acquiring Person (or
an Affiliate or Associate thereof), the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.

     Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a period
of thirty (30) days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the incumbent Rights
Agent or the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation

                                       50


organized and doing business under the laws of the United States or of any state
thereof, in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination in the conduct of its corporate trust or stock transfer business by
federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $5,000,000 or (b) an
Affiliate controlled by a corporation described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed, but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until a
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.

     Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its

                                       51


option, issue new Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
Exercise Price per share and the number or kind or class of shares of stock or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Voting Stock following the Distribution Date and
prior to the Expiration Date, the Company may with respect to shares of Voting
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale.

     Section 23. REDEMPTION.

     (a) The Company may, at its option, but only by the vote of a majority of
the Board of Directors, redeem all but not less than all of the then outstanding
Rights, at any time prior to the Stock Acquisition Date at a redemption price of
$.001 per Right, subject to adjustments as provided in subsection (c) below (the
"Redemption Price").

     (b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time so designated by action
of the Board of Directors ordering the redemption of the Rights and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten (10) days after the effective time of the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they

                                       52


appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each notice of redemption will
state the method by which the payment of the Redemption Price will be made. At
the option of the Board of Directors, the Redemption Price may be paid in cash
to each Rights holder or by the issuance of shares (and, at the Company's
election pursuant to Section 14(b) hereof, cash or depositary receipts in lieu
of fractions of shares other than fractions which are integral multiples of one
one-thousandth of a share) of Preferred Stock or Common Stock having a Fair
Market Value equal to such cash payment.

     (c) In the event the Company shall at any time after the date of this
Agreement (A) pay any dividend on Common Stock in shares of Common Stock, (B)
subdivide or split the outstanding shares of Common Stock into a greater number
of shares or (C) combine or consolidate the outstanding shares of Common Stock
into a smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock, then, and in each such event, the Redemption Price shall
be appropriately adjusted to reflect the foregoing.

     Section 24. NOTICE OF PROPOSED ACTIONS.

     (a) In case the Company, after the Distribution Date, shall propose (i) to
effect any of the transactions referred to in Section 11(a)(i) or to pay any
dividend to the holders of record of its shares of Common Stock payable in
shares of capital stock of any class or to make any other distribution to the
holders of record of its Common Stock (other than a regular periodic cash
dividend), or (ii) to offer to the holders of record of its

                                       53


Common Stock options, warrants, or other rights to subscribe for or to purchase
shares of Common Stock (including any security convertible into or exchangeable
for Common Stock) or shares of stock of any class or any other securities,
options, warrants, convertible or exchangeable securities or other rights, or
(iii) to effect any reclassification of its Preferred Stock or Common Stock or
any recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least ten (10) days
prior to the record date for determining holders of record of the Preferred
Stock for purposes of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of record of Common Stock or
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect

                                       54


the legality or validity of the action taken by the Company or the vote upon any
such action.

     (b) In case the event referred to in Section 11(a)(ii) shall occur, then
the Company shall as soon as practicable thereafter, in accordance with Section
25 hereof, give to each holder of a Right notice of the occurrence of such
event, which notice shall describe the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof.

     Section 25. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:

          United Stationers Inc.
          2200 East Golf Road
          Des Plaines, Illinois 60016-1267
          Attn: General Counsel

Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of record of any
Right Certificate or Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:

          BANKBOSTON, N.A.
          c/o Equiserve Limited Partnership
          150 Royall Street
          Canton, Massachusetts 02021

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right shall be

                                       55


sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

     Section 26. SUPPLEMENTS AND AMENDMENTS. For as long as the Rights are then
redeemable and except as provided in the last sentence of this Section 26, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of the Rights. At any time when the Rights
are not then redeemable and except as provided in the last sentence of this
Section 26, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Right Certificates (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable,
PROVIDED, that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Right
Certificates. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price.

     Section 27. EXCHANGE. (a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that

                                       56


have become null and void pursuant to the provisions of Section 7(e) hereof) by
exchanging for each such Right a number of shares of Common Stock having an
aggregate Fair Market Value on the date such Person becomes an Acquiring Person
equal to the Spread, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date such Person becomes an
Acquiring Person (such amount per Right being hereinafter referred to as the
"Exchange Consideration"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than an Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Voting Stock
then outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 27(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 27(a).

     (b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 27
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive the Exchange Consideration. The Company shall
promptly give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each

                                       57


such notice of exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.

     (c) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 27, the Company shall
substitute to the extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a number of shares of
Preferred Stock or fractions thereof having an aggregate Fair Market Value equal
to the Fair Market Value of one share of Common Stock as of the date any Person
becomes an Acquiring Person.

     (d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares. In
lieu of such fractional shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional shares of Common
Stock would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the purposes
of this paragraph (d), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock for the Trading Day
immediately prior to the date of exchange pursuant to this Section 27.

                                       58


     Section 28. SUCCESSORS. All of the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

     Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the holders of Common Stock in their capacity as holders
of the Rights) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights).

     Section 30. DELAWARE CONTRACT. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed and
enforced in accordance with the laws of such state applicable to contracts to be
made and performed entirely within such state.

     Section 31. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

     Section 32. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                       59


     Section 33. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

     Section 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The Board
of Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.

                                       60


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

                                       UNITED STATIONERS INC.

                                       By:
                                         --------------------------------------
                                       Name:
                                           ------------------------------------
                                       Title:
                                            -----------------------------------

                                       BANKBOSTON, N.A.

                                       By:
                                          -------------------------------------
                                       Name:
                                           ------------------------------------
                                       Title:
                                           ------------------------------------



                                                                      EXHIBIT A

                AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED
                TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
                   BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
                  ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
                  RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
                 SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
                    BE EXERCISED OR TRANSFERRED TO ANY PERSON

                             UNITED STATIONERS INC.

                          SUMMARY OF RIGHTS TO PURCHASE
                         SERIES A JUNIOR PREFERRED STOCK


     On July 27, 1999, the Board of Directors of United Stationers Inc. (the
"Company") declared a dividend distribution of one Preferred Stock Purchase
Right for each outstanding share of Common Stock, par value $.10 per share (the
"Common Stock"), of the Company. The distribution is payable as of August 16,
1999 to stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one-thousandth (1/1,000) of a share of
preferred stock of the Company, designated as Series A Junior Preferred Stock
(the "Preferred Stock") at a price of one hundred dollars ($100) per
one-thousandth (1/1,000) of a share ("Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and BANKBOSTON, N.A., as Rights Agent (the "Rights Agent").

     AS DISCUSSED BELOW, INITIALLY THE RIGHTS WILL NOT BE EXERCISABLE,
CERTIFICATES WILL NOT BE SENT TO STOCKHOLDERS AND THE RIGHTS AUTOMATICALLY WILL
TRADE WITH THE COMMON STOCK.

     The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Company (an "Acquiring Person") and (ii) the tenth business
day (or such later date as may be determined by the Board of Directors prior to
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person) after the date of the commencement or announcement of a
person's or group's intention to commence a tender or exchange offer the
consummation of which would result in the ownership of 15% or more of the
Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of August 16, 1999, by such Common Stock certificate with a copy of this Summary
of Rights attached thereto. An Acquiring

                                      A-1


Person does not include (A) the Company, (B) any subsidiary of the Company, (C)
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company, or any trust or other entity organized, appointed,
established or holding voting stock for or pursuant to the terms of any such
plan, or (D) any person or group of affiliated or associated persons whose
ownership of 15% or more of the shares of voting stock of the Company then
outstanding results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii)).

     Until the Distribution Date (or earlier redemption, exchange or expiration
of the Rights), new Common Stock certificates issued after August 16, 1999 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
the surrender for transfer of any of the Common Stock certificates outstanding
as of August 16, 1999, with or without a copy of this Summary of Rights attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the Distribution Date.

     The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on July 26, 2009, unless earlier redeemed or
exchanged by the Company as described below.

     The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. The Preferred
Stock may not be issued except upon exercise of Rights. Each share of Preferred
Stock will be entitled to receive when, as and if declared, a quarterly dividend
in an amount equal to the greater of $0.001 per share or 1,000 times the cash
dividends declared on the Company's Common Stock. In addition, the holders of
the Preferred Stock are entitled to receive 1,000 times any non-cash dividends
(other than dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of the liquidation of the Company, the holders
of Preferred Stock will be entitled to receive, for each share of Preferred
Stock, a payment in an amount equal to the greater of $0.001 or 1,000 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
1,000 votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is exchanged, each
share of Preferred Stock will be entitled to receive 1,000 times the amount
received per share of Common Stock. The

                                      A-2


rights of Preferred Stock as to dividends, liquidation and voting are protected
by anti-dilution provisions.

     The number of shares of Preferred Stock issuable upon exercise of the
Rights and Exercise Price of the Rights are subject to certain adjustments from
time to time in the event of a stock dividend on, or a subdivision or
combination of, the Common Stock. The Exercise Price for the Rights also is
subject to adjustment in the event of extraordinary distributions of cash or
other property to holders of Common Stock.

     Unless the Rights are earlier redeemed or exchanged, in the event that,
after the time that a Person becomes an Acquiring Person, the Company were to be
acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right will from and after such date have the
right to receive, upon payment of the Exercise Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price.

     In addition, unless the Rights are earlier redeemed or exchanged, in the
event that a person or group becomes an Acquiring Person, the Rights Agreement
provides that proper provisions will be made so that each holder of record of a
Right, other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Exercise Price, that number of shares of the Preferred Stock having a market
value at the time of the transaction equal to two times the Exercise Price (such
market value to be determined with reference to the market value of the
Company's Common Stock as provided in the Rights Agreement).

     At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
voting stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, for that number of shares of the Company's Common Stock
having a fair market value on the first date such person or group became an
Acquiring Person equal to the excess of (i) the value of the shares of Preferred
Stock issuable upon the exercise of the Rights in the event of such acquisition
over (ii) the exercise price of the Rights, in each case as adjusted.

     Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one-thousandth of a share) may, at the election of the
Company, be evidenced by depositary receipts. The Company may also issue cash in
lieu of fractional shares which are not integral multiples of one-thousandth of
a share.

     At any time prior to the time there has been a public announcement that a
person has become an Acquiring Person, the Company may redeem the Rights in
whole,

                                      A-3


but not in part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the effective time of the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

     For as long as the Rights are then redeemable, the Company may, except with
respect to the Redemption Price, amend the Rights in any manner, including an
amendment to extend the time period in which the Rights may be redeemed. At any
time when the Rights are not then redeemable, the Company may amend the Rights
in any manner that does not materially adversely affect the interests of holders
of the Rights as such.

     Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.

     A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K dated July 28,
1999. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement which is
incorporated in this summary description herein by reference.

                                      A-4


                                                                      EXHIBIT B

                           [Form of Right Certificate]

Certificate No. W-                                                ______ Rights

     NOT EXERCISABLE AFTER JULY 26, 2009 OR EARLIER IF EXCHANGED OR REDEEMED.
     THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY AND
     UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.001 PER RIGHT (SUBJECT TO
     ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS AGREEMENT.
     AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED
     TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
     ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
     SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE
     EXERCISED OR TRANSFERRED TO ANY PERSON.

                                Right Certificate

     This certifies that __________________________, , or its registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of July 27, 1999 (the "Rights
Agreement") between United Stationers Inc., a Delaware corporation (the
"Company"), and _____________________________, a banking corporation organized
under the laws of the State of ___________ (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (New York time) on July
26, 2009 at the office of the Rights Agent designated in the Rights Agreement
for such purpose, or its successor as Rights Agent, in New York, New York, one
one-thousandth (1/1,000) of a fully paid nonassessable share of Series A Junior
Preferred Stock (the "Preferred Stock") of the Company at a purchase

                                      B-1


price of one hundred dollars ($100), as the same may from time to time be
adjusted in accordance with the Rights Agreement (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase attached hereto duly executed.

     As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events and, upon the happening of certain events,
securities other than shares of Preferred Stock, or other property, may be
acquired upon exercise of the Rights evidenced by this Right Certificate, as
provided in the Rights Agreement.

     This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.

     This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Right

                                      B-2


Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.

     Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option or under certain
other circumstances at a redemption price of $.001 per Right.

     No fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth (1/1,000) of a share) are required to
be issued upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof the Company may cause depositary receipts to be issued and/or a cash
payment may be made, as provided in the Rights Agreement.

     No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,

                                      B-3


until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.

     This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.

                                      B-4

     WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _____________, _____.

ATTEST:

                                                   By:
- --------------------------------                      -------------------------
Secretary                                          Title:
                                                        -----------------------

Countersigned:

[Rights Agent]

By
  -------------------------------
         Authorized Signature

                                      B-5


                   [Form of Reverse Side of Right Certificate]

                               FORM OF ASSIGNMENT
                               ------------------

                (To be executed by the registered holder if such
               holder desires to transfer the Right Certificates.)


     FOR VALUE RECEIVED ____________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
                             (Please print name and address of transferee)
______________________________________________________________Rights evidenced
by this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution. Dated: ___________, _____

                                    -------------------------------------------
                                    Signature
Signature Guaranteed:

                                      B-6


                                   CERTIFICATE

     The undersigned hereby certifies by checking the appropriate boxes that:

     (1) this Right Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and

     (2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).


Dated:
      --------------,------          -------------------------------------------
                                    Signature

                                     NOTICE

     The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.

                                      B-7


                          FORM OF ELECTION TO PURCHASE

                      (To be executed if registered holder
                   desires to exercise the Right Certificate.)

TO _____________________:

     The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such share(s) be issued in the following name:

Please insert social security
or other identifying number: __________________________________________________
________________________________________________________________________________
                         (Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

                                      B-8


Please insert social security
or other identifying number:
                            ---------------------------------------------------

- -------------------------------------------------------------------------------
                         (Please print name and address)

- -------------------------------------------------------------------------------
Dated:
      -----------------,------

                                    -------------------------------------------
                                    Signature
                                    (Signature must conform in all respects to
                                     name of holder as specified on the face of
                                     this Right Certificate)

Signature Guaranteed:

                                      B-9


                                                                       EXHIBIT C

                                     FORM OF
                           CERTIFICATE OF DESIGNATIONS
                                       OF
                         SERIES A JUNIOR PREFERRED STOCK
                                       OF
                             UNITED STATIONERS INC.

                     Pursuant to Section 151 of the Delaware
                             General Corporation Law

     I, Susan Maloney Meyer, the Vice President, General Counsel and Secretary
of United Stationers Inc., a corporation organized and existing under the
Delaware General Corporation Law (the "Company"), in accordance with the
provisions of Section 151 of such law, DO HEREBY CERTIFY that pursuant to the
authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the Board of Directors on July 27, 1999 adopted
the following resolution which creates a series of shares of Preferred Stock
designated as Series A Junior Preferred Stock, as follows:

     RESOLVED, that pursuant to Section 151(g) of the Delaware General
Corporation Law and the authority vested in the Board of Directors of the
Company in accordance with the provisions of the Certificate of Incorporation of
the Company, a series of Preferred Stock of the Company be, and hereby is,
created, and the powers, designations, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof, be, and hereby are, as
follows:

                                      C-1


     Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Preferred Stock" (the "Series A Preferred Stock")
and the number of shares constituting such series shall be 68,000.

     Section 2. DIVIDENDS AND DISTRIBUTIONS.

     (A) Subject to the provisions for adjustment hereinafter set forth, and
subject to the rights of the holders of any shares of any series of Preferred
Stock ranking prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per share
(rounded to the nearest cent) equal to 1,000 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, $0.10 par
value per share, of the Company (the "Common Stock") and (ii) a preferential
cash dividend (the "Preferential Dividends"), if any, in preference to the
holders of Common Stock, on the first day of each fiscal quarter of the Company
(each a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, payable in an amount (except in the case of the
first Quarterly Dividend Payment if the date of the first issuance of Series A
Preferred Stock is a date other than a Quarterly Dividend Payment date, in which
case such payment shall be a prorated amount of such amount) equal to $0.001 per
share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or, with

                                      C-2


respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the event
the Company shall, at any time after the issuance of any share or fraction of a
share of Series A Preferred Stock, make any distribution on the shares of Common
Stock of the Company, whether by way of a dividend or a reclassification of
stock, a recapitalization, reorganization or partial liquidation of the Company
or otherwise, which is payable in cash or any debt security, debt instrument,
real or personal property or any other property (other than cash dividends
subject to the immediately preceding sentence, a distribution of shares of
Common Stock or other capital stock of the Company or a distribution of rights
or warrants to acquire any such share, including any debt security convertible
into or exchangeable for any such share, at a price less than the Fair Market
Value (as hereinafter defined) of such share), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind, of 1,000 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the Series
A Preferred Stock to which holders thereof are entitled pursuant to clause (i)
of the first sentence of this paragraph and pursuant to the second sentence of
this paragraph are hereinafter referred to as "Dividends" and the multiple of
such cash and non-cash dividends on the Common Stock applicable to the
determination of the Dividends, which shall be 1,000 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple". In the event the Company shall at any time after
August 16, 1999 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a

                                      C-3


subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, then in each such case the Dividend Multiple thereafter applicable
to the determination of the amount of Dividends which holders of shares of
Series A Preferred Stock shall be entitled to receive shall be the Dividend
Multiple applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.

     (B) The Company shall declare each Dividend at the same time it declares
any cash or non-cash dividend or distribution on the Common Stock in respect of
which a Dividend is required to be paid. No cash or non-cash dividend or
distribution on the Common Stock in respect of which a Dividend is required to
be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series A Preferred
Stock.

     (C) Preferential Dividends shall begin to accrue on outstanding shares of
Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issuance of any shares of Series A Preferred Stock. Accrued but
unpaid Preferential Dividends shall cumulate but shall not bear interest.
Preferential Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of

                                      C-4


such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.

     Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:

     (A) Subject to the provisions for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the holders of the Common Stock. The
number of votes which a holder of Series A Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". In the event the Company shall
at any time after August 16, 1999 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then in each
such case the Vote Multiple thereafter applicable to the determination of the
number of votes per share to which holders of shares of Series A Preferred Stock
shall be entitled after such event shall be the Vote Multiple immediately prior
to such event multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

     (B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock and
the holders

                                      C-5


of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.

     (C) In the event that the Preferential Dividends accrued on the Series A
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or irrevocably set aside for
payment, the holders of record of Preferred Stock of the Company of all series
(including the Series A Preferred Stock), other than any series in respect of
which such right is expressly withheld by the Certificate of Incorporation or
the authorizing resolutions included in any Certificate of Designations
therefor, shall have the right, at the next meeting of stockholders called for
the election of directors, to elect two members to the Board of Directors, which
directors shall be in addition to the number required prior to such event, to
serve until the next Annual Meeting and until their successors are elected and
qualified or their earlier resignation, removal or incapacity or until such
earlier time as all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series A Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series A
Preferred Stock shall continue to have the right to elect directors as provided
by the immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.

                                      C-6


     (D) Except as otherwise required by the Certificate of Incorporation or by
law or set forth herein, holders of Series A Preferred Stock shall have no other
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action.

     Section 4. CERTAIN RESTRICTIONS.

     (A) Whenever Preferential Dividends or Dividends are in arrears or the
Company shall be in default of payment thereof, thereafter and until all accrued
and unpaid Preferential Dividends and Dividends, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid or set
irrevocably aside for payment in full, and in addition to any and all other
rights which any holder of shares of Series A Preferred Stock may have in such
circumstances, the Company shall not:

          (i) declare or pay dividends on, make any other distributions on, or
     redeem or purchase or otherwise acquire for consideration, any shares of
     stock ranking junior (either as to dividends or upon liquidation,
     dissolution or winding up) to the Series A Preferred Stock;

          (ii) declare or pay dividends on or make any other distributions on
     any shares of stock ranking on a parity as to dividends with the Series A
     Preferred Stock, unless dividends are paid ratably on the Series A
     Preferred Stock and all such parity stock on which dividends are payable or
     in arrears in proportion to the total amounts to which the holders of all

                                      C-7


     such shares are then entitled if the full dividends accrued thereon were to
     be paid;

          (iii) except as permitted by subparagraph (iv) of this paragraph 4(A),
     redeem or purchase or otherwise acquire for consideration shares of any
     stock ranking on a parity (either as to dividends or upon liquidation,
     dissolution or winding up) with the Series A Preferred Stock, provided that
     the Company may at any time redeem, purchase or otherwise acquire shares of
     any such parity stock in exchange for shares of any stock of the Company
     ranking junior (both as to dividends and upon liquidation, dissolution or
     winding up) to the Series A Preferred Stock; or

          (iv) purchase or otherwise acquire for consideration any shares of
     Series A Preferred Stock, or any shares of stock ranking on a parity with
     the Series A Preferred Stock (either as to dividends or upon liquidation,
     dissolution or winding up), except in accordance with a purchase offer made
     to all holders of such shares upon such terms as the Board of Directors,
     after consideration of the respective annual dividend rates and other
     relative rights and preferences of the respective series and classes, shall
     determine in good faith will result in fair and equitable treatment among
     the respective series or classes.

     (B) The Company shall not permit any Subsidiary (as hereinafter defined) of
the Company to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under paragraph (A) of this
Section 4,

                                      C-8


purchase or otherwise acquire such shares at such time and in such manner. A
"Subsidiary" of the Company shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power sufficient
to elect a majority of the board of directors of such corporation or other
entity or other persons performing similar functions are beneficially owned,
directly or indirectly, by the Company or by any corporation or other entity
that is otherwise controlled by the Company.

     (C) The Company shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights Agreement
dated as of July 27, 1999 between the Company and BANKBOSTON, N.A. as Rights
Agent, as it may be amended from time to time, a copy of which is on file with
the Secretary of the Company at its principal executive office and shall be made
available to stockholders of record without charge upon written request therefor
addressed to said Secretary. Notwithstanding the foregoing sentence, nothing
contained in the provisions hereof shall prohibit or restrict the Company from
issuing for any purpose any series of Preferred Stock with rights and privileges
similar to, different from, or greater than, those of the Series A Preferred
Stock.

     Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new

                                      C-9


series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors.

     Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless the holders of shares of Series A Preferred
Stock shall have received for each share of Series A Preferred Stock, subject to
adjustment as hereinafter provided, (A) $1,000 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment or, (B) if greater than the amount specified in clause
(i)(A) of this sentence, an amount equal to 1,000 times the aggregate amount to
be distributed per share to holders of Common Stock, as the same may be adjusted
as hereinafter provided and (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of

                                      C-10


the Company applicable pursuant to said clause to the determination of the
Participating Liquidation Amount, as said multiple may be adjusted from time to
time as hereinafter provided, is hereinafter referred to as the "Liquidation
Multiple". In the event the Company shall at any time after August 16, 1999
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser number
of shares of Common Stock, then, in each such case, the Liquidation Multiple
thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Series A Preferred Stock shall be entitled after such
event shall be the Liquidation Multiple applicable immediately prior to such
event multiplied by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

     Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.

     (A) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
share of capital stock of the Company (other than any share of Common Stock of
the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall be adjusted so that after such

                                      C-11


event the holders of Series A Preferred Stock shall be entitled, in respect of
each share of Series A Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately prior to such
adjustment, to (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such Transaction multiplied by the additional
dividends which the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such capital stock, (ii)
such additional voting rights as equal the Vote Multiple in effect immediately
prior to such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock and (iii) such additional
distributions upon liquidation, dissolution or winding up of the Company as
equal the Liquidation Multiple in effect immediately prior to such Transaction
multiplied by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding up of the
Company by virtue of the receipt in the Transaction of such capital stock, as
the case may be, all as provided by the terms of such capital stock.

     (B) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Fair Market Value of a
share of Common Stock on the date of issuance of such right or warrant, then and
in each such event the dividend rights, voting rights and rights upon the
liquidation, dissolution or winding up of the Company of the shares of Series A
Preferred Stock shall each be adjusted so that after

                                      C-12


such event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.

     (C) In the event that holders of shares of Common Stock of the Company
receive after August 16, 1999 in respect of their shares of Common Stock any
right or warrant to purchase capital stock of the Company (other than shares of
Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series A Preferred Stock shall be entitled, in
respect of each share of Series A Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled immediately prior to
such event, to receive

                                      C-13


(i) such additional dividends as equal the Dividend Multiple in effect
immediately prior to such event multiplied, first, by the additional dividends
to which the holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which could be acquired
upon such exercise and multiplied again by the Discount Fraction (as hereinafter
defined) and (ii) such additional voting rights as equal the Vote Multiple in
effect immediately prior to such event multiplied, first, by the additional
voting rights to which the holder of a share of Common Stock shall be entitled
upon exercise of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distributions upon liquidation, dissolution
or winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Company as contemplated by this paragraph immediately after
the distribution thereof and the purchase price per share for such share of
capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.

                                      C-14


     (D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Company to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be the last
sale price, regular way, or, in case, no such sale takes place on such day, the
average of the closing bid and asked prices, regular way (in either case, as
reported in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the Nasdaq National Market), or, if
the shares are not listed or admitted to trading on the Nasdaq National Market,
as reported in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange or Nasdaq market
on which the shares are listed or admitted to trading or, if the shares are not
listed or admitted to trading on any national securities exchange or Nasdaq
market, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in

                                      C-15


use, or if on any such date the shares are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the shares selected by the Board of Directors of
the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange or Nasdaq market on which the shares are listed or
admitted to trading is open for the transaction of business or, if the shares
are not listed or admitted to trading on any national securities exchange or
Nasdaq market, on which the Nasdaq National Market or such other national
securities exchange as may be selected by the Board of Directors of the Company
is open. If the shares are not publicly held or not so listed or traded on any
day within the period of 30 Trading Days applicable to the determination of Fair
Market Value thereof as aforesaid, "Fair Market Value" shall mean the fair
market value thereof per share as determined in good faith by the Board of
Directors of the Company. In either case referred to in the foregoing sentence,
the determination of Fair Market Value shall be described in a statement filed
with the Secretary of the Company.

     Section 8. CONSOLIDATION, MERGER, ETC. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each outstanding share of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into the aggregate amount of stock, securities, cash and/or other
property (payable in like kind), as the case may be, for which or into which
each share of Common Stock is changed or exchanged multiplied by the highest of
the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.

                                      C-16


     Section 9. EFFECTIVE TIME OF ADJUSTMENTS.

     (A) Adjustments to the Series A Preferred Stock required by the provisions
hereof shall be effective as of the time at which the event requiring such
adjustments occurs.

     (B) The Company shall give prompt written notice to each holder of a share
of Series A Preferred Stock of the effect of any adjustment to the voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the Company of such shares required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.

     Section 10. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
provisions hereof and the Certificate of Incorporation of the Company.

     Section 11. RANKING. Unless otherwise provided in the Certificate of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's Preferred Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.

                                      C-17


     Section 12. AMENDMENT. The provisions hereof and the Certificate of
Incorporation of the Company shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series A Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series A Preferred Stock, voting together as a single class.

     IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of perjury
this 27th day of July, 1999.

                                   By:
                                      -----------------------------------------
                                   Name:    Susan Maloney Meyer
                                   Title:   Vice President, General Counsel and
                                            Secretary

ATTEST:

By:
   -----------------------------------------
Name:
         -----------------------------------
Title:
         -----------------------------------

                                      C-18

EX-4.3

EXHIBIT 4.3

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





                          UNITED STATIONERS SUPPLY CO.,

                                    as Issuer

                                       AND

                            THE ORDER PEOPLE COMPANY

                           as New Subsidiary Guarantor

                                       AND

                              THE BANK OF NEW YORK,


                                   as Trustee



                          FIRST SUPPLEMENTAL INDENTURE

                            Dated as of June 30, 2000

                                       to

                                    Indenture

                           Dated as of April 15, 1998
                           --------------------------

                                  $100,000,000

                        8-3/8% Senior Subordinated Notes

                                    due 2008

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





      FIRST SUPPLEMENTAL INDENTURE dated as of June 30, 2000, among UNITED
STATIONERS SUPPLY CO., an Illinois corporation (the "COMPANY"), THE ORDER PEOPLE
COMPANY, a Delaware corporation (the "NEW SUBSIDIARY GUARANTOR"), and THE BANK
OF NEW YORK, a New York banking corporation, as Trustee (the "TRUSTEE").

      WHEREAS, the Company and certain subsidiary guarantors have heretofore
executed and delivered to the Trustee an Indenture dated as of April 15, 1998
(the "Indenture"), providing for the issuance of $100,000,000 aggregate
principal amount of 8-3/8% Senior Subordinated Notes due 2008 (the "NOTES"); and

      WHEREAS, the Company, the New Subsidiary Guarantor and the Trustee desire
by this First Supplemental Indenture, pursuant to and as contemplated by the
provisions of the Indenture relating to the addition of guarantors, including,
without limitation, Sections 901 and 1017 thereof, to add the New Subsidiary
Guarantor as a guarantor pursuant to the terms of the Indenture; and

      WHEREAS, the execution and delivery of this First Supplemental Indenture
has been authorized by resolutions of the Board of Directors of each of the
Company and the New Subsidiary Guarantor; and

      WHEREAS, all conditions and requirements necessary to make this First
Supplemental Indenture a valid, binding legal instrument in accordance with its
terms have been performed and fulfilled by the parties hereto and the execution
and delivery thereof have been in all respects duly authorized by the parties
hereto.

      NOW, THEREFORE, in consideration of the above premises, each party agrees,
for the benefit of the others and for the equal and ratable benefit of the
holders of the Notes, as follows:

                                     ARTICLE I.

                     ASSUMPTION OF OBLIGATIONS AS GUARANTOR

Section 1.01.  ASSUMPTION. The New Subsidiary Guarantor hereby expressly and
unconditionally assumes each and every covenant, agreement and undertaking of a
0Guarantor in the Indenture as of the date of this First Supplemental Indenture,
and also hereby expressly and unconditionally assumes each and every covenant,
agreement and undertaking of a Guarantor in each Note outstanding on the date of
this First Supplemental Indenture.

                                   ARTICLE II.

                            MISCELLANEOUS PROVISIONS

Section 2.01.  TERMS DEFINED. For all purposes of this First Supplemental
Indenture, except as otherwise defined or unless the context otherwise requires,
terms used in capitalized form in this First Supplemental Indenture and defined
in the Indenture have the meanings specified in the Indenture.

                                       2


Section 2.02.  INDENTURE.  Except as amended hereby, the Indenture and the
Notes are in all respects ratified and confirmed and all the terms shall remain
in full force and effect.

Section 2.03.  GOVERNING LAW. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE
OVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section 2.04.  SUCCESSORS.  All agreements of the Company and the New
Subsidiary Guarantor in this First Supplemental Indenture and the Notes shall
bind their successors. All agreements of the Trustee in this First Supplemental
Indenture shall bind its successors.

Section 2.05.  DUPLICATE ORIGINALS.  All parties may sign any number of
copies of this First Supplemental Indenture. Each signed copy shall be an
original, but all of them together shall represent the same agreement.

Section 2.06.  SEVERABILITY. In case any one or more of the provisions in this
First Supplemental Indenture or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.

Section 2.07.  TRUSTEE DISCLAIMER. The Trustee accepts the amendment of the
Indenture effected by this First Supplemental Indenture and agrees to execute
the trust created by the Indenture as hereby amended, but on the terms and
conditions set forth in the Indenture, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee, which
terms and provisions shall in like manner define and limit its liabilities and
responsibilities in the performance of the trust created by the Indenture as
hereby amended, and without limiting the generality of the foregoing, the
Trustee shall not be responsible in any manner whatsoever for or with respect to
any of the recitals or statements contained herein, all of which recitals or
statements are made solely by the Company and the New Subsidiary Guarantor, or
for or with respect to (i) the validity or sufficiency of this First
Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper
authorization hereof by the Company and the New Subsidiary Guarantor by
corporate action or otherwise, (iii) the due execution hereof by the Company and
the New Subsidiary Guarantor or (iv) the consequences (direct or indirect and
whether deliberate or inadvertent) of any amendment herein provided for, and the
Trustee makes no representation with respect to any such matters.

Section 2.08.  EFFECTIVENESS. This First Supplemental Indenture shall become
effective, once executed, upon receipt by the Trustee of a certificate of an
appropriate officer of the Company; and an opinion of Weil, Gotshal & Manges
LLP, counsel to the Company, each of which shall be dated no earlier than the
date hereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]


                                       3



      IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year written above.




                                          UNITED STATIONERS SUPPLY CO., as
                                          Issuer


                                          By:
                                                ------------------------------
                                          Name:
                                                ------------------------------
                                          Title:
                                                ------------------------------




                                          THE ORDER PEOPLE COMPANY, as New
                                          Subsidiary Guarantor


                                          By:
                                                ------------------------------
                                          Name:
                                                ------------------------------
                                          Title:
                                                ------------------------------



                                          THE BANK OF NEW YORK,
                                          as Trustee

                                          By:
                                                ------------------------------
                                          Name:
                                                ------------------------------
                                          Title:
                                                ------------------------------

EX-4.4

                                                                   EXHIBIT 4.4

================================================================================


                          UNITED STATIONERS SUPPLY CO.,

                                    as Issuer

                                       AND

                   CORPORATE EXPRESS CALLCENTER SERVICES, INC.

                           as New Subsidiary Guarantor

                                       AND

                              THE BANK OF NEW YORK,

                                   as Trustee

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

                          SECOND SUPPLEMENTAL INDENTURE

                            Dated as of July 1, 2000

                                       to

                                    Indenture

                           Dated as of April 15, 1998

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

                                  $100,000,000

                        8-3/8% Senior Subordinated Notes

                                    due 2008

================================================================================



     SECOND SUPPLEMENTAL INDENTURE dated as of July 1, 2000, among UNITED
STATIONERS SUPPLY CO., an Illinois corporation (the "COMPANY"), CORPORATE
EXPRESS CALLCENTER SERVICES, INC. (to be renamed United CallCenter Services,
Inc.), a Delaware corporation (the "NEW SUBSIDIARY GUARANTOR"), and THE BANK OF
NEW YORK, a New York banking corporation, as Trustee (the "TRUSTEE").

     WHEREAS, the Company and certain subsidiary guarantors have heretofore
executed and delivered to the Trustee an Indenture dated as of April 15, 1998
(the "INDENTURE"), providing for the issuance of $100,000,000 aggregate
principal amount of 8-3/8% Senior Subordinated Notes due 2008 (the "NOTES");

     WHEREAS, the Company and The Order People Company, a Delaware corporation
("THE ORDER PEOPLE"), have heretofore executed and delivered to the Trustee a
First Supplemental Indenture, dated as of June 30, 2000, by which The Order
People was added as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the Company, the New Subsidiary Guarantor and the Trustee desire
by this Second Supplemental Indenture, pursuant to and as contemplated by the
provisions of the Indenture relating to the addition of guarantors, including,
without limitation, Sections 901 and 1017 thereof, to add the New Subsidiary
Guarantor as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the execution and delivery of this Second Supplemental Indenture
has been authorized by resolutions of the Board of Directors of each of the
Company and the New Subsidiary Guarantor; and

     WHEREAS, all conditions and requirements necessary to make this Second
Supplemental Indenture a valid, binding legal instrument in accordance with its
terms have been performed and fulfilled by the parties hereto and the execution
and delivery thereof have been in all respects duly authorized by the parties
hereto.

     NOW, THEREFORE, in consideration of the above premises, each party agrees,
for the benefit of the others and for the equal and ratable benefit of the
holders of the Notes, as follows:

                                   ARTICLE I.

                     ASSUMPTION OF OBLIGATIONS AS GUARANTOR

Section 1.01. ASSUMPTION. The New Subsidiary Guarantor hereby expressly and
unconditionally assumes each and every covenant, agreement and undertaking of a
Guarantor in the Indenture as of the date of this Second Supplemental Indenture,
and also hereby expressly and unconditionally assumes each and every covenant,
agreement and undertaking of a Guarantor in each Note outstanding on the date of
this Second Supplemental Indenture.

                                       2


                                   ARTICLE II.

                            MISCELLANEOUS PROVISIONS

Section 2.01. TERMS DEFINED. For all purposes of this Second Supplemental
Indenture, except as otherwise defined or unless the context otherwise requires,
terms used in capitalized form in this Second Supplemental Indenture and defined
in the Indenture have the meanings specified in the Indenture.

Section 2.02. INDENTURE. Except as amended hereby, the Indenture and the Notes
are in all respects ratified and confirmed and all the terms shall remain in
full force and effect.

Section 2.03. GOVERNING LAW. THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section 2.04. SUCCESSORS. All agreements of the Company and the New Subsidiary
Guarantor in this Second Supplemental Indenture and the Notes shall bind their
successors. All agreements of the Trustee in this Second Supplemental Indenture
shall bind its successors.

Section 2.05. DUPLICATE ORIGINALS. All parties may sign any number of copies of
this Second Supplemental Indenture. Each signed copy shall be an original, but
all of them together shall represent the same agreement.

Section 2.06. SEVERABILITY. In case any one or more of the provisions in this
Second Supplemental Indenture or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.

Section 2.07. TRUSTEE DISCLAIMER. The Trustee accepts the amendment of the
Indenture effected by this Second Supplemental Indenture and agrees to execute
the trust created by the Indenture as hereby amended, but on the terms and
conditions set forth in the Indenture, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee, which
terms and provisions shall in like manner define and limit its liabilities and
responsibilities in the performance of the trust created by the Indenture as
hereby amended, and without limiting the generality of the foregoing, the
Trustee shall not be responsible in any manner whatsoever for or with respect to
any of the recitals or statements contained herein, all of which recitals or
statements are made solely by the Company and the New Subsidiary Guarantor, or
for or with respect to (i) the validity or sufficiency of this Second
Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper
authorization hereof by the Company and the New Subsidiary Guarantor by
corporate action or otherwise, (iii) the due execution hereof by the Company and
the New Subsidiary Guarantor or (iv) the consequences (direct or indirect and

                                       3


whether deliberate or inadvertent) of any amendment herein provided for, and the
Trustee makes no representation with respect to any such matters.

Section 2.08. EFFECTIVENESS. This Second Supplemental Indenture shall become
effective, once executed, upon receipt by the Trustee of a certificate of an
appropriate officer of the Company; and an opinion of Weil, Gotshal & Manges
LLP, counsel to the Company, each of which shall be dated no earlier than the
date hereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                       4


     IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the day and year written above.

                                         UNITED STATIONERS SUPPLY CO.,
                                         as Issuer

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                         CORPORATE EXPRESS CALLCENTER
                                         SERVICES, INC., as New Subsidiary
                                         Guarantor

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                         THE BANK OF NEW YORK,
                                         as Trustee

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

EX-4.5

                                                                    EXHIBIT 4.5

================================================================================


                          UNITED STATIONERS SUPPLY CO.,

                                    as Issuer

                                       AND

                    UNITED STATIONERS FINANCIAL SERVICES LLC

                           as New Subsidiary Guarantor

                                       AND

                              THE BANK OF NEW YORK,

                                   as Trustee



                          THIRD SUPPLEMENTAL INDENTURE

                             Dated as of May 1, 2001

                                       to

                                    Indenture

                           Dated as of April 15, 1998



                                  $100,000,000

                        8-3/8% Senior Subordinated Notes

                                    due 2008

================================================================================



     THIRD SUPPLEMENTAL INDENTURE dated as of May 1, 2001, among UNITED
STATIONERS SUPPLY CO., an Illinois corporation (the "COMPANY"), UNITED
STATIONERS FINANCIAL SERVICES LLC, an Illinois limited liability company (the
"NEW SUBSIDIARY GUARANTOR"), and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (the "TRUSTEE").

     WHEREAS, the Company and certain subsidiary guarantors have heretofore
executed and delivered to the Trustee an Indenture dated as of April 15, 1998
(the "INDENTURE"), providing for the issuance of $100,000,000 aggregate
principal amount of 8-3/8% Senior Subordinated Notes due 2008 (the "NOTES");

     WHEREAS, the Company and The Order People Company, a Delaware corporation
("THE ORDER PEOPLE"), have heretofore executed and delivered to the Trustee a
First Supplemental Indenture, dated as of June 30, 2000, by which The Order
People was added as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the Company and United CallCenter Services, Inc., a Delaware
corporation (formerly known as Corporate Express CallCenter Services, Inc.
("CALLCENTER"), have heretofore executed and delivered to the Trustee a Second
Supplemental Indenture, dated as of July 1, 2000, by which CallCenter was added
as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the Company, the New Subsidiary Guarantor and the Trustee desire
by this Third Supplemental Indenture, pursuant to and as contemplated by the
provisions of the Indenture relating to the addition of guarantors, including,
without limitation, Sections 901 and 1017 thereof, to add the New Subsidiary
Guarantor as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the execution and delivery of this Third Supplemental Indenture
has been authorized by resolutions of the Board of Directors of each of the
Company and the New Subsidiary Guarantor; and

     WHEREAS, all conditions and requirements necessary to make this Third
Supplemental Indenture a valid, binding legal instrument in accordance with its
terms have been performed and fulfilled by the parties hereto and the execution
and delivery thereof have been in all respects duly authorized by the parties
hereto.

     NOW, THEREFORE, in consideration of the above premises, each party agrees,
for the benefit of the others and for the equal and ratable benefit of the
holders of the Notes, as follows:

                                   ARTICLE I.

                     ASSUMPTION OF OBLIGATIONS AS GUARANTOR

Section 1.01. ASSUMPTION. The New Subsidiary Guarantor hereby expressly and
unconditionally assumes each and every covenant, agreement and undertaking of a
Guarantor in the Indenture as of the date of this Third Supplemental Indenture,
and also hereby expressly and

                                       2


unconditionally assumes each and every covenant, agreement and undertaking of a
Guarantor in each Note outstanding on the date of this Third Supplemental
Indenture.

                                   ARTICLE II.

                            MISCELLANEOUS PROVISIONS

Section 2.01. TERMS DEFINED. For all purposes of this Third Supplemental
Indenture, except as otherwise defined or unless the context otherwise requires,
terms used in capitalized form in this Third Supplemental Indenture and defined
in the Indenture have the meanings specified in the Indenture.

Section 2.02. INDENTURE. Except as amended hereby, the Indenture and the Notes
are in all respects ratified and confirmed and all the terms shall remain in
full force and effect.

Section 2.03. GOVERNING LAW. THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section 2.04. SUCCESSORS. All agreements of the Company and the New Subsidiary
Guarantor in this Third Supplemental Indenture and the Notes shall bind their
successors. All agreements of the Trustee in this Third Supplemental Indenture
shall bind its successors.

Section 2.05. DUPLICATE ORIGINALS. All parties may sign any number of copies of
this Third Supplemental Indenture. Each signed copy shall be an original, but
all of them together shall represent the same agreement.

Section 2.06. SEVERABILITY. In case any one or more of the provisions in this
Third Supplemental Indenture or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.

Section 2.07. TRUSTEE DISCLAIMER. The Trustee accepts the amendment of the
Indenture effected by this Third Supplemental Indenture and agrees to execute
the trust created by the Indenture as hereby amended, but on the terms and
conditions set forth in the Indenture, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee, which
terms and provisions shall in like manner define and limit its liabilities and
responsibilities in the performance of the trust created by the Indenture as
hereby amended, and without limiting the generality of the foregoing, the
Trustee shall not be responsible in any manner whatsoever for or with respect to
any of the recitals or statements contained herein, all of which recitals or
statements are made solely by the Company and the New Subsidiary Guarantor, or
for or with respect to (i) the validity or sufficiency of this Third
Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper
authorization hereof by the Company and the New Subsidiary

                                       3


Guarantor by corporate action or otherwise, (iii) the due execution hereof by
the Company and the New Subsidiary Guarantor or (iv) the consequences (direct or
indirect and whether deliberate or inadvertent) of any amendment herein provided
for, and the Trustee makes no representation with respect to any such matters.

Section 2.08. EFFECTIVENESS. This Third Supplemental Indenture shall become
effective, once executed, upon receipt by the Trustee of a certificate of an
appropriate officer of the Company; and an opinion of Weil, Gotshal & Manges
LLP, counsel to the Company, each of which shall be dated no earlier than the
date hereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                       4


     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed as of the day and year written above.

                                         UNITED STATIONERS SUPPLY CO.,
                                         as Issuer

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                         UNITED STATIONERS FINANCIAL
                                         SERVICES LLC, as New Subsidiary
                                         Guarantor

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                         THE BANK OF NEW YORK,
                                         as Trustee

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

EX-4.6

                                                                   EXHIBIT 4.6

================================================================================


                          UNITED STATIONERS SUPPLY CO.,

                                    as Issuer

                                       AND

                    UNITED STATIONERS TECHNOLOGY SERVICES LLC

                           as New Subsidiary Guarantor

                                       AND

                              THE BANK OF NEW YORK,

                                   as Trustee

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

                          FOURTH SUPPLEMENTAL INDENTURE

                            Dated as of July 1, 2001

                                       to

                                    Indenture

                           Dated as of April 15, 1998

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

                                  $100,000,000

                        8-3/8% Senior Subordinated Notes

                                    due 2008

================================================================================



     FOURTH SUPPLEMENTAL INDENTURE dated as of July 1, 2001, among UNITED
STATIONERS SUPPLY CO., an Illinois corporation (the "Company"), UNITED
STATIONERS TECHNOLOGY SERVICES LLC, an Illinois limited liability company (THE
"NEW SUBSIDIARY GUARANTOR"), and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (the "TRUSTEE").

     WHEREAS, the Company and certain subsidiary guarantors have heretofore
executed and delivered to the Trustee an Indenture dated as of April 15, 1998
(the "INDENTURE"), providing for the issuance of $100,000,000 aggregate
principal amount of 8-3/8% Senior Subordinated Notes due 2008 (the "NOTES");

     WHEREAS, the Company and The Order People Company, a Delaware corporation
("THE ORDER PEOPLE"), have heretofore executed and delivered to the Trustee a
First Supplemental Indenture, dated as of June 30, 2000, by which The Order
People was added as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the Company and United CallCenter Services, Inc., a Delaware
corporation (formerly known as Corporate Express CallCenter Services, Inc.
("CALLCENTER"), have heretofore executed and delivered to the Trustee a Second
Supplemental Indenture, dated as of July 1, 2000, by which CallCenter was added
as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the Company and United Stationers Financial Services LLC, an
Illinois limited liability company ("USFS"), have heretofore executed and
delivered to the Trustee a Third Supplemental Indenture, dated as of May 1,
2001, by which USFS was added as a guarantor pursuant to the terms of the
Indenture;

     WHEREAS, the Company, the New Subsidiary Guarantor and the Trustee desire
by this Fourth Supplemental Indenture, pursuant to and as contemplated by the
provisions of the Indenture relating to the addition of guarantors, including,
without limitation, Sections 901 and 1017 thereof, to add the New Subsidiary
Guarantor as a guarantor pursuant to the terms of the Indenture;

     WHEREAS, the execution and delivery of this Fourth Supplemental Indenture
has been authorized by resolutions of the Board of Directors of each of the
Company and the New Subsidiary Guarantor; and

     WHEREAS, all conditions and requirements necessary to make this Fourth
Supplemental Indenture a valid, binding legal instrument in accordance with its
terms have been performed and fulfilled by the parties hereto and the execution
and delivery thereof have been in all respects duly authorized by the parties
hereto.

     NOW, THEREFORE, in consideration of the above premises, each party agrees,
for the benefit of the others and for the equal and ratable benefit of the
holders of the Notes, as follows:

                                       2


                                   ARTICLE I.

                     ASSUMPTION OF OBLIGATIONS AS GUARANTOR

Section 1.01. ASSUMPTION. The New Subsidiary Guarantor hereby expressly and
unconditionally assumes each and every covenant, agreement and undertaking of a
Guarantor in the Indenture as of the date of this Fourth Supplemental Indenture,
and also hereby expressly and unconditionally assumes each and every covenant,
agreement and undertaking of a Guarantor in each Note outstanding on the date of
this Fourth Supplemental Indenture.

                                   ARTICLE II.

                            MISCELLANEOUS PROVISIONS

Section 2.01. TERMS DEFINED. For all purposes of this Fourth Supplemental
Indenture, except as otherwise defined or unless the context otherwise requires,
terms used in capitalized form in this Fourth Supplemental Indenture and defined
in the Indenture have the meanings specified in the Indenture.

Section 2.02. INDENTURE. Except as amended hereby, the Indenture and the Notes
are in all respects ratified and confirmed and all the terms shall remain in
full force and effect.

Section 2.03. GOVERNING LAW. THIS FOURTH SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

Section 2.04. SUCCESSORS. All agreements of the Company and the New Subsidiary
Guarantor in this Fourth Supplemental Indenture and the Notes shall bind their
successors. All agreements of the Trustee in this Fourth Supplemental Indenture
shall bind its successors.

Section 2.05. DUPLICATE ORIGINALS. All parties may sign any number of copies of
this Fourth Supplemental Indenture. Each signed copy shall be an original, but
all of them together shall represent the same agreement.

                                       3


Section 2.06. SEVERABILITY. In case any one or more of the provisions in this
Fourth Supplemental Indenture or in the Notes shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.

Section 2.07. TRUSTEE DISCLAIMER. The Trustee accepts the amendment of the
Indenture effected by this Fourth Supplemental Indenture and agrees to execute
the trust created by the Indenture as hereby amended, but on the terms and
conditions set forth in the Indenture, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Trustee, which
terms and provisions shall in like manner define and limit its liabilities and
responsibilities in the performance of the trust created by the Indenture as
hereby amended, and without limiting the generality of the foregoing, the
Trustee shall not be responsible in any manner whatsoever for or with respect to
any of the recitals or statements contained herein, all of which recitals or
statements are made solely by the Company and the New Subsidiary Guarantor, or
for or with respect to (i) the validity or sufficiency of this Fourth
Supplemental Indenture or any of the terms or provisions hereof, (ii) the proper
authorization hereof by the Company and the New Subsidiary Guarantor by
corporate action or otherwise, (iii) the due execution hereof by the Company and
the New Subsidiary Guarantor or (iv) the consequences (direct or indirect and
whether deliberate or inadvertent) of any amendment herein provided for, and the
Trustee makes no representation with respect to any such matters.

Section 2.08. EFFECTIVENESS. This Fourth Supplemental Indenture shall become
effective, once executed, upon receipt by the Trustee of a certificate of an
appropriate officer of the Company; and an opinion of Weil, Gotshal & Manges
LLP, counsel to the Company, each of which shall be dated no earlier than the
date hereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                       4


     IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental
Indenture to be duly executed as of the day and year written above.

                                         UNITED STATIONERS SUPPLY CO., as
                                         Issuer

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                         UNITED STATIONERS TECHNOLOGY
                                         SERVICES LLC, as New Subsidiary
                                         Guarantor

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                         THE BANK OF NEW YORK,
                                         as Trustee

                                         By:
                                               ---------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

EX-4.10

                                                                  EXHIBIT 4.10


                         GUARANTEE ASSUMPTION AGREEMENT

          GUARANTEE ASSUMPTION AGREEMENT (this "AGREEMENT") dated as of July 1,
2001 by United Stationers Technology Services LLC, an Illinois limited liability
company (the "ADDITIONAL SUBSIDIARY GUARANTOR"), in favor of The Chase Manhattan
Bank, as administrative agent for the lenders or other financial institutions or
entities party as "Lenders" to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "ADMINISTRATIVE
AGENT").

          United Stationers Supply Co., United Stationers Inc., the lenders
party thereto and the Administrative Agent, are parties to the Third Amended and
Restated Credit Agreement dated as of June 29, 2000 (as modified and
supplemented and in effect from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit agreement are used herein with the same meanings.

          Pursuant to Section 9.21(a) of the Credit Agreement, the Additional
Subsidiary Guarantor hereby agrees to become a "Subsidiary Guarantor" for all
purposes of the Credit Agreement, and a "Subsidiary Guarantor" and an "Issuer"
for all purposes of the Subsidiary Guarantee and Security Agreement (and hereby
supplements Annexes 1 through 6 to said Subsidiary Guarantee and Security
Agreement as specified in Appendix A). Without limiting the foregoing, the
Additional Subsidiary Guarantor hereby, jointly and severally with the other
Subsidiary Guarantors, guarantees to each Lender and the Administrative Agent
and their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Guaranteed
Obligations (as defined in Section 3.01 of the Subsidiary Guarantee and Security
Agreement) in the same manner and to the same extent as is provided in Section 3
of the Subsidiary Guarantee and Security Agreement. In addition, the Additional
Subsidiary Guarantor hereby makes the representations and warranties set forth
in Section 2 of the Subsidiary Guarantee and Security Agreement, with respect to
itself and its obligations under this Agreement, as if each reference in such
Sections to the Credit Documents included reference to this Agreement.

          The Additional Subsidiary Guarantor hereby instructs its counsel to
deliver the opinions referred to in Section 9.21(a) of the Credit Agreement to
the Lenders and the Administrative Agent.



          IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused
this Guarantee Assumption Agreement to be duly executed and delivered as of the
day and year first above written.

                                 UNITED STATIONERS TECHNOLOGY
                                 SERVICES LLC


                                 By:
                                    -----------------------------------------
                                 Name:
                                      ---------------------------------------
                                 Title:
                                       --------------------------------------

Accepted and agreed:

THE CHASE MANHATTAN BANK,
  as Administrative Agent

By
  ----------------------
  Title:


                                        2


                                                                      Appendix A

                  SUPPLEMENT TO ANNEX 1 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                                  PLEDGED STOCK

                                      None



                  SUPPLEMENT TO ANNEX 2 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                   LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS
                                       AND
                    APPLICATIONS FOR COPYRIGHT REGISTRATIONS

                              [See Section 2.04(d)]

                                      NONE



                  SUPPLEMENT TO ANNEX 3 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                     LIST OF PATENTS AND PATENT APPLICATION

                              [See Section 2.04(d)]

                                      NONE



                  SUPPLEMENT TO ANNEX 4 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                  LIST OF TRADENAMES, TRADEMARKS, SERVICE MARKS
                                       AND
            APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATION

                              [See Section 2.04(d)]

                                      NONE



                  SUPPLEMENT TO ANNEX 5 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS

                       [See Section 2.04(d), (e) and (f)]

                              See attached document



                  SUPPLEMENT TO ANNEX 6 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                                LIST OF LOCATIONS

                               [SEE SECTION 6.07]

CHIEF EXECUTIVE OFFICE:
2200 East Golf Road
Des Plaines, Illinois  60016

OTHER LOCATIONS:
2001 Rand Road
Des Plaines, Illinois  60016

1661 Feehanville Road
Mt. Prospect, Illinois 60056



                         GUARANTEE ASSUMPTION AGREEMENT

          GUARANTEE ASSUMPTION AGREEMENT (this "AGREEMENT") dated as of May 1,
2001 by United Stationers Financial Services LLC, an Illinois limited liability
company (the "ADDITIONAL SUBSIDIARY GUARANTOR"), in favor of The Chase Manhattan
Bank, as administrative agent for the lenders or other financial institutions or
entities party as "Lenders" to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "ADMINISTRATIVE
AGENT").

          United Stationers Supply Co., United Stationers Inc., the lenders
party thereto and the Administrative Agent, are parties to the Third Amended and
Restated Credit Agreement dated as of June 29, 2000 (as modified and
supplemented and in effect from time to time, the "CREDIT AGREEMENT"). Terms
defined in the Credit Agreement are used herein with the same meanings.

          Pursuant to Section 9.21(a) of the Credit Agreement, the Additional
Subsidiary Guarantor hereby agrees to become a "Subsidiary Guarantor" for all
purposes of the Credit Agreement, and a "Subsidiary Guarantor" and an "Issuer"
for all purposes of the Subsidiary Guarantee and Security Agreement (and hereby
supplements Annexes 1 through 6 to said Subsidiary Guarantee and Security
Agreement as specified in Appendix A). Without limiting the foregoing, the
Additional Subsidiary Guarantor hereby, jointly and severally with the other
Subsidiary Guarantors, guarantees to each Lender and the Administrative Agent
and their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Guaranteed
Obligations (as defined in Section 3.01 of the Subsidiary Guarantee and Security
Agreement) in the same manner and to the same extent as is provided in Section 3
of the Subsidiary Guarantee and Security Agreement. In addition, the Additional
Subsidiary Guarantor hereby makes the representations and warranties set forth
in Section 2 of the Subsidiary Guarantee and Security Agreement, with respect to
itself and its obligations under this Agreement, as if each reference in such
Sections to the Credit Documents included reference to this Agreement.

          The Additional Subsidiary Guarantor hereby instructs its counsel to
deliver the opinions referred to in Section 9.21(a) of the Credit Agreement to
the Lenders and the Administrative Agent.



          IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused
this Guarantee Assumption Agreement to be duly executed and delivered as of the
day and year first above written.

                                  UNITED STATIONERS FINANCIAL
                                  SERVICES LLC


                                  By:
                                     -----------------------------------------
                                  Name:
                                       ---------------------------------------
                                  Title:
                                        --------------------------------------

Accepted and agreed:

THE CHASE MANHATTAN BANK,
  as Administrative Agent

By
  -----------------------
  Title:


                                        2


                                                                      Appendix A

                  SUPPLEMENT TO ANNEX 1 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                                  PLEDGED STOCK

                          [See Section 2.04(b) and (c)]



- --------------------------------------------------------------------------------
Issuer   Certificate     Record or        Number of Shares   Par Value  Class
           Number     Beneficial Owner
- --------------------------------------------------------------------------------
                                                         

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

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


                                      None



                  SUPPLEMENT TO ANNEX 2 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                   LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS
                                       AND
                    APPLICATIONS FOR COPYRIGHT REGISTRATIONS

                              [See Section 2.04(d)]

                                      None



                  SUPPLEMENT TO ANNEX 3 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                     LIST OF PATENTS AND PATENT APPLICATION

                              [See Section 2.04(d)]

                                      None



                  SUPPLEMENT TO ANNEX 4 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                  LIST OF TRADENAMES, TRADEMARKS, SERVICE MARKS
                                       AND
            APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATION

                              [See Section 2.04(d)]

                                      None



                  SUPPLEMENT TO ANNEX 5 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS

                       [See Section 2.04(d), (e) and (f)]

                                      None



                  SUPPLEMENT TO ANNEX 6 OF SUBSIDIARY GUARANTEE
                             AND SECURITY AGREEMENT

                                LIST OF LOCATIONS

                               [SEE SECTION 6.07]

2001 Rand Road
Des Plaines, Illinois  60016

EX-10.1

EXHIBIT 10.1

================================================================================

                                                                  EXECUTION COPY

                          UNITED STATIONERS SUPPLY CO.,

                    UNITED STATIONERS FINANCIAL SERVICES LLC,

                                       and

                    UNITED STATIONERS FINANCIAL SERVICES LLC,

                                   as Servicer

                 AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT


                             Dated as of May 1, 2001

================================================================================



                        AMENDED AND RESTATED RECEIVABLES

                                 SALE AGREEMENT

                                TABLE OF CONTENTS



                                                                                      PAGE
                                    ARTICLE I

                                   DEFINITIONS
                                                                                   
Section 1.01      Certain Defined Terms................................................2
Section 1.02      Accounting and UCC Terms.............................................8
Section 1.03      Other Terms..........................................................9
Section 1.04      Computation of Time Periods..........................................9

                                   ARTICLE II

                        PURCHASE AND SALE OF RECEIVABLES

Section 2.01      Purchase and Sale of Receivables.....................................9
Section 2.02      Purchase Price......................................................11
Section 2.03      Payment of Purchase Price...........................................11
Section 2.04      No Repurchase.......................................................13
Section 2.05      Rebates, Adjustments, Returns and Reductions; Modifications.........13
Section 2.06      Limited Repurchase Obligations......................................13
Section 2.07      Obligations Unaffected..............................................15
Section 2.08      Certain Charges.....................................................15
Section 2.09      Certain Allocations.................................................15
Section 2.10      Further Assurances..................................................15
Section 2.11      Additional Repurchase Obligations...................................16

                                   ARTICLE III

                             CONDITIONS TO PURCHASES

Section 3.01      Conditions Precedent to USFS's Initial Purchase.....................17
Section 3.02      Conditions Precedent to the Addition of a Seller....................19
Section 3.03      Conditions Precedent to Each of USFS's Purchases of Receivables.....21
Section 3.04      Conditions Precedent to Each Seller's Obligations...................22


                                       i


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                                                                                   
Section 4.01      Representations and Warranties of USFS..............................23
Section 4.02      Representations and Warranties of the Sellers.......................24

                                    ARTICLE V

                                GENERAL COVENANTS

Section 5.01      Affirmative Covenants of the Sellers................................31
Section 5.02      Reporting Requirements..............................................39
Section 5.03      Negative Covenants..................................................40

                                   ARTICLE VI

                           PURCHASE TERMINATION EVENTS

Section 6.01      Purchase Termination Events.........................................42
Section 6.02      Additional Remedies.................................................45

                                   ARTICLE VII

                                 INDEMNIFICATION

Section 7.01      Indemnities by the Sellers..........................................45
Section 7.02      Indemnities by USFS.................................................48

                                  ARTICLE VIII

                             USFS SUBORDINATED NOTE

Section 8.01      USFS Subordinated Note..............................................48
Section 8.02      Restrictions on Transfer of Contributed Note and USFS Subordinated
                  Note ...............................................................49



                                       ii


                                   ARTICLE IX

                                 MISCELLANEOUS
                                                                                   
Section 9.01      Amendment...........................................................50
Section 9.02      Notices, Etc........................................................50
Section 9.03      No Waiver; Remedies.................................................50
Section 9.04      Successors and Assigns..............................................50
Section 9.05      Costs, Expenses and Taxes...........................................51
Section 9.06      Integration.........................................................51
Section 9.07      Captions and Cross References.......................................51
Section 9.08      Reserved............................................................52
Section 9.09      Reserved............................................................52
Section 9.10      Execution in Counterparts...........................................52
Section 9.11      Acknowledgment of Assignments.......................................52
Section 9.12      No Petition in Bankruptcy...........................................52
Section 9.13      Addition of Sellers.................................................52
Section 9.14      Treatment of Sellers other than USSC; Termination Thereof...........53
Section 9.15      Termination.........................................................54
Section 9.16      Waiver of Jury Trial; Submission of Jurisdiction; Other Waivers.....54
Section 9.17      GOVERNING LAW.......................................................55



SCHEDULE I
SCHEDULE II
SCHEDULE III
SCHEDULE IV
SCHEDULE V
SCHEDULE VI
SCHEDULE VII
SCHEDULE VIII

Exhibit A - Form of USFS Subordinated Note
Exhibit B - Form of Additional Seller Supplement
Exhibit C - Form of UCC Certificate

Annex 1

                                      iii


                 AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT

     AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT, dated as of May 1, 2001
(as amended, supplemented or otherwise modified and in effect from time to time,
this "AGREEMENT"), among UNITED STATIONERS SUPPLY CO., an Illinois corporation
("USSC") (the "SELLER", and together with each other Subsidiary of UNITED
STATIONERS INC. from time to time added as a seller hereunder pursuant to
Section 9.13, the "SELLERS"); UNITED STATIONERS FINANCIAL SERVICES LLC, an
Illinois limited liability company ("USFS"); and USFS, in its capacity as
servicer (the "SERVICER").


                              W I T N E S S E T H :

     WHEREAS, the Sellers, USS Receivables Company, Ltd. (the "COMPANY"), and
USSC and other Sellers have entered into a Receivables Sale Agreement dated as
of April 3, 1998 (the "ORIGINAL AGREEMENT");

     WHEREAS, the Sellers, the Company and the Servicer desire to amend and
restate the Original Agreement for the purpose of substituting USFS for the
Company as purchaser of the Receivables and Receivables Property from the
Sellers;

     WHEREAS, the Company, USSC and The Chase Manhattan Bank (the "TRUSTEE"),
have entered into a Servicing Agreement, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified and in effect from time to time, the
"ORIGINAL SERVICING AGREEMENT"), pursuant to which USSC has acted as Servicer of
the Receivables and Receivables Property;

     WHEREAS, pursuant to an Amended and Restated Servicing Agreement, dated as
of the date hereof, among the Company, USFS, USSC, as Support Provider, and the
Trustee, USFS has been substituted for USSC as Servicer of the Receivables and
Receivables Property and USSC has assumed the duties and obligations of Support
Provider;

     WHEREAS, contemporaneously with the execution and delivery of this
Agreement, USFS, the Company, and USFS, as Servicer, have entered into a USFS
Receivables Sale Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified and in effect from time to time, the "USFS
RECEIVABLES SALE AGREEMENT"), pursuant to which USFS will sell to the Company
and the Company will purchase from USFS Receivables and Receivables Property;

                                       1


     WHEREAS, the Sellers intend to sell Receivables and Receivables Property to
USFS on the terms and subject to the conditions set forth in this Agreement;

     WHEREAS, USFS desires to purchase Receivables and Receivables Property from
the Sellers on the terms and subject to the conditions set forth in this
Agreement;

     WHEREAS, the Sellers and USFS desire the sale of Receivables and
Receivables Property from the Sellers to USFS to be a true sale providing USFS
with the full benefits of ownership of the Receivables.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

                                   ARTICLE I
                                  DEFINITIONS

     Section 1.01 CERTAIN DEFINED TERMS. (a) As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

     "ABR" means, for any day, rate per annum equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate.

     "ADDITIONAL SELLER SUPPLEMENT" means an instrument substantially in the
form of Exhibit B hereto pursuant to which a Subsidiary of United Stationers
Inc. becomes a Seller party hereto.

     "AUTHORIZED OFFICERS" means those officers of the Sellers designated in
Schedule I hereto (or in such other Schedule as may be delivered by the Sellers
to the other parties hereto from time to time) as duly authorized to execute and
deliver this Agreement and any instruments or documents in connection herewith
on behalf of the Sellers and to take, from time to time, all other actions on
behalf of the Sellers in connection herewith.

                                       2


     "CLOSING DATE" means May 1, 2001.

     "CODE" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder or any successor statute and related regulations.

     "COMPANY" has the meaning specified in the recitals hereto.

     "COMPANY SELLER REPURCHASE PAYMENT" has the meaning specified in subsection
2.06(b).

     "CONTRACT" means a contract between any Seller and any Person pursuant to
or under which such Person shall be obligated to make payments to such Seller.

     "CONTRIBUTED NOTE" means that certain subordinated promissory note executed
by the Company pursuant to the Original Agreement in favor of USSC and
contributed by USSC to USFS.

     "DISCOUNTED PERCENTAGE" has the meaning specified in Schedule VII hereto.

     "DOCUMENTS" has the meaning specified in subsection 5.01(r)(iv)(B).

     "EARLY TERMINATION" has the meaning specified in Section 6.01.

     "EFFECTIVE DATE" means (i) with respect to each Seller as of the Closing
Date, the Closing Date and (ii) with respect to any Subsidiary of United
Stationers Inc. added as a Seller pursuant to Section 9.13 hereof subsequent to
the date hereof, the Seller Addition Date with respect to each such Subsidiary.

     "ERISA AFFILIATE" means, with respect to any Person, any trade or business
(whether or not incorporated) that is a member of a group of which such Person
is a member and which is treated as a single employer under Section 414 of the
Code.

     "EXCLUDED RECEIVABLE" means any Receivable which, prior to the Closing
Date, was transferred by USSC to the Company pursuant to the Original Agreement;
PROVIDED that in the event any Excluded Receivable is included in a Required
Report, for the purposes of Section 2.01 hereof and Section 2.1 of the Pooling
Agreement and the definition of "Collections", such receivable shall not be an
Excluded Receivable.

                                       3


     "EXCLUDED RECEIVABLES PAYMENT" means any payment made by an Obligor with
respect to an Excluded Receivable.

     "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by The Chase Manhattan Bank from three federal funds
brokers of recognized standing selected by The Chase Manhattan Bank.

     "INDEMNIFIED AMOUNTS" has the meaning specified in Section 7.01.

     "INITIAL USFS SUBORDINATED NOTE AMOUNT" has the meaning specified in
subsection 8.01(b).

     "LIEN" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement relating to such asset and (c) in the
case of securities, any purchase option, call or other similar right of a third
party with respect to such securities; PROVIDED, HOWEVER, that if a lien is
imposed under Section 412(n) of the Code or Section 302(f) of ERISA for a
failure to make a required installment or other payment to a plan to which
Section 412(n) of the Code or Section 302(f) of ERISA applies, then such lien
shall not be treated as a "Lien" from and after the time any Person who is
obligated to make such payment pays to such plan the amount of such lien
determined under Section 412(n)(3) of the Code or Section 302(f)(3) of ERISA, as
the case may be, and provides to the Trustee, any Agent and each Rating Agency
written evidence reasonably satisfactory to the Rating Agencies of the release
of such lien, or such lien expires pursuant to Section 412(n)(4)(B) of the Code
or Section 302(f)(4)(B) of ERISA.

     "MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which such Person or any ERISA Affiliate of
such Person (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding five years
made or accrued an obligation to make contributions.

                                       4


     "NON-SECURITIZED RECEIVABLES" means any Receivable, exclusive of Excluded
Receivables hereunder, which either (i) arises from any Seller's advertising
business; (ii) is owed by a Person who is not a resident of the United States,
its territories or possessions and/or a payment obligation of a Person that is
not denominated and payable in U.S. Dollars in the United States; (iii) is owed
by a Governmental Authority; or (iv) the payment for which is evidenced or
required to be evidenced by a note or other promissory instrument; PROVIDED that
in the event any Non-Securitized Receivable is included in a Required Report,
for the purposes of Section 2.01 hereof and Section 2.1 of the Pooling Agreement
and the definition of "Collections", such receivable shall not be a Non-Excluded
Receivable.

     "ORIGINAL AGREEMENT" has the meaning specified in the recitals hereto.

     "OUTSTANDING SALE PRICE AMOUNT" means, at any time with respect to any
Seller, the aggregate Purchase Price received by such Seller from USFS or, prior
to the Closing Date, from the Company, with respect to the aggregate outstanding
Principal Amount at such time of the Purchased Receivables of such Seller.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "PAYMENT DATE" has the meaning specified in subsection 2.03(a).

     "PLAN" means, with respect to any Person, any pension plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code which is maintained for employees of such Person or any ERISA
Affiliate of such Person.

     "POOLING AGREEMENT" means the Amended and Restated Pooling Agreement, dated
as of the date hereof, among the Company, the Servicer and The Chase Manhattan
Bank, as Trustee and Securities Intermediary, as such agreement may be further
amended, supplemented, waived, or otherwise modified from time to time,
including, without limitation, the Series 1998-1 Supplement and the Series
2000-2 Supplement.

     "POTENTIAL PURCHASE TERMINATION EVENT" means any condition or act specified
in Section 6.01 that, with the giving of notice or the lapse of time or both,
would become a Purchase Termination Event.

     "PRIME RATE" means the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its

                                       5


principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

     "PURCHASE PRICE" has the meaning specified in Section 2.02.

     "PURCHASE TERMINATION DATE" means, with respect to any Seller, the date on
which USFS's obligation to purchase Receivables from such Seller shall
terminate, which shall be the date on which an Early Termination occurs with
respect to such Seller.

     "PURCHASE TERMINATION EVENT" has the meaning specified in Section 6.01.

     "PURCHASED RECEIVABLE" means, at any time, any Receivable sold to (i) USFS
by any Seller pursuant to, and in accordance with the terms of, this Agreement
and not theretofore resold to such Seller pursuant to subsection 2.01(b) or
Section 2.06 or (ii) the Company by USSC pursuant to, and in accordance with,
the terms of the Original Agreement and not theretofore resold to USSC pursuant
to subsection 2.01(b) or Section 2.06 thereof.

     "PURCHASED RECEIVABLES PERCENTAGE" means, with respect to any Seller as to
which USSC has submitted a Seller Termination Request, the percentage equivalent
of a fraction, the numerator of which is an amount equal to the aggregate
outstanding Principal Amount of Purchased Receivables sold by such Seller as of
the applicable Seller Termination Request Date, and the denominator of which is
an amount equal to the aggregate outstanding Principal Amount of all Purchased
Receivables as of such date.

     "RECEIVABLE" means the indebtedness and payment obligations of any Person
to a Seller (including, without limitation, obligations constituting an account
or general intangible or evidenced by a note, instrument, contract, security
agreement, chattel paper or other evidence of indebtedness or security) arising
from a sale of merchandise or the provision of services by such Seller,
including, without limitation, any right to payment for goods sold or for
services rendered, and including the right to payment of any interest, sales
taxes, finance charges, returned check or late charges and other obligations of
such Person with respect thereto; PROVIDED that "Receivables" shall not include
Excluded Receivables.

     "RECEIVABLES LIST" has the meaning specified in subsection 2.01(e).

                                       6


     "RECEIVABLES PROPERTY" has the meaning specified in subsection 2.01(a).

     "RELATED PROPERTY" means, with respect to each Receivable:

            (a) all of the applicable Seller's interest in the goods (including
returned goods), if any, relating to the sale which gave rise to such
Receivable;

            (b) all other security interests or Liens, and the applicable
Seller's interest in the property subject thereto from time to time purporting
to secure payment of such Receivable, together with all financing statements
signed by an Obligor describing any collateral securing such Receivable; and

            (c) all guarantees, insurance, letters of credit and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable;

in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or including without limitation, pursuant to any
obligations evidenced by a note, instrument, contract, security agreement,
chattel paper or other evidence of indebtedness or security and the proceeds
thereof.

     "RELEVANT UCC STATE" means each jurisdiction in which the filing of a UCC
financing statement is necessary or desirable to perfect USFS's interest in the
Receivables.

     "REPORTABLE EVENT" means any reportable event as defined in Section 4043(b)
of ERISA or the regulations issued thereunder with respect to a Plan (other than
a Plan maintained by an ERISA Affiliate which is considered an ERISA Affiliate
only pursuant to subsection (m) or (o) of Section 414 of the Code).

     "SEC" means the United States Securities and Exchange Commission.

     "SELLER ADDITION DATE" has the meaning specified in Section 3.02.

     "SELLER ADJUSTMENT PAYMENT" has the meaning specified in Section 2.05.

     "SELLER REPURCHASE PAYMENT" has the meaning specified in subsection
2.06(a).

                                       7


     "SELLER TERMINATION REQUEST" has the meaning specified in subsection
9.14(a).

     "SELLER TERMINATION REQUEST DATE" has the meaning specified in subsection
9.14(a).

     "SERIES 1998-1 SUPPLEMENT" means the Second Amended and Restated Series
1998-1 Supplement, dated as of the date hereof, among the Company, the Servicer
and The Chase Manhattan Bank, as Funding Agent, Trustee, Securities Intermediary
and APA Bank, and Park Avenue Receivables Corporation, as Initial Purchaser, to
the Pooling Agreement, as each such agreement may be further amended,
supplemented or otherwise modified from time to time.

     "SERIES 2000-2 SUPPLEMENT" means the Amended and Restated Series 2000-2
Supplement, dated as of the date hereof, among the Company, the Servcicer, The
Chase Manhattan Bank, as Trustee and Securities Intermediary, Market Street
Funding Corporation, as Committed Purchaser, and PNC Bank, National Association,
as Administrator, to the Pooling Agreement, as each such agreement may be
further amended, supplemented or otherwise modified from time to time.

     "SUBORDINATED NOTE" has the meaning specified in Section 8.01 of the USFS
Receivables Sale Agreement.

     "TRUSTEE" has the meaning specified in the recitals hereto.

     "UCC CERTIFICATE" means a certificate substantially in the form of Exhibit
C hereto.

     "USFS RECEIVABLES SALE AGREEMENT" has the meaning specified in the recitals
hereto.

     "USFS SUBORDINATED NOTE" has the meaning specified in Section 8.01.

     "WITHDRAWAL LIABILITIES" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

     (b)  All capitalized terms used herein and not otherwise defined have the
meanings assigned to such terms in Section 1.1 of the Pooling Agreement.

     Section 1.02 ACCOUNTING AND UCC TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP; and all

                                       8


terms used in Article 9 of the UCC that are used but not specifically defined
herein are used herein as defined therein.

     Section 1.03 OTHER TERMS. The words "herein", "hereof", and "hereunder" and
words of similar import refer to this Agreement as a whole, including the
exhibits and schedules hereto, as the same may from time to time be amended or
supplemented, and not to any particular section, subsection or clause contained
in this Agreement, and all references to Sections, subsections, Exhibits and
Schedules shall mean, unless the context clearly indicates otherwise, the
Sections and subsections hereof and the Exhibits and Schedules attached hereto,
the terms of which Exhibits and Schedules are hereby incorporated into this
Agreement. Whenever appropriate, in the context, terms used herein in the
singular also include the plural, and vice versa.

     Section 1.04 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".

                                   ARTICLE II
                        PURCHASE AND SALE OF RECEIVABLES

     Section 2.01 PURCHASE AND SALE OF RECEIVABLES. (a) Each of the Sellers
hereby sells, assigns, transfers and conveys to USFS, without recourse (except
to the limited extent provided herein), all its respective right, title and
interest in, to and under (i) all Receivables now existing and hereafter arising
from time to time, (ii) all payment and enforcement rights (but none of the
obligations) with respect to such Receivables, (iii) all Related Property in
respect of such Receivables, (iv) all Collections with respect to the foregoing
clauses (i), (ii) and (iii) (including any such Collections in any Lockboxes or
Lockbox Accounts) (the payment and enforcement rights, Related Property and
Collections referred to in clauses (ii), (iii) and (iv) above are hereinafter
collectively referred to as the "RECEIVABLES PROPERTY") and (v) all proceeds (as
defined in Section 9-306 of the UCC) of the foregoing.

     (b)  On each applicable Effective Date and on the date of creation of each
newly created Receivable (but only so long as no Early Termination with respect
to the Seller which created such Receivable shall have occurred and be
continuing), all of the applicable Seller's right, title and interest in, to and
under (i) in the case of each such Effective Date, all then existing Receivables
and all Receivables Property in

                                       9


respect of such Receivables and (ii) in the case of each such date of
creation, all such newly created Receivables and all Receivables Property in
respect of such Receivables shall be immediately and automatically sold,
assigned, transferred and conveyed to USFS pursuant to paragraph (a) above
without any further action by such Seller or any other Person. If any Seller
shall not have received payment from USFS of the Purchase Price for any newly
created Receivable and the related Receivables Property on the Payment Date
therefor in accordance with the terms of subsection 2.03(b), such newly created
Receivable and the Receivables Property with respect thereto shall, upon receipt
of notice from the applicable Seller of such failure to receive payment,
immediately and automatically be sold, assigned, transferred and reconveyed by
USFS to such Seller without any further action by USFS or any other Person.

     (c)  The parties to this Agreement intend that the transactions
contemplated by subsections 2.01(a) and (b) hereby shall be, and shall be
treated as, a purchase by USFS and a sale by the applicable Seller of the
Purchased Receivables and the Receivables Property in respect thereof and not a
loan secured by such Purchased Receivables and Receivables Property. All sales
of Receivables and Receivables Property by any Seller hereunder shall be without
recourse to, or representation or warranty of any kind (express or implied) by,
any Seller, except as otherwise specifically provided herein. The foregoing
sale, assignment, transfer and conveyance does not constitute and is not
intended to result in a creation or assumption by USFS of any obligation of any
Seller or any other Person in connection with the Receivables, the Receivables
Property or any agreement or instrument relating thereto, including any
obligation to any Obligor. If this Agreement does not constitute a valid sale,
assignment, transfer and conveyance of all right, title and interest of each
Seller in, to and under the Purchased Receivables and the Receivables Property
in respect thereof despite the intent of the parties hereto, such Seller hereby
grants a "security interest" (as defined in the UCC) in the Purchased
Receivables, the Receivables Property in respect thereof and all proceeds
thereof to USFS and the parties agree that this Agreement shall constitute a
security agreement under the UCC. With respect to Purchased Receivbables and
Receivables Property (as such terms are defined in the Original Agreement) that
have been sold by USSC to the Company pursuant to the Orignal Agreement, the
security interest granted by USSC to the Company pursuant to subsection 2.01(c)
of the Original Agreement in all right, title and interest of USSC in, to and
under such Purchased Receivables and Receivables Property shall remain in full
force and effect.

     (d)  In connection with the foregoing conveyances, each Seller agrees
to record and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables and Receivables Property now existing and hereafter
acquired by

                                       10


USFS from the Sellers meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect USFS's
ownership or security interest in the Receivables and Receivables Property, and
to deliver evidence of the execution and delivery of such financing statements
to USFS on or prior to the related Effective Date.

     (e)  In connection with the foregoing conveyances, each Seller agrees
at its own expense, as agent of USFS, (i) to indicate, or cause to be indicated,
on the computer files containing a master database of Receivables that all
Receivables included in such files and all Receivables Property, have been sold
to USFS in accordance with this Agreement and (ii) to deliver, or cause to be
delivered, to USFS computer files, microfiche lists, a typed or printed list or
other tangible evidence reasonably acceptable to USFS (a "RECEIVABLES LIST")
containing true and complete list (A) on the Closing Date, of (I) the Obligors
whose Receivables have been sold to the Company prior to the Closing Date and
the balance of the Receivables of each such Obligor as of the Closing Date and
(B) on each Effective Date (including the Closing Date) of Obligors whose
Receivables are to be sold to USFS on such Effective Date and the balance of the
Receivables of each such Obligor as of such Effective Date.

     Section 2.02 PURCHASE PRICE. The amount payable by USFS to a Seller, (the
"PURCHASE PRICE") for Receivables and Receivables Property on any Payment Date
under this Agreement shall be equal to the product of (a) the aggregate
outstanding Principal Amount of such Receivables as set forth in the applicable
Required Report and (b) the Discounted Percentage with respect to such Seller.

     Section 2.03 PAYMENT OF PURCHASE PRICE. (a) Upon the fulfillment of the
conditions set forth in Article III, the Purchase Price for Receivables and the
Receivables Property shall be paid or provided for by USFS in the manner
provided below on each day for which a Required Report is delivered pursuant to
Section 4.1 of the Servicing Agreement (each such day, a "PAYMENT DATE") in
respect of a Reported Period (which Required Report shall specify, by Seller,
the Principal Amount of Receivables being sold on such Payment Date, the
aggregate Purchase Price for such Receivables and the components of payment as
provided in paragraph (b) below). The Sellers hereby appoint the Servicer as
their agent to receive, for allocation by the Servicer to the Sellers, payments
of the Purchase Price of the Receivables and the Receivables Property sold to
USFS and hereby authorize USFS to make all such payments due to any Seller
directly to an account of, or as otherwise directed by, the Servicer. The
Servicer hereby accepts and agrees to such appointment. All payments under this
Agreement shall be made not later than 3:00 p.m. (New York City time) on the
date specified therefor in Dollars in same day

                                       11


funds or by check, as the Servicer shall elect, and to the bank account
designated in writing by the Servicer to USFS.

     (b) The Purchase Price for Receivables and Receivables Property shall be
paid by USFS on each Payment Date as follows:

          (i) by netting the amount of any Seller Adjustment Payments or Seller
     Repurchase Payments pursuant to Section 2.05 or 2.06, respectively, against
     such Purchase Price;

         (ii) to the extent available for such purpose, in cash from the net
     proceeds of transfers of interests in Purchased Receivables by USFS to
     other Persons including, without limitation, the Company pursuant to the
     USFS Receivables Sale Agreement;

        (iii) at the option of USFS, by means of an addition to the principal
     amount of the USFS Subordinated Note in an aggregate amount equal to the
     remaining portion of the Purchase Price; PROVIDED, HOWEVER, that with
     respect to any Seller, the outstanding principal amount of such Seller's
     interest in the USFS Subordinated Note shall not at any time exceed 25% of
     the Outstanding Sale Price Amount with respect to such Seller; PROVIDED
     FURTHER that USFS may pay the Purchase Price by means of additions to the
     principal amount of the USFS Subordinated Note only if, at the time of such
     payment and after giving effect thereto, the fair market value of USFS's
     assets, including, without limitation, amounts owed to USFS by the Company
     under the Subordinated Note and the Contributed Note, is greater than the
     amount of its liabilities including, without limitation, its liabilities
     under the USFS Subordinated Note and any amounts due and payable by USFS
     under the USFS Receivables Sale Agreement and the other Transaction
     Documents. Any such addition to the principal amount of the USFS
     Subordinated Note shall be allocated among the Sellers (PRO RATA according
     to the Principal Amount of Receivables sold by each Seller) by the Servicer
     in accordance with the provisions of this subsection 2.03(b)(iii) and
     Section 8.01. The Servicer may evidence such additional principal amounts
     by recording the date and amount thereof on the grid attached to such USFS
     Subordinated Note, PROVIDED that the failure to make any such recordation
     or any error in such grid shall not adversely affect any Seller's rights;
     and

         (iv) in cash from the proceeds of capital contributed by USSC to USFS,
     if any, in respect of its equity interest in USFS.

                                       12


     (c) The Servicer shall be responsible, in its sole discretion but in
accordance with the preceding subsection 2.03(b), for allocating among the
Sellers the payment of the Purchase Price for Receivables and any amounts netted
therefrom pursuant to subsection 2.03(b)(i), which allocation shall be, subject
to the first proviso contained in subsection 2.03(b)(iii), either in the form of
cash received from USFS or as an addition to the principal amount of a Seller's
interest in the USFS Subordinated Note.

     (d) Whenever any payment to be made under this Agreement shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day. Amounts not paid when due in accordance with the
terms of this Agreement shall bear interest at a rate equal at all times to the
ABR PLUS 2%, payable on demand.

     Section 2.04 NO REPURCHASE. Except to the extent expressly set forth
herein, no Seller shall have any right or obligation under this Agreement, by
implication or otherwise, to repurchase from USFS any Purchased Receivables or
Receivables Property or to rescind or otherwise retroactively affect any
purchase of any Purchased Receivables or Receivables Property after the Payment
Date relating thereto.

     Section 2.05 REBATES, ADJUSTMENTS, RETURNS AND REDUCTIONS; MODIFICATIONS.
From time to time, a Seller may make Dilution Adjustments to Receivables in
accordance with this Section 2.05 and subsection 5.03(c). The Sellers, jointly
and severally, agree to pay to USFS in cash, on the first Business Day
immediately succeeding the date of the grant of any Dilution Adjustment
(regardless of which Seller shall have granted such Dilution Adjustment), the
amount of any such Dilution Adjustment (a "SELLER ADJUSTMENT PAYMENT"); PROVIDED
that, prior to the occurrence of any Early Termination with respect to all
Sellers, any such Seller Adjustment Payment due to USFS on any Payment Date
shall, on such Payment Date, be netted against the Purchase Price of newly
created Receivables in accordance with subsection 2.03(b)(i) to the extent of
such Purchase Price and the remaining amount of such Seller Adjustment Payment
due to USFS after such netting, if any, shall be paid to USFS on such date in
cash. The amount of any Dilution Adjustment made with respect to any Reported
Period shall be set forth on the Required Report prepared with respect to such
Reported Period.

     Section 2.06 LIMITED REPURCHASE OBLIGATIONS. (a) With respect to
Receivables conveyed to USFS on or after the date hereof, in the event that (i)
any representation or warranty contained in Section 4.02 in respect of any such
Receivable transferred to USFS is not true and correct in any material respect
on the

                                       13


applicable Payment Date, or (ii) there is a breach of any covenant contained in
subsection 5.01(d), (g) or (h) or Section 5.03 with respect to the Seller of any
such Receivable and such breach has a material adverse effect on USFS's interest
in such Receivable or (iii) USFS's interest in any such Receivable is not a
first priority perfected ownership or security interest at any time as a result
of any action taken by, or any failure to take action by, any Seller, then the
relevant Seller agrees to pay to USFS in cash an amount equal to the Purchase
Price of such Receivable (whether USFS paid such Purchase Price in cash or
otherwise) less Collections received by the Company in respect of such
Receivable pursuant to the Pooling Agreement, such payment to occur no later
than the Payment Date occurring on the 30th day (or, if such 30th day is not a
Payment Date, on the Payment Date immediately succeeding such 30th day) after
the day such breach or incorrectness becomes known (or should have become known
with due diligence) to such Seller (unless such breach or incorrectness shall
have been cured on or before such day); PROVIDED that, prior to any Early
Termination with respect to all Sellers, any such payment due and owing to USFS
on such Payment Date shall be netted against the Purchase Price of newly created
Receivables in accordance with subsection 2.03(b)(i) to the extent of such
Purchase Price and the remaining amount of such payment due to USFS after such
netting, if any, shall be paid to USFS in cash to the extent still unpaid on
such Payment Date. Any payment by any Seller pursuant to this subsection 2.06(a)
is referred to as a "SELLER REPURCHASE PAYMENT." The obligation to reacquire any
Receivable shall, upon satisfaction thereof, constitute the sole remedy with
respect to the event giving rise to such obligation available to USFS.
Simultaneously with any Seller Repurchase Payment with respect to any
Receivable, such Receivable and the Receivables Property with respect thereto
shall immediately and automatically be sold, assigned, transferred and conveyed
by USFS to the applicable Seller without any further action by USFS or any other
Person.

     (b) With respect to Receivables conveyed to the Company prior to the
Closing Date, in the event that (i) any representation or warranty contained in
Section 4.02 of the Original Agreement in respect of any such Receivable
transferred to the Company pursuant to the Original Agreement is not true and
correct in any material respect on the applicable Payment Date, or (ii) there is
a breach of any covenant contained in subsection 5.01(d), (g) or (h) or Section
5.03 of the Original Agreement with respect to any such Receivable and such
breach has a material adverse effect on the Company's interest in such
Receivable or (iii) the Company's interest in any such Receivable is not a first
priority perfected ownership or security interest at any time as a result of any
action taken by, or any failure to take action by, USSC, then USSC agrees to pay
to the Company in cash an amount equal to the Purchase Price of such Receivable
(whether the Company paid such Purchase Price

                                       14


in cash or otherwise) less Collections received by the Company in respect of
such Receivable pursuant to the Pooling Agreement, such payment to occur no
later than the Payment Date occurring on the 30th day (or, if such 30th day is
not a Payment Date, on the Payment Date immediately succeeding such 30th day)
after the day such breach or incorrectness becomes known (or should have become
known with due diligence) to USSC (unless such breach or incorrectness shall
have been cured on or before such day). Any payment by USSC pursuant to this
subseection 2.06(b) is referred to as a "COMPANY SELLER REPURCHASE PAYMENT." The
obligation to reacquire any such Receivable shall, upon satisfaction thereof,
constitute the sole remedy respecting the event giving rise to such obligation
available to the Company. Simultaneously with any Company Seller Repurchase
Payment with respect to any Receivable, such Receivable and the Receivables
Property with respect thereto shall immediately and automatically be sold,
assigned, transferred and conveyed by the Company to USSC without any further
action by the Company or any other Person.

     Section 2.07 OBLIGATIONS UNAFFECTED. The obligations of the Sellers to USFS
under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable or any sale of a Receivable.

     Section 2.08 CERTAIN CHARGES. Each Seller and USFS agree that late charge
revenue, reversals of discounts, other fees and charges and other similar items,
whenever created, accrued in respect of Purchased Receivables shall be the
property of USFS notwithstanding the occurrence of an Early Termination and all
Collections with respect thereto shall continue to be allocated and treated as
Collections in respect of Purchased Receivables.

     Section 2.09 CERTAIN ALLOCATIONS. The Sellers hereby agree that, following
the occurrence of an Early Termination, all Collections and other proceeds
received in respect of Receivables generated by USSC and sold to the Company
prior to the date hereof pursuant to the Original Agreement shall be applied,
FIRST to pay the outstanding Principal Amount of Purchased Receivables (as of
the date of such Early Termination) of the Obligor to whom such Collections are
attributable until such Purchased Receivables are paid in full and, SECOND to
USSC to pay Receivables of such Obligor not sold to the Company pursuant to the
Original Agreement; PROVIDED, HOWEVER, that notwithstanding the foregoing, if an
Obligor indicates that a particular Collection be applied to a specific
Receivable of such Obligor, then such Collection shall be applied to pay such
Receivable.

     Section 2.10 FURTHER ASSURANCES. From time to time at the request of a
Seller, USFS shall deliver to such Seller such documents, assignments, releases
and instruments of termination as such Seller may reasonably request to evidence
the
                                       15


reconveyance by USFS to such Seller of a Receivable pursuant to the terms of
subsection 2.01(b) or Section 2.06, PROVIDED that USFS shall have been paid all
amounts due thereunder; and USFS and the Servicer shall take such action as such
Seller may reasonably request, at the expense of such Seller, to assure that any
such Receivable, the Related Property and Collections with respect thereto do
not remain commingled with other Collections hereunder.

     Section 2.11 ADDITIONAL REPURCHASE OBLIGATIONS. (a) (i) With respect to
Receivables conveyed to USFS on or after the Closing Date, in the event of any
breach by any Seller of any of the representations and warranties set forth in
subsection 4.02(a), (b), (c), (e), (f) or (g), as of the date made, which breach
has a material adverse effect on the interests of USFS in such Receivables or
the related Receivables Property, then USFS, by notice then given in writing to
such Seller, may direct such Seller to purchase all Receivables and Receivables
Property sold by such Seller to USFS and such Seller shall be obligated to make
such purchase on the next Distribution Date occurring at least five Business
Days after receipt of such notice on the terms and conditions set forth in
subsection 2.11(b) below; PROVIDED, HOWEVER, that no such purchase shall be
required to be made if, by such Distribution Date, the representations and
warranties contained in subsections 4.02(a), (b), (c), (e), (f) or (g) shall be
true and correct in all material respects, and any material adverse effect on
USFS caused thereby has been cured.

     (ii) With respect to Receivables conveyed to the Company pursuant to
the Original Agreement prior to the Closing Date, in the event of any breach by
USSC of any of the representations and warranties set forth in subsection
4.02(a), (b), (c), (e), (f) or (g) of the Original Agreement, as of the date
made, which breach has a material adverse effect on the interests of Company in
such Receivables or the related Receivables Property, then USSC, upon receipt of
notice from the Company, shall be obligated to purchase the Receivables and
Receivables sold by it to the Company pursuant to the Original Agreement on the
next Distribution Date occurring at least five Business Days after receipt of
such notice on the terms and conditions set forth in subsection 2.11(b) below;
PROVIDED, HOWEVER, that no such purchase shall be required to be made if, by
such Distribution Date, the representations and warranties contained in
subsections 4.02(a), (b), (c), (e), (f) or (g) of the Original Agreement shall
be true and correct in all material respects, and any material adverse effect on
the Company caused thereby has been cured.

     (b) Such Seller or USSC, as the case may be, shall, as the purchase price
for the Receivables and Receivables Property to be purchased pursuant to
subsection 2.11(a) above, pay to USFS or the Company, as applicable, on the
Business Day preceding such Distribution Date, an amount equal to the Purchase

                                       16


Price of the relevant Purchased Receivables, less Collections received by the
Company pursuant to the Pooling Agreement in respect of such Purchased
Receivables, as of such Distribution Date. Upon payment of such amount, in
immediately available funds, to USFS or the Company, as applicable, the rights
of rights of USFS or the Company, as the case may be, with respect to such
Purchased Receivables shall terminate and such interest therein will be
transferred to such Seller or USSC, as applicable, and USFS or the Company, as
applicable, shall have no further rights with respect thereto. If USFS or the
Company, as the case may be, gives notice directing the Seller or USSC, as
applicable, to purchase the Purchased Receivables as provided above, the
obligation of such Seller or USSC, as applicable, to purchase the Purchased
Receivables pursuant to this Section 2.11 shall upon satisfaction thereof
constitute the sole remedy with respect to an event of the type specified in the
first sentence of each of subsection 2.11(a)(i) and 2.11(a)(ii) available to
USFS and the Company, respectively.

                                  ARTICLE III
                            CONDITIONS TO PURCHASES

     Section 3.01 CONDITIONS PRECEDENT TO USFS's INITIAL PURCHASE. The
obligation of USFS to purchase Receivables and Receivables Property hereunder on
the Effective Date from the Sellers is subject to the conditions precedent that
USFS shall have received on or before the date of such purchase the following,
each (unless otherwise indicated) dated the Closing Date of such sale and in
form and substance reasonably satisfactory to USFS:

          (a) RESOLUTIONS. Copies of the resolutions of the Board of Directors
of each Seller approving this Agreement and the other Transaction Documents to
be delivered by such Seller and the transactions contemplated thereby, certified
by the Secretary or Assistant Secretary of such Seller;

          (b) SECRETARY'S CERTIFICATE. A certificate of the Secretary or
Assistant Secretary of each Seller certifying the names and true signatures of
the officers authorized on behalf of such Seller to sign this Agreement and the
other Transaction Documents to be delivered by it (on which certificates USFS
may conclusively rely until such time as USFS shall receive from any such Seller
a revised certificate with respect to such Seller meeting the requirements of
this subsection (b));

          (c) CORPORATE DOCUMENTS. The certificate or articles of incorporation
of each Seller, duly certified by the secretary of state of such Seller's

                                       17


jurisdiction of incorporation, as of a recent date acceptable to USFS, together
with a copy of the by-laws of such Seller, duly certified by the Secretary or an
Assistant Secretary of such Seller;

          (d) UCC CERTIFICATE, UCC FINANCING STATEMENTS. (i) A UCC Certificate
duly executed by a Responsible Officer of the applicable Seller and dated such
date of purchase and (ii) executed copies of such proper financing statements,
in form suitable for filing, naming the applicable Seller as the seller, USFS as
the purchaser and the Company as assignee of the Receivables, the Receivables
Property and all proceeds thereof in each jurisdiction in which USFS (or any of
its assignees) deems it necessary or desirable to perfect USFS's ownership
interest in all Receivables and Receivables Property under the UCC or any
comparable law of such jurisdiction;

          (e) UCC SEARCHES. A written search report listing all effective
financing statements that name the applicable Seller as debtor or assignor and
that are filed in the jurisdictions in which filings were made pursuant to
subsection 3.01(d) and in any other jurisdictions that USFS determines are
necessary or appropriate, together with copies of such financing statements
(none of which, except for those described in subsection 3.01(d) or the
financing statements previously executed by USSC in favor of the Company shall
cover any Receivables or Receivables Property), and tax and judgment lien
searches showing no such liens that are not permitted by the Transaction
Documents;

          (f) OTHER TRANSACTION DOCUMENTS. Original copies, executed by each of
the parties thereto, of each of the other Transaction Documents to be executed
and delivered in connection herewith;

          (g) Reserved.

          (h) CONSENTS. Copies of all consents, if any (including, without
limitation, consents under loan agreements and indentures to which any Seller or
its Affiliates are parties), necessary to consummate the transactions
contemplated by the Transaction Documents;

          (i) LEGAL OPINIONS. One or more legal opinions from counsel to the
Sellers and counsel to USFS to the effect that:

               (A) the sales of Receivables by each Seller to USFS pursuant to
this Agreement are true sales and that such Receivables would not be property of
such Seller's bankruptcy estate;

                                       18


               (B) a court should not order the substantive consolidation of the
assets and liabilities of the Company, on the one hand, with those of any Seller
or USFS, on the other hand;

               (C) to the effect that each Seller and USFS, as applicable, has
all approvals, judicial, regulatory, legal or otherwise, needed to execute,
deliver and perform each Transaction Document to which it is a party and that no
conflict or default will occur as a result of the execution, delivery and
performance thereof;

               (D) to the effect that USFS has a perfected ownership or security
interest in the Receivables and Receivables Property; and

               (E) addressing other customary matters.

All of the legal opinions referred to in this subsection 3.01(i) shall be
addressed to the Trustee and any other Person reasonably requested by USFS.

          (j) RESERVED.

          (k) LIST OF OBLIGORS. A Receivables List containing the information
required by subsection 2.01(e)(ii).

     Section 3.02 CONDITIONS PRECEDENT TO THE ADDITION OF A SELLER. No
Subsidiary of United Stationers Inc. approved by USFS as an additional Seller
pursuant to Section 9.13 shall be added as a Seller hereunder unless the
conditions set forth below shall have been satisfied on or before the date
designated for the addition of such Seller (the "SELLER ADDITION DATE"):

          (a) ADDITIONAL SELLER SUPPLEMENT, UCC CERTIFICATE. USFS shall have
received (with a copy for the Trustee) (i) an Additional Seller Supplement duly
executed and delivered by such Seller and (ii) a UCC Certificate duly executed
by a Responsible Officer of such Seller and dated the related Seller Addition
Date.

          (b) RESOLUTIONS. USFS shall have received copies of duly adopted
resolutions of the Board of Directors of such Seller as in effect on the related
Seller Addition Date and in form and substance reasonably satisfactory to USFS,
authorizing this Agreement, the documents to be delivered by such Seller
hereunder and the transactions contemplated hereby, certified by the Secretary
or Assistant Secretary of such Seller.

                                       19


          (c) SECRETARY'S CERTIFICATE. USFS shall have received duly executed
certificates of the Secretary or an Assistant Secretary of such Seller, dated
the related Seller Addition Date, certifying the names and true signatures of
the officers authorized on behalf of such Seller to sign the Additional Seller
Supplement or any instruments or documents in connection with this Agreement.

          (d) CORPORATE DOCUMENTS. USFS shall have received the certificate or
articles of incorporation (or equivalent charter document) of such Seller, duly
certified by the secretary of state of such Seller's jurisdiction of formation,
as of a recent date acceptable to USFS, together with a copy of the by-laws (or
equivalent governance document) of such Seller, duly certified by the Secretary
or an Assistant Secretary of such Seller.

          (e) LOCKBOX AGREEMENT. A Lockbox Account with respect to Receivables
to be sold by such Seller shall have been established in the name of the Company
(or established in the name of such seller and assigned to USFS which will then
assign such Lockbox Account to the Company), and the Servicer shall have
delivered with respect to such Lockbox Account a Lockbox Agreement in
substantially the form of Exhibit A to the Pooling Agreement.

          (f) UCC SEARCHES. USFS shall have received reports of UCC and other
searches of such Seller with respect to the Receivables and the Receivables
Property reflecting the absence of Liens thereon, except Permitted Liens and
Liens created in connection with a transfer by USFS of such Purchased
Receivables and except for Liens as to which USFS has received UCC termination
statements in proper form for filing.

          (g) UCC FINANCING STATEMENTS. Such Seller shall have filed and
recorded, at its own expense, UCC-1 financing statements naming USFS as
purchaser and such Seller as seller with respect to the Receivables and the
Receivables Property (excluding returned merchandise) in such manner and in such
jurisdictions as are necessary or desirable to perfect USFS's ownership or
security interest therein under the UCC and delivered evidence of such filings
to USFS; and all other action necessary or desirable, in the opinion of USFS, to
perfect USFS's ownership or security interest in the Receivables and Receivables
Property shall have been duly taken.

          (h) LIST OF OBLIGORS. Such Seller shall have delivered to USFS a a
Receivables List containing the information required by subsection 2.01(e)(ii).

                                       20


          (i) OPINIONS. USFS shall have received (i) legal opinions on behalf of
such Seller as to general corporate matters of such Seller (including, without
limitation, an opinion as to the perfection and priority of USFS's interest in
the Purchased Receivables) and (ii) confirmation (A) as to the "true sale"
nature of the sale of Receivables of such Seller hereunder and (B) as to the
absence of substantive consolidation issues between such Seller, United
Stationers Inc., USSC and USFS on the one hand and the Company on the other
hand, all in form and substance reasonably satisfactory to USFS. Such legal
opinions and confirmation shall be addressed to the Trustee and any other Person
reasonably requested by the Company.

          (j) Reserved.

          (k) CONSENTS. USFS shall have received copies of all consents with
respect to such Seller, if any (including, without limitation, consents under
loan agreements and indentures to which such Seller or its Affiliates are
parties), necessary to consummate the transactions contemplated by the
Transaction Documents.

          (l) GUARANTY. USSC shall have executed and delivered to USFS an
instrument in form and substance satisfactory to USFS, the Company, and the
Trustee, on behalf of the Holders, pursuant to which USSC shall guarantee the
obligations of such additional Seller under this Agreement.

     Section 3.03 CONDITIONS PRECEDENT TO EACH OF USFS's PURCHASES OF
RECEIVABLES. The obligation of USFS to pay for any Receivable and the
Receivables Property with respect thereto on each Payment Date (including the
Effective Date) shall be subject to the further conditions precedent that, on
and as of such Payment Date:

          (a) the following statements shall be true (and the acceptance by the
relevant Seller of the Purchase Price for such Receivable on such Payment Date
shall constitute a representation and warranty by such Seller that on such
Payment Date such statements are true):

               (i) the representations and warranties of such Seller contained
     in Section 4.02 shall be true and correct in all material respects on and
     as of such Payment Date as though made on and as of such date except to the
     extent any such representation or warranty is expressly made only as of
     another date (in which case it shall be true and correct in all material
     respects on and as of such other date);

                                       21


               (ii) after giving effect to such purchase, no (A) Early
     Termination with respect to such Seller or (B) Potential Purchase
     Termination Event with respect to a Purchase Termination Event set forth in
     clause (g)(ii) of Section 6.01 shall have occurred and be continuing; and

               (iii) there has been no material adverse change since the date of
     this Agreement in the collectibility of the Receivables taken as a whole;

          (b) USFS and the Trustee shall be satisfied that such Seller's
systems, procedures and record keeping relating to the Purchased Receivables
remain in all material respects sufficient and satisfactory in order to permit
the purchase and administration of the Purchased Receivables in accordance with
the terms and intent of this Agreement;

          (c) USFS shall have received payment in full of all amounts for which
payment is due from such Seller pursuant to Sections 2.05, 2.06 or 7.01;

          (d) USFS shall have received such other approvals, opinions or
documents as USFS may reasonably request; and

          (e) such Seller shall have complied with all of its covenants in all
material respects and satisfied all of its obligations in all material respects
under this Agreement required to be complied with or satisfied as of such date;

PROVIDED, HOWEVER, that the failure of such Seller to satisfy any of the
foregoing conditions shall not prevent such Seller from subsequently selling
Receivables upon satisfaction of all such conditions or exercising its rights
under subsection 2.01(b).

     Section 3.04 CONDITION PRECEDENT TO EACH SELLER'S OBLIGATIONS. The
obligation of a Seller on each Payment Date (including on the Effective Date)
shall be subject to the condition precedent that, on such date, the following
statement shall be true (and the payment by USFS of the Purchase Price for such
Receivable on such date shall constitute a representation and warranty by USFS
that on such Payment Date such statement is true): (i) no Early Amortization
Event or Potential Early Amortization Event of a type, with respect to the
Company, set forth in subsection 7.1(a) of the Pooling Agreement shall have
occurred and be continuing and (ii) no Early Termination, as set forth in
Section 6 of the USFS Receivables Sale Agreement, shall have occurred.

                                       22


                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

     Section 4.01 REPRESENTATIONS AND WARRANTIES OF USFS. USFS represents and
warrants as to itself for the benefit of the Sellers as follows:

          (a) It (i) is a limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, and is duly qualified as a foreign limited liability company and is
in good standing in each jurisdiction in which the ownership of its property or
its business as conducted and proposed to be conducted require such
qualification or in which the failure to so qualify would not reasonably be
expected to have a Material Adverse Effect, (ii) has the requisite limited
liability company power and authority to effect the transactions contemplated
hereby, and (iii) has all requisite limited liability company power and
authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted.

          (b) The execution, delivery and performance by it of this Agreement
and all instruments and documents to be delivered hereunder by it, and the
transactions contemplated hereby and thereby, (i) are within its limited
liability company powers, have been duly authorized by all necessary limited
liability company action and do not (A) contravene its certificate of formation
or limited liability company agreement, (B) violate any law or regulation or any
order or decree of any court or governmental instrumentality, (C) conflict with
or result in the breach of, or constitute a default under, any indenture,
mortgage or deed of trust or any material lease, agreement or other instrument
binding on or affecting it or any of its respective subsidiaries or any of its
material properties or (D) result in or require the creation or imposition of
any Lien EXCEPT as created or imposed hereunder or under the Pooling Agreement,
and no transaction contemplated hereby requires compliance on its part with any
bulk sales act or similar law, and (ii) do not require the consent of,
authorization by or approval of or notice to or filing or registration with, any
governmental body, agency, authority, regulatory body or any other Person other
than those which have been obtained or made EXCEPT for the filing of the
financing statements referred to in ARTICLE III hereof, which filings the
Sellers hereby represent shall have been duly made prior to or substantially
contemporaneously with any purchases of Receivables and other Receivables
Property and shall at all times be in full force and effect (except as they may
be terminated by USFS). This Agreement has been duly executed and delivered by
USFS and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent

                                       23


conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general, and (B) as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).

     Section 4.02 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each Seller
hereby represents and warrants for the benefit of USFS and its assigns on the
Closing Date and on each Payment Date, as follows:

          (a) ORGANIZATION AND GOOD STANDING. Such Seller (i) is an entity duly
organized or formed and validly existing as an entity in good standing under the
laws of the state of its incorporation or formation, as the case may be, (ii) is
duly qualified as a foreign entity and is in good standing in each jurisdiction
in which the failure to so qualify would reasonably be expected to have a
Material Adverse Effect and (iii) and has full power, authority and legal right
to own its properties and conduct its business as such properties are presently
owned and such business is presently conducted, and to execute, deliver and
perform its obligations under this Agreement.

          (b) DUE QUALIFICATION. Such Seller has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals and where the failure to preserve and maintain such qualification,
licenses or approvals is reasonably likely to have a Material Adverse Effect.

          (c) DUE AUTHORIZATION. The execution and delivery of this Agreement
and the other Transaction Documents to which it is a party and the consummation
of the transactions provided for therein have been duly authorized by such
Seller by all necessary action on its part.

          (d) NO DEFAULT. Such Seller is not in default under or with respect to
any of its Contractual Obligations in any respect which would be reasonably
likely to have a Material Adverse Effect with respect to such Seller. No (i)
Early Termination or (ii) Potential Purchase Termination Event with respect to a
Purchase Termination Event set forth in clause (g)(ii) of Section 6.01, in each
case with respect to such Seller, has occurred and is continuing.

          (e) VALID SALE; BINDING OBLIGATIONS. Each transfer of Receivables and
Receivables Property made pursuant to this Agreement shall constitute a valid
sale, transfer and assignment of the Receivables and the Receivables Property to
USFS which is perfected and of first priority under

                                       24


applicable law, enforceable against creditors of, and purchasers from, such
Seller; and this Agreement constitutes, and each other Transaction Document to
be signed by such Seller when duly executed and delivered will constitute, an
enforceable obligation of such Seller in accordance with its terms, except (A)
as such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights in general,
and (B) as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).

          (f) NO VIOLATION. The execution, delivery and performance of, and the
consummation of the transactions contemplated by, this Agreement and the other
Transaction Documents and the fulfillment of the terms hereof and thereof will
not (i) conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a default
(which, in the case of clauses (B) and (C) below would reasonably be expected to
cause a Material Adverse Effect) under, (A) the articles or certificate of
incorporation or by-laws of such Seller (or equivalent governance documents),
(B) any contract, indenture, loan agreement, mortgage, deed of trust, or, (C)
other material agreement or instrument to which such Seller is a party or by
which such Seller or any of its material properties is bound, (ii) result in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of any such contract, indenture, loan agreement, mortgage, deed of trust,
or other agreement or instrument, other than this Agreement and the other
Transaction Documents, or (iii) violate any law or any order, rule, or
regulation of any court or of any federal, state, local or other regulatory
body, administrative agency, or other governmental instrumentality of the United
States of America having jurisdiction over such Seller or any of its properties.

          (g) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to the knowledge of such Seller, threatened against such Seller before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document,
(iii) seeking any determination or ruling that, in the reasonable judgment of
such Seller, could materially and adversely affect the performance by such
Seller of its obligations under this Agreement or any other Transaction Document
or (iv) seeking any determination or ruling that could materially and adversely
affect the validity or enforceability of this Agreement or any other Transaction
Document.

                                       25


          (h) BULK SALES ACT. No transaction contemplated by this Agreement or
any other Transaction Document with respect to such Seller requires compliance
with, or will be subject to avoidance under, any bulk sales act or similar law.

          (i) GOVERNMENT APPROVALS. No authorization or approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body in the United States of America is required for the due execution, delivery
and performance by such Seller of this Agreement or any other Transaction
Document to which it is a party EXCEPT for the filing of the UCC financing
statements referred to in Article III, all of which, at the time required in
Article III, shall have been duly made and shall be in full force and effect.

          (j) BONA FIDE RECEIVABLES. Each Receivable of such Seller is, or will
be, if transferred pursuant to this Agreement, or was, if transferred pursuant
to the Original Agreement, an account receivable arising out of such Seller's
performance in accordance with the terms of the Contract, if any, giving rise to
such Receivable. Such Seller has no knowledge of any fact which would lead it to
expect that such Eligible Receivable will not be paid in full when due. Each
Receivable sold by it under the Original Agreement or hereunder, as the case may
be, and designated on a Required Report to be an Eligible Receivable was or will
be, as the case may be, at its respective Payment Date, an Eligible Receivable.
The aggregate outstanding Principal Amount of Receivables so sold by such Seller
on any Payment Date and so designated as Eligible Receivables was or will be, as
the case may be, correctly set forth on the Required Report with respect to such
Payment Date.

          (k) OFFICE. The principal place of business and the chief executive
office of such Seller are as indicated for such Seller on Schedule II hereto and
have not changed during the period of four consecutive months ending on such
date (unless otherwise indicated on the UCC Certificate delivered by such Seller
pursuant to subsection 3.01(d) or 3.02(a), as the case may be), and the offices
where such Seller keeps its records concerning the Receivables and related
Contracts and all purchase orders and other agreements related to the
Receivables are as indicated for such Seller on Schedule II hereto (or at such
other locations, notified to USFS in accordance with Section 5.01(i), in
jurisdictions where all action required by subsections 5.01(r)(1) has been taken
and completed).

          (l) MARGIN REGULATIONS. No use of any funds obtained by such Seller
under this Agreement or the other Transaction Documents will conflict with or
contravene any of Regulations T, U and X promulgated by the Board of Governors
of the Federal Reserve System from time to time.

                                       26


          (m) QUALITY OF TITLE. Each Seller is the legal and beneficial owner of
each Receivable and all Receivables Property which is to be transferred to USFS
by such Seller, and such Receivables and Receivables Property shall be
transferred by such Seller free and clear of any Lien (other than any Permitted
Lien or Lien arising under any other Transaction Document, arising solely as the
result of any action taken by USFS hereunder or any Permitted Lien); prior to
such transfer such Seller shall have made all filings under applicable law in
each relevant jurisdiction in order to protect and perfect USFS's ownership or
security interest in all Receivables and Receivables Property against all
creditors of, and purchasers from, such Seller; and USFS shall have acquired and
shall continue to have maintained a valid and perfected first priority ownership
or security interest in each Receivable and the Receivables Property free and
clear of any Lien (other than any Lien arising solely as the result of any
action taken by USFS hereunder or by the Trustee); and no effective financing
statement or other instrument similar in effect covering any Receivable, any
interest therein or any Receivables Property with respect thereto is on file in
any recording office except such as may be filed in favor of (i) such Seller in
accordance with the Contracts, (ii) USFS pursuant to this Agreement and (iii)
the Trustee pursuant to the Pooling Agreement.

          (n) ACCURACY OF INFORMATION. All factual written information
heretofore or contemporaneously furnished by such Seller or its Affiliates
(other than USFS) to USFS for purposes of or in connection with any Transaction
Document or any transaction contemplated hereby or thereby is, and all other
such factual, written information hereafter furnished (if prepared by such
Seller or any Affiliate or, if not prepared by such Seller or any Affiliate, to
the extent that information contained therein was supplied by such Seller or any
Affiliate) by such Seller or any Affiliate (other than USFS) to USFS pursuant to
or in connection with any Transaction Document shall be, true and accurate in
every material respect on the date as of which such information is or will be
furnished (unless such information relates to another date), and such
information is not, and shall not be (as the case may be) incomplete by omitting
to state a material fact or any fact necessary to make the statements contained
therein not misleading as of such date.

          (o) PROCEEDS BANKS, PAYMENT INSTRUCTIONS. The names and addresses of
all the Lockbox Processors, together with the account numbers of the Lockbox
Accounts into which collections are deposited at such institutions, are
specified in Schedule III. The Sellers have transferred all of their right,
title and interest in each Lockbox Account to USFS, which will in turn transfer
such interest to the Company. Each Lockbox Processor has executed and delivered
to the Company a Lockbox Agreement. Each Seller, or the Servicer on its behalf,
will

                                       27


instruct all Obligors to make all payments in respect of the Receivables
and Related Property in accordance with subsection 2.3(a) of the Servicing
Agreement.

          (p) VALID TRANSFERS. No transfer of any Receivables or any Receivables
Property to USFS by such Seller constitutes a fraudulent transfer or fraudulent
conveyance or is otherwise void or voidable under similar laws or principles,
the doctrine of equitable subordination or for any other reason. The transfers
of Receivables and Receivables Property by such Seller to USFS pursuant to this
Agreement, and all other transactions between such Seller and USFS, have been
and will be made in good faith and without intent to hinder, delay or defraud
creditors of such Seller, and such Seller acknowledges that it has received and
will receive fair consideration and reasonably equivalent value for the
purchases by USFS of Receivables and Receivables Property hereunder. The
purchase of Receivables and Receivables Property by USFS from such Seller
constitutes a true sale of such Receivables and Receivables Property under
applicable state law.

          (q) TRADE NAMES. Such Seller uses no trade name in the furnishing of
its products or services which generate Receivables other than its actual
corporate name and the trade names set forth for such Seller in Schedule VI and
in the case of trade names, only in the jurisdictions indicated on Schedule VI.
During the five years preceding the date hereof, except as set forth in Schedule
VI and in the case of trade names, only in the jurisdictions indicated on
Schedule VI, such Seller (i) has not been known by any legal name or trade name
other than its corporate name, and (ii) has not been the subject of any merger
or other corporate reorganization.

          (r) COMPLIANCE WITH APPLICABLE LAWS. Such Seller is in material
compliance with the requirements of all applicable laws, rules, regulations, and
orders of all governmental authorities (federal, state, local or foreign, and
including, without limitation, environmental laws), a breach of any of which,
individually or in the aggregate, would be reasonably likely either (i) to have
a material adverse effect on (A) the business, operations, business prospects or
condition (financial or other) of such Seller or (B) the ability of such Seller
to perform its obligations under this Agreement and the other Transaction
Documents, or (ii) to impair the collectibility of any Receivables or any
Receivables Property or the enforceability or validity of any Contract.

          (s) TAXES. Such Seller has filed all federal and all material state
and local tax returns required by law to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges due from such Seller or is contesting any such tax, assessment or other
governmental

                                       28


charge in good faith through appropriate proceedings, except where such failure
would not reasonably be expected to cause a Material Adverse Effect. Such Seller
knows of no basis for any material additional tax assessment for any fiscal year
for which adequate reserves have not been established.

          (t) ACCOUNTING TREATMENT. Such Seller will not prepare any financial
statements that account for the transactions contemplated hereby in a manner
which is, nor will it in any other respect (except for tax purposes) account for
the transactions contemplated hereby in a manner which is, inconsistent with
USFS's ownership interest in the Receivables and Receivables Property.

          (u) ERISA Matters.

               (i) Except as specifically disclosed in Schedule VIII hereto,
     such Seller and each of its ERISA Affiliates are in compliance in all
     material respects with the applicable provisions of ERISA and the
     regulations and published interpretations thereunder with respect to each
     Plan of such Seller or any of its ERISA Affiliates, except for such
     noncompliance which could not reasonably be expected to result in a
     Material Adverse Effect with respect to such Seller.

               (ii) No Reportable Event has occurred as to which such Seller or
     any of its ERISA Affiliates was required to file a report with the PBGC,
     other than reports for which the 30-day notice requirement is waived,
     reports that have been filed and reports the failure of which to file would
     not reasonably be expected to result in a Material Adverse Effect with
     respect to such Seller.

               (iii) Except as specifically disclosed in Schedule VIII hereto,
     as of the Effective Date, the present value of all benefit liabilities
     under each Plan of such Seller or any of its ERISA Affiliates (on an
     ongoing basis and based on those assumptions used to fund such Plan) did
     not, as of the last valuation report applicable thereto, exceed the value
     of the assets of such Plan, except to the extent that such excess would not
     have a Material Adverse Effect with respect to such Seller.

               (iv) Neither such Seller nor any of its ERISA Affiliates has
     incurred any Withdrawal Liability that could reasonably be expected to
     result in a Material Adverse Effect with respect to such Seller.

                                       29


               (v) Neither such Seller nor any of its ERISA Affiliates has
     received any notification that any Multiemployer Plan is in reorganization
     or has been terminated within the meaning of Title IV of ERISA, or that a
     reorganization or termination has resulted or could reasonably be expected
     to result, through increases in the contributions required to be made to
     such Plan or otherwise, in a Material Adverse Effect with respect to such
     Seller.

          (v) CREDIT AND COLLECTION POLICIES. Schedule IV accurately describes
such Seller's Policies relating to Contracts and Receivables in effect on the
Closing Date.

          (w) SOLVENCY. Both prior to and after giving effect to the
transactions contemplated by the Transaction Documents, (i) the assets of such
Seller, at fair valuation, will exceed its liabilities (including contingent
liabilities), (ii) the capital of such Seller will not be unreasonably small to
conduct its business, and (iii) such Seller will not have incurred debts, and
does not intend to incur debts, beyond its ability to pay such debts as they
mature.

          (x) INVESTMENT COMPANY ACT. Neither such Seller nor any of such
Seller's Subsidiaries is (i) an "investment company" registered or required to
be registered under the 1940 Act, or (ii) a "holding company", or a "subsidiary
company" or an "affiliate" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.

          (y) OWNERSHIP. All of the issued and outstanding capital stock of such
Seller is owned, directly or indirectly, by United Stationers Inc.

          (z) Reserved.

          (aa) RECEIVABLES DOCUMENTS. Upon the delivery, if any, by such Seller
to USFS of licenses, rights, computer programs, related materials, computer
tapes, disks, cassettes and data relating to the administration of the Purchased
Receivables pursuant to subsection 5.01(r), USFS shall have been furnished with
all materials and data reasonably necessary to permit timely collection of the
Purchased Receivables without the participation of such Seller in such
collection.

          (bb) RECEIVABLES LISTS. The Receivables Lists delivered pursuant to
subsection 2.01(e) set forth in all material respects an accurate and complete
listing as of the applicable Effective Date of all Receivables transferred or

                                       30


to be transferred to USFS on such Effective Date and the information contained
therein with respect to the identity and Principal Amount of each such
Receivable is true and correct in all material respects as of the applicable
Effective Date.

          The representations and warranties set forth in this Section 4.02
shall survive the transfer and assignment of the respective Receivables to USFS
pursuant to this Agreement. Each Seller hereby represents and warrants to USFS,
as of the Effective Date and each Payment Date, that the representations and
warranties of such Seller set forth in Section 4.02 are true and correct in all
material respects as of such date, except for any representation and warranty
specifically made as of an earlier date, in which case such representation and
warranty shall be true and correct in all material respects as of such earlier
date. Upon discovery by any Seller or USFS of any material breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.

                                    ARTICLE V
                               GENERAL COVENANTS

     Section 5.01 AFFIRMATIVE COVENANTS OF THE SELLERS. Each Seller covenants
that, until the Purchase Termination Date shall have occurred with respect to
such Seller and there are no amounts outstanding with respect to the Purchased
Receivables previously sold by such Seller to USFS (other than Charged-off
Receivables):

          (a) PRESERVATION OF CORPORATE EXISTENCE AND NAME. Such Seller will
preserve and maintain in all material respects its existence, rights, franchises
and privileges in the jurisdiction of its incorporation or formation, as the
case may be, and qualify and remain qualified in good standing as a foreign
entity in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification could have a
Material Adverse Effect with respect to such Seller.

          (b) MAINTENANCE OF PROPERTY. Such Seller will keep all material
property and assets useful and necessary in its business in good working order
and condition (normal wear and tear excepted), except to the extent that the
failure to do any of the foregoing with respect to any such property would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect with respect to USFS.

          (c) DELIVERY OF COLLECTIONS. In the event that such Seller receives
Collections, such Seller agrees to pay to the applicable Lockbox Account all

                                       31


payments received by such Seller in respect of the Receivables as soon as
practicable after receipt thereof by such Seller.

          (d) COMPLIANCE WITH LAWS, ETC. Such Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders
applicable to the Receivables and the Receivables Property, including, without
limitation, rules and regulations relating to truth in lending, fair credit
billing, fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy, where failure to so comply could reasonably be expected
to have a materially adverse impact on the amount of Collections thereunder.

          (e) VISITATION RIGHTS. At any reasonable time during normal business
hours and from time to time upon reasonable prior notice, such Seller shall
permit (i) USFS, or any of its assignees, agents or representatives, (A) to
examine and make copies of and abstracts from the records, books of account and
documents (including, without limitation, computer tapes and disks) of such
Seller relating to Receivables and Related Property owned or to be purchased by
USFS hereunder, including, without limitation, the related Contracts and
purchase orders and other agreements and (B) following the termination of the
appointment of USFS as Servicer, to be present at the offices and properties of
USFS to administer and control the collection of amounts owing on the Purchased
Receivables and (ii) USFS, or any of its assignees, agents or representatives,
or the Trustee (upon the giving of appropriate notice to such Seller) to visit
the properties of such Seller for the purpose of examining such records, books
of account and documents, and to discuss the affairs, finances and accounts of
such Seller relating to the Receivables or such Seller's performance hereunder
with any of its officers or directors and with its independent certified public
accountants;

PROVIDED, that USFS or its assignees, agents or representatives, as the case may
be, shall notify the Seller prior to any contact with such accountants and shall
give such Seller the opportunity to participate in such discussions.

          (f) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Such Seller will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables and the
Receivables Property in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information which,
in each case, in the reasonable discretion of USFS or its assignees, are
necessary or advisable for the collection of all Receivables and the Receivables
Property (including, without limitation, records adequate to permit the
identification of each new Receivable and all Collections of and adjustments to
each existing Receivable).

                                       32


          (g) PERFORMANCE AND COMPLIANCE WITH POLICIES, RECEIVABLES AND
CONTRACTS. Such Seller will (i) perform its obligations in accordance with and
comply in all material respects with the Policies, as amended from time to time
in accordance with the Transaction Documents and (ii) at its expense, timely and
fully perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Receivables and the Contracts
related to the Receivables and Related Property and all purchase orders and
other agreements related to such Receivables and Related Property.

          (h) OBLIGATIONS. Such Seller shall pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its other obligations of whatever nature, except where (a) the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on its books, or (b) the failure to so pay, discharge or satisfy all
such obligations would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect in respect of such Seller and would not subject any of
its properties to any Lien prohibited by subsection 5.03(b).

          (i) LOCATION OF RECORDS. Such Seller will keep its principal place of
business and chief executive office, and the offices where it keeps its records
concerning the Receivables, all Receivables Property, all Contracts and purchase
orders and other agreements related to such Receivables (and all original
documents relating thereto), at the addressees) of such Seller referred to in
Schedule II or, upon 30 days' prior written notice to USFS, at such other
locations in jurisdictions where all action required by subsection 5.01(r) shall
have been taken and completed; PROVIDED, HOWEVER, that the Rating Agency
Condition shall have been satisfied with respect to any changes in location of
such Seller's principal place of business or chief executive office and such
location is not in a state which is within the Tenth Circuit unless it delivers
an opinion of counsel reasonably acceptable to the Rating Agencies to the effect
that OCTAGON GAS SYSTEMS, INC. V. RIMMER, 995 F.2d 948 (10th Cir. 1993), is no
longer controlling precedent in the Tenth Circuit.

          (j) FURNISHING COPIES, ETC. Such Seller shall furnish to USFS (i) upon
USFS's request, a certificate of a Responsible Officer with responsibilities
over the finances of such Seller certifying, as of the date thereof, that to
such Responsible Officer's knowledge, no Purchase Termination Event has occurred
and is continuing and setting forth the computations used by such Responsible
Officer in making such determination; (ii) as soon as possible and in any event
within two Business Days after a Responsible Officer of such Seller becomes

                                       33


aware of the occurrence of any Purchase Termination Event or Potential Purchase
Termination Event, a statement of a Responsible Officer of such Seller setting
forth in reasonable detail the particulars of such Purchase Termination Event or
Potential Purchase Termination Event and the action that such Seller proposes to
take or has taken with respect thereto; (iii) promptly after obtaining knowledge
that a Receivable was, at the time of USFS's purchase thereof, not an Eligible
Receivable, notice thereof; (iv) promptly after obtaining knowledge of any
threatened action or proceeding affecting such Seller or its Subsidiaries before
any court, governmental agency or arbitrator that may reasonably be expected to
materially and adversely affect the enforceability of this Agreement and the
other Transaction Documents, notice of such action or proceeding; and (v)
promptly following USFS's request therefor, such other information, documents,
records or reports with respect to the Receivables or the related Contracts or
the conditions or operations, financial or otherwise, of such Seller, as USFS
may from time to time reasonably request.

          (k) OBLIGATION TO RECORD AND REPORT. Such Seller shall, to the fullest
extent permitted by GAAP and by applicable law, record each purchase of the
Purchased Receivables as a sale on its books and records, reflect each purchase
of Purchased Receivables in its financial statements and tax returns as a sale
and recognize gain or loss, as the case may be, on each purchase of Purchased
Receivables, except to the extent that such purchases are not reportable for tax
purposes due to the filing of tax forms of United Stationers Inc. on a
consolidated basis with those of the Sellers, USFS and the Company.

          (l) CONTINUING COMPLIANCE WITH THE UNIFORM COMMERCIAL CODE. Such
Seller shall, without limiting the requirements of subsection 5.01(r), at its
expense, preserve, continue, and maintain or cause to be preserved, continued,
and maintained USFS's valid and properly perfected title to each Receivable and
the Receivables Property purchased hereunder, including, without limitation,
filing or recording UCC financing statements in each relevant jurisdiction.

          (m) PROCEEDS OF RECEIVABLES. Such Seller shall use all reasonable
efforts to cause all payments made by Obligors in respect of Purchased
Receivables and Related Property to be made in accordance with subsection 2.3(a)
of the Servicing Agreement.

          (n) Reserved.

          (o) TAXES. Such Seller will file all federal and all material state
and local tax returns and reports required by law to be filed by it and will pay
all taxes and governmental charges thereby shown to be owing, except any such

                                       34


taxes or charges which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP
have been set aside on its books except where the failure to file such returns
and reports and pay such taxes and governmental charges would not reasonably be
expected to cause a Material Adverse Effect.

          (p) SEPARATE CORPORATE EXISTENCE OF THE COMPANY. Such Seller hereby
acknowledges that the Trustee and the Holders are entering into the transactions
contemplated by the Transaction Documents in reliance upon the Company's
identity as a legal entity separate from the Sellers, USFS and all other
Affiliates thereof (each such Affiliate, a "USS AFFILIATE") and that the Trustee
and the Holders would be prejudiced by any substantive consolidation of the
Company with any Seller or USFS. Therefore, from and after the date hereof, such
Seller will take (or refrain from taking, as the case may be) such actions, and
will cause each other Affiliate it controls to take (or refrain from taking, as
the case may be) such actions, as shall be required in order that:

               (i) Except as specifically provided in Sections 7.01 and 9.05, no
     USS Affiliate will pay the Company's operating expenses and liabilities,
     recognizing, however, that certain organizational expenses of the Company
     and expenses relating to creation and implementation of the securitization
     program contemplated by the Transaction Documents have been or shall be
     paid by such Seller or USFS.

               (ii) Each USS Affiliate will conduct its business at offices
     segregated from the Company's offices. If office space is leased from any
     USS Affiliate, a separate written lease on arm's-length terms will be in
     effect at a market rental rate.

               (iii) Each USS Affiliate will maintain corporate records and
     books of account separate from those of the Company and telephone numbers,
     mailing addresses, stationery and other business forms that are separate
     and distinct from those of the Company.

               (iv) Any financial statements of any USS Affiliate that are
     consolidated to include the Company will contain a detailed note
     substantially in the form, and to the effect, of the note set forth on
     Annex 1.

               (v) The Company's assets will be maintained in a manner that
     facilitates their identification and segregation from those of such Seller
     and the other USS Affiliates.

                                       35


               (vi) Each USS Affiliate will strictly observe corporate
     formalities in its dealings with the Company, and funds or other assets of
     the Company will not be commingled or pooled with those of any affiliated
     Person other than funds constituting (i) Excluded Receivables Payments or
     (ii) Collections remitted to a Collector pursuant to subsection 2.3(a) of
     the Servicing Agreement; PROVIDED that, in each case, such funds shall not
     be commingled for more than one (2) Business Days. No Affiliate will
     maintain joint bank accounts with the Company or other depository accounts
     with the Company to which any USS Affiliate has independent access (other
     than the Collection Concentration Account).

               (vii) Any transaction between the Company and any USS Affiliate
     will be fair and equitable to the Company, will be the type of transaction
     which would be entered into by a prudent Person in the position of the
     Company with a USS Affiliate, and will be on terms which are at least as
     favorable to the Company as may be obtained from a Person which is not a
     USS Affiliate, it being understood and agreed that the transactions
     contemplated in the Transaction Documents meet the requirements of this
     clause (vii).

               (viii) No USS Affiliate will hold itself out, or permit itself to
     be held out, as having agreed to pay or be liable for the debts of the
     Company.

               (ix) Except for the authority delegated to the Servicer pursuant
     to the Servicing Agreement, the duly elected Board of Directors of the
     Company and the Company's duly appointed officers shall at all times have
     sole authority to control decisions and actions with respect to the daily
     business affairs of the Company.

               (x) Such Seller shall comply with those procedures described in
     the Specified Bankruptcy Opinion Provisions which are applicable to such
     Seller, except, in each case above, for such failure to take actions or
     refrain from taking actions that are, in the aggregate, not material.

          (q) DEPOSITS IN PROGRAM ACCOUNTS. Such Seller shall use all reasonable
efforts to minimize the deposit of any funds other than Collections (except
funds consisting of Excluded Receivables Payments) in any of the Lockbox
Accounts, the Collection Concentration Account and the Collection Account.

          (r) Further Action Evidencing Purchases.

                                       36


               (i) Such Seller agrees that from time to time, at its expense, it
     will promptly execute and deliver all further instruments and documents,
     and take all further action, that may be necessary or desirable or that
     USFS or its assignees may reasonably request, to protect or more fully
     evidence USFS's ownership, right, title and interest in the Receivables and
     Receivables Property sold by such Seller and its rights under the Contracts
     with respect thereto, or to enable USFS or its assignees to exercise or
     enforce any of its rights hereunder or under any other Transaction
     Document. Without limiting the generality of the foregoing, such Seller
     will upon the request of USFS or its assignees (A) execute and file, in
     accordance with the provisions of the UCC of the applicable jurisdiction,
     continuation statements with respect to all financing statements filed in
     connection with the transactions contemplated hereby, as well as such
     financing or continuation statements, or amendments thereto, and such other
     instruments or notices, as may be necessary or, in the reasonable opinion
     of USFS, desirable, (B) indicate on its books and records (including,
     without limitation, master data processing records) that the Receivables
     and Receivables Property have been sold and assigned to USFS, USFS has sold
     and assigned its interest therein to the Company and, in turn, the Company
     has conveyed its interest therein to the Trustee for the benefit of the
     Holders, and provide to Company and USFS, upon request, copies of any such
     records, (C) contact customers to confirm and verify Receivables and (D)
     obtain the agreement of any Person having a Lien on any Receivables owned
     by such Seller (other than any Lien created or imposed hereunder, under the
     Pooling Agreement or under any other Transaction Document or any Permitted
     Lien) to release such Lien upon the purchase of any such Receivables by
     USFS.

               (ii) Such Seller hereby irrevocably authorizes USFS, the Company
     and the Trustee to file one or more financing or continuation statements,
     and amendments thereto, relative to all or any part of the Receivables and
     Receivables Property sold or to be sold by such Seller, without the
     signature of such Seller where permitted by law.

               (iii) If such Seller fails to perform any of its agreements or
     obligations under this Agreement, USFS or its assignees may (but shall not
     be required to) perform, or cause performance of, such agreements or
     obligations, and the expenses of USFS incurred in connection therewith
     shall be payable by such Seller as provided in Section 9.05.

               (iv) Such Seller agrees that, whether or not a Purchase
     Termination Event has occurred:

                                       37


               (A) USFS (and its assignees) shall have the right at any time to
notify, or require that such Seller at its own expense notify, the respective
Obligors of USFS's ownership of the Purchased Receivables and Receivables
Property and may direct that payment of all amounts due or to become due under
the Purchased Receivables be made directly to USFS or its designee;

               (B) such Seller shall, upon the Company or USFS's written request
and at such Seller's expense, (I) assemble all of such Seller's documents,
instruments and other records (including credit files and computer tapes or
disks) that (A) evidence or will evidence or record Receivables sold by such
Seller and (B) are otherwise necessary or desirable to effect Collections of
such Purchased Receivables (collectively, the "DOCUMENTS") and (II) deliver the
Documents to USFS or its designee at a place designated by USFS. In recognition
of such Seller's need to have access to any Documents which may be transferred
to USFS or its designee hereunder, whether as a result of its continuing
business relationship with any Obligor for Receivables purchased hereunder, USFS
hereby grants to such Seller an irrevocable license to access the Documents
transferred by such Seller to USFS and to access any such transferred computer
software in connection with any activity arising in the ordinary course of such
Seller's business, PROVIDED that such Seller shall not disrupt or otherwise
interfere with USFS's use of and access to the Documents and its computer
software during such license period;

               (C) such Seller hereby grants to USFS an irrevocable power of
attorney (coupled with an interest) to take any and all steps in such Seller's
name necessary or desirable, in the reasonable opinion of USFS, to collect all
amounts due under the Purchased Receivables, including, without limitation,
endorsing such Seller's name on checks and other instruments representing
Collections, enforcing the Purchased Receivables and exercising all rights and
remedies in respect thereof, and

               (D) upon written request of the Company or USFS, such Seller will
(I) deliver to USFS or a party designated by the Company or USFS all licenses,
rights, computer programs, related material, computer tapes, disks, cassettes
and data necessary to the immediate collection of the Purchased Receivables by
the Company or USFS, with or without the participation of such Seller (excluding
software licenses which by their terms are not permitted to be so delivered,
PROVIDED that such Seller

                                       38


shall use reasonable efforts to obtain consent of the relevant licensor to such
delivery) and (II) make such arrangements with respect to the collection of the
Purchased Receivables as may be reasonably required by the Company or USFS.

          (s) LEGEND REQUIREMENT FOR CHATTEL PAPER. Such Seller agrees (i) at
all times, with respect to chattel paper, to comply with the procedures set
forth in Schedule 3 to the Pooling Agreement and (ii) that any Receivable that
constitutes or is evidenced by "chattel paper" as defined in Article 9 of the
UCC as in effect in the Relevant UCC State shall bear a legend stating that such
Receivable has been sold to USFS, sold, in turn, to the Company and conveyed, in
turn, to the Trust.

          (t) COMPUTER FILES. Such Seller shall, at its own cost and expense,
retain the ledger used by such Seller as a master record of the Obligors and
retain copies of all documents relating to each Obligor as custodian and agent
for the Company and USFS and other Persons with interests in the Purchased
Receivables and mark the computer tape or other physical records of the
Purchased Receivables to the effect that interests in the Purchased Receivables
existing with respect to the Obligors listed thereon have been sold to USFS,
USFS has sold an interest therein and has granted a security interest therein to
the Company and the Company has conveyed an interest therein and granted a
security interest therein.

          (u) LOCKBOX AGREEMENTS. With respect to each Lockbox Processor, such
Seller shall execute and deliver, or cause to be executed and delivered, a
Lockbox Agreement in substantially the form of Exhibit A to the Pooling
Agreement within five (5) Business Days of the date hereof.

     Section 5.02 REPORTING REQUIREMENTS. Each Seller shall furnish to USFS and
its assigns from the date hereof until the Purchase Termination Date shall have
occurred with respect to such Seller and until there are no amounts outstanding
with respect to Purchased Receivables previously sold by such Seller to USFS:

          (a) COMPLIANCE CERTIFICATE. Not later than 95 days after the end of
each fiscal year and not later than 50 days after the end of each of the first
three fiscal quarters of each fiscal year, a certificate of a Responsible
Officer of such Seller stating that, to the best of such Responsible Officer's
knowledge, such Seller during such period, has observed or performed in all
material respects all of its covenants and other agreements, and satisfied in
all material respects every condition, contained in the Transaction Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has

                                       39


obtained no knowledge of any Purchase Termination Event or Potential Purchase
Termination Event except as specified in such certificate;

          (b) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event which such Seller
files under ERISA with the Internal Revenue Service, the PBGC or the U.S.
Department of Labor or which such Seller receives from the PBGC if, in each
case, such report or notice relates to an event or condition that could
reasonably be expected to give rise to a Termination Notice, an Early
Amortization Event or a Material Adverse Effect;

          (c) TERMINATION EVENTS; OTHER MATERIAL EVENTS. As soon as possible and
in any event within two Business Days after a Responsible Officer of such Seller
obtains knowledge of each Purchase Termination Event, Potential Purchase
Termination Event, Servicer Default, Potential Servicer Default or any other
event that has a material likelihood of having a Material Adverse Effect with
respect to a Seller, a written statement of a Responsible Officer of such Seller
setting forth details of such event and the action that such Seller proposes to
take with respect thereto; and

          (d) OTHER. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of such Seller as the Company or USFS may
from time to time reasonably request in order to protect its respective
interests under or as contemplated by the Transaction Documents.

     Section 5.03 NEGATIVE COVENANTS. Each Seller covenants that, until the
Purchase Termination Date shall have occurred with respect to such Seller and
there are no amounts outstanding with respect to Purchased Receivables
previously sold by such Seller to USFS:

          (a) RECEIVABLES TO BE ACCOUNTS, GENERAL INTANGIBLES OR CHATTEL PAPER.
Such Seller will take no action to cause any Receivable to be evidenced by any
"instrument" other than, PROVIDED that the procedures set forth in Schedule 3 to
the Pooling Agreement are fully implemented with respect thereto, an instrument
which together with a security agreement constitutes "chattel paper" (each as
defined in the UCC as in effect in the Relevant UCC State). Such Seller will
take no action to cause any Receivable to be anything other than an "account",
"general intangible" or "chattel paper" (each as defined in the UCC as in effect
in the Relevant UCC State).

                                       40


          (b) SECURITY INTERESTS. Except for the conveyances hereunder and as
provided below, such Seller will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any other Lien
on any Receivable or Receivables Property, whether now existing or hereafter
created, or any interest therein; such Seller will immediately notify USFS and
its assignees of the existence of any other Lien (other than any Permitted Lien)
on any Receivable or Receivables Property; and such Seller shall defend the
right, title and interest of USFS and its assignees in, to and under the
Receivables or Receivables Property, whether now existing or hereafter created,
against all claims of third parties claiming through or under such Seller;
PROVIDED, HOWEVER, that nothing in this subsection 5.03(b) shall prevent or be
deemed to prohibit such Seller from suffering to exist upon any of the
Receivables or Receivables Property any Permitted Lien.

          (c) EXTENSION OR AMENDMENT OF RECEIVABLES; INELIGIBLE RECEIVABLES.
Such Seller will not extend, rescind, cancel, make any Dilution Adjustment to,
amend or otherwise modify, or attempt or purport to extend, rescind, cancel,
make any Dilution Adjustment to, amend or otherwise modify, the terms of any
Purchased Receivables, or otherwise take any action to cause, or which would
permit, a Receivable that was designated as an Eligible Receivable on the
Payment Date relating to such Receivable to cease to be an Eligible Receivable,
except in any such case (a) in accordance with the terms of the Policies, (b) as
required by any Requirement of Law or (c) in the case of Dilution Adjustments
(whether or not permitted by any other clause of this sentence), upon making a
Seller Adjustment Payment pursuant to Section 2.05.

          (d) CHANGE IN CREDIT AND COLLECTION POLICIES. Such Seller will not
make or permit to be made any change in its Policies in any material respect
that is materially adverse to the interests of USFS or its assigns (including
the Trustee and the Holders).

          (e) PLACE OF BUSINESS, ETC. Such Seller will not change its principal
place of business or chief executive office from the location listed on Schedule
II or change the location of its records relating to the Receivables and
Receivables Property from those specified on Schedule II, unless in any such
event such Seller shall have given USFS and the Company at least thirty days'
prior written notice thereof fully in accordance with the terms and provisions
of subsection 5.01(i) and shall have taken all action necessary or reasonably
requested by USFS to amend its existing financing statements and continuation
statements so that they are not misleading and to file additional financing
statements in all applicable jurisdictions, if necessary, to perfect the
interests of USFS in all of the Receivables and Receivables Property.

                                       41


          (f) CHANGE IN NAME. Such Seller will not change its name, identity or
corporate structure in any manner which would make any financing statement or
continuation statement (or other similar instrument) relating to this Agreement
seriously misleading within the meaning of Section 9-402(7) of the UCC, or
impair the perfection of USFS's interest in any Receivable under any other
similar law, without having (i) delivered 30 days' prior written notice to the
Company, USFS, the Servicer and the Trustee and (ii) taken all action required
by subsection 5.01(a) or 5.01(r).

          (g) CHANGE IN PAYMENT INSTRUCTIONS TO OBLIGORS. Such Seller shall not
instruct the Obligor on any Receivables to make payments with respect to such
Receivables and the Receivables Property with respect thereto other than to the
places listed in Schedule III.

          (h) ACCOUNTING CHANGES. Such Seller shall not make any material change
(i) in accounting treatment and reporting practices except as permitted or
required by GAAP, (ii) in tax reporting treatment except as permitted or
required by law, in any case, as disclosed in the notes to the financial
statements delivered pursuant to Section 5.02, or otherwise, (iii) in the
calculation or presentation of financial and other information contained in
other reports delivered hereunder, or (iv) in any financial policy of such
Seller if such change could have a material adverse effect on the Receivables
taken as a whole or the collection thereof.

          (i) BUSINESS OF SELLERS. Such Seller shall not fail to maintain and
operate the business currently conducted by such Seller and business activities
reasonably incidental or related thereto in substantially the manner in which it
is presently conducted and operated if such failure would change in any material
respect the character of its business and such change would be adverse to the
interest of USFS, its assigns (including the Company) and the Trustee for the
benefit of the Holders except (x) if such change is necessary under any
Requirement of Law, (y) if such change would not reasonably be expected to have
a Material Adverse Effect with respect to the Servicer or (z) the Rating Agency
Condition is satisfied with respect thereto.


                                   ARTICLE VI
                           PURCHASE TERMINATION EVENTS

     Section 6.01 PURCHASE TERMINATION EVENTS. If, with respect to any Seller,
any of the following events (each, a "PURCHASE TERMINATION EVENT" with respect
to such Seller) shall have occurred and be continuing:

                                       42


          (a) The Seller shall fail to make any payment or deposit to be made by
it hereunder when due and such failure shall remain unremedied for two Business
Days; or

          (b) There shall have occurred (i) an Early Amortization Event set
forth in Section 7.1 of the Pooling Agreement or (ii) the Amortization Period
with respect to all outstanding Series shall have occurred and be continuing; or

          (c) Any representation or warranty made or deemed to be made by such
Seller or any of its officers under or in connection with any Transaction
Document, Monthly Settlement Statement or other information, statement, record,
certificate, document or report delivered pursuant to a Transaction Document
shall prove to have been false or incorrect in any material respect when made or
deemed made (including in each case by omission of information necessary to make
such representation, warranty, certificate or statement not materially
misleading); PROVIDED, that no such event shall constitute a Purchase
Termination Event unless such event shall continue unremedied for a period of 30
days from the earlier of (A) the date any Responsible Officer of such Seller
obtains knowledge thereof and (B) the date such Seller receives notice of the
incorrectness of such representation or warranty from USFS, the Servicer or the
Trustee; PROVIDED, FURTHER, that a Purchase Termination Event shall not be
deemed to have occurred under this paragraph (c) based upon a breach of any
representation or warranty set forth in Section 4.02 with respect to any
Receivable if such Seller shall have complied with the provisions of Section
2.06 with respect to such Receivable; or

          (d) Such Seller shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in subsection 5.01(d),
(g) or (h) or Section 5.03 of this Agreement on its part to be performed or
observed and any such failure shall remain unremedied for five Business Days;
PROVIDED, that a Purchase Termination Event shall not be deemed to have occurred
under this paragraph (d) based upon a breach of any covenant set forth in
subsection 5.01(d), (g) or (h) or Section 5.03 with respect to any Receivable if
the applicable Seller shall have complied with the provisions of Section 2.06
with respect to such Receivable; or

          (e) Such Seller shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in any Transaction
Document on its part to be performed or observed and any such failure shall
remain unremedied for a period of 30 days from the earlier of (A) the date any
Responsible

                                       43


Officer of such Seller obtains knowledge of such failure and (B) the date such
Seller receives notice thereof from USFS, the Servicer or the Trustee; or

          (f) Any Transaction Document to which such Seller is a party shall
cease, for any reason, to be in full force and effect, or USSC, or other such
Seller shall so assert in writing, or USFS shall fail to have a valid and
perfected first priority ownership or security interest in the Receivables and
the Receivables Property; or

          (g) (i) such Seller shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or such Seller shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against such
Seller any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days; or (iii) there shall be commenced against such Seller
or any of its Subsidiaries any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof, or (iv) such Seller
or any of its respective Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) such Seller shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or

          (h) USFS has been terminated as Servicer following a Servicer Default
with respect to USFS under the Servicing Agreement; or

          (i) a Responsible Officer of USSC receives notice or becomes aware
that a notice of Lien has been filed by the PBGC against any Seller, USFS or the
Trust under Section 4.12(n) of the Code or Section 302(f) of ERISA for a failure
to make a required installment or other payment to a plan to which Section
4.12(n) of the Code or Section 302(f) of ERISA applies;

                                       44


then, (x) in the case of any Purchase Termination Event with respect to any
Seller described in paragraph (b)(i), (g), (i) and (j) above, the obligation of
USFS to purchase Receivables from such Seller shall thereupon automatically
terminate without further notice of any kind, which is hereby waived by such
Seller, (y) in the case of any Purchase Termination Event with respect to a
Seller described in paragraph (b)(ii) above, the obligation of USFS to purchase
Receivables from such Seller shall thereupon terminate without notice of any
kind, which is hereby waived by such Seller, unless both USFS and such Seller
agree in writing that such event shall not trigger an Early Termination
hereunder and (z) in the case of any other Purchase Termination Event with
respect to any Seller, so long as such Purchase Termination Event shall be
continuing, USFS may terminate its obligation to purchase Receivables from such
Seller by written notice to such Seller (any termination with respect to any
Seller pursuant to clause (x), (y) or (z) of this Section 6.01 is herein called
an "EARLY TERMINATION" with respect to such Seller); PROVIDED, HOWEVER, that in
the event of an involuntary petition or proceeding as described in paragraphs
(g)(ii) and (g)(iii) above, USFS shall not purchase Receivables from such Seller
until such time, if any, as such involuntary petition or proceeding has been
dismissed, PROVIDED that such dismissal shall have occurred within 60 days of
the filing of such petition or the commencement of such proceeding.

     Section 6.02 ADDITIONAL REMEDIES. Upon the occurrence of any Purchase
Termination Event, USFS shall have, in addition to all other rights and remedies
under this Agreement or otherwise, all other rights and remedies provided under
the UCC of each applicable jurisdiction and other applicable laws, which rights
shall be cumulative. Without limiting the foregoing, the occurrence of a
Purchase Termination Event shall not deny to USFS any remedy (in addition to
termination of USFS's obligation to purchase Receivables from any relevant
Seller or Sellers) to which USFS may be otherwise appropriately entitled,
whether by statute or other applicable law, at law or in equity.

                                  ARTICLE VII
                                INDEMNIFICATION

     Section 7.01 INDEMNITIES BY THE SELLERS. Without limiting any other rights
that USFS may have hereunder or under applicable law and subject to Section
2.06, each Seller hereby agrees to pay, indemnify and hold USFS harmless from
and against any and all claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, reasonable costs (including reasonable
attorneys' fees), expenses and disbursements of any kind or nature whatsoever
related thereto (a) which may at

                                       45


any time be imposed on, incurred by or asserted against USFS in any way relating
to, arising out of or resulting from this Agreement or any other Transaction
Document or the transactions contemplated hereby or thereby or any action taken
or omitted by USFS under or in connection with any of the foregoing or in
respect of any Receivable or (b) which would not have been imposed on, incurred
by or asserted against USFS but for its having purchased the Receivables
hereunder (all such claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements being
collectively referred to as "INDEMNIFIED AMOUNTS"), PROVIDED that the Sellers
shall have no obligation under this Section 7.01 to USFS with respect to
Indemnified Amounts (i) to the extent resulting from gross negligence or willful
misconduct on the part of USFS, its agents or its assignees; (ii) resulting from
any Obligor*s inability to pay an amount due and payable with respect to a
Receivable for credit reasons (it being understood that this clause (ii) shall
not limit Section 2.05), and PROVIDED, FURTHER, that if a court of competent
jurisdiction in a final non-appealable order determines that such Indemnified
Amounts arose in part from USFS's gross negligence or willful misconduct, the
Sellers shall reimburse USFS for the portion of such claim not resulting from
USFS*s gross negligence or willful misconduct, and PROVIDED, FURTHER, that to
the extent a determination of gross negligence or willful misconduct is made
after the payment of any Indemnified Amounts related thereto, the Seller shall
be repaid any amounts reimbursed under the preceding clause that, due to such
determination, it should not have paid. Without limiting or being limited by the
foregoing and subject to Section 2.06, each Seller shall pay on demand to USFS
any and all amounts necessary to indemnify USFS from and against any and all
Indemnified Amounts relating to or resulting from:

          (a) the transfer by any Seller of any interest in any Receivable or
Receivables Property or proceeds thereof which are not or which cease to be
Eligible Receivables;

          (b) reliance on any representation or warranty or statement made or
deemed made by any Seller (or any of its officers) under or in connection with
this Agreement or in any certificate or report delivered pursuant hereto that,
in either case, shall have been false or incorrect in any material respect when
made or deemed made;

          (c) the failure by any Seller to comply with any applicable law, rule
or regulation of any governmental authority with respect to any Receivable or
Receivables Property, or the nonconformity of any Receivable or Receivables
Property with any such applicable law, rule or regulation;

                                       46


          (d) the failure to vest and maintain vested in USFS an ownership
interest in any Receivable or Receivables Property, free and clear of any Lien,
other than a Lien arising under the Transaction Documents or a Permitted Lien,
whether existing at the time of the purchase of such Receivable or Receivables
Property or at any time thereafter;

          (e) the failure to file, or any delay in filing, financing statements
or other similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any Receivables or
Receivables Property of any Seller;

          (f) any dispute, claim, offset or defense (other than discharge in
bankruptcy of a Seller) of the Obligor to the payment of any Receivable of any
Seller (including, without limitation, a defense based on such Receivable or the
related Contract not being fully enforceable against the Obligor in accordance
with its terms), or any other claim resulting from the sale of the merchandise
or services related to any such Receivable or the furnishing or failure to
furnish such merchandise or services;

          (g) any failure of any Seller to perform its duties or obligations
under this Agreement or the Transaction Documents;

          (h) any products liability claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Receivable or
Receivables Property;

          (i) the commingling of Collections of Receivables at any time with
other funds of any Seller other than as permitted by the terms of this
Agreement;

          (j) any claim involving environmental liability that relates to any
property that has been, is now or hereafter will be owned, leased, operated or
otherwise used by any Seller;

          (k) any tax or governmental fee or charge (but not including franchise
taxes and taxes upon or measured by net income of USFS), all interest and
penalties thereon or with respect thereto, and all out-of-pocket costs and
expenses, including the reasonable fees and expenses of counsel in defending
against the same, which may arise by reason of the purchase or ownership of any
Receivable or Receivables Property, or any interest therein or in any goods
which secure any such

                                       47


Receivables, any Receivables Property or any other rights or assets transferred
hereunder; and

          (l) any investigation, litigation or proceeding related to this
Agreement or in respect of any Receivable or Receivables Property of any Seller.

     Notwithstanding the foregoing, no Seller shall under any circumstances be
required to indemnify USFS for any Indemnified Amounts that result from any
delay in the collection of any Receivables or any default by an Obligor with
respect to any Receivables. The agreements set forth in this Section 7.01 shall
survive the collection of all Receivables, the termination of this Agreement and
the payment of all amounts payable hereunder.

     Section 7.02 INDEMNITIES BY USFS. Without limiting any other rights that
the Sellers may have hereunder or under applicable law, USFS hereby agrees to
indemnify each Seller from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) arising out of or resulting
from such Seller's reliance on any representation or warranty made by USFS in
this Agreement or in any certificate delivered pursuant hereto that, in either
case, shall have been false or incorrect in any material respect when made or
deemed made.

                                  ARTICLE VIII
                             USFS SUBORDINATED NOTE

     Section 8.01 USFS SUBORDINATED NOTE. (a) On the initial Effective Date,
contemporaneously with the sale of Receivables and Receivable Property by the
Sellers, USFS shall issue to the Sellers a Subordinated Promissory Note
substantially in the form of Exhibit A hereto (as amended, supplemented or
otherwise modified from time to time, the "USFS SUBORDINATED NOTE").

          (b) The initial aggregate principal amount of the USFS Subordinated
Note (the "INITIAL USFS SUBORDINATED NOTE AMOUNT") shall be equal to $0.

          (c) Following the initial Effective Date, the aggregate principal
amount of the USFS Subordinated Note at any time shall be equal to the
difference between (i) the sum of the Initial USFS Subordinated Note Amount and
each addition to the principal amount of the USFS Subordinated Note with respect
to each Seller pursuant to Section 2.03 as of such time and (ii) the aggregate
amount of all payments made in respect of the principal of the USFS Subordinated
Note as of

                                       48


such time. All payments made in respect of the USFS Subordinated Note shall be
allocated among the Sellers by the Servicer and shall be allocated to pay
accrued and unpaid interest thereon, and SECOND, to pay the outstanding
principal amount thereof.

          (d) Each Seller's interest in the USFS Subordinated Note shall be
equal to the aggregate of each addition to the USFS Subordinated Note allocated
to such Seller pursuant to subsection 2.03(c), LESS the sum of each repayment
thereof allocated to such Seller by the Servicer in accordance with subsection
8.01(c). Interest on the outstanding principal amount of the USFS Subordinated
Note shall accrue on the last day of each Settlement Period at a rate per annum
equal to the ABR plus 2% from and including the initial Effective Date to but
excluding the last day of each Settlement Period and shall be paid (x) on each
Distribution Date with respect to the principal amount of the USFS Subordinated
Note outstanding from time to time during the Settlement Period immediately
preceding such Distribution Date and/or (y) on the maturity date thereof.
Principal thereunder not paid or prepaid pursuant to the terms thereof shall be
payable on the maturity date of the USFS Subordinated Note. Default in the
payment of principal or interest under the USFS Subordinated Note shall not
constitute a Purchase Termination Event under this Agreement, a Servicer Default
under any Servicing Agreement or an Early Amortization Event under the Pooling
Agreement or any Supplement thereto.

     Section 8.02 RESTRICTIONS ON TRANSFER OF CONTRIBUTED NOTE AND USFS
SUBORDINATED NOTE. (a) Each of the parties hereto hereby waives the restrictions
on transfer of the Contributed Note contained therein and in Section 8.02 of the
Original Agreement, subject to subsection 8.02(b) below.

     (b) Subsequent to the date hereof, neither (i) the the USFS Subordinated
Note, or any right of any Seller to receive payments thereunder, nor (ii) the
Contributed Note, or any right thereunder of USSC or its assignee, USSF, shall
be assigned, transferred, exchanged, pledged, hypothecated, participated or
otherwise conveyed (each, a "TRANSFER") to any Person (any such Person, a
"SUBORDINATED NOTE TRANSFEREE") unless or (X) notice of such Transfer has been
given to the Company, USFS, the Trustee, the Funding Agent and the
Administrator, (Y) such Subordinated Note Transferee has delivered an
instrument, in form and substance reasonably acceptable to the Company, USFS,
the Trustee, the Funding Agent and the Administrator, pursuant to which such
Subordinated Note Transferee agrees to abide by the terms of the USFS
Subordinated Note and this Article VIII and (Z) each of the Company, USFS, the
Trustee, the Funding Agent and the Administrator have given their consent to
such Transfer, which consent shall not be unreasonably withheld.

                                       49


                                   ARTICLE IX
                                 MISCELLANEOUS

     Section 9.01 AMENDMENT. Neither this Agreement nor any of the terms hereof
may be amended, supplemented or modified except in a writing signed by USFS and
the Sellers. Any amendment, supplement or modification shall not be effective
until the Rating Agency Condition, if applicable, has been satisfied.

     Section 9.02 NOTICES, ETC. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage-prepaid, by facsimile or by overnight courier, (a) in the case of
USFS, to it at the address or facsimile number set forth in Section 10.4 of the
Pooling Agreement and (b) in the case of all other parties, to such party at the
address or facsimile number of the Servicer set forth in Section 10.4 of the
Pooling Agreement or, in the case of the foregoing clause (a) or (b), at such
other address or facsimile number as shall be designated by the relevant party
in a written notice to the other parties hereto given in accordance with this
Section 9.02. All notices and communications provided for hereunder shall be
effective, (a) if personally delivered by express mail or courier, when
received, (b) if sent by certified mail, three Business Days after having been
deposited in the mail, postage prepaid and (c) if transmitted by facsimile, when
sent, receipt confirmed by telephone or electronic means.

     Section 9.03 NO WAIVER; REMEDIES. No failure on the part of USFS to
exercise, and no delay in exercising, any right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

     Section 9.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the Sellers and USFS and their respective successors
(whether by merger, consolidation or otherwise) and assigns. Each Seller agrees
that it will not assign or transfer all or any portion of its rights or
obligations hereunder without the prior written consent of USFS and the Company.
The Sellers acknowledge that USFS shall assign all of its rights hereunder to
the Company, pursuant to the USFS Receivables Sale Agreement, and that the
Company, in turn, shall assign all such rights to the Trustee, for the benefit
of the Holders, pursuant to the Pooling Agreement. Each Seller consents to such
assignment and agrees that Company and the Trustee, on behalf of the Holders, to
the extent provided in the Pooling Agreement, shall be entitled to enforce the
terms of this Agreement and the rights (including, without limitation, the right
to grant or withhold any consent or

                                       50


waiver) of USFS directly against such Seller, whether or not a Purchase
Termination Event or a Potential Purchase Termination Event has occurred. Each
Seller further agrees that, in respect of its obligations hereunder, it will act
at the direction of and in accordance with all requests and instructions from
the Company or the Trustee until all amounts due to the Investor
Certificateholders are paid in full. The Company and the Trustee, on behalf of
the Holders, shall have the rights of a third-party beneficiary under this
Agreement.

     Section 9.05 COSTS, EXPENSES AND TAXES. In addition to the limited rights
of indemnification granted to USFS under Article VII hereof, each Seller agrees
to pay on demand all reasonable out-of-pocket costs and expenses of USFS in
connection with the negotiation, preparation, execution and delivery of, and any
amendment, supplement or other modification to, this Agreement, the other
Transaction Documents and any other documents prepared in connection herewith
and therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for USFS with respect thereto and
with respect to advising USFS as to its rights and remedies under this
Agreement, the other Transaction Documents and any such other documents, and all
costs and expenses (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other Transaction
Documents and any such other documents. In addition, each Seller agrees to pay
any and all stamp and other taxes and governmental fees payable or determined to
be payable in connection with the execution, delivery, filing and recording of
this Agreement or the other Transaction Documents to be delivered hereunder, and
agrees to hold USFS harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omitting to pay such taxes
and fees.

     Section 9.06 INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.

     Section 9.07 CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise provided
herein, references in this Agreement to any "Section," "Exhibit," "Annex" or
"Schedule" are to such Section of or Exhibit or Annex or Schedule to this
Agreement, as the case may be.

                                       51


     Section 9.08 RESERVED.

     Section 9.09 RESERVED.

     Section 9.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

     Section 9.11 ACKNOWLEDGMENT OF ASSIGNMENTS. Each Seller hereby acknowledges
and consents to the assignment by USFS, pursuant to the USFS Receivables Sale
Agreement, of Receivables, Receivables Property and its rights under this
Agreement to the Company. Each Seller acknowledges that the Company, pursuant to
the Pooling Agreement, will grant a security interest in its interests in the
Lockbox Accounts and the Collection Concentration Account to the Trustee for the
benefit of the Holders. Each Seller agrees to take any action that USFS, the
Company or the Trustee may reasonably request in connection with such
assignments or security interests.

     Section 9.12 NO PETITION IN BANKRUPTCY. Each Seller covenants and agrees
that prior to the date which is one year and one day after the date of
termination of this Agreement pursuant to Section 9.13, it will not institute
against or join any other Person in instituting against the Company any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceeding under the laws of the United States, any State of
the United States or the Cayman Islands.

     Section 9.13 ADDITION OF SELLERS. Subject to the terms and conditions
hereof, from time to time one or more wholly-owned Subsidiaries of United
Stationers Inc. may become additional Sellers parties hereto, the receivables
originated by which may constitute Eligible Receivables of such Seller. If any
such Subsidiary wishes to become an additional Seller, it shall submit a request
to such effect in writing to USFS and forward a copy of such request to the
Company and the Trustee. USFS, at the direction of the Company, may, subject to
the terms and provisions of the Pooling and Servicing Agreements, agree to or
deny any such request; PROVIDED that, if USFS shall have failed to respond to
any such request within 30 days after receipt thereof, such request shall be
deemed to have been denied. If USFS shall have agreed to any such request
pursuant to this Section 9.11, then in the case of a wholly-owned Subsidiary of
United Stationers Inc., such wholly-owned Subsidiary shall become an additional
Seller party hereto on the

                                       52


related Seller Addition Date upon satisfaction of the conditions set forth in
Section 3.02 and the conditions, if any, set forth in the Pooling and Servicing
Agreements.

     Section 9.14 TREATMENT OF SELLERS OTHER THAN USSC; TERMINATION THEREOF. (a)
USSC hereby covenants and agrees with USFS that USSC shall not permit any Seller
or USFS at any time to cease to be a wholly-owned Subsidiary of United
Stationers Inc., except as provided in the following paragraph (b).

          (b) If United Stationers Inc. wishes to permit any Seller to cease to
be a wholly-owned Subsidiary of United Stationers Inc., then USSC shall submit a
request (a "SELLER TERMINATION REQUEST") to such effect in writing to USFS, with
a copy therof to the Company and the Trustee, which request shall be accompanied
by a certificate prepared by a Responsible Officer of the Servicer indicating
the Purchased Receivables Percentage applicable to such Seller as of the date of
submission of such request (the "SELLER TERMINATION REQUEST DATE"). USFS, at the
direction of the Company and subject to the terms and provisions of the Pooling
and Servicing Agreements, shall consent to or deny any such Seller Termination
Request, PROVIDED that, if USFS shall have failed to respond to any such Seller
Termination Request within 30 days after receipt thereof, such Seller
Termination Request shall be deemed to have been denied. If USFS shall have
consented to any such Seller Termination Request, and such consent shall not be
in violation of any applicable provision of the Pooling and Servicing
Agreements, then the relevant Seller shall be terminated as a Seller hereunder
on the date of the consummation of the transaction in connection with which such
Seller ceases to be a wholly-owned Subsidiary of United Stationers Inc. or, if
USSC requests in writing that the termination date be a date prior to the
consummation of such transaction, such earlier requested date (but in no event
more than 30 days prior to the consummation of such transaction); PROVIDED that
if an earlier date is so requested, USSC or any Subsidiary of United Stationers
Inc. shall have entered into a valid and legally, binding agreement to effect
such transaction on or before a date certain; PROVIDED FURTHER that, if the
Purchased Receivables Percentage applicable to such Seller as of the relevant
Seller Termination Request Date is less than 10%, then USFS shall consent to
such Seller Termination Request unless such consent would violate the terms and
provisions of the Pooling and Servicing Agreements. From and after the date any
such Seller is terminated as a Seller pursuant to this subsection, USFS shall
cease buying Receivables and Receivables Property from such Seller. Each such
Seller shall be released as a Seller party hereto for all other purposes and
shall cease to be a party hereto on such termination date.

          (c) A terminated Seller shall have no further obligation under any
Transaction Document, other than to repurchase Receivables previously

                                       53


sold by it to USFS or the Company, as applicable, pursuant to Section 2.06 and
indemnification obligations under Section 7.01.

     Section 9.15 TERMINATION. This Agreement will terminate at such time as (a)
an Early Termination shall have occurred with respect to all Sellers hereunder
and (b) all Receivables purchased hereunder have been collected, and the
proceeds thereof turned over to USFS (or as directed by USFS) and all other
amounts owing to USFS hereunder shall have been paid in full or, if Receivables
sold hereunder have not been collected, such Receivables have become Defaulted
Receivables and USFS shall have completed its collection efforts with respect
thereto; PROVIDED, HOWEVER, that the indemnities of the Sellers to USFS set
forth in this Agreement shall survive such termination and PROVIDED FURTHER that
USFS shall remain entitled to receive any collections on Receivables sold
hereunder which have become Defaulted Receivables.

     Section 9.16 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION; OTHER
WAIVERS.

          (a) EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF ANY OF THE PARTIES HERETO OR
ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.

          (b) Each of USFS and the Sellers hereby irrevocably and
unconditionally:

               (i) submits itself and its property in any legal action or
     proceeding relating to this Agreement and the other Transaction Documents
     to which it is a party, or for recognition and enforcement of any judgment
     in respect thereof, to the non-exclusive general jurisdiction of the courts
     of the State of New York, the courts of the United States of America for
     the Southern District of New York, and appellate courts from any thereof;

                                       54


               (ii) consents that any such action or proceeding may be brought
     in such courts and waives any objection that it may now or hereafter have
     to the venue of any such action or proceeding in any such court or that
     such action or proceeding was brought in an inconvenient court and agrees
     not to plead or claim the same;

               (iii) agrees that service of process in any such action or
     proceeding may be effected by mailing a copy thereof by registered or
     certified mail (or any substantially similar form of mail), postage
     prepaid, to such Person at its address referred to in Section 9.02 or at
     such other address of which the relevant Seller or USFS, as the case may
     be, shall have been notified pursuant thereto;

               (iv) agrees that nothing herein shall affect the right to effect
     service of process in any other manner permitted by law or shall limit the
     right to sue in any other jurisdiction; and

               (v) waives, to the maximum extent not prohibited by law, any
     right it may have to claim or recover in any legal action or proceeding
     referred to in this subsection 9.07(b) any special, exemplary, punitive or
     consequential damages.

     SECTION 9.17 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                       55




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

                               THE SELLER:

                               UNITED STATIONERS SUPPLY CO.

                               By:
                                  ---------------------------------------------
                                  Name:
                                  Title:

                               THE SERVICER:

                               UNITED STATIONERS FINANCIAL SERVICES LLC

                                By:
                                  ---------------------------------------------
                                  Name:
                                  Title:

                               UNITED STATIONERS FINANCIAL SERVICES LLC

                               By:
                                  ---------------------------------------------
                                  Name:
                                  Title:



Consented to by:

USS RECEIVABLES COMPANY, LTD.

By:
   ------------------------------------
Name:
Title:

                                       57




                                   SCHEDULE I

                               AUTHORIZED OFFICERS

                              
Eileen A. Kamerick               Executive Vice President and Chief Financial Officer

Susan Maloney Meyer              Senior Vice President, General Counsel and Secretary

Kathleen S. Dvorak               Senior Vice President, Investor Relations and Financial Administration

Brian S. Cooper                  Senior Vice President, Treasurer and Assistant Secretary





                                   SCHEDULE II

     Principal place of business and Chief Executive Office of USSC:

                                2200 E. Golf Road
                           Des Plaines, Illinois 60016
                                  (Cook County)

     Offices where USSC keeps its records concerning Receivables and Related
     Contracts, purchase orders and all other Agreements related to the
     Receivables:

                                2200 E. Golf Road
                           Des Plaines, Illinois 60016
                                  (Cook County)



                                  SCHEDULE III

                               Lockbox Processors:

                           THE NORTHERN TRUST COMPANY

     Lockbox Number 92515          Chicago, Illinois

     Lockbox Account Number 55719

                                    PNC BANK

     Lockbox Number 7780-1274      Philadelphia, Pennsylvania
     Lockbox Number 31001-0284     Pasadena, California

     Lockbox Account Number 2149466



                                   SCHEDULE IV

                 Policies Concerning Contracts and Receivables:

                               On File with Seller



                                   SCHEDULE VI

                            CORPORATE AND TRADE NAMES

                          United Stationers Supply Co.


                               JURISDICTIONS USED

                                    Illinois



                                  SCHEDULE VII

                              DISCOUNTED PERCENTAGE

The Discounted Percentage applicable to the Receivables purchased on any date
from any Seller shall equal 98.41%; PROVIDED, that, with respect to
Non-Securitized Receivables, the Discounted Percentage shall equal 78.43%;
PROVIDED FURTHER, that the Discounted Percentage may be revised with the mutual
written consent of the Sellers and USFS, based the a valution report of a third
party. The Discounted Percentage is (and to the extent revised, shall be)
reflective of a fair market value discount based on an historical analysis of
losses, dilutions, delinquencies and agings on the Receivables, and which takes
into account the anticipated funding and servicing costs to USFS, as well as
arm's-length return to USFS.



                                 SCHEDULE VIII

                                     ERISA

                                      None





                                                                       EXHIBIT A
                                                   TO RECEIVABLES SALE AGREEMENT

                         FORM OF USES SUBORDINATED NOTE





                                     FORM OF
                        USFS SUBORDINATED PROMISSORY NOTE

Des Plaines, Illinois                                               May 1, 2001

     FOR VALUE RECEIVED, the undersigned, UNITED STATIONERS FINANCIAL SERVICES
LLC, an Illinois limited company ("USFS"), does hereby promise to pay to the
order of UNITED STATIONERS SUPPLY CO., an Illinois corporation ("USSC"), and
each Subsidiary of UNITED STATIONERS INC. which is from time to time a party to
the Receivables Sale Agreement referred to below (collectively, the "SELLERS"),
and their successors and permitted assigns, the principal amount of this
Subordinated Promissory Note (this "USFS SUBORDINATED NOTE"), determined as
described below, together with interest thereon which shall accrue on the last
day of each Settlement Period at a rate per annum equal to the ABR in effect
from time to time plus two percent (2%) from and including the initial Effective
Date to but excluding the last day of each Settlement Period and shall, subject
to the terms and conditions hereof, be paid (x) on each Distribution Date with
respect to this USFS Subordinated Note outstanding from time to time during the
Settlement Period immediately preceding such Distribution Date and/or (y) on the
Maturity Date (as hereinafter defined). Capitalized terms used herein and not
otherwise defined are used herein as defined in the Amended and Restated
Receivables Sale Agreement, dated as of May 1, 2001, among the Sellers, USFS,
and USFS, as Servicer (such agreement, as it may from time to time be amended,
supplemented or otherwise modified in accordance with its terms, the
"RECEIVABLES SALE AGREEMENT") and the Amended and Restated Pooling Agreement,
dated as of May 1, 2001, among USS Receivables Company, Ltd., USFS, as Servicer,
and The Chase Manhattan Bank, as Trustee and as Securities Intermediary (such
agreement, as it may from time to time further be amended, supplemented or
otherwise modified in accordance with its terms, the "POOLING AGREEMENT"). This
USFS Subordinated Note is the USFS Subordinated Note referred to in the
Receivables Sale Agreement.

     The Initial USFS Subordinated Note Amount shall be equal to ____________
($___________). Following the Effective Date, the aggregate principal amount of
this USFS Subordinated Note at any time shall be equal to the difference between
(i) the sum of the Initial USFS Subordinated Note Amount and each addition to
the principal amount of the USFS Subordinated Note with respect to each Seller
pursuant to Section 2.03 of the Receivables Sale Agreement as of such time and
(ii) the aggregate amount of all payments made in respect of the principal of
this USFS Subordinated Note as of such time. All payment made in respect of this
USFS Subordinated Note shall be allocated among the Sellers by the Servicer in
accordance with the Receivables Sale Agreement and shall be allocated FIRST, to
pay accrued and unpaid interest thereon, and SECOND, to pay the outstanding
principal amount thereof. Principal hereunder not paid or prepaid pursuant to
the terms hereof shall be payable on the date (the "MATURITY DATE") on which all
of the Investor Certificateholders with respect to each Outstanding Series shall
have been paid in full all amounts owing to them under any Pooling and Servicing



Agreement. Payments of interest on and principal under this USFS Subordinated
Note shall be paid by wire transfer of immediately available funds to such
account of each Seller as such Seller may designate in writing from time to
time. Notwithstanding the foregoing, no payment of interest or principal (any of
the foregoing, a "PAYMENT") may be made under this USFS Subordinated Note at any
time unless (i) at the date such payment is to be made, USFS shall have made all
payments in respect of its repurchase obligations pursuant to the USFS
Receivables Sale Agreement at such date and (ii) such payment is effected in
accordance with all corporate and legal formalities applicable to USFS;
PROVIDED, HOWEVER, that (A) no payment shall be made on, and no Seller shall
make any claim for any payment on, any date if (x) a Potential Early
Amortization Event of a type referred to in clause (a)(ii) or (iii) of Section
7.1 of the Pooling Agreement or (y) an Early Amortization Event has occurred and
is continuing (or would occur as a result of such payment) on such date and (B)
all payments made on any date shall be payable by USFS solely from funds
available to USFS which are not otherwise needed or required on such date to be
applied to the payment of any amounts by USFS pursuant to the USFS Receivables
Sale Agreement and the Sellers shall make no claim for payment in contravention
of this clause (B). Default in the payment of interest on and principal under
this USFS Subordinated Note shall not constitute a Purchase Termination Event
under the Receivables Sale Agreement, a Servicer Default under the Servicing
Agreement, or an Early Amortization Event under the Pooling Agreement or any
Supplement thereto.

     Each holder of this USFS Subordinated Note agrees that it shall have no
right to be paid, and shall have no claim to payment, except in accordance with,
and subject to the terms and conditions of, this USFS Subordinated Note.

     Neither this USFS Subordinated Note, nor any right of any Seller to receive
payments hereunder, shall be assigned, transferred, exchanged, pledged,
hypothecated, participated or otherwise conveyed, except as set forth in Section
8.02 of the Receivables Sale Agreement.

     USFS hereby waives diligence, presentment, demand, protest and notice of
any kind whatsoever. The failure of any holder to exercise any of its rights
hereunder in any particular instance shall not constitute a waiver thereof in
that or any subsequent instance.

     If any payment or distribution of any kind be collected or received by any
Seller in respect of amounts owing to such Seller under this USFS Subordinated
Note when pursuant hereto such payment should not have been made to or received
by such Seller, such Seller forthwith shall deliver the same to the Trustee for
the benefit of the Holders. Until so delivered, such payment or distribution
shall be held in trust by such Seller as the property of the Holders, segregated
from other funds and property held by such Seller.



     Each Seller covenants and agrees that, prior to the date which is one (1)
year and one (1) day after the date of termination of the Receivables Sale
Agreement pursuant to Section 9.15 thereof, it will not institute against, or
join any other Person in instituting against, USS Receivables Company, Ltd. any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any federal or state bankruptcy or similar law.

     THIS USFS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                       UNITED STATIONERS FINANCIAL SERVICES LLC

                       By:
                          --------------------------------------------------





                                                                    EXHIBIT B TO
                                                            AMENDED AND RESTATED
                                                      RECEIVABLES SALE AGREEMENT

                      FORM OF ADDITIONAL SELLER SUPPLEMENT

          SUPPLEMENT, dated ___________, to the Amended and Restated Receivables
Sale Agreement Agreement dated as of May 1, 2001 (as may from time to time be
amended, supplemented or otherwise modified, the "AGREEMENT"), among UNITED
STATIONERS SUPPLY CO., an Illinois corporation ("USSC"), (the "SELLER," and
together with each other subsidiary of UNITED STATIONERS INC. from time to time
added as a seller pursuant to Section 9.13 of the Agreement, (the "SELLERS")),
UNITED STATIONERS FINANCIAL SERVICES LLC, an Illinois limited liability company
("USFS"), and USFS, in its capacity as servicer (terms used but not defined
herein have the meaning given them in the Agreement).

                              W I T N E S S E T H:

          WHEREAS, the Agreement provides that any Subsidiary of USSC, although
not originally a Seller thereunder, may become a Seller under the Agreement,
with (i) the consent of USFS pursuant to Section 9.13 of the Agreement and (ii)
the satisfaction of each of the conditions precedent set forth in Section 3.02
of the Agreement (including the requirement under subsection 3.02(a) thereof
that such additional Seller deliver to USFS a supplement in substantially the
form of this Supplement); and

          WHEREAS, the undersigned is not an original Seller under the Agreement
but now desires to become a Seller thereunder.

          NOW, THEREFORE, the undersigned hereby agrees as follows:

          1. The undersigned agrees to be bound by all of the provisions of the
Agreement applicable to a Seller thereunder and agrees that it shall, on the
date this Supplement is accepted by USFS, become a Seller for all purposes of
the Agreement to the same extent as if originally a party thereto.

          IN WITNESS THEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.

                       [Insert name of Seller]

                               By:
                                  ---------------------------------------------

                                  Title:---------------------------------------



                                                                    EXHIBIT C TO
                                                            AMENDED AND RESTATED
                                                      RECEIVABLES SALE AGREEMENT

                                 UCC CERTIFICATE

     The undersigned, the Treasurer and Assistant Secretary of United Stationers
Supply Co., an Illinois corporation ("USSC"), makes reference to the Amended and
Restated Receivables Sale Agreement dated as of May 1, 2001 (as may from time to
time be amended, supplemented or otherwise modified, the "AGREEMENT"), among
USSC and United Stationers Financial Services LLC, an Illinois limited company
("USFS"), and USFS in its capacity as servicer (terms used but not defined
herein have the meaning given them in the Agreement), and in connection
therewith hereby certifies to USFS, the Company and the Trustee, on behalf of
USSC and not individually, as follows:

1. NAMES.

     (a) The exact corporate name of USSC, as such name appears in its
certificate of incorporation, is as follows:

                          United Stationers Supply Co.

     (b) Set forth below is each other corporate name USSC has had since
its organization, together with the date of the relevant change:

                                      NONE

          (a)    (c) Except as set forth in SCHEDULE A hereto, USSC has
not changed its identity or corporate structure in any way within the
past five years.

     (d) No other names (including trade names or similar appellations) have
been used by USSC or any of its divisions or other business units in connection
with the conduct of its business or the ownership of its properties at any time
during the past five years.

                                       2


2. CURRENT LOCATIONS.

          (b)    (a) The chief executive office of USSC is located at the
following address:

                          United Stationers Supply Co.
                                2200 E. Golf Road
                                   Cook County
                           Des Plaines, Illinois 60016

     (b) USSC does not maintain any books or records relating to any
Receivables and Receivables Property at any location other than as set forth in
Paragraph 2(a) above.

3. FEDERAL TAXPAYER IDENTIFICATION NUMBER. The following is USSC's Federal
Taxpayer Identification Number:

                                   36-2431718

4. SCHEDULE OF FILINGS. The Office of the Secretary of State of the State of
Illinois is the only office in which a filing by USSC of a financing statement
on Form UCC-l is required to be made in connection with the transactions
contemplated by the Agreement.

          IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of April,
2001.

                              --------------------------------------------------
                              Name:
                              Title:

                                       3


                                     ANNEX 1
                           TO THE AMENDED AND RESTATED
                           RECEIVABLES SALE AGREEMENT

     United Stationers Financial Services LLC is a separate wholly-owned
subsidiary of United Stationers Supply Co.

                                       4

EX-10.2

Exhibit 10.2

                           RECEIVABLES SALE AGREEMENT

          RECEIVABLES SALE AGREEMENT, dated as of May 1, 2001 (as amended,
supplemented or otherwise modified and in effect from time to time, this
"AGREEMENT"), among UNITED STATIONERS FINANCIAL SERVICES LLC, an Illinois
limited liability company ("USFC"); USS RECEIVABLES COMPANY, LTD., a Cayman
Islands limited liability company (the "COMPANY"); and USFC, in its capacity as
servicer (the "SERVICER").

                              W I T N E S S E T H :

          WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Sellers (as defined herein), USFC, and the Servicer, have entered
into an Amended and Restated Receivables Sale Agreement (as amended,
supplemented or otherwise modified and in effect from time to time, the "Amended
and Restated Receivables Sale Agreement") dated as of the date hereof, pursuant
to which the Sellers have agreed to sell and USFC has agreed to purchase
Receivables and Receivables Property (each as defined herein);

          WHEREAS, USFC intends to sell Receivables and Receivables Property
(both as hereinafter defined) to the Company on the terms and subject to the
conditions set forth in this Agreement;

          WHEREAS, the Company desires to purchase Receivables and Receivables
Property from USFC on the terms and subject to the conditions set forth in this
Agreement;

          WHEREAS, USFC and the Company desire the sale of Receivables and
Receivables Property from the Sellers to the Company to be a true sale providing
the Company with the full benefits of ownership of the Receivables; and

          WHEREAS, to obtain a portion of the necessary funds to purchase such
Receivables and Receivables Property, the Company has entered into the Amended
and Restated Pooling Agreement, the Second Amended and Restated Series 1998-1
Supplement and the Amended and Restated Series 2000-1 Supplement, each dated as
of the date hereof.

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:



                                   ARTICLE I
                                  DEFINITIONS

          Section 1.01 CERTAIN DEFINED TERMS. (a) As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          "ABR" means, for any day, rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate.

          "AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT" has the meaning
specified in the receitals hereto.

          "AUTHORIZED OFFICERS" means those officers of USFC designated in
Schedule I hereto (or in such other Schedule as may be delivered by USFS to the
other parties hereto from time to time) as duly authorized to execute and
deliver this Agreement and any instruments or documents in connection herewith
on behalf of USFS and to take, from time to time, all other actions on behalf of
USFS in connection herewith.

          "CLOSING DATE" means May 1, 2001.

          "CODE" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder or any successor statute and related regulations.

          "CONTRACT" means a contract between any Seller and any Person pursuant
to or under which such Person shall be obligated to make payments to such
Seller.

          "DISCOUNTED PERCENTAGE" has the meaning specified in Schedule VII
hereto.

          "DOCUMENTS" has the meaning specified in subsection 5.01(r)(iv)(B).

          "EARLY TERMINATION" has the meaning specified in Section 6.01.

          "EFFECTIVE DATE" means May 1, 2001.

                                       2


          "ERISA AFFILIATE" means, with respect to any Person, any trade or
business (whether or not incorporated) that is a member of a group of which such
Person is a member and which is treated as a single employer under Section 414
of the Code.

          "EXCLUDED RECEIVABLE" means any Receivable which either (i) arises
from any Seller's advertising business; (ii) is owed by a Person who is not a
resident of the United States, its territories or possessions and/or a payment
obligation of a Person that is not denominated and payable in U.S. Dollars in
the United States; (iii) is owed by a Governmental Authority; or (iv) the
payment for which is evidenced or required to be evidenced by a note or other
promissory instrument; provided that in the event any Excluded Receivable is
included in a Required Report, for the purposes of Section 2.01 hereof and
Section 2.1 of the Pooling Agreement and the definition of "Collections", such
receivable shall not be an Excluded Receivable.

          "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by The Chase Manhattan Bank from three federal funds
brokers of recognized standing selected by The Chase Manhattan Bank.

          "INDEMNIFIED AMOUNTS" has the meaning specified in Section 7.01.

          "INITIAL CLOSING DATE" means the date of the initial issuance of the
Investor Certificates.

          "INITIAL SUBORDINATED NOTE AMOUNT" has the meaning specified in
subsection 8.01(b).

          "LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities, any purchase option, call or other similar right
of a third party with respect to such securities; PROVIDED, HOWEVER, that if a
lien is imposed under Section 412(n) of the Code or Section 302(f) of ERISA for
a failure to make a required installment or other payment to a plan to which
Section 412(n) of the Code or Section 302(f) of ERISA applies, then such lien
shall not be treated as a "Lien" from and after the time any

                                       3


Person who is obligated to make such payment pays to such plan the amount of
such lien determined under Section 412(n)(3) of the Code or Section 302(f)(3) of
ERISA, as the case may be, and provides to the Trustee, any Agent and each
Rating Agency written evidence reasonably satisfactory to the Rating Agencies of
the release of such lien, or such lien expires pursuant to Section 412(n)(4)(B)
of the Code or Section 302(f)(4)(B) of ERISA.

          "MULTIEMPLOYER PLAN" means a "multiemployer plan" (within the meaning
of Section 4001(a)(3) of ERISA) and to which such Person or any ERISA Affiliate
of such Person (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding five years
made or accrued an obligation to make contributions.

          "OUTSTANDING SALE PRICE AMOUNT" means, at any time, the aggregate
Purchase Price received by USFC or, prior to the Effective Date, by the Sellers
from the Company with respect to the aggregate outstanding Principal Amount at
such time of the Purchased Receivables or, prior to the Effective Date, received
by the applicable Seller.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "PAYMENT DATE" has the meaning specified in subsection 2.03(a).

          "PLAN" means, with respect to any Person, any pension plan (other than
a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code which is maintained for employees of such Person or any ERISA
Affiliate of such Person.

          "POOLING AGREEMENT" means the Amended and Restated Pooling Agreement,
dated as of the date hereof, among the Company, the Servicer and the Trustee on
behalf of the Holders, as such agreement may be further amended, supplemented,
waived, or otherwise modified from time to time, including, without limitation,
the Series 1998-1 Supplement.

          "POTENTIAL PURCHASE TERMINATION EVENT" means any condition or act
specified in Section 6.01 that, with the giving of notice or the lapse of time
or both, would become a Purchase Termination Event.

          "PRIME RATE" means the rate of interest per annum publicly announced
from time to time by The Chase Manhattan Bank as its prime rate in effect at its

                                       4


principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

          "PURCHASE PRICE" has the meaning specified in Section 2.02.

          "PURCHASE TERMINATION DATE" means the date on which the Company's
obligation to purchase Receivables from USFC shall terminate, which shall be the
date on which an Early Termination occurs with respect to USFC.

          "PURCHASE TERMINATION EVENT" has the meaning specified in Section
6.01.

          "PURCHASED RECEIVABLE" means, at any time, any Receivable sold to the
Company by USFC pursuant to, and in accordance with the terms of, this Agreement
and not theretofore resold to USFC pursuant to subsection 2.01(b) or Section
2.06.

          "RECEIVABLE" means the indebtedness and payment obligations of any
Person to a Seller (including, without limitation, obligations constituting an
account or general intangible or evidenced by a note, instrument, contract,
security agreement, chattel paper or other evidence of indebtedness or security)
arising from a sale of merchandise or the provision of services by such Seller,
including, without limitation, any right to payment for goods sold or for
services rendered, and including the right to payment of any interest, sales
taxes, finance charges, returned check or late charges and other obligations of
such Person with respect thereto; provided that, except as otherwise expressly
provided, for all purposes hereunder "Receivables" shall not include Excluded
Receivables.

          "RECEIVABLES LIST" has the meaning specified in subsection 2.01(e).

          "RECEIVABLES PROPERTY" has the meaning specified in subsection
2.01(a).

          "RELATED PROPERTY" means, with respect to each Receivable:

          (a)  all of USFS's interest in the goods (including returned goods),
if any, relating to the sale which gave rise to such Receivable;

          (b)  all other security interests or Liens, and USFS's interest in
the property subject thereto from time to time purporting to secure payment of
such Receivable, together with all financing statements signed by an Obligor
describing any collateral securing such Receivable; and

                                       5


          (c)  all guarantees, insurance, letters of credit and other agreements
or arrangements of whatever character from time to time supporting or securing
payment of such Receivable;

in the case of clauses (b) and (c), whether pursuant to the contract related to
such Receivable or otherwise or including without limitation, pursuant to any
obligations evidenced by a note, instrument, contract, security agreement,
chattel paper or other evidence of indebtedness or security and the proceeds
thereof.

          "RELEVANT UCC STATE" means each jurisdiction in which the filing of a
UCC financing statement is necessary or desirable to perfect the Company's
interest in the Receivables.

          "REPORTABLE EVENT" means any reportable event as defined in Section
4043(b) of ERISA or the regulations issued thereunder with respect to a Plan
(other than a Plan maintained by an ERISA Affiliate which is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Section 414 of the Code).

          "SEC" means the United States Securities and Exchange Commission.

          "SELLER ADJUSTMENT PAYMENT" has the meaning specified in Section 2.05.

          "SELLER REPURCHASE PAYMENT" has the meaning specified in Section 2.06.

          "SELLERS" shall mean United Stationers Supply Co. in its capacity as
Seller under the Amended and Restated Receivables Sale Agreement and any
directly or indirectly wholly-owned subsidiary of United Stationers Inc. which
has been added as a Seller in accordance with the provisions of the Amended and
Restated Receivables Sale Agreement and the other Transaction Documents (but, in
each case, excluding any such Subsidiaries which have been terminated as Sellers
in accordance with the provisions thereof and of the other Transaction
Documents), all of the foregoing in their capacities as Sellers under the
Receivables Sale Agreement; each, individually, a "SELLER".

          "SERIES 1998-1 SUPPLEMENT" means the Second Amended and Restated
Series 1998-1 Supplement, dated as of the date hereof, among the Company, the
Servicer and the Trustee, to the Pooling Agreement, as each such agreement may
be further amended, supplemented or otherwise modified from time to time.

                                       6


          "SUBORDINATED NOTE" has the meaning specified in Section 8.01.

          "UCC CERTIFICATE" means a certificate substantially in the form of
Exhibit C hereto.

          "USSC" means United Stationers Supply Co., an Illinois corporation.

          "WITHDRAWAL LIABILITIES" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

          (b)  All capitalized terms used herein and not otherwise defined have
the meanings assigned such terms in Section 1.1 of the Pooling Agreement.

          Section 1.02 ACCOUNTING AND UCC TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP; and all
terms used in Article 9 of the UCC that are used but not specifically defined
herein are used herein as defined therein.

          Section 1.03 OTHER TERMS. The words "herein", "hereof", and
"hereunder" and words of similar import refer to this Agreement as a whole,
including the exhibits and schedules hereto, as the same may from time to time
be amended or supplemented, and not to any particular section, subsection or
clause contained in this Agreement, and all references to Sections, subsections,
Exhibits and Schedules shall mean, unless the context clearly indicates
otherwise, the Sections and subsections hereof and the Exhibits and Schedules
attached hereto, the terms of which Exhibits and Schedules are hereby
incorporated into this Agreement. Whenever appropriate, in the context, terms
used herein in the singular also include the plural, and vice versa.

          Section 1.04 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".

                                   ARTICLE II
                        PURCHASE AND SALE OF RECEIVABLES

          Section 2.01 PURCHASE AND SALE OF RECEIVABLES. (a) USFC hereby sells,
assigns, transfers and conveys to the Company, without recourse (except to the
limited extent provided herein), all its respective right, title and interest
in, to and

                                       7


under (i) all Receivables now existing and hereafter arising from time to time,
(ii) all payment and enforcement rights (but none of the obligations) with
respect to such Receivables, (iii) all Related Property in respect of such
Receivables, (iv) all Collections with respect to the foregoing clauses (i),
(ii) and (iii) (the payment and enforcement rights, Related Property and
Collections referred to in clauses (ii), (iii) and (iv) above are hereinafter
collectively referred to as the "RECEIVABLES PROPERTY"), (v) all its rights
under the Amended and Restated Receivables Sale Agreement and (vi) all proceeds
of the foregoing.

          (b)  On the Effective Date and on the date of creation of each newly
created Receivable (but only so long as no Early Termination shall have occurred
and be continuing), all of USFC's right, title and interest in, to and under (i)
in the case of the Effective Date, all then existing Receivables and all
Receivables Property in respect of such Receivables and (ii) in the case of each
such date of creation, all such newly created Receivables and all Receivables
Property in respect of such Receivables shall be immediately and automatically
sold, assigned, transferred and conveyed to the Company pursuant to paragraph
(a) above without any further action by USFC or any other Person. If USFC shall
not have received payment from the Company of the Purchase Price for any newly
created Receivable and the related Receivables Property on the Payment Date
therefor in accordance with the terms of subsection 2.03(b), such newly created
Receivable and the Receivables Property with respect thereto shall, upon receipt
of notice from USFC of such failure to receive payment, immediately and
automatically be sold, assigned, transferred and reconveyed by the Company to
USFC without any further action by the Company or any other Person.

          (c)  The parties to this Agreement intend that the transactions
contemplated by subsections 2.01(a) and (b) hereby shall be, and shall be
treated as, a purchase by the Company and a sale by USFC of the Purchased
Receivables and the Receivables Property in respect thereof and not a loan
secured by such Purchased Receivables and Receivables Property. All sales of
Receivables and Receivables Property by USFC hereunder shall be without recourse
to, or representation or warranty of any kind (express or implied) by, USFC,
except as otherwise specifically provided herein. The foregoing sale,
assignment, transfer and conveyance does not constitute and is not intended to
result in a creation or assumption by the Company of any obligation of USFC or
any other Person in connection with the Receivables, the Receivables Property or
any agreement or instrument relating thereto, including any obligation to any
Obligor. If this Agreement does not constitute a valid sale, assignment,
transfer and conveyance of all right, title and interest of USFC in, to and
under the Purchased Receivables and the Receivables Property in respect thereof
despite the intent of the parties hereto, USFC hereby grants a "security
interest" (as

                                       8


defined in the UCC) in the Purchased Receivables, the Receivables Property in
respect thereof its rights under the Amended and Restated Receivables Sale
Agreement and all proceeds thereof to the Company and the parties agree that
this Agreement shall constitute a security agreement under the UCC.

          (d)  In connection with the foregoing conveyances, USFC agrees to
record and file, at its own expense, financing statements (and continuation
statements with respect to such financing statements when applicable) with
respect to the Receivables and Receivables Property now existing and hereafter
acquired by the Company from USFC meeting the requirements of applicable state
law in such manner and in such jurisdictions as are necessary to perfect the
Company's ownership or security interest in the Receivables and Receivables
Property and its rights under the Amended and Restated Receivables Sale
Agreement, and to deliver evidence of the execution and delivery of such
financing statements to the Company on or prior to the related Effective Date.

          (e)  In connection with the foregoing conveyances, USFC agrees at its
own expense, as agent of the Company, (i) to indicate, or cause to be indicated,
on the computer files containing a master database of Receivables that all
Receivables included in such files and all Receivables Property, have been sold
to the Company in accordance with this Agreement and (ii) to deliver, or cause
to be delivered, to the Company computer files, microfiche lists, a typed or
printed list or other tangible evidence reasonably acceptable to the Company (a
"RECEIVABLES LIST") containing true and complete lists (A) on the Closing Date,
of (I) the Obligors whose Receivables have been transferred to the Company prior
to the Closing Date and the balance of the Receivables of each such Obligor as
of the Closing Date and (II) the obligors whose Receivables are to be
transferred to the Company on the Closing Date and the balance of the
Receivables each such Obligor as of the Closing Date and (B) on each Effective
Date, of Obligors whose Receivables are to be transferred to the Company on such
Effective Date and the balance of the Receivables originated by each such
Obligor as of such Effective Date.

          Section 2.02 PURCHASE PRICE. The amount payable by the Company to USFC
(the "PURCHASE PRICE") for Receivables and Receivables Property on any Payment
Date under this Agreement shall be equal to the product of (a) the aggregate
outstanding Principal Amount of such Receivables as set forth in the applicable
Required Report and (b) the Discounted Percentage.

          Section 2.03 PAYMENT OF PURCHASE PRICE. (a) Upon the fulfillment of
the conditions set forth in Article III, the Purchase Price for Receivables and
the Receivables Property shall be paid or provided for by the Company in the
manner provided below on each day for which a Required Report is delivered
pursuant to

                                       9


Section 4.1 of the Servicing Agreement (each such day, a "PAYMENT DATE") in
respect of a Reported Period (which Required Report shall specify the Principal
Amount of Receivables being sold on such Payment Date, the aggregate Purchase
Price for such Receivables and the components of payment as provided in
paragraph (b) below). USFC hereby appoints the Servicer as its agent to receive
payments of the Purchase Price of the Receivables and the Receivables Property
sold to the Company and hereby authorizes the Company to make all such payments
due to USFC directly to an account of, or as otherwise directed by, the
Servicer. The Servicer hereby accepts and agrees to such appointment. All
payments under this Agreement shall be made not later than 3:00 p.m. (New York
City time) on the date specified therefor in Dollars in same day funds or by
check, as the Servicer shall elect, and to the bank account designated in
writing by the Servicer to the Company.

          (b)  The Purchase Price for Receivables and Receivables Property shall
be paid by the Company on each Payment Date as follows:

                    (i)    by netting the amount of any Seller Adjustment
     Payments or Seller Repurchase Payments pursuant to Section 2.05 or 2.06,
     respectively, against such Purchase Price;

                    (ii)   to the extent available for such purpose, in cash
     from Collections released to the Company pursuant to the Pooling Agreement;

                    (iii)  to the extent available for such purpose, in cash
     from the net proceeds of a transfer of interests in Purchased Receivables
     by the Company to other Persons;

                    (iv)   at the option of the Company, by means of an addition
     to the principal amount of the Subordinated Note in an aggregate amount
     equal to the remaining portion of the Purchase Price; PROVIDED, HOWEVER,
     that the outstanding principal amount of the Subordinated Note shall not at
     any time exceed 25% of the Outstanding Sale Price Amount; PROVIDED,
     FURTHER, that the Company may pay the Purchase Price by means of additions
     to the principal amount of the Subordinated Note only if, at the time of
     such payment and after giving effect thereto, the fair market value of the
     Company's assets, including, without limitation, any beneficial interests
     in or indebtedness of a trust and all Receivables and Receivables Property
     the Company owns, is greater than the amount of its liabilities including
     its liabilities on the Subordinated Note and all interest and other fees
     due and payable under the Pooling Agreement and the other Transaction
     Documents. The Servicer may evidence such additional principal amounts by
     recording

                                       10


     the date and amount thereof on the grid attached to such Subordinated Note,
     PROVIDED that the failure to make any such recordation or any error in such
     grid shall not adversely affect USFC's rights; and

                    (v)    in cash from the proceeds of capital contributed by
     USSC to the Company, if any, in respect of its equity interest in the
     Company.

          (c)  Whenever any payment to be made under this Agreement shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day. Amounts not paid when due in accordance
with the terms of this Agreement shall bear interest at a rate equal at all
times to the ABR PLUS 2%, payable on demand.

          Section 2.04 NO REPURCHASE. Except to the extent expressly set forth
herein, USFC shall have no right or obligation under this Agreement, by
implication or otherwise, to repurchase from the Company any Purchased
Receivables or Receivables Property or to rescind or otherwise retroactively
affect any purchase of any Purchased Receivables or Receivables Property after
the Payment Date relating thereto.

          Section 2.05 REBATES, ADJUSTMENTS, RETURNS AND REDUCTIONS;
MODIFICATIONS. From time to time, a Seller under the Amended and Restated
Receivables Sale Agreement may make Dilution Adjustments to Receivables in
accordance with Section 2.05 and subsection 5.03(c) thereof. USFC agrees to pay
to the Company in cash, on the first Business Day immediately succeeding the
date of the grant of any Dilution Adjustment, the amount of any such Dilution
Adjustment (a "SELLER ADJUSTMENT PAYMENT") received by it pursuant to the
Amended and Restated Receivables Sale Agreement; PROVIDED that, prior to the
occurrence of any Early Termination, any such Seller Adjustment Payment due to
the Company on any Payment Date shall, on such Payment Date, be netted against
the Purchase Price of newly purchased Receivables in accordance with subsection
2.03(b)(i) to the extent of such Purchase Price and the remaining amount of such
Seller Adjustment Payment due to the Company after such netting, if any, shall
be paid to the Company on such date in cash. The amount of any Dilution
Adjustment made with respect to any Reported Period shall be set forth on the
Required Report prepared with respect to such Reported Period.

          Section 2.06 LIMITED REPURCHASE OBLIGATION. In the event that (i) any
representation or warranty contained in Section 4.02 in respect of any
Receivable transferred to the Company is not true and correct in any material
respect on the applicable Payment Date, or (ii) there is a breach of any
covenant contained in

                                       11


subsection 5.01(d), (g) or (h) or Section 5.03 with respect to any Receivable
and such breach has a material adverse effect on the Company's interest in such
Receivable or (iii) the Company's interest in any Receivable is not a first
priority perfected ownership or security interest at any time as a result of any
action taken by, or any failure to take action by, USFC, then USFC agrees to pay
to the Company in cash an amount equal to the Purchase Price of such Receivable
(whether the Company paid such Purchase Price in cash or otherwise) less
Collections received by the Company in respect of such Receivable, such payment
to occur no later than the Payment Date occurring on the 30th day (or, if such
30th day is not a Payment Date, on the Payment Date immediately succeeding such
30th day) after the day such breach or incorrectness becomes known (or should
have become known with due diligence) to USFC (unless such breach or
incorrectness shall have been cured on or before such day); PROVIDED that, prior
to any Early Termination, any such payment due and owing to the Company on such
Payment Date shall be netted against the Purchase Price of newly created
Receivables in accordance with subsection 2.03(b)(i) to the extent of such
Purchase Price and the remaining amount of such payment due to the Company after
such netting, if any, shall be paid to the Company in cash to the extent still
unpaid on such Payment Date. Any payment by USFC pursuant to this Section 2.06
is referred to as a "SELLER REPURCHASE PAYMENT." The obligation to reacquire any
Receivable shall, upon satisfaction thereof, constitute the sole remedy
respecting the event giving rise to such obligation available to the Company.
Simultaneously with any Seller Repurchase Payment with respect to any
Receivable, such Receivable and the Receivables Property with respect thereto
shall immediately and automatically be sold, assigned, transferred and conveyed
by the Company to USFC without any further action by the Company or any other
Person.

          Section 2.07 OBLIGATIONS UNAFFECTED. The obligations of USFS to the
Company under this Agreement shall not be affected by reason of any invalidity,
illegality or irregularity of any Receivable or any sale of a Receivable.

          Section 2.08 CERTAIN CHARGES. USFC and the Company agree that late
charge revenue, reversals of discounts, other fees and charges and other similar
items, whenever created, accrued in respect of Purchased Receivables shall be
the property of the Company notwithstanding the occurrence of an Early
Termination and all Collections with respect thereto shall continue to be
allocated and treated as Collections in respect of Purchased Receivables.

          Section 2.09 RESERVED.

          Section 2.10 FURTHER ASSURANCES. From time to time at the request of
USFC, the Company shall deliver to USFC such documents, assignments, releases
and instruments of termination as USFC may reasonably request to evidence the

                                       12


reconveyance by the Company to USFC of a Receivable pursuant to the terms of
subsection 2.01(b) or Section 2.06, PROVIDED that the Company shall have been
paid all amounts due thereunder; and the Company and the Servicer shall take
such action as USFC may reasonably request, at the expense of USFC, to assure
that any such Receivable, the Related Property and Collections with respect
thereto do not remain commingled with other Collections hereunder.

          Section 2.11 PURCHASE OF COMPANY'S INTEREST IN RECEIVABLES AND
RECEIVABLES PROPERTY. (a) In the event of any breach by USFC of any of the
representations and warranties set forth in subsection 4.02(a), (b), (c), (e),
(f) or (g), as of the date made, which breach has a material adverse effect on
the interests of the Company in the Receivables or the Receivables Property,
then the Company, by notice then given in writing to USFC, may direct USFC to
purchase all Receivables and Receivables Property and USFC shall be obligated to
make such purchase on the next Distribution Date occurring at least five
Business Days after receipt of such notice on the terms and conditions set forth
in subsection 2.11(b) below; PROVIDED, HOWEVER, that no such purchase shall be
required to be made if, by such Distribution Date, the representations and
warranties contained in subsections 4.02(a), (b), (c), (e), (f) or (g) shall be
true and correct in all material respects, and any material adverse effect on
the Company caused thereby has been cured.

          (b)  USFC shall, as the purchase price for the Receivables and
Receivables Property to be purchased pursuant to subsection 2.11(a) above, pay
to the Company, on the Business Day preceding such Distribution Date, an amount
equal to the Purchase Price of the Purchased Receivables, less Collections
received by the Company in respect of such Purchased Receivables, as of such
Distribution Date. Upon payment of such amount, in immediately available funds,
to the Company, the Company's rights with respect to the Purchased Receivables
shall terminate and such interest therein will be transferred to USFC and the
Company shall have no further rights with respect thereto. If the Company gives
notice directing USFC to purchase the Purchased Receivables as provided above,
the obligation of USFC to purchase the Purchased Receivables pursuant to this
Section 2.11 shall upon satisfaction thereof constitute the sole remedy
respecting an event of the type specified in the first sentence of this Section
2.11 available to the Company.

                                       13


                                  ARTICLE III
                             CONDITIONS TO PURCHASES

          Section 3.01 CONDITIONS PRECEDENT TO COMPANY'S INITIAL PURCHASE. The
obligation of the Company to purchase Receivables and Receivables Property
hereunder on the Effective Date from USFC is subject to the conditions precedent
that the Company shall have received on or before the date of such purchase the
following, each (unless otherwise indicated) dated the Effective Date and in
form and substance reasonably satisfactory to the Company:

               (a)  RESOLUTIONS. Copies of the resolutions of the Board of
Directors of USFC approving this Agreement and the other Transaction Documents
to be delivered by USFC and the transactions contemplated thereby, certified by
the Secretary or Assistant Secretary of USFC;

               (b)  SECRETARY'S CERTIFICATE. A certificate of the Secretary or
Assistant Secretary of USFC certifying the names and true signatures of the
officers authorized on behalf of USFC to sign this Agreement and the other
Transaction Documents to be delivered by it (on which certificates the Company
may conclusively rely until such time as the Company shall receive from USFC a
revised certificate with respect to USFC meeting the requirements of this
subsection (b));

               (c)  CORPORATE DOCUMENTS. The certificate of formation of USFC,
duly certified by the secretary of state of USFC's jurisdiction of formation, as
of a recent date acceptable to the Company, together with a copy of the limited
liability company agreement of USFC, duly certified by the Secretary or an
Assistant Secretary of USFC;

               (d)  UCC CERTIFICATE, UCC FINANCING STATEMENTS. (i) A UCC
Certificate duly executed by a Responsible Officer of USFC and dated such date
of purchase and (ii) executed copies of such proper financing statements, filed
prior to the Effective Date, naming USFC as the seller, the Company as the
purchaser and the Trustee on behalf of the Holders as the assignee of the
Receivables, Receivables Property, USFS's rights under the Amended and Restated
Receivables Sale Agreement and all proceeds thereof in each jurisdiction in
which the Company (or any of its assignees) deems it necessary or desirable to
perfect the Company's ownership and/or security interest in all Receivables,
Receivables Property, USFS's rights under the Amended and Restated Receivables
Sale Agreement and all proceeds thereof under the UCC or any comparable law of
such jurisdiction;

               (e) UCC SEARCHES. A written search report listing all effective
financing statements that name USFC as debtor or assignor and that are

                                       14


filed in the jurisdictions in which filings were made pursuant to subsection
3.01(d) and in any other jurisdictions that the Company determines are necessary
or appropriate, together with copies of such financing statements (none of
which, except for those described in subsection 3.01(d) shall cover any
Receivables or Receivables Property), and tax and judgment lien searches showing
no such liens that are not permitted by the Transaction Documents;

               (f) OTHER TRANSACTION DOCUMENTS. Original copies, executed by
each of the parties thereto, of each of the other Transaction Documents to be
executed and delivered in connection herewith;

               (g)  BACK-UP SERVICING ARRANGEMENTS. Evidence that USFS maintains
disaster recovery systems and back-up computer and other information management
systems that, in the Company's reasonable judgment, are sufficient to protect
USFS's business against material interruption or loss or destruction of its
primary computer and information management systems and to prevent any
disruption of the servicing of any Receivable conveyed to the Company pursuant
to this Agreement or the Amended and Restated Receivables Sale Agreement.

               (h) CONSENTS. Copies of all consents, if any (including, without
limitation, consents under loan agreements and indentures to which any Seller,
USFC or its Affiliates are parties), necessary to consummate the transactions
contemplated by the Transaction Documents;

               (i) LEGAL OPINIONS. One or more legal opinions from counsel to
USFC and counsel to the Company to the effect that:

                         (A) the sales of Receivables by USFC to the Company
     pursuant to this Agreement are true sales and that such Receivables would
     not be property of USFC's bankruptcy estate;

                         (B) a court should not order the substantive
     consolidation of the assets and liabilities of the Company on the one hand
     with those of any Seller or USFS, on the other hand;

                         (C) to the effect that USFC and the Company, as
     applicable, has all approvals, judicial, regulatory, legal or otherwise,
     needed to execute, deliver and perform each Transaction Document to which
     it is a party and that no conflict or default will occur as a result of the
     execution, delivery and performance thereof;

                                       15


                         (D) to the effect that the Company has a perfected
     ownership or security interest in the Receivables and Receivables Property;
     and

                         (E) addressing other customary matters.

All of the legal opinions referred to in this subsection 3.01(i) shall be
addressed to the Trustee and any other Person reasonably requested by the
Company.

               (j) LOCKBOX AGREEMENT. With respect to each Lockbox Processor, a
Lockbox Agreement substantially the form of Exhibit A to the Pooling Agreement.

               (k) LIST OF OBLIGORS. A Receivables List.

               (l) RESERVED.

          Section 3.02 RESERVED.


          Section 3.03 CONDITIONS PRECEDENT TO EACH OF THE COMPANY'S PURCHASES
OF RECEIVABLES. The obligation of the Company to pay for any Receivable and the
Receivables Property with respect thereto on each Payment Date (including the
Effective Date) shall be subject to the further conditions precedent that, on
and as of such Payment Date:

               (a) the following statements shall be true (and the acceptance by
USFC of the Purchase Price for such Receivable on such Payment Date shall
constitute a representation and warranty by USFC that on such Payment Date such
statements are true):

                    (i)    the representations and warranties of USFC contained
     in Section 4.02 shall be true and correct in all material respects on and
     as of such Payment Date as though made on and as of such date except to the
     extent any such representation or warranty is expressly made only as of
     another date (in which case it shall be true and correct in all material
     respects on and as of such other date);

                    (ii)   after giving effect to such purchase, no (A) Early
     Termination or (B) Potential Purchase Termination Event with respect to a
     Purchase Termination Event set forth in clause (g)(ii) of Section 6.01
     shall have occurred and be continuing; and

                                       16


                    (iii)  there has been no material adverse change since the
     date of this Agreement in the collectibility of the Receivables taken as a
     whole;

               (b) the Company and the Trustee shall be satisfied that USFC's
systems, procedures and record keeping relating to the Purchased Receivables
remain in all material respects sufficient and satisfactory in order to permit
the purchase and administration of the Purchased Receivables in accordance with
the terms and intent of this Agreement;

               (c) the Company shall have received payment in full of all
amounts for which payment is due from USFC pursuant to Sections 2.05, 2.06 or
7.01;

               (d) the Company shall have received such other approvals,
opinions or documents as the Company may reasonably request; and

               (e) USFC shall have complied with all of its covenants in all
material respects and satisfied all of its obligations in all material respects
under this Agreement required to be complied with or satisfied as of such date;

PROVIDED, HOWEVER, that the failure of USFC to satisfy any of the foregoing
conditions shall not prevent USFC from subsequently selling Receivables upon
satisfaction of all such conditions or exercising its rights under subsection
2.01(b).

          Section 3.04 CONDITION PRECEDENT TO USFC'S OBLIGATIONS. The obligation
of USFC on each Payment Date (including on the Effective Date) shall be subject
to the condition precedent that, on such date, the following statement shall be
true (and the payment by the Company of the Purchase Price for such Receivable
on such date shall constitute a representation and warranty by the Company that
on such Payment Date such statement is true): (i) no Early Amortization Event or
Potential Early Amortization Event of a type, with respect to the Company, set
forth in subsection 7.1(a) of the Pooling Agreement shall have occurred and be
continuing and (ii) no Early Termination, as set forth in Section 6 of the
Amended and Restated Receivables Sale Agreement, shall have occurred.

                                       17


                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

          Section 4.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as to itself for the benefit of USFC as follows:

               (a)  It (i) is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, and is duly qualified as a foreign limited liability company and is
in good standing in each jurisdiction in which the ownership of its property or
its business as conducted and proposed to be conducted require such
qualification or in which the failure to so qualify would not reasonably be
expected to have a Material Adverse Effect, (ii) has the requisite limited
liability company power and authority to effect the transactions contemplated
hereby, and (iii) has all requisite limited liability company power and
authority and the legal right to own, pledge, mortgage and operate its
properties, and to conduct its business as now or currently proposed to be
conducted.

               (b)  The execution, delivery and performance by it of this
Agreement and all instruments and documents to be delivered hereunder by it, and
the transactions contemplated hereby and thereby, (i) are within its limited
liability company powers, have been duly authorized by all necessary limited
liability company action, including the consent of shareholders where required,
and do not (A) contravene its memorandum and articles of association, (B)
violate any law or regulation or any order or decree of any court or
governmental instrumentality, (C) conflict with or result in the breach of, or
constitute a default under, any indenture, mortgage or deed of trust or any
material lease, agreement or other instrument binding on or affecting it or any
of its respective subsidiaries or any of its material properties or (D) result
in or require the creation or imposition of any Lien except as created or
imposed hereunder or under the Pooling Agreement, and no transaction
contemplated hereby requires compliance on its part with any bulk sales act or
similar law, and (ii) do not require the consent of, authorization by or
approval of or notice to or filing or registration with, any governmental body,
agency, authority, regulatory body or any other Person other than those which
have been obtained or made except for the filing of the financing statements
referred to in Article III hereof, which filings USFS hereby represents shall
have been duly made prior to or substantially contemporaneously with any
purchases of Receivables and other Receivables Property and shall at all times
be in full force and effect (except as they may be terminated by the Company).
This Agreement has been duly executed and delivered by the Company and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms except (A) as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance,

                                       18


reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).

          Section 4.02 REPRESENTATIONS AND WARRANTIES OF USFC. USFC hereby
represents and warrants for the benefit of the Company and its assigns on the
Closing Date and on each Payment Date, as follows:

               (a)  Organization and Good Standing. USFC (i) is an Illinois
limited liability company duly organized and validly existing as a limited
liability company in good standing under the laws of the state of its formation,
(ii) is duly qualified as a foreign limited liability company and is in good
standing in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a Material Adverse Effect and (iii) and has full
limited liability company power, authority and legal right to own its properties
and conduct its business as such properties are presently owned and such
business is presently conducted, and to execute, deliver and perform its
obligations under this Agreement.

               (b)  Due Qualification. USFC has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business requires such qualification, licenses or
approvals and where the failure to preserve and maintain such qualification,
licenses or approvals is reasonably likely to have a Material Adverse Effect.

               (c)  Due Authorization. The execution and delivery of this
Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions provided for therein have been duly authorized
by USFC by all necessary limited liability company action on its part.

               (d)  No Default. USFC is not in default under or with respect to
any of its Contractual Obligations in any respect which would be reasonably
likely to have a Material Adverse Effect with respect to USFC. No (i) Early
Termination or (ii) Potential Purchase Termination Event with respect to a
Purchase Termination Event set forth in clause (g)(ii) of Section 6.01, in each
case with respect to USFC, has occurred and is continuing.

               (e)  Valid Sale; Binding Obligations. Each transfer of
Receivables and Receivables Property made pursuant to this Agreement shall
constitute a valid sale, transfer and assignment of the Receivables and the
Receivables Property to the Company which is perfected and of first priority
under applicable law, enforceable against creditors of, and purchasers from,
USFC; and

                                       19


this Agreement constitutes, and each other Transaction Document to be signed by
USFC when duly executed and delivered will constitute, an enforceable obligation
of USFC in accordance with its terms, except (A) as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general, and (B) as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).

               (f)  No Violation. The execution, delivery and performance of,
and the consummation of the transactions contemplated by, this Agreement and the
other Transaction Documents and the fulfillment of the terms hereof and thereof
will not (i) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default (which, in the case of clauses (B) and (C) below would reasonably be
expected to cause a Material Adverse Effect) under, (A) the articles of
organization and limited liability company agreement of USFC, (B) any contract,
indenture, loan agreement, mortgage, deed of trust, or, (C) other agreement or
instrument to which USFC is a party or by which USFC or any of its material
properties is bound, (ii) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such contract, indenture,
loan agreement, mortgage, deed of trust, or other agreement or instrument, other
than this Agreement and the other Transaction Documents, or (iii) violate any
law or any order, rule, or regulation of any court or of any federal, state,
local or other regulatory body, administrative agency, or other governmental
instrumentality of the United States of America having jurisdiction over USFC or
any of its properties.

               (g)  No Proceedings. There are no proceedings or investigations
pending or, to the knowledge of USFC, threatened against USFC before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement or any other
Transaction Document, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document,
(iii) seeking any determination or ruling that, in the reasonable judgment of
USFC, could materially and adversely affect the performance by USFC of its
obligations under this Agreement or any other Transaction Document or (iv)
seeking any determination or ruling that could materially and adversely affect
the validity or enforceability of this Agreement or any other Transaction
Document.

               (h)  Bulk Sales Act. No transaction contemplated by this
Agreement or any other Transaction Document with respect to USFC requires
compliance with, or will be subject to avoidance under, any bulk sales act or
similar law.

                                       20


               (i)  Government Approvals. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body in the United States of America is required for the due
execution, delivery and performance by USFC of this Agreement or any other
Transaction Document to which it is a party except for the filing of the UCC
financing statements referred to in Article III, all of which, at the time
required in Article III, shall have been duly made and shall be in full force
and effect.

               (j)  Bona Fide Receivables. USFC has no knowledge of any fact
which should have led it to expect at the time of its classification of any
Receivable as an Eligible Receivable hereunder that such Eligible Receivable
would not be paid in full when due. Each Receivable sold by it hereunder and
designated on a Required Report to be an Eligible Receivable will be, at its
respective Payment Date, an Eligible Receivable. The aggregate outstanding
Principal Amount of Receivables so sold by it on any Payment Date and so
designated as Eligible Receivables is correctly set forth on the Required Report
with respect to such Payment Date.

               (k)  Office. The principal place of business and the chief
executive office of USFC are as indicated on Schedule II hereto and have not
changed during the period of four consecutive months ending on such date (unless
otherwise indicated on the UCC Certificate delivered by USFC pursuant to
subsection 3.01(d) or 3.02(a), as the case may be), and the offices where USFC
keeps its records concerning the Receivables and related Contracts and all
purchase orders and other agreements related to the Receivables are as indicated
on Schedule II hereto (or at such other locations, notified to the Company in
accordance with Section 5.01(i), in jurisdictions where all action required by
subsections 5.01(p) and 5.01(r)(i) has been taken and completed).

               (l)  Margin Regulations. No use of any funds obtained by USFC
under this Agreement or the other Transaction Documents will conflict with or
contravene any of Regulations G, T, U and X promulgated by the Board of
Governors of the Federal Reserve System from time to time.

               (m)  Quality of Title. USFC is the legal and beneficial owner of
each Receivable and all Receivables Property which is to be transferred to the
Company by USFC, and such Receivables and Receivables Property shall be
transferred by USFC free and clear of any Lien (other than any Lien arising
under any other Transaction Document, or arising solely as the result of any
action taken by the Company hereunder); prior to such transfer USFC shall have
made all filings under applicable law in each relevant jurisdiction in order to
protect and perfect the Company's ownership or security interest in all
Receivables and Receivables

                                       21


Property against all creditors of, and purchasers from, USFC; and the Company
shall have acquired and shall continue to have maintained a valid and perfected
first priority ownership or security interest in each Receivable and the
Receivables Property free and clear of any Lien (other than any Lien arising
solely as the result of any action taken by the Company hereunder or by the
Trustee); and no effective financing statement or other instrument similar in
effect covering any Receivable, any interest therein or any Receivables Property
with respect thereto is on file in any recording office except such as may be
filed in favor of (i) the applicable Seller of such Receivable in accordance
with the Contracts, (ii) USFC in accordance with the Amended and Restated
Receivables Sale Agreement, (iii) the Company pursuant to this Agreement and
(iv) the Trustee pursuant to the Pooling Agreement.

               (n)  Accuracy of Information. All factual written information
heretofore or contemporaneously furnished by USFC or its Affiliates (other than
the Company) to the Company for purposes of or in connection with any
Transaction Document or any transaction contemplated hereby or thereby is, and
all other such factual, written information hereafter furnished (if prepared by
USFC or any Affiliate or, if not prepared by USFC or any Affiliate, to the
extent that information contained therein was supplied by USFC or any Affiliate)
by USFC or any Affiliate (other than the Company) to the Company pursuant to or
in connection with any Transaction Document shall be, true and accurate in every
material respect on the date as of which such information is or will be
furnished (unless such information relates to another date), and such
information is not, and shall not be (as the case may be) incomplete by omitting
to state a material fact or any fact necessary to make the statements contained
therein not misleading as of such date.

               (o)  Proceeds Banks, Payment Instructions. The names and
addresses of all the Lockbox Processors, together with the account numbers of
the Lockbox Accounts into which collections are deposited at such institutions,
are specified in Schedule III to the Amended and Restated Receivables Sale
Agreement. The Sellers under the Amended and Restated Receivables Sale Agreement
have transferred all of their right, title and interest in each Lockbox Account
to the Company. Each Lockbox Processor has executed and delivered to the Company
a Lockbox Agreement.

               (p)  Valid Transfers. No transfer of any Receivables or any
Receivables Property to the Company by USFC constitutes a fraudulent transfer or
fraudulent conveyance or is otherwise void or voidable under similar laws or
principles, the doctrine of equitable subordination or for any other reason. The
transfers of Receivables and Receivables Property by USFC to the Company
pursuant to this Agreement, and all other transactions between USFC and the
Company, have been and will be made in good faith and without intent to hinder,

                                       22


delay or defraud creditors of USFC, and USFC acknowledges that it has received
and will receive fair consideration and reasonably equivalent value for the
purchases by the Company of Receivables and Receivables Property hereunder. The
purchase of Receivables and Receivables Property by the Company from USFC
constitutes a true sale of such Receivables and Receivables Property under
applicable state law.

               (q)  Trade Names. USFC uses no trade names other than its actual
corporate name and the trade names set forth in Schedule VI and in the case of
trade names, only in the jurisdictions indicated on Schedule VI. During the five
years preceding the date hereof, except as set forth in Schedule VI and in the
case of trade names, only in the jurisdictions indicated on Schedule VI, USFC
(i) has not been known by any legal name or trade name other than its corporate
name, and (ii) has not been the subject of any merger or other corporate
reorganization.

               (r)  Compliance with Applicable Laws. USFC is in material
compliance with the requirements of all applicable laws, rules, regulations, and
orders of all governmental authorities (federal, state, local or foreign, and
including, without limitation, environmental laws), a breach of any of which,
individually or in the aggregate, would be reasonably likely either (i) to have
a material adverse effect on (A) the business, operations, business prospects or
condition (financial or other) of USFC or (B) the ability of USFC to perform its
obligations under this Agreement and the other Transaction Documents, or (ii) to
impair the collectibility of any Receivables or any Receivables Property or the
enforceability or validity of any Contract.

               (s)  Taxes. USFC has filed all federal and all material state and
local tax returns required by law to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges due from USFC or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings, except where
such failure would not reasonably be expected to cause a Material Adverse
Effect. USFC knows of no basis for any material additional tax assessment for
any fiscal year for which adequate reserves have not been established.

               (t) Reserved.

               (u) ERISA Matters.

                    (i)    Except as specifically disclosed in Schedule VIII
     hereto, USFC and each of its ERISA Affiliates are in compliance in all
     material respects with the applicable provisions of ERISA and the
     regulations and published interpretations thereunder with respect to each
     Plan of USFC

                                       23


     or any of its ERISA Affiliates, except for such noncompliance which could
     not reasonably be expected to result in a Material Adverse Effect with
     respect to USFC.

                    (ii)   No Reportable Event has occurred as to which USFC or
     any of its ERISA Affiliates was required to file a report with the PBGC,
     other than reports for which the 30-day notice requirement is waived,
     reports that have been filed and reports the failure of which to file would
     not reasonably be expected to result in a Material Adverse Effect with
     respect to USFC.

                    (iii)  Except as specifically disclosed in Schedule VIII
     hereto, as of the Effective Date, the present value of all benefit
     liabilities under each Plan of USFC or any of its ERISA Affiliates (on an
     ongoing basis and based on those assumptions used to fund such Plan) did
     not, as of the last valuation report applicable thereto, exceed the value
     of the assets of such Plan, except to the extent that such excess would not
     have a Material Adverse Effect with respect to USFC.

                    (iv)   Neither USFC nor any of its ERISA Affiliates has
     incurred any Withdrawal Liability that could reasonably be expected to
     result in a Material Adverse Effect with respect to USFC.

                    (v)    Neither USFC nor any of its ERISA Affiliates has
     received any notification that any Multiemployer Plan is in reorganization
     or has been terminated within the meaning of Title IV of ERISA, or that a
     reorganization or termination has resulted or could reasonably be expected
     to result, through increases in the contributions required to be made to
     such Plan or otherwise, in a Material Adverse Effect with respect to such
     USFC.

               (v)  Reserved.

               (w)  Solvency. Both prior to and after giving effect to the
transactions contemplated by the Transaction Documents, (i) the assets of USFC,
at fair valuation, will exceed its liabilities (including contingent
liabilities), (ii) the capital of USFC will not be unreasonably small to conduct
its business, and (iii) USFC will not have incurred debts, and does not intend
to incur debts, beyond its ability to pay such debts as they mature.

               (x) Investment Company Act. Neither USFC nor any of USFC's
Subsidiaries is (i) an "investment company" registered or required to be
registered under the 1940 Act, or (ii) a "holding company", or a "subsidiary

                                       24


company" or an "affiliate" of a "holding company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.

               (y)  Ownership. All of the issued and outstanding capital stock
of USFC is owned, directly or indirectly, by United Stationers Inc.

               (z)  Indebtedness to Company. Immediately prior to consummation
of the transactions contemplated hereby on the Effective Date, USFC had no
outstanding Indebtedness to the Company other than amounts permitted by this
Agreement.

               (aa) Receivables Documents. Upon the delivery, if any, by USFC to
the Company of licenses, rights, computer programs, related materials, computer
tapes, disks, cassettes and data relating to the administration of the Purchased
Receivables pursuant to subsection 5.01(r), the Company shall have been
furnished with all materials and data reasonably necessary to permit timely
collection of the Purchased Receivables without the participation of USFC in
such collection.

               (bb) Receivables Lists. The Receivables Lists delivered pursuant
to subsection 2.01(e) set forth in all material respects an accurate and
complete listing as of the Effective Date of all Receivables to be transferred
to the Company on the Effective Date and the information contained therein with
respect to the identity and Principal Amount of each such Receivable is true and
correct in all material respects as of the Cut-Off Date.

               (cc) Seller's Representations and Warranties. Each of the
representations and warranties made in the Amended and Restated Receivables Sale
Agreement by the applicable Seller is true and correct in all material respects.

          The representations and warranties set forth in this Section 4.02
shall survive the transfer and assignment of the respective Receivables to the
Company pursuant to this Agreement. USFC hereby represents and warrants to the
Company, as of the Effective Date and each Payment Date, that the
representations and warranties of USFC set forth in Section 4.02 are true and
correct in all material respects as of such date, except for any representation
and warranty specifically made as of an earlier date, in which case such
representation and warranty shall be true and correct in all material respects
as of such earlier date. Upon discovery by USFC or the Company of any material
breach of any of the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the other.

                                       25


                                   ARTICLE V
                                GENERAL COVENANTS

          Section 5.01 AFFIRMATIVE COVENANTS OF USFS. USFC covenants that, until
the Purchase Termination Date shall have occurred and there are no amounts
outstanding with respect to the Purchased Receivables (other than Charged-off
Receivables):

               (a)  Preservation of Existence as a Limited Liability Company and
Name. USFC will preserve and maintain in all material respects its existence as
a limited liability company, rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in good standing
as a foreign limited liability company in each jurisdiction where the failure to
preserve and maintain such existence, rights, franchises, privileges and
qualification could have a Material Adverse Effect with respect to USFC.

               (b)  Maintenance of Property. USFC will keep all material
property and assets useful and necessary in its business in good working order
and condition (normal wear and tear excepted), except to the extent that the
failure to do any of the foregoing with respect to any such property would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect with respect to the Company.

               (c)  Delivery of Collections. In the event that USFC receives
Collections, USFC agrees to pay to the applicable Lockbox Account all payments
received by USFC in respect of the Receivables as soon as practicable after
receipt thereof by USFC.

               (d)  Compliance with Laws, Etc. USFC shall comply in all material
respects with all applicable laws, rules, regulations and orders applicable to
the Receivables and the Receivables Property, including, without limitation,
rules and regulations relating to truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices and
privacy, where failure to so comply could reasonably be expected to have a
materially adverse impact on the amount of Collections thereunder.

               (e)  Visitation Rights. At any reasonable time during normal
business hours and from time to time upon reasonable prior notice, USFC shall
permit (i) the Company, or any of its agents or representatives, (A) to examine
and make copies of and abstracts from the records, books of account and
documents (including, without limitation, computer tapes and disks) of USFC
relating to Receivables and Related Property owned or to be purchased by the
Company

                                       26


hereunder, including, without limitation, the related Contracts and purchase
orders and other agreements and (B) following the termination of the appointment
of USFS as Servicer, [or of any Seller USFC as a Servicing Party] with respect
to the Receivables, to be present at the offices and properties of USFC to
administer and control the collection of amounts owing on the Purchased
Receivables and (ii) the Company, or any of its agents or representatives, or
the Trustee (upon the giving of appropriate notice to the Company) to visit the
properties of USFC for the purpose of examining such records, books of account
and documents, and to discuss the affairs, finances and accounts of USFC
relating to the Receivables or USFC's performance hereunder with any of its
officers or directors and with its independent certified public accountants;

PROVIDED, that the Company or its agents or representatives, as the case may be,
shall notify USFC prior to any contact with such accountants and shall give USFC
the opportunity to participate in such discussions.

               (f)  Keeping of Records and Books of Account. USFC will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables and the
Receivables Property in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information which,
in each case, in the reasonable discretion of the Company, are necessary or
advisable for the collection of all Receivables and the Receivables Property
(including, without limitation, records adequate to permit the identification of
each new Receivable and all Collections of and adjustments to each existing
Receivable).

               (g)  Performance and Compliance with Policies, Receivables and
Contracts. USFC will (i) perform its obligations in accordance with and comply
in all material respects with the Policies, as amended from time to time in
accordance with the Transaction Documents and (ii) at its expense, cause each
Seller to timely and fully perform and comply with all material provisions,
covenants and other promises required to be observed by it under the Receivables
and the Contracts related to the Receivables and Related Property and all
purchase orders and other agreements related to such Receivables and Related
Property.

               (h)  Obligations. USFC shall pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its other obligations of whatever nature, except where (a) the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on its books, or (b) the failure to so pay, discharge or satisfy all
such obligations would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect in respect of

                                       27


USFC and would not subject any of its properties to any Lien prohibited by
subsection 5.03(b).

               (i)  Location of Records. USFC will keep its principal place of
business and chief executive office, and the offices where it keeps its records
concerning the Receivables, all Receivables Property, all Contracts and purchase
orders and other agreements related to such Receivables (and all original
documents relating thereto), at the address referred to in Schedule II or, upon
30 days' prior written notice to the Company, at such other locations in
jurisdictions where all action required by subsection 5.01(r) shall have been
taken and completed; provided, however, that the Rating Agency Condition shall
have been satisfied with respect to any changes in location of USFC's principal
place of business or chief executive office and such location is not in a state
which is within the Tenth Circuit unless it delivers an opinion of counsel
reasonably acceptable to the Rating Agencies to the effect that Octagon Gas
Systems, Inc. v. Rimmer, 995 F.2d 948 (10th Cir. 1993), is no longer controlling
precedent in the Tenth Circuit.

               (j) Furnishing Copies, Etc. USFC shall furnish to the Company (i)
upon the Company's request, a certificate of a Responsible Officer with
responsibilities over the finances of USFC certifying, as of the date thereof,
that to such Responsible Officer's knowledge, no Purchase Termination Event has
occurred and is continuing and setting forth the computations used by such
Responsible Officer in making such determination; (ii) as soon as possible and
in any event within two Business Days after a Responsible Officer of USFC
becomes aware of the occurrence of any Purchase Termination Event or Potential
Purchase Termination Event, a statement of a Responsible Officer of USFC setting
forth in reasonable detail the particulars of such Purchase Termination Event or
Potential Purchase Termination Event and the action that USFC proposes to take
or has taken with respect thereto; (iii) promptly after obtaining knowledge that
a Receivable was, at the time of the Company's purchase thereof, not an Eligible
Receivable, notice thereof; (iv) promptly after obtaining knowledge of any
threatened action or proceeding affecting USFC or its Subsidiaries before any
court, governmental agency or arbitrator that may reasonably be expected to
materially and adversely affect the enforceability of this Agreement and the
other Transaction Documents, notice of such action or proceeding; and (v)
promptly following the Company's request therefor, such other information,
documents, records or reports with respect to the Receivables or the related
Contracts or the conditions or operations, financial or otherwise, of USFC, as
the Company may from time to time reasonably request.

               (k) Obligation to Record and Report. USFC shall, to the fullest
extent permitted by GAAP and by applicable law, record each purchase of the

                                       28


Purchased Receivables as a sale on its books and records, reflect each purchase
of Purchased Receivables in its financial statements and tax returns as a sale
and recognize gain or loss, as the case may be, on each purchase of Purchased
Receivables.

               (l)  Continuing Compliance with the Uniform Commercial Code. USFC
shall, without limiting the requirements of subsection 5.01(r), at its expense,
preserve, continue, and maintain or cause to be preserved, continued, and
maintained the Company's valid and properly perfected title to each Receivable
and the Receivables Property purchased hereunder, including, without limitation,
filing or recording UCC financing statements in each relevant jurisdiction.

               (m)  Proceeds of Receivables. USFC shall use all reasonable
efforts to cause all payments made by Obligors in respect of Purchased
Receivables and Related Property to be made in accordance with subsection 2.3(a)
of the Servicing Agreement.

               (n)  Reserved.

               (o)  Taxes. USFC will file all federal and all material state and
local tax returns and reports required by law to be filed by it and will pay all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP have been
set aside on its books except where the failure to file such returns and reports
and pay such taxes and governmental charges would not reasonably be expected to
cause a Material Adverse Effect.

               (p)  Separate Corporate Existence of the Company. USFC hereby
acknowledges that the Trustee and the Holders are entering into the transactions
contemplated by the Transaction Documents in reliance upon the Company's
identity as a legal entity separate from the Sellers, USFC and all other
Affiliates thereof (each such Affiliate, a "USS Affiliate") and that the Trustee
and the Holders would be prejudiced by any substantive consolidation of the
Company with any Seller or USFC. Therefore, from and after the date hereof, USFC
will take (or refrain from taking, as the case may be) such actions, and will
cause each other USS Affiliate it controls to take (or refrain from taking, as
the case may be) such actions, as shall be required in order that:

                    (i)    Except as specifically provided in Sections 7.01 and
     9.05, no USS Affiliate will pay the Company's operating expenses and
     liabilities, recognizing, however, that certain organizational expenses of

                                       29


     the Company and expenses relating to creation and initial implementation of
     the securitization program contemplated by the Transaction Documents have
     been or shall be paid by USFC.

                    (ii)   Each USS Affiliate will conduct its business at
     offices segregated from the Company's offices. If office space is leased
     from any USS Affiliate, a separate written lease on arm's-length terms will
     be in effect at a market rental rate.

                    (iii)  Each USS Affiliate will maintain corporate records
     and books of account separate from those of the Company and telephone
     numbers, mailing addresses, stationery and other business forms that are
     separate and distinct from those of the Company.

                    (iv)   Any financial statements of any USS Affiliate that
     are consolidated to include the Company will contain a detailed note
     substantially in the form, and to the effect, of the note set forth on
     Annex 1.

                    (v)    The Company's assets will be maintained in a manner
     that facilitates their identification and segregation from those of the
     Sellers, USFC and the other USS Affiliates.

                    (vi)   Each USS Affiliate will strictly observe corporate
     formalities in its dealings with the Company, and funds or other assets of
     the Company will not be commingled or pooled with those of any affiliated
     Person. No USS Affiliate will maintain joint bank accounts with the Company
     or other depository accounts with the Company to which any USS Affiliate
     has independent access.

                    (vii)  Any transaction between the Company and any USS
     Affiliate will be fair and equitable to the Company, will be the type of
     transaction which would be entered into by a prudent Person in the position
     of the Company with a USS Affiliate, and will be on terms which are at
     least as favorable to the Company as may be obtained from a Person which is
     not a USS Affiliate, it being understood and agreed that the transactions
     contemplated in the Transaction Documents meet the requirements of this
     clause (vii).

                    (viii) No USS Affiliate will hold itself out, or permit
     itself to be held out, as having agreed to pay or be liable for the debts
     of the Company.

                                       30


                    (ix)   The duly elected Board of Directors of the Company
     and the Company's duly appointed officers shall at all times have sole
     authority to control decisions and actions with respect to the daily
     business affairs of the Company.

                    (x)    USFC shall comply with those procedures described in
     the Specified Bankruptcy Opinion Provisions which are applicable to USFC,
     except, in each case above, for such failure to take actions or refrain
     from taking actions that are, in the aggregate, not material.

               (q)  Deposits in Program Accounts. USFC shall use all reasonable
efforts to minimize the deposit of any funds other than Collections in any of
the Lockbox Accounts, the Collection Concentration Account and the Collection
Account.

               (r)  Further Action Evidencing Purchases.

                    (i)    USFC agrees that from time to time, at its expense,
     it will promptly execute and deliver all further instruments and documents,
     and take all further action, that may be necessary or desirable or that the
     Company may reasonably request, to protect or more fully evidence the
     Company's ownership, right, title and interest in the Receivables and
     Receivables Property sold by USFC and its rights under the Contracts with
     respect thereto, or to enable the Company to exercise or enforce any of its
     rights hereunder or under any other Transaction Document. Without limiting
     the generality of the foregoing, USFC will upon the request of the Company
     (A) execute and file, in accordance with the provisions of the UCC of the
     applicable jurisdiction, continuation statements with respect to all
     financing statements filed in connection with the transactions contemplated
     hereby, as well as such financing or continuation statements, or amendments
     thereto, and such other instruments or notices, as may be necessary or, in
     the reasonable opinion of the Company, desirable, (B) indicate on its books
     and records (including, without limitation, master data processing records)
     that the Receivables and Receivables Property have been sold and assigned
     to the Company and, in turn, the Company has conveyed its interest therein
     to the Trustee for the benefit of the Holders, and provide to the Company,
     upon request, copies of any such records, (C) contact customers to confirm
     and verify Receivables and (D) obtain the agreement of any Person having a
     Lien on any Receivables owned by USFC (other than any Lien created or
     imposed hereunder or under the Pooling Agreement or any Permitted Lien) to
     release such Lien upon the purchase of any such Receivables by the Company.

                                       31


                    (ii)   USFC hereby irrevocably authorizes the Company and
     the Trustee to file one or more financing or continuation statements, and
     amendments thereto, relative to all or any part of the Receivables and
     Receivables Property sold or to be sold by USFC, without the signature of
     USFC where permitted by law.

                    (iii)  If USFC fails to perform any of its agreements or
     obligations under this Agreement, the Company or its assignees may (but
     shall not be required to) perform, or cause performance of, such agreements
     or obligations, and the expenses of the Company incurred in connection
     therewith shall be payable by USFC as provided in Section 9.06.

                    (iv)   USFC agrees that, whether or not a Purchase
     Termination Event has occurred:

                         (A) the Company (and its assignees) shall have the
     right at any time to notify, or require that USFC at its own expense
     notify, the respective Obligors of the Company's ownership of the Purchased
     Receivables and Receivables Property and may direct that payment of all
     amounts due or to become due under the Purchased Receivables be made
     directly to the Company or its designee;

                         (B) USFC shall, upon the Company's written request and
     at USFC's expense, (I) assemble all of USFC's documents, instruments and
     other records (including credit files and computer tapes or disks) that (A)
     evidence or will evidence or record Receivables sold by USFC and (B) are
     otherwise necessary or desirable to effect Collections of such Purchased
     Receivables (collectively, the "DOCUMENTS") and (II) deliver the Documents
     to the Company or its designee at a place designated by the Company. In
     recognition of USFC's need to have access to any Documents which may be
     transferred to the Company hereunder, whether as a result of its continuing
     business relationship with any Obligor for Receivables purchased hereunder
     or as a result of its responsibilities as Servicer, the Company hereby
     grants to USFC an irrevocable license to access the Documents transferred
     by USFC to the Company and to access any such transferred computer software
     in connection with any activity arising in the ordinary course of USFC's
     business or in performance of USFC's duties as a Servicing Party, PROVIDED
     that USFC shall not disrupt or otherwise interfere with the Company's use
     of and access to the Documents and its computer software during such
     license period;

                                       32


                         (C) USFC hereby grants to the Company an irrevocable
     power of attorney (coupled with an interest) to take any and all steps in
     USFC's name necessary or desirable, in the reasonable opinion of the
     Company, to collect all amounts due under the Purchased Receivables,
     including, without limitation, endorsing USFC's name on checks and other
     instruments representing Collections, enforcing the Purchased Receivables
     and exercising all rights and remedies in respect thereof, and

                         (D) upon written request of the Company, USFC will (I)
     deliver to the Company or a party designated by the Company all licenses,
     rights, computer programs, related material, computer tapes, disks,
     cassettes and data necessary to the immediate collection of the Purchased
     Receivables by the Company, with or without the participation of USFC
     (excluding software licenses which by their terms are not permitted to be
     so delivered, PROVIDED that USFC shall use reasonable efforts to obtain
     consent of the relevant licensor to such delivery) and (II) make such
     arrangements with respect to the collection of the Purchased Receivables as
     may be reasonably required by the Company.

               (s)  Legend Requirement For Chattel Paper. USFC agrees (i) at all
times, with respect to chattel paper, to comply with the procedures set forth in
Schedule 3 to the Pooling Agreement and (ii) that any Receivable that
constitutes or is evidenced by "chattel paper" as defined in Article 9 of the
UCC as in effect in the Relevant UCC State shall bear a legend stating that such
Receivable has been sold to the Company and conveyed to the Trust.

               (t)  Computer Files. USFC shall, at its own cost and expense,
retain the ledger used by USFC as a master record of the Obligors and retain
copies of all documents relating to each Obligor as custodian and agent for the
Company and other Persons with interests in the Purchased Receivables and mark
the computer tape or other physical records of the Purchased Receivables to the
effect that interests in the Purchased Receivables existing with respect to the
Obligors listed thereon have been sold to the Company and that the Company has
sold an interest therein and has granted a security interest therein.

          Section 5.02 REPORTING REQUIREMENTS. USFC shall furnish to the Company
and its assigns from the date hereof until the Purchase Termination Date shall
have occurred with respect to USFC and until there are no amounts outstanding
with respect to Purchased Receivables previously sold by USFC to the Company:

               (a)  Compliance Certificate. Not later than 95 days after the end
of each fiscal year and not later than 50 days after the end of each of the
first

                                       33


three fiscal quarters of each fiscal year, a certificate of a Responsible
Officer of USFC stating that, to the best of such Responsible Officer's
knowledge, USFC during such period, has observed or performed in all material
respects all of its covenants and other agreements, and satisfied in all
material respects every condition, contained in the Transaction Documents to
which it is a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Purchase Termination Event
or Potential Purchase Termination Event except as specified in such certificate;

               (b)  ERISA. Promptly after the filing or receiving thereof,
copies of all reports and notices with respect to any Reportable Event which
USFC files under ERISA with the Internal Revenue Service, the PBGC or the U.S.
Department of Labor or which USFC receives from the PBGC if, in each case, such
report or notice relates to an event or condition that could reasonably be
expected to give rise to a Termination Notice, an Early Amortization Event or a
Material Adverse Effect;

               (c)  Termination Events; Other Material Events. As soon as
possible and in any event within two Business Days after a Responsible Officer
of USFC obtains knowledge of each Purchase Termination Event, Potential Purchase
Termination Event, Servicer Default, Potential Servicer Default or any other
event that has a material likelihood of having a Material Adverse Effect with
respect to USFC, a written statement of a Responsible Officer of USFC setting
forth details of such event and the action that USFC proposes to take with
respect thereto; and

               (d)  Other. Promptly, from time to time, such other information,
documents, records or reports respecting the Receivables or the condition or
operations, financial or otherwise, of USFC as the Company may from time to time
reasonably request in order to protect the interests of the Company under or as
contemplated by the Transaction Documents.

          Section 5.03 NEGATIVE COVENANTS. USFC covenants that, until the
Purchase Termination Date shall have occurred with respect to USFC and there are
no amounts outstanding with respect to Purchased Receivables previously sold by
USFC to the Company:

               (a)  Receivables to be Accounts, General Intangibles or Chattel
Paper. USFC will take no action to cause any Receivable to be evidenced by any
"instrument" other than, provided that the procedures set forth in Schedule 3 to
the Pooling Agreement are fully implemented with respect thereto, an instrument
which together with a security agreement constitutes "chattel paper" (each as
defined in the UCC as in effect in the Relevant UCC State). USFC will take no
action to

                                       34


cause any Receivable to be anything other than an "account", "general
intangible" or "chattel paper" (each as defined in the UCC as in effect in the
Relevant UCC State).

               (b)  Security Interests. Except for the conveyances hereunder and
as provided below, USFC will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any other Lien on any
Receivable or Receivables Property, whether now existing or hereafter created,
or any interest therein; USFC will immediately notify the Company of the
existence of any other Lien (other than a Permitted Lien) on any Receivable or
Receivables Property; and USFC shall defend the right, title and interest of the
Company in, to and under the Receivables or Receivables Property, whether now
existing or hereafter created, against all claims of third parties claiming
through or under USFC; provided, however, that nothing in this subsection
5.03(b) shall prevent or be deemed to prohibit USFC from suffering to exist upon
any of the Receivables or Receivables Property any Permitted Lien.

               (c)  Extension or Amendment of Receivables; Ineligible
Receivables. USFC will not, nor will it permit any Seller to, extend, rescind,
cancel, make any Dilution Adjustment to, amend or otherwise modify, or attempt
or purport to extend, rescind, cancel, make any Dilution Adjustment to, amend or
otherwise modify, the terms of any Purchased Receivables, or otherwise take any
action to cause, or which would permit, a Receivable that was designated as an
Eligible Receivable on the Payment Date relating to such Receivable to cease to
be an Eligible Receivable, except in any such case (a) in accordance with the
terms of the Policies, (b) as required by any Requirement of Law or (c) in the
case of Dilution Adjustments (whether or not permitted by any other clause of
this sentence), upon making a Seller Adjustment Payment pursuant to Section
2.05.

               (d)  Change in Credit and Collection Policies. USFC will not make
or permit to be made any change in its Policies in any material respect that is
materially adverse to the interests of the Company or its assigns (including the
Trustee and the Holders).

               (e)  Place of Business, etc. USFC will not change its principal
place of business or chief executive office from the location listed on Schedule
II or change the location of its records relating to the Receivables and
Receivables Property from those specified on Schedule II, unless in any such
event USFC shall have given the Company at least thirty days' prior written
notice thereof fully in accordance with the terms and provisions of subsection
5.01(i) and shall have taken all action necessary or reasonably requested by the
Company to amend its existing financing statements and continuation statements
so that they are not misleading and to file additional financing statements in
all applicable jurisdictions,

                                       35


if necessary, to perfect the interests of the Company in all of the Receivables
and Receivables Property.

               (f)  Change in Name. USFC will not change its name, identity or
corporate structure in any manner which would make any financing statement or
continuation statement (or other similar instrument) relating to this Agreement
seriously misleading within the meaning of Section 9-402(7) of the UCC, or
impair the perfection of the Company's interest in any Receivable under any
other similar law, without having (i) delivered 30 days' prior written notice to
the Company, the Servicer and the Trustee and (ii) taken all action required by
subsection 5.01(a) or 5.01(r).

               (g)  Change in Payment Instructions to Obligors. USFC shall not
instruct, nor shall it permit any Seller to, the Obligor on any Receivables to
make payments with respect to such Receivables and the Receivables Property with
respect thereto other than to the places listed in Schedule III of the Amended
and Restated Receivables Sale Agreement.

               (h)  Accounting Changes. USFC shall not make any material change
(i) in accounting treatment and reporting practices except as permitted or
required by GAAP, (ii) in tax reporting treatment except as permitted or
required by law, in any case, as disclosed in the notes to the financial
statements delivered pursuant to Section 5.02, or otherwise, (iii) in the
calculation or presentation of financial and other information contained in
other reports delivered hereunder, or (iv) in any financial policy of USFC if
such change could have a material adverse effect on the Receivables taken as a
whole or the collection thereof.

               (i)  Business of USFC. USFC shall not fail to maintain and
operate the business currently conducted or proposed to be conducted by USFC and
business activities reasonably incidental or related thereto in substantially
the manner in which it is presently conducted and operated if such failure would
change in any material respect the character of its business and such change
would be adverse to the interest of the Company or its assigns (including the
Trustee for the benefit of the Holders), except (x) if such change is necessary
under any Requirement of Law, (y) if such change would not reasonably be
expected to have a Material Adverse Effect with respect to the Servicer or (z)
the Rating Agency Condition is satisfied with respect thereto.

                                       36


                                   ARTICLE VI
                           PURCHASE TERMINATION EVENTS

          Section 6.01 PURCHASE TERMINATION EVENTS. If, with respect to USFC,
any of the following events (each, a "PURCHASE TERMINATION EVENT" with respect
to USFC) shall have occurred and be continuing:

               (a)  USFC shall fail to make any payment or deposit to be made by
it hereunder when due and such failure shall remain unremedied for two Business
Days; or

               (b)  There shall have occurred (i) an Early Amortization Event
set forth in Section 7.1 of the Pooling Agreement or (ii) the Amortization
Period with respect to all outstanding Series shall have occurred and be
continuing; or

               (c)  Any representation or warranty made or deemed to be made by
USFC or any of its officers under or in connection with any Transaction
Document, Monthly Settlement Statement or other information, statement, record,
certificate, document or report delivered pursuant to a Transaction Document
shall prove to have been false or incorrect in any material respect when made or
deemed made (including in each case by omission of material information
necessary to make such representation, warranty, certificate or statement not
misleading); provided, that no such event shall constitute a Purchase
Termination Event unless such event shall continue unremedied for a period of 30
days from the earlier of (A) the date any Responsible Officer of USFC obtains
knowledge thereof and (B) the date USFC receives notice of the incorrectness of
such representation or warranty from the Company, the Servicer or the Trustee;
provided, further, that a Purchase Termination Event shall not be deemed to have
occurred under this paragraph (c) based upon a breach of any representation or
warranty set forth in Section 4.02 with respect to any Receivable if USFC shall
have complied with the provisions of Section 2.06 with respect to such
Receivable; or

               (d)  USFC shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in subsection 5.01(d),
(g) or (h) or Section 5.03 of this Agreement on its part to be performed or
observed and any such failure shall remain unremedied for five Business Days;
provided, that a Purchase Termination Event shall not be deemed to have occurred
under this paragraph (d) based upon a breach of any covenant set forth in
subsection 5.01(d), (g) or (h) or Section 5.03 with respect to any Receivable if
USFC shall have complied with the provisions of Section 2.06 with respect to
such Receivable; or

                                       37


               (e)  USFC shall fail to perform or observe in any material
respect any other term, covenant or agreement contained in any Transaction
Document on its part to be performed or observed and any such failure shall
remain unremedied for a period of 30 days from the earlier of (A) the date any
Responsible Officer of USFC obtains knowledge of such failure and (B) the date
USFC receives notice thereof from the Company, the Servicer or the Trustee; or

               (f)  Any Transaction Document to which USFC is a party shall
cease, for any reason, to be in full force and effect, or USSC, or other USFC
shall so assert in writing, or the Company shall fail to have a valid and
perfected first priority ownership or security interest in the Receivables and
the Receivables Property; or

               (g)  (i) USFC shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
assets, or USFC shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against USFC any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against USFC or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof, or (iv) USFC or any of its respective
Subsidiaries shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) USFC shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due;

               (h)  USFS has been terminated as Servicer following a Servicer
Default with respect to USFS under the Servicing Agreement;

               (i)  a Responsible Officer of USFS receives notice or becomes
aware that a notice of Lien has been filed by the PBGC against USFC, the Company
or the Trust under Section 4.12(n) of the Code or Section 302(f) of ERISA

                                       38


for a failure to make a required installment or other payment to a plan to which
Section 4.12(n) of the Code or Section 302(f) of ERISA applies; or

               (j)  a Purchase Termination Event under the Amended and Restated
Receivables Sale Agreement has occurred;

then, (x) in the case of any Purchase Termination Event with respect to USFC
described in paragraph (b)(i), (g), (i) and (j) above, the obligation of the
Company to purchase Receivables from USFC shall thereupon automatically
terminate without further notice of any kind, which is hereby waived by USFC,
(y) in the case of any Purchase Termination Event with respect to USFS described
in paragraph (b)(ii) above, the obligation of the Company to purchase
Receivables from USFC shall thereupon terminate without notice of any kind,
which is hereby waived by USFC, unless both the Company and USFC agree in
writing that such event shall not trigger an Early Termination hereunder and (z)
in the case of any other Purchase Termination Event with respect to USFC, so
long as such Purchase Termination Event shall be continuing, the Company may
terminate its obligation to purchase Receivables from USFC by written notice to
USFC (any termination with respect to USFC pursuant to clause (x), (y) or (z) of
this Section 6.01 is herein called an "EARLY TERMINATION" with respect to USFC);
PROVIDED, HOWEVER, that in the event of an involuntary petition or proceeding as
described in paragraphs (g)(ii) and (g)(iii) above, the Company shall not
purchase Receivables from USFC until such time, if any, as such involuntary
petition or proceeding has been dismissed, PROVIDED that such dismissal shall
have occurred within 60 days of the filing of such petition or the commencement
of such proceeding.

          Section 6.02 ADDITIONAL REMEDIES. Upon the occurrence of any Purchase
Termination Event, the Company shall have, in addition to all other rights and
remedies under this Agreement or otherwise, all other rights and remedies
provided under the UCC of each applicable jurisdiction and other applicable
laws, which rights shall be cumulative. Without limiting the foregoing, the
occurrence of a Purchase Termination Event shall not deny to the Company any
remedy (in addition to termination of the Company's obligation to purchase
Receivables from USFC) to which the Company may be otherwise appropriately
entitled, whether by statute or other applicable law, at law or in equity.

                                       39


                                  ARTICLE VII
                                 INDEMNIFICATION

          Section 7.01 INDEMNITIES BY USFC. Without limiting any other rights
that the Company may have hereunder or under applicable law and subject to
Section 2.06, USFC hereby agrees to pay, indemnify and hold the Company harmless
from and against any and all claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, reasonable costs (including reasonable
attorneys' fees), expenses and disbursements of any kind or nature whatsoever
related thereto (a) which may at any time be imposed on, incurred by or asserted
against the Company in any way relating to, arising out of or resulting from
this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby or any action taken or omitted by the Company
under or in connection with any of the foregoing or in respect of any Receivable
or (b) which would not have been imposed on, incurred by or asserted against the
Company but for its having purchased the Receivables hereunder (all such claims,
losses, liabilities, obligations, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements being collectively referred to as "INDEMNIFIED
AMOUNTS"), PROVIDED that USFC shall have no obligation under this Section 7.01
to the Company with respect to Indemnified Amounts (i) to the extent resulting
from gross negligence or willful misconduct on the part of the Company, its
agents or its assignees; (ii) resulting from any Obligor's inability to pay an
amount due and payable with respect to a Receivable for credit reasons (it being
understood that this clause (ii) shall not limit Section 2.05), and PROVIDED,
FURTHER, that if a court of competent jurisdiction in a final non-appealable
order determines that such Indemnified Amounts arose in part from the Company's
gross negligence or willful misconduct, USFC shall reimburse the Company for the
portion of such claim not resulting from the Company's gross negligence or
willful misconduct, and PROVIDED, FURTHER, that to the extent a determination of
gross negligence or willful misconduct is made after the payment of any
Indemnified Amounts related thereto, USFC shall be repaid any amounts reimbursed
under the preceding clause that, due to such determination, it should not have
paid. Without limiting or being limited by the foregoing and subject to Section
2.06, USFC shall pay on demand to the Company any and all amounts necessary to
indemnify the Company from and against any and all Indemnified Amounts relating
to or resulting from:

               (a)  the transfer by USFC of any interest in any Receivable or
Receivables Property or proceeds thereof which are not or which cease to be
Eligible Receivables;

               (b)  reliance on any representation or warranty or statement made
or deemed made by USFC (or any of its officers) under or in connection with

                                       40


this Agreement or in any certificate or report delivered pursuant hereto that,
in either case, shall have been false or incorrect in any material respect when
made or deemed made;

               (c)  the failure by USFC to comply with any applicable law, rule
or regulation of any governmental authority with respect to any Receivable or
Receivables Property, or the nonconformity of any Receivable or Receivables
Property with any such applicable law, rule or regulation;

               (d)  the failure to vest and maintain vested in the Company an
ownership interest in any Receivable or Receivables Property, free and clear of
any Lien, other than a Lien arising under the Transaction Documents, whether
existing at the time of the purchase of such Receivable or Receivables Property
or at any time thereafter;

               (e)  the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other applicable laws with respect to any Receivables
or Receivables Property of USFC;

               (f)  any dispute, claim, offset or defense (other than discharge
in bankruptcy of USFC) of the Obligor to the payment of any Receivable of USFC
(including, without limitation, a defense based on such Receivable or the
related Contract not being fully enforceable against the Obligor in accordance
with its terms), or any other claim resulting from the sale of the merchandise
or services related to any such Receivable or the furnishing or failure to
furnish such merchandise or services;

               (g)  any failure of USFC to perform its duties or obligations
under this Agreement or the Transaction Documents;

               (h)  any products liability claim arising out of or in connection
with merchandise, insurance or services that are the subject of any Receivable
or Receivables Property;

               (i)  the commingling of Collections of Receivables at any time
with other funds of USFC;

               (j)  any claim involving environmental liability that relates to
any property that has been, is now or hereafter will be owned, leased, operated
or otherwise used by USFC;

                                       41


               (k)  any tax or governmental fee or charge (but not including
franchise taxes and taxes upon or measured by net income of the Company), all
interest and penalties thereon or with respect thereto, and all out-of-pocket
costs and expenses, including the reasonable fees and expenses of counsel in
defending against the same, which may arise by reason of the purchase or
ownership of any Receivable or Receivables Property, or any interest therein or
in any goods which secure any such Receivables, any Receivables Property or any
other rights or assets transferred hereunder; and

               (l)  any investigation, litigation or proceeding related to this
Agreement or in respect of any Receivable or Receivables Property of USFC.

          Notwithstanding the foregoing, USFC shall not under any circumstances
be required to indemnify the Company for any Indemnified Amounts that result
from any delay in the collection of any Receivables or any default by an Obligor
with respect to any Receivables. The agreements set forth in this Section 7.01
shall survive the collection of all Receivables, the termination of this
Agreement and the payment of all amounts payable hereunder.

          Section 7.02 INDEMNITIES BY THE COMPANY. Without limiting any other
rights that USFC may have hereunder or under applicable law, the Company hereby
agrees to indemnify USFC from and against any and all claims, losses and
liabilities (including reasonable attorneys' fees) arising out of or resulting
from USFC's reliance on any representation or warranty made by the Company in
this Agreement or in any certificate delivered pursuant hereto that, in either
case, shall have been false or incorrect in any material respect when made or
deemed made.

                                  ARTICLE VIII
                                SUBORDINATED NOTE

          Section 8.01 SUBORDINATED NOTE. (a) On the initial Effective Date,
contemporaneously with the sale of Receivables and Receivables Property by USFC,
the Company shall issue to USFC a subordinated note substantially in the form of
Exhibit A hereto (as amended, supplemented or otherwise modified from time to
time, the "SUBORDINATED NOTE").

               (b)  The initial aggregate principal amount of the Subordinated
Note (the "Initial Subordinated Note Amount") shall be equal to $[-].

               (c)  Following the initial Effective Date, the aggregate
principal amount of the Subordinated Note at any time shall be equal to the

                                       42


difference between (i) the sum of the Initial Subordinated Note Amount and each
addition to the principal amount of the Subordinated Note with respect to USFC
pursuant to Section 2.03 as of such time and (ii) the aggregate amount of all
payments made in respect of the principal of the Subordinated Note as of such
time. All payments made in respect of the Subordinated Note shall be allocated
by the Servicer to pay accrued and unpaid interest thereon, and second, to pay
the outstanding principal amount thereof.

               (d)  Interest on the outstanding principal amount of the
Subordinated Note shall accrue on the last day of each Settlement Period at a
rate per annum equal to the ABR plus 2% from and including the initial Effective
Date to but excluding the last day of each Settlement Period and shall be paid
(x) on each Distribution Date with respect to the principal amount of the
Subordinated Note outstanding from time to time during the Settlement Period
immediately preceding such Distribution Date and/or (y) on the maturity date
thereof. Principal thereunder not paid or prepaid pursuant to the terms thereof
shall be payable on the maturity date of the Subordinated Note. Default in the
payment of principal or interest under the Subordinated Note shall not
constitute a Purchase Termination Event under this Agreement, a Servicer Default
under any Servicing Agreement or an Early Amortization Event under the Pooling
Agreement or any Supplement thereto.

          Section 8.02 RESTRICTIONS ON TRANSFER OF SUBORDINATED NOTE. Neither
the Subordinated Note, nor any right of USFC to receive payments thereunder,
shall be assigned, transferred, exchanged, pledged, hypothecated, participated
or otherwise conveyed.

                                   ARTICLE IX
                                  MISCELLANEOUS

          Section 9.01 AMENDMENT. Neither this Agreement nor any of the terms
hereof may be amended, supplemented or modified except in a writing signed by
the Company and USFC. Any amendment, supplement or modification shall not be
effective until the Rating Agency Condition, if applicable, has been satisfied.

          Section 9.02 NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or sent by
certified mail, postage-prepaid, by facsimile or by overnight courier, (a) in
the case of the Company, to it at the address or facsimile number set forth in
Section 10.4 of the Pooling Agreement and (b) in the case of all other parties,
to such party at the address or facsimile number of the Servicer set forth in
Section 10.4 of the Pooling

                                       43


Agreement or, in the case of the foregoing clause (a) or (b), at such other
address or facsimile number as shall be designated by the relevant party in a
written notice to the other parties hereto given in accordance with this Section
9.02. All notices and communications provided for hereunder shall be effective,
(a) if personally delivered by express mail or courier, when received, (b) if
sent by certified mail, three Business Days after having been deposited in the
mail, postage prepaid and (c) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.

          Section 9.03 NO WAIVER; REMEDIES. No failure on the part of the
Company to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

          Section 9.04 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of USFC and the Company and their respective
successors (whether by merger, consolidation or otherwise) and assigns. USFC
agrees that it will not assign or transfer all or any portion of its rights or
obligations hereunder without the prior written consent of the Company. USFC
acknowledges that the Company shall assign all of its rights hereunder to the
Trustee, for the benefit of the Holders, pursuant to the Pooling Agreement. USFC
consents to such assignment and agrees that the Trustee, to the extent provided
in the Pooling Agreement, shall be entitled to enforce the terms of this
Agreement and the rights (including, without limitation, the right to grant or
withhold any consent or waiver) of the Company directly against USFC, whether or
not a Purchase Termination Event or a Potential Purchase Termination Event has
occurred. USFC further agrees that, in respect of its obligations hereunder, it
will act at the direction of and in accordance with all requests and
instructions from the Trustee until all amounts due to the Investor
Certificateholders are paid in full. The Trustee, on behalf of the Holders,
shall have the rights of a third-party beneficiary under this Agreement.

          Section 9.05 COSTS, EXPENSES AND TAXES. In addition to the limited
rights of indemnification granted to the Company under Article VII hereof, USFC
agrees to pay on demand all reasonable out-of-pocket costs and expenses of the
Company in connection with the negotiation, preparation, execution and delivery
of, and any amendment, supplement or other modification to, this Agreement, the
other Transaction Documents and any other documents prepared in connection
herewith and therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Company with
respect thereto and

                                       44


with respect to advising the Company as to its rights and remedies under this
Agreement, the other Transaction Documents and any such other documents, and all
costs and expenses (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the other Transaction
Documents and any such other documents. In addition, USFC agrees to pay any and
all stamp and other taxes and governmental fees payable or determined to be
payable in connection with the execution, delivery, filing and recording of this
Agreement or the other Transaction Documents to be delivered hereunder, and
agrees to hold the Company harmless from and against any and all liabilities
with respect to or resulting from any delay in paying or omitting to pay such
taxes and fees.

          Section 9.06 INTEGRATION. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and thereof and
shall together constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof, superseding all prior oral or
written understandings.

          Section 9.07 CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning or
interpretation of any provision of this Agreement. Unless otherwise provided
herein, references in this Agreement to any "Section," "Exhibit," "Annex" or
"Schedule" are to such Section of or Exhibit or Annex or Schedule to this
Agreement, as the case may be.

          Section 9.08 RESERVED.

          Section 9.09 RESERVED.

          Section 9.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.

          Section 9.11 ACKNOWLEDGMENT OF ASSIGNMENTS. USFC hereby acknowledges
and consents to the assignment by the Company of Receivables and Receivables
Property and the rights of the Company under this Agreement pursuant to the
Pooling and Servicing Agreements. USFC acknowledges that the Company will grant
a security interest in the Lockbox Accounts, the Collection Concentration
Account and the Collection Account to the Trustee for the benefit of the
Holders. USFC agrees to take any action that the Company or the Trustee may
reasonably request in connection with such assignment or security interest.

                                       45


          Section 9.12 NO PETITION IN BANKRUPTCY. USFC covenants and agrees that
prior to the date which is one year and one day after the date of termination of
this Agreement pursuant to Section 9.15, it will not institute against or join
any other Person in instituting against the Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States, any State of the United
States or the Cayman Islands.

          Section 9.13 ADDITION OF SELLERS UNDER THE AMENDED AND RESTATED
RECEIVABLES SALE AGREEMENT. Subject to subsection 8.15(a) of the Pooling
Agreement, the Company shall direct USFC to agree to or deny the request of any
Subsidiary of United Stationers Inc. desiring to become an additional Seller
under the Amended and Restated Receivables Sale Agreement pursuant to Section
9.13 thereof.

          Section 9.14 TERMINATION OF SELLERS UNDER THE AMENDED AND RESTATED
RECEIVABLES SALE AGREEMENT. Subject to subsection 8.15(b) of the Pooling
Agreement, the Company shall direct USFC to consent to or deny any Seller
Termination Request made pursuant to subsection 9.14 of the Amended and Restated
Receivables Sale Agreement.

          Section 9.15 TERMINATION. This Agreement will terminate at such time
as (a) an Early Termination shall have occurred hereunder and (b) all
Receivables purchased hereunder have been collected, and the proceeds thereof
turned over to the Company and all other amounts owing to the Company hereunder
shall have been paid in full or, if Receivables sold hereunder have not been
collected, such Receivables have become Defaulted Receivables and the Company
shall have completed its collection efforts with respect thereto; PROVIDED,
HOWEVER, that the indemnities of USFC to the Company set forth in this Agreement
shall survive such termination and PROVIDED, FURTHER, that the Company shall
remain entitled to receive any collections on Receivables sold hereunder which
have become Defaulted Receivables.

          Section 9.16 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION; OTHER
WAIVERS.

               (a)  EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT
OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION
HEREWITH OR

                                       46


THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN), ACTIONS OF ANY OF THE PARTIES HERETO OR ANY OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

               (b)  Each of the Company and USFC hereby irrevocably and
unconditionally:

                    (i)    submits itself and its property in any legal action
     or proceeding relating to this Agreement and the other Transaction
     Documents to which it is a party, or for recognition and enforcement of any
     judgment in respect thereof, to the non-exclusive general jurisdiction of
     the courts of the State of New York, the courts of the United States of
     America for the Southern District of New York, and appellate courts from
     any thereof;

                    (ii)   consents that any such action or proceeding may be
     brought in such courts and waives any objection that it may now or
     hereafter have to the venue of any such action or proceeding in any such
     court or that such action or proceeding was brought in an inconvenient
     court and agrees not to plead or claim the same;

                    (iii)  agrees that service of process in any such action or
     proceeding may be effected by mailing a copy thereof by registered or
     certified mail (or any substantially similar form of mail), postage
     prepaid, to such Person at its address referred to in Section 9.02 or at
     such other address of which USFC or the Company, as the case may be, shall
     have been notified pursuant thereto;

                    (iv)   agrees that nothing herein shall affect the right to
     effect service of process in any other manner permitted by law or shall
     limit the right to sue in any other jurisdiction; and

                    (v)    waives, to the maximum extent not prohibited by law,
     any right it may have to claim or recover in any legal action or proceeding
     referred to in this subsection 9.07(b) any special, exemplary, punitive or
     consequential damages.

          SECTION 9.17 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS

                                       47


AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

                                       48




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

                                      THE SELLER:

                                      UNITED STATIONERS FINANCIAL
                                      SERVICES LLC

                                      By:
                                         ---------------------------------------
                                         Name:
                                         Title:

                                      THE SERVICER:

                                      UNITED STATIONERS FINANCIAL
                                      SERVICES LLC

                                      By:
                                         ---------------------------------------
                                         Name:
                                         Title:

                                      USS RECEIVABLES COMPANY, LTD.

                                      By:
                                         ---------------------------------------
                                         Name:
                                         Title:




                                   SCHEDULE I

                               AUTHORIZED OFFICERS

                                [to be provided]



                                   SCHEDULE II

                          [information to be confirmed]

Principal place of business and Chief Executive Offices of USFC:

                          [information to be confirmed]

                                 2001 Rand Road
                           Des Plaines, Illinois 60016
                                  (Cook County)

Offices where USFC keeps its records concerning Receivables and Related
Contracts, purchase orders and all other Agreements related to the Receivables:

                                 2001 Rand Road
                           Des Plaines, Illinois 60016
                                  (Cook County)



                                  SCHEDULE III

                                   [Reserved]



                                   SCHEDULE IV

                 Policies Concerning Contracts and Receivables:

                                On File with USFC



                                   SCHEDULE VI

                            CORPORATE AND TRADE NAMES

                    United Stationers Financial Services LLC

                               JURISDICTIONS USED
                                [to be confirmed]

                                    Illinois



                                                                    SCHEDULE VII

                              DISCOUNTED PERCENTAGE

                       [USSC TO ADVISE ON NEW DEFINITION]

The Discounted Percentage applicable to the Receivables purchased on any date
from USFC shall equal (a) until the date which is 90 days after the initial
Effective Date, [98.88]% and (b) thereafter, the percentage obtained from the
following formula:

          100% - (A + B + C + D)

As determined by the Company as of the related Payment Date,

where

A=   Adjusted Loss Reserve Percentage, which as of such Payment Date will
     equal the ratio obtained by dividing (a) Charged-Off Receivables (net of
     recoveries in respect of Charged-Off Receivables) with respect to USFC
     during the six-fiscal-month period immediately preceding the Settlement
     Report Date most recently preceding such Payment Date by (b) two times the
     aggregate amount of Collections during the three-fiscal-month period
     immediately preceding the Settlement Report Date most recent to such
     Payment Date with respect to Receivables originated by USFC.

B=   Adjusted Carrying Cost Reserve Percentage, which as of such Payment Date
     will equal the amount obtained by dividing (a) the product of (i) 1.3, (ii)
     Days Sales Outstanding and (iii) the ABR by (b) 365.

C=   the Servicing Fee Percentage divided by 360.

D=   Processing Expense Reserve Percentage, which will equal 0.1% and reflects
     the cost of the Company's overhead, including costs of processing the
     purchase of Receivables and other normal operating costs and a reasonable
     profit margin.

None of the elements of the above-referenced formula, in respect of any purchase
of receivables, will be adjusted following the related Payment Date.



With respect to each calculation set forth above with respect to a Settlement
Report Date, such calculation as calculated on such Settlement Report Date and
included in the applicable Monthly Settlement Statement shall remain in effect
from and including the related Settlement Report Date to but excluding the
following Settlement Report Date.



                                  SCHEDULE VIII

                                      ERISA

                                      None





                                                                       Exhibit A
                                                   TO RECEIVABLES SALE AGREEMENT

                            FORM OF SUBORDINATED NOTE





                                     FORM OF
                          SUBORDINATED PROMISSORY NOTE

Des Plaines, Illinois                                                May 1, 2001

          FOR VALUE RECEIVED, the undersigned, USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited company (the "COMPANY"), does hereby promise to pay to
the order of UNITED STATIONERS FINANCIAL SERVICES LLC, an Illinois limited
liability company (" USFC"), and its successors and permitted assigns, the
principal amount of this Subordinated Promissory Note (this "SUBORDINATED
NOTE"), determined as described below, together with interest thereon which
shall accrue on the last day of each Settlement Period at a rate per annum equal
to the ABR in effect from time to time plus two percent (2%) from and including
the initial Effective Date to but excluding the last day of each Settlement
Period and shall, subject to the terms and conditions hereof, be paid (x) on
each Distribution Date with respect to this Subordinated Note outstanding from
time to time during the Settlement Period immediately preceding such
Distribution Date and/or (y) on the Maturity Date (as hereinafter defined).
Capitalized terms used herein and not otherwise defined are used herein as
defined in the Receivables Sales Agreement dated as of May 1, 2001, among USFC,
the Company, and USFC, as Servicer (such agreement, as it may from time to time
be amended, supplemented or otherwise modified in accordance with its terms, the
" USFC RECEIVABLES SALE AGREEMENT") and the Amended and Restated Pooling
Agreement dated as of May 1, 2001, among the Company, USFC, as Servicer, and The
Chase Manhattan Bank, as Trustee and as Securities Intermediary (such agreement,
as it may from time to time further be amended, supplemented or otherwise
modified in accordance with its terms, the "POOLING AGREEMENT"). This
Subordinated Note is the Subordinated Note referred to in the USFC Receivables
Sale Agreement.

          The Initial Subordinated Note Amount shall be equal to ____________
($___________). Following the Effective Date, the aggregate principal amount of
this Subordinated Note at any time shall be equal to the difference between (1)
the sum of the Initial Subordinated Note Amount and each addition to the
principal amount of the Subordinated Note with respect to USFC pursuant to
Section 2.03 of the USFC Receivables Sale Agreement as of such time and (ii) the
aggregate amount of all payments made in respect of the principal of this
Subordinated Note as of such time. All payment made in respect of this
Subordinated Note shall be distributed to USFC by the Servicer in accordance
with the USFC Receivables Sale Agreement and shall be allocated FIRST, to pay
accrued and unpaid interest thereon, and SECOND, to pay the outstanding
principal amount thereof. Principal hereunder not paid or prepaid pursuant to
the terms hereof shall be payable on the date (the "MATURITY DATE") on which all
of the Investor Certificateholders with respect to each Outstanding Series shall
have been paid in



full all amounts owing to them under any Pooling and Servicing Agreement.
Payments of interest on and principal under this Subordinated Note shall be paid
by wire transfer of immediately available funds to the account of USFC or any
other such account as USFC may designate in writing from time to time.
Notwithstanding the foregoing, no payment of interest or principal (any of the
foregoing, a "PAYMENT") may be made under this Subordinated Note at any time
unless (i) at the date such payment is to be made, the Company shall have made
all payments in respect of its repurchase obligations pursuant to the Pooling
Agreement at such date and (ii) such payment is effected in accordance with all
corporate and legal formalities applicable to the Company; PROVIDED, HOWEVER,
that (A) no payment shall be made on, and USFC shall make no claim for any
payment on, any date if (x) a Potential Early Amortization Event of a type
referred to in clause (a)(ii) or (iii) of Section 7.1 of the Pooling Agreement
or (y) an Early Amortization Event has occurred and is continuing (or would
occur as a result of such payment) on such date and (B) all payments made on any
date shall be payable by the Company solely from funds available to the Company
which are not otherwise needed or required on such date to be applied to the
payment of any amounts by the Company pursuant to any Pooling and Servicing
Agreement and USFC shall make no claim for payment in contravention of this
clause (B). Default in the payment of interest on and principal under this
Subordinated Note shall not constitute a Purchase Termination Event under the
USFC Receivables Sale Agreement, a Servicer Default under the Servicing
Agreement, or an Early Amortization Event under the Pooling Agreement or any
Supplement thereto.

          The holder of this Subordinated Note agrees that it shall have no
right to be paid, and shall have no claim to payment, except in accordance with,
and subject to the terms and conditions of, this Subordinated Note.

          Neither this Subordinated Note, nor any right of USFC to receive
payments hereunder, shall be assigned, transferred, exchanged, pledged,
hypothecated, participated or otherwise conveyed.

          The Company hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The failure of any holder to exercise any of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.

          If any payment or distribution of any kind be collected or received by
USFC in respect of amounts owing to USFC under this Subordinated Note when
pursuant hereto such payment should not have been made to or received by USFC,
USFC forthwith shall deliver the same to the Trustee for the benefit of the
Holders. Until so delivered, such payment or distribution shall be held in trust
by USFC as the property of the Holders, segregated from other funds and property
held by USFC.



          USFC covenants and agrees that, prior to the date which is one (1)
year and one (1) day after the date of termination of the USFC Receivables Sale
Agreement pursuant to Section 9.15 thereof, it will not institute against, or
join any other Person in instituting against, the Company any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law.

          THIS SUBORDINATED NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                      USS RECEIVABLES COMPANY, LTD.

                                      By:
                                         ---------------------------------------
                                      Name:
                                      Title:





                                                                    EXHIBIT C TO
                                                                RECEIVABLES SALE
                                                                       AGREEMENT

                                 UCC CERTIFICATE

          The undersigned, the Treasurer and Assistant Secretary of UNITED
STATIONERS FINANCIAL SERVICES LLC, an Illinois limited liability company ("
USFC"), makes reference to the USFC Receivables Sale Agreement dated as of May
1, 2001 (as may from time to time be amended, supplemented or otherwise
modified, the "AGREEMENT"), among USFC and USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited company, and USFC in its capacity as servicer (terms used
but not defined herein have the meaning given them in the Agreement), and in
connection therewith hereby certifies to the Company and the Trustee, on behalf
of USFC and not individually, as follows:

1.   NAMES.

          (a)  The exact corporate name of USFC, as such name appears in its
certificate of formation, is as follows:

               United Stationers Financial Services LLC

          (b)  Set forth below is each other corporate name USFC has had since
its organization, together with the date of the relevant change:

                                      NONE

               (a)       (c) Except as set forth in Schedule A hereto, USFC has
not changed its identity or corporate structure in any way within the past five
years.

          (d)  SCHEDULE B hereto lists all other names (including trade names or
similar appellations) used by USFC or any of its divisions or other business
units in connection with the conduct of its business or the ownership of its
properties at any time during the past five years.

2.   CURRENT LOCATIONS.
               (b)       (a) The chief executive office of USFC is located at
the following address:



                   [United Stationers Financial Services, LLC.
                                 2001 Rand Road
                                   Cook County
                           Des Plaines, Illinois 60016

          (b)  SCHEDULE C hereto lists all the locations where USFC maintains
any books or records relating to any Receivables and Receivables Property.

3.   FEDERAL TAXPAYER IDENTIFICATION NUMBER. The following is USFC's Federal
Taxpayer Identification Number:

                                       [ ]

4.   SCHEDULE OF FILINGS. Attached hereto as SCHEDULE D is a schedule setting
forth each filing office in which a filing by USFC of a financing statement on
Form UCC-l is to be made in connection with the transactions contemplated by the
Agreement.

          IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of April,
2001.

                                      ---------------------------
                                      [Name:]
                                      [Title:]





                                   SCHEDULE A

USFC has not changed its identity or corporate structure in any way within the
past five years.



                                   SCHEDULE B

All other names (including trade names or similar appellations) used by USFC or
any of its divisions or other business units in connection with the conduct of
its business or the ownership of its properties at any time during the past five
years.

                                     [None.]



                                   SCHEDULE C

                                 2001 Rand Road
                                   Cook County
                           Des Plaines, Illinois 60016



                                   SCHEDULE D
                                [to be confirmed]

Listed below is each filing office in which a filing by USFC of a financing
statement on Form UCC-l is to be made in connection with the transactions
contemplated by the Agreement.

                                      Secretary of State of Illinois





                 ANNEX 1 TO THE USFC RECEIVABLES SALE AGREEMENT

          USS Receivables Company, Ltd. is a separate wholly-owned, bankruptcy
remote, subsidiary of United Stationers Financial Services LLC established to
purchase accounts receivable from United Stationers Supply Co. and certain of
its other subsidiaries.

EX-10.3

Exhibit 10.3

                                                                  EXECUTION COPY

================================================================================

                         USS RECEIVABLES COMPANY, LTD.,

                                   as Company,

                    UNITED STATIONERS FINANCIAL SERVICES LLC,

                                  as Servicer,

                          UNITED STATIONERS SUPPLY CO.,

                              as Support Provider,

                                       and

                            THE CHASE MANHATTAN BANK,

                                   as Trustee

                    AMENDED AND RESTATED SERVICING AGREEMENT

                             Dated as of May 1, 2001

================================================================================



                                TABLE OF CONTENTS



                                                                              Page
                                                                             

                              ARTICLE I DEFINITIONS

1.1 Definitions..................................................................2

1.2 Other Definitional Provisions................................................3

             ARTICLE II ADMINISTRATION AND SERVICING OF RECEIVABLES

2.1 Appointment of Servicer......................................................4

2.2 Servicing Procedures.........................................................4

2.3 Collections..................................................................6

2.4 Reserved.....................................................................9

2.5 Servicing Compensation.......................................................9

           ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SERVICER
                            AND THE SUPPORT PROVIDER

3.1 Corporate Existence - Compliance with Law...................................11

3.2 Corporate Power: Authorization..............................................11

3.3 Enforceability..............................................................12

3.4 No Legal Bar................................................................12

3.5 No Material Litigation......................................................12

3.6 No Default..................................................................12

3.7 Servicing Ability...........................................................12

3.8 Location of Records.........................................................13


                                       i





                                                                             
                      ARTICLE IV COVENANTS OF THE SERVICER

4.1 Delivery of Required Reports................................................13

4.2 Delivery of Monthly Settlement Statement....................................13

4.3 Delivery of Quarterly Servicer's Certificate................................14

4.4 Delivery of Independent Public Accountants' Servicing Reports...............14

4.5 No Guarantee or Assumption of Company's Liabilities.........................15

4.6 Extension, Amendment and Adjustment of Receivables, Amendment of and
Compliance with Policies........................................................15

4.7 Protection of Investor Certificateholders' Rights...........................16

4.8 Security Interest...........................................................16

4.9 Location of Records.........................................................16

4.10 Visitation Rights..........................................................16

4.11 Lockbox Agreement: Lockbox Accounts........................................17

4.12 Delivery of Financial Statements...........................................17

4.13 Notices....................................................................18

4.14 Application of Proceeds....................................................18

            ARTICLE V OTHER MATTERS RELATING TO THE SERVICER AND THE
                                SUPPORT PROVIDER

5.1 Merger, Consolidation, etc..................................................19

5.2 Indemnification of the Trust and the Trustee................................20

5.3 Servicer Not to Resign......................................................21

5.4 Access to Certain Documentation and Information Regarding the Receivables...21

5.5 Performance Support Obligation of Support Provider..........................22


                                       ii






                                                                             
                          ARTICLE VI SERVICER DEFAULTS

6.1 Servicer Default............................................................25

6.2 Trustee to Act; Appointment of Successor....................................30

6.3 Waiver of Past Defaults.....................................................31

                      ARTICLE VII MISCELLANEOUS PROVISIONS

7.1 Amendment...................................................................32

7.2 Termination.................................................................32

7.3 Notices.....................................................................32

7.4 Counterparts................................................................32

7.5 Third-Party Beneficiaries...................................................32

7.6 Merger and Integration......................................................32

7.7 Headings....................................................................33

7.8 No Set-Off..................................................................33

7.9 No Bankruptcy Petition......................................................33

7.10 Consequential Damages......................................................33

7.11 Governing Law..............................................................33


                                    EXHIBITS

Exhibit A   Form of Quarterly Servicer's Certificate
Exhibit B   Form of Agreed Upon Procedures

                                      iii


                    AMENDED AND RESTATED SERVICING AGREEMENT

               AMENDED AND RESTATED SERVICING AGREEMENT, dated as of
May 1, 2001 (as amended, supplemented or otherwise modified and in effect from
time to time, this "AGREEMENT") among USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited liability company (the "COMPANY"); UNITED STATIONERS
FINANCIAL SERVICES LLC, an Illinois limited liability company, as servicer
("USFS", and in such capacity as servicer, the "SERVICER"); UNITED STATIONERS
SUPPLY CO., an Illinois corporation, as support provider ("USSC", and in such
capacity as support provider, the "SUPPORT PROVIDER"), and The Chase Manhattan
Bank, a New York banking corporation, not in its individual capacity, but solely
as trustee (in such capacity, the "TRUSTEE").

                                   WITNESSETH:

               WHEREAS, USFS and the Sellers have entered into an Amended and
Restated Receivables Sale Agreement, dated as of the date hereof (as further
amended, supplemented or otherwise modified from time to time, the "RECEIVABLES
SALE AGREEMENT");

               WHEREAS, pursuant to the Receivables Sale Agreement, the Sellers
sell to USFS, and USFS purchases from the Sellers, all of the Sellers' right,
title and interest in, to and under the Receivables now existing or hereafter
created and in the rights of the Seller in, to and under all Related Property
related thereto;

               WHEREAS, the Company and USFS have entered into a Receivables
Sale Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "USFS RECEIVABLES SALE AGREEMENT");

               WHEREAS, pursuant to the USFS Receivables Sale Agreement, USFS
sells to the Company, and the Company purchases from USFS, all of the USFS's
right, title and interest in, to and under the Receivables now existing or
hereafter created and in the rights of USFS in, to and under all Related
Property related thereto;

               WHEREAS, the Company in turn has transferred the Receivables now
existing or hereafter created and the rights of the Company in, to and under all
Related Property related thereto to a master trust pursuant to an Amended and
Restated Pooling Agreement (as further amended, supplemented or otherwise
modified from time to time, the "POOLING AGREEMENT"), among the Company, the
Servicer and the Trustee; and

                                       1


               WHEREAS, the Company, USSC, as servicer, and the Trustee have
entered into a Servicing Agreement dated as of April 3, 1998 (the "ORIGINAL
AGREEMENT");

               WHEREAS, USFS is a separate, wholly-owned subsidiary of USSC;

               WHEREAS, the parties to such Original Agreement desire to amend
and restate the Original Agreement for the purpose of substituting USFS for USSC
as Servicer and having USSC act as Support Provider;

               WHEREAS, by executing and delivering (i) the Second Amended and
Restated Series 1998-1 Supplement, dated as of the date hereof, among the
Company, the Servicer, Chase, as Funding Agent, Trustee, Securities Intermediary
and APA Bank, and Park Avenue Receivables Corporation, as Initial Purchaser, or
(ii) the Amended and Restated Series 2000-2 Supplement, dated as of the date
hereof, among the Company, the Servicer, Chase, as Trustee and Securities
Intermediary, Market Street Funding Corporation, as Committed Purchaser, and
PNC Bank, National Association, as Administrator, as applicable, the Investor
Certificateholders consent to the execution and delivery of this Agreement.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

               1.1 DEFINITIONS Unless otherwise defined herein, capitalized
terms which are used herein shall have the meanings assigned to such terms in
Section 1.1 of the Pooling Agreement and each Supplement thereto, including,
without limitation, the Second Amended and Restated Series 1998-1 Supplement,
dated as of the date hereof (as further amended, supplemented, or otherwise
modified and in effect from time to time, the "SERIES 1998-1 SUPPLEMENT") among
the Company, the Servicer, The Chase Manhattan Bank, as Funding Agent, Trustee,
and APA Bank, and Park Avenue Receivables Corporation, as Initial Purchaser and
the Amended and Restated Series 2000-2 Supplement, dated as of the date hereof
(as further amended, supplemented or otherwise modified from time to time, the
"SERIES 2000-2 SUPPLEMENT") among the Company, the Servicer, The Chase Manhattan
Bank, as Trustee and Securities Intermediary, Market Street Funding Corporation,
as Committed Purchase, and PNC Bank, National Association, as Administrator.

                                       2


               1.2 OTHER DEFINITIONAL PROVISIONS (a) All terms defined herein or
in the Pooling Agreement shall have their defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.

                    (b) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.1 of the Pooling Agreement, and accounting terms partly defined in
Section 1.1 of the Pooling Agreement to the extent not defined, shall have the
respective meanings given to them under GAAP. To the extent that the definitions
of accounting terms herein are inconsistent with the meanings of such terms
under GAAP, the definitions contained herein shall control.

                    (c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references contained in this agreement are
references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.

                    (d) The definitions contained in Section 1.1 of the
Agreement are applicable to the singular as well as the plural forms of such
terms and to the masculine, the feminine and the neuter genders of such terms.

                    (e) Where reference is made in this Agreement or the Pooling
Agreement to the principal amount of Receivables, such reference shall, unless
explicitly stated otherwise, be deemed a reference to the Principal Amount of
such Receivables.

                    (f) Any reference herein or in any other Transaction
Document to a provision of the Internal Revenue Code or ERISA shall be deemed a
reference to any successor provision thereto.

                    (g) All references herein to any agreement or instrument
shall be deemed references to such agreement or instrument as amended,
supplemented or otherwise modified from time to time unless there are any
restrictions herein on the amendment, supplementation or modification of such
agreement or instrument.

                                       3


                                   ARTICLE II

                          ADMINISTRATION AND SERVICING
                                 OF RECEIVABLES

               2.1 APPOINTMENT OF SERVICER USFS hereby agrees to act as the
Servicer under the Pooling Agreement and this Agreement, the Company and the
Trustee hereby consent to USFS acting as the Servicer, and the Investor
Certificateholders by their acceptance of the Certificates consent to USFS's
acting as the Servicer. In such capacity, the Servicer will have responsibility
for the management of the servicing and receipt of Collections in respect of the
Receivables and will have the authority to make any management decisions
relating to the Receivables to the extent such authority is necessary or
desirable and not inconsistent with the authority granted to the Servicer under
any Pooling and Servicing Agreement. The Company, the Trustee and the Investor
Certificateholders shall treat USFS as the Servicer and may conclusively rely on
the instructions, notices and reports of USFS as Servicer for so long as USFS is
the Servicer.

               2.2 SERVICING PROCEDURES (a) The Servicer shall, subject to the
directions, if any, of the Company, manage the servicing and administration of
the Receivables, the collection of payments due under the Receivables and the
charging off of any Receivables as uncollectible, all in accordance with all
Requirements of Law, the Policies and all the terms and provisions of the
Pooling and Servicing Agreements. The Servicer shall have full power and
authority, acting alone or through any party properly designated by it
hereunder, to do any and all things in connection with such servicing and
administration which it may deem necessary or desirable, but at all times
subject to the terms of this Agreement and the other Transaction Documents. The
Servicer shall exercise the same care and apply the same policies with respect
to the collection of the Receivables that it would exercise and apply if it
owned such Receivables, all with reasonable care and diligence and otherwise in
accordance with the foregoing requirements. Without limiting the generality of
the foregoing and subject to Section 6.1, the Servicer or its designee is hereby
authorized and empowered (i) to give direction to the Trustee with respect to
withdrawals from, and payments to, the Collection Account and/or the Collection
Concentration Account in accordance with the Required Reports and as otherwise
specified in the Pooling and Servicing Agreements, (ii) to execute and deliver,
on behalf of the Trust for the benefit of the Investor Certificateholders, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Receivables and, after the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable Requirements of Law, to
commence enforcement proceedings with respect to such Receivables and (iii) to
make any filings, refilings, reports, notices, applications and registrations
with, and to seek any consents or authorizations from,

                                       4


the SEC and any state securities authority on behalf of the Trust as may be
necessary or advisable to comply with any federal or state securities or
reporting requirements or laws.

                    (b) The Servicer will, at its cost and expense and as agent
for the Company, the Trust and the Investor Certificateholders, use its best
efforts to collect, consistent with its past practices and in accordance with
all Requirements of Law and Policies, as and when the same becomes due, the
amount owing on each Receivable. The Servicer will not make any material changes
that deviate from the Policies in its administrative, servicing and collection
systems except (i) as expressly permitted by the terms of any Pooling and
Servicing Agreement and (ii) after giving written notice to the Trustee and the
Rating Agencies of any such material change and receiving such parties' written
consent thereto. In the event of default under any Receivable, the Servicer
shall have the power and authority, on behalf of the Company and the Trust for
the benefit of the Investor Certificateholders, to take such action in respect
of such Receivable as the Servicer may deem advisable. In the enforcement or
collection of any Receivable, the Servicer shall be entitled to sue thereon (i)
in its own name or (ii) if, but only if, the Company consents in writing (which
consent shall not be unreasonably withheld or delayed), as agent for the
Company. In no event shall the Servicer be entitled to take any action which
would make the Company, the Trustee or the Investor Certificateholders a party
to any litigation without the express prior written consent of such Person.

                    (c) Without limiting the generality of the foregoing and
subject to Section 6.2, the Servicer is hereby authorized and empowered to
delegate any or all of its servicing, collection, enforcement and administrative
duties hereunder with respect to the Receivables to a Person who agrees to
conduct such duties in accordance with the Policies. The Servicer shall notify
the Company, the Trustee and any Rating Agency of the appointment of a designee
as provided for herein; PROVIDED, HOWEVER, that, in the event that such
delegation would reasonably be expected to adversely affect the ability of the
Trustee or the Servicer to perform its obligations in the manner contemplated by
any Pooling and Servicing Agreement, or otherwise to have a material adverse
effect upon the Receivables taken as a whole, the Servicer shall give prior
written notice to the Company, the Trustee, each Agent and the Rating Agencies
of any such delegation, and prior to such delegation's being effective, the
Servicer shall have received notice that the Rating Agency Condition shall be
satisfied after giving effect to such delegation and shall have obtained the
consent of the Company and each Agent to such delegation. No delegation of
duties by the Servicer permitted hereunder will relieve the Servicer of its
liability and responsibility with respect to such duties. Any agreement for the
delegation of such duties shall be deemed to be between the parties to such
agreement alone and the Trustee and holders of Investor Certificates shall not
be deemed parties thereto and

                                       5


shall have no obligations, duties or liabilities with respect to any party to
whom such duties are delegated.

                    (d) Except as provided in any Pooling and Servicing
Agreement, neither the Servicer nor any Successor Servicer shall be obligated to
use servicing procedures, offices, employees or accounts for servicing the
Receivables transferred to the Company and, subsequently, to the Trust, which
are separate from the procedures, offices, employees and accounts used by the
Servicer or such Successor Servicer, as the case may be, in connection with
servicing other receivables.

                    (e) The Servicer shall maintain reasonable and customary
fidelity bond coverage insuring against losses through wrongdoing of its
officers and employees who are involved in the servicing of the Receivables,
including, without limitation, depositor's forgery.

                    (f) The Servicer shall comply with and perform its servicing
obligations with respect to the Receivables in accordance with the contracts, if
any, relating to the Receivables and the Policies, except insofar as any failure
to so comply or perform would not reasonably be expected to have a Material
Adverse Effect with respect to the Servicer.

                    (g) The Servicer shall take no action to cause any
Receivable to be evidenced by any "instrument" (other than an instrument which
constitutes or together with a security agreement constitutes "chattel paper"
(each as defined in the UCC as in effect in any state in which the Company's
USFS's or the applicable Seller's chief executive office or books and records
relating to such Receivable are located)) or any title in bearer form except in
connection with its enforcement or collection of a Defaulted Receivable, in
which event the Servicer shall deliver such instrument to the Trustee as soon as
reasonably practicable but in no event more than five days after the execution
thereof. The Servicer shall hold any chattel paper evidencing a Receivable as
custodian for the Trustee.

               2.3 COLLECTIONS (a) As of the Closing Date, (i) Lockboxes and
Lockbox Accounts shall have been established in the name of the Company, and
assigned to the Trustee for the benefit of the Holders pursuant to the Pooling
Agreement; (ii) the Trustee has established the Collection Account in the name
of the Trust for the benefit of the Holders and the Collection Concentration
Account in the name of the Company, pursuant to the Pooling Agreement; and
(iii) the Servicer shall have instructed all Obligors to make all payments in
respect of the Receivables to a Lockbox (except to the extent that the servicer
of the Receivables, prior to such date, in the normal course of its business and
consistent with its practices, has permitted Obligors to remit payments to a
Collector), and such instructions thereafter

                                       6


shall continue to be in full force and effect. The Servicer is hereby authorized
to collect payments in accordance with the foregoing sentence. Any payments
collected by a Collector shall be deposited into a Lockbox Account within one
Business Day following receipt thereof; PROVIDED that on any business day all
Collectors may hold in the aggregate up to $150,000, provided that in all events
such payments shall be deposited within three Business Days following receipt
thereof. All Collections received in a Lockbox shall, within one Business Day of
receipt thereof, be deposited in a Lockbox Account. All immediately available
funds deposited in a Lockbox Account shall be transferred by the relevant
Lockbox Processor within one Business Day of receipt thereof to the Collection
Concentration Account or, in the event of a Potential Early Amortization Event
or Early Amortization Event, to the Collection Account. Except as permitted in
the first sentence of this subsection 2.3(a), in the event that any payments in
respect of the Receivables are made directly to the Support Provider or Servicer
(including, without limitation, any employees thereof or independent contractors
employed thereby), the Support Provider or the Servicer, as applicable, shall,
within one Business Day of receipt thereof, forward such amounts to a Lockbox
(including by depositing instruments evidencing any such amounts into any such
Lockbox Account) and, prior to forwarding such amounts, the Support Provider or
the Servicer, as applicable, shall hold such payments in trust as custodian for
the Trustee. Each of the Company and the Servicer represents, warrants and
agrees that all Collections shall be collected, processed and deposited by it
pursuant to, and in accordance with the terms of, the Pooling and Servicing
Agreements.

                    (a) Each Lockbox Agreement shall provide that the Lockbox
Processor thereunder is irrevocably directed, and such Lockbox Processor
irrevocably agrees, to (i) deposit funds received in the Lockbox directly into
the Lockbox Account and (ii) transfer immediately available funds on deposit in
the Lockbox Account within one Business Day of receipt thereof to the Trustee
for deposit in the Collection Concentration Account or, in the event of a
Potential Early Amortization Event or Early Amortization Event, to the
Collection Account. Each Lockbox Agreement shall be substantially in the form of
Exhibit A to the Pooling Agreement or in such form as the Lockbox Processor
party thereto employs in the ordinary course of its business for transactions of
a type similar to the one contemplated by this Agreement, and which form shall
be reasonably acceptable to the Trustee. A new Lockbox Account may be designated
from time to time by the Company and the Servicer; PROVIDED that the Lockbox
Processor chosen to maintain such new Lockbox Account shall have entered into a
Lockbox Agreement with the Company, the Servicer and the Trustee prior to any
funds being deposited into such Lockbox Account. The Company or the Servicer
shall notify each Rating Agency of the designation of a new Lockbox Account.
Prior to any resignation of the Lockbox Processor or termination of the Lockbox
Processor by the Company or the Trustee, the Servicer hereby agrees to obtain a
replacement Lockbox Processor, the unsecured

                                       7


and uncollateralized obligations of which (or of its holding company parent) are
rated in one of the three highest long-term or short-term rating categories by
each Rating Agency rating such replacement Lockbox Processor, to serve under a
Lockbox Agreement which is reasonably acceptable to the Trustee.

                    (b) The Trustee shall administer amounts on deposit in the
Collection Account, and the Servicer, on behalf of the Trust, shall administer
amounts on deposit in the Lockbox Accounts, in each case in accordance with the
terms of the Pooling and Servicing Agreements. Each of the Company and the
Servicer acknowledges and agrees that (i) it shall not have any right to
withdraw any funds on deposit in the Collection Account or any Lockbox Account,
(ii) all amounts deposited in the Collection Account or any Lockbox Account
shall be under the sole dominion and control of the Trustee (subject to the
Servicer's right to direct the application of such amounts as provided by the
terms of any Pooling and Servicing Agreement), (iii) with respect to the
Eligible Investments, the Trustee shall be entitled to exercise the rights that
comprise such financial assets and to exercise the ordinary rights of an
entitlement holder, and (iv) the securities account into which Eligible
Investments may be held or credited shall be an account of the Trustee and not
the Company or the Servicer, but if, despite such intent, the securities account
is determined to be an account of the Company or the Servicer then the
securities intermediary shall comply with entitlement orders originated by the
Trustee without further consent by the Company or the Servicer.

                    (c) As soon as practicable but in any event not later than
the Business Day following the date that the Servicer determines, identifies and
certifies in writing to the Trustee that any of the collected funds received in
any of the Lockboxes, the Lockbox Accounts, the Collection Concentration Account
or the Collection Account do not constitute Collections on account of the
Receivables, such monies which do not constitute such Collections shall be
remitted to the applicable Seller to the extent such determination and
identification is reasonably satisfactory to the Trustee.

                    (d) All collections received or deposited in the Collection
Account as "Collections" shall be deemed, for purposes of the Transaction
Documents, to have been received or deposited as of the Business Day Received
(as defined in the immediately succeeding sentence). As used herein, the term
"BUSINESS DAY RECEIVED" shall mean (i) if funds are deposited in the Collection
Account by 3:00 p.m., New York City time, such day of deposit and (ii) if funds
are deposited in the Collection Account after 3:00 p.m., New York City time, the
Business Day next following such day of deposit.

                                       8


                    (e) Unless otherwise required by law or unless an Obligor
designates that a payment be applied to a specific Receivable, all Collections
received from an Obligor shall be applied to the oldest Receivables of such
Obligor.

                    (f) The Servicer, following notification that collections of
any receivable or other intangible owed to any Seller which is not a Receivable
have been deposited in error into any Lockbox Account, shall segregate all such
collections or, if such collections have been deposited into the Collection
Concentration Account or the Collection Account, shall segregate such
collections for transfer to such Seller. Promptly after such misapplied
collections have been identified in writing to the Trustee, the Trustee shall
transfer and turn over all such collections to such Seller.

               2.4 RESERVED.

               2.5 SERVICING COMPENSATION (a) As full compensation for its
servicing activities hereunder and reimbursement for its expenses as set forth
in subsection (b) the Servicer shall be entitled to receive on each Distribution
Date for the preceding Settlement Period prior to the termination of the Trust
pursuant to Section 9.1 of the Pooling Agreement a servicing fee (the "SERVICING
FEE"). The Servicing Fee shall be an amount equal to (i) the product of (A) the
Servicing Fee Percentage and (B) the average aggregate Principal Amount of the
Receivables in the Trust for the Settlement Period immediately preceding such
Settlement Period (or, if such later Settlement Period is the initial Settlement
Period, the average aggregate Principal Amount of the Receivables in the Trust
in April 2001) and (C) the number of days in such Settlement Period, DIVIDED BY
(ii) 360 (or, with respect to a particular Outstanding Series, as shall be
provided in the related Supplement). Except as otherwise set forth in the
related Supplement, the share of the Servicing Fee allocable to each Outstanding
Series for any Settlement Period shall be an amount equal to the product of
(i) the Servicing Fee for such Settlement Period and (ii) a fraction (expressed
as a percentage) (A) the numerator of which is the daily average Invested Amount
for such Settlement Period with respect to such Series and (B) the denominator
of which is the daily average Aggregate Invested Amount for such Settlement
Period (with respect to any such Series, the "MONTHLY SERVICING FEE"); PROVIDED,
HOWEVER, that if on any day USFS or any Affiliate thereof is acting as the
Servicer and an Early Amortization Event has occurred and is continuing with
respect to any Outstanding Series, payment of the Monthly Servicing Fee with
respect to such Series shall be deferred until all amounts due under the
Investor Certificates of such Series have been paid in full. The Servicing Fee
shall be payable to the Servicer solely pursuant to the terms of, and to the
extent amounts are available for payment under, Article III of the Pooling
Agreement.

                                       9


                    (b) The Company hereby directs the Servicer, and the
Servicer hereby agrees, to pay amounts due to the Trustee pursuant to Section
8.5 of the Pooling Agreement and the reasonable fees and disbursements of
independent accountants and counsel, including the Trustee's reasonable
out-of-pocket expenses relating to the Trustee's inspections, if any, of the
Servicer's servicing facility in connection with the Trustee's role as potential
Successor Servicer, which inspections shall occur not more frequently than once
per calendar year, and all other out-of-pocket fees and expenses of the Trust
(including reasonable counsel fees, if any) not expressly stated herein to be
for the account of the Investor Certificateholders; PROVIDED, HOWEVER, that in
no event shall the Servicer be liable for any federal, state or local income or
franchise tax, or any interest or penalties with respect thereto, assessed on
the Trust, the Trustee or the Investor Certificateholders except in accordance
with Section 5.2 and as otherwise expressly provided herein. Notwithstanding
anything to the contrary herein or in any other Pooling and Servicing Agreement,
in the event that the Servicer fails to pay any amount due to the Trustee
pursuant to Section 8.5 of the Pooling Agreement, or following the commencement
and continuance of an Early Amortization Period, the Trustee shall be entitled,
in addition to any other rights it may have under law and under the Pooling
Agreement, to receive directly such amounts owing to it under the Pooling and
Servicing Agreements from, and in the same order of priority as, the Servicing
Fee before payment to the Servicer of any portion thereof, PROVIDED, that in the
event the Servicer shall have elected to waive its rights to payment of the
Servicing Fee or the Servicing Fee is deferred pursuant to subsection 2.5(a),
the Trustee shall nonetheless be entitled to receive such amounts from payments
which would ordinarily be applied to the payment of the Servicing Fee, in the
same order of priority as though such Servicing Fee were payable. The Servicer
shall be required to pay expenses for its own account, and, with respect to the
Receivables in the Trust, shall not be entitled to any payment therefor other
than the Servicing Fee. Nothing contained herein shall be construed to limit the
obligation of the Servicer or the Company to pay any amounts due the Trustee
pursuant to Section 8.5 of the Pooling Agreement or pursuant to the terms of any
applicable Supplement.

                                  ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
                      THE SERVICER AND THE SUPPORT PROVIDER

               As of (a) the date hereof and (b) each Issuance Date, each of the
Servicer and the Support Provider (unless otherwise indicated below) hereby
makes the following representations and warranties with respect to itself to
each of the other parties hereto:

                                       10


               3.1 CORPORATE EXISTENCE - COMPLIANCE WITH LAW It (i) is a
corporation or limited liability company, as the case may be, duly organized or
formed, validly existing and in good standing under the laws of the jurisdiction
of its organization or formation as the case may be, (ii) has all requisite
power and authority, and all legal right, to own and operate its properties, to
lease the properties it operates as lessee and to conduct its business as now
conducted, (iii) is duly qualified as a foreign corporation or limited liability
company, as the case may be, to do business and in good standing (or is exempt
from such requirements) under the laws of each jurisdiction in which the
ownership of its assets or the conduct of its business, including without
limitation the servicing of Receivables as required by this Agreement requires
such qualification, or in which the failure to so qualify would reasonably be
expected to have a Material Adverse Effect, and (iv) is in compliance with all
Requirements of Law.

               3.2 CORPORATE POWER: AUTHORIZATION It has the requisite power and
authority, and the legal right, to execute, deliver and perform this Agreement
and the other Transaction Documents to which it is a party and has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party. No consent
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person is required in connection with
the execution, delivery, performance, validity or enforceability of this
Agreement and the other Transaction Documents to which it is a party by or
against the Servicer or Support Provider, as the case may be, other than
(i) those consents which have duly been obtained or made and are in full force
and effect on the Initial Closing Date, the date hereof, or the relevant
Issuance Date, as the case may be, (ii) any filings of UCC- 1 financing
statements necessary to perfect USFS's, the Company's or the Trust's interest in
the Receivables and the Related Property, (iii) those that may be required under
state securities or "blue sky" laws in connection with the offering or sale of
Certificates and (iv) any such consent, authorization, filing, notice or other
act, the absence of which would not be reasonably likely to have a Material
Adverse Effect with respect to the Servicer or the Support Provider, as the case
may be. This Agreement and each other Transaction Document to which it is a
party have been duly executed and delivered on behalf of the Servicer or the
Support Provider, as the case may be.

                                       11


               3.3 ENFORCEABILITY This Agreement and each other Transaction
Document to which the Servicer or the Support Provider, as the case may be, is a
party constitute the legal, valid and binding obligation of such party
enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights generally and except as
such enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity).

               3.4 NO LEGAL BAR The execution, delivery and performance of this
Agreement and each other Transaction Document to which it is a party will not
violate any Requirement of Law or Contractual Obligation of the Servicer (other
than any violation which would not be reasonably likely to have a Material
Adverse Effect with respect to the Servicer or the Support Provider, as
applicable), and will not result in, or require, the creation or imposition of
any Lien (other than Permitted Liens) on any of its properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation.

               3.5 NO MATERIAL LITIGATION (a) There are no actions, suits,
investigations or proceedings at law or in equity or by or before any
arbitrator, court or Governmental Authority now pending or, to the knowledge of
the Servicer or the Support Provider, as applicable, threatened against or
affecting it or any of its properties, revenues or rights which (i) involve this
Agreement, any of the other Transaction Documents to which it is a party or any
of the transactions contemplated hereby or thereby or (ii) if adversely
determined, could individually or in the aggregate, result in a Material Adverse
Effect with respect to the Servicer or the Support Provider, as applicable.

                    (b) The Servicer or the Support Provider, as the case may
be, is not in default under or with respect to any Requirement of Law where such
default would be reasonably likely to have a Material Adverse Effect with
respect to the Servicer or the Support Provider, as applicable.

               3.6 NO DEFAULT The Servicer or the Support Provider, as the case
may be, is not in default under or with respect to any of its Contractual
Obligations in any respect which would be reasonably likely to have a Material
Adverse Effect with respect to the Servicer or the Support Provider, as
applicable. No Servicer Default or Potential Servicer Default has occurred and
is continuing with respect to the Servicer.

               3.7 SERVICING ABILITY With respect to the Servicer, as of the
related Issuance Date, there has not been since the date of this Agreement any
material adverse change in the ability of the Servicer to perform its
obligations as Servicer

                                       12


under any Transaction Document. With respect to the Support Provider, as of any
Issuance Date subsequent to the date of this Agreement, there has not been since
the date of this Agreement any material adverse change in the ability of the
Support Provider to perform its obligations as Support Provider under this
Agreement.

               3.8 LOCATION OF RECORDS With respect to the Servicer, the offices
at which the Servicer keeps its records concerning the Receivables serviced by
it either (i) are located at the addresses set forth on Schedule II to the
applicable Receivables Sale Agreement or (ii) have been notified to the Company
and the Trustee in accordance with the provisions of Section 4.9. With respect
to the Servicer, the Servicer's place of business or chief executive office if
the Servicer has more than one place of business is located at one of such
locations.

                                   ARTICLE IV

                            COVENANTS OF THE SERVICER

               4.1 DELIVERY OF REQUIRED REPORTS In the event that (i) a Purchase
Termination Event or a Potential Purchase Termination Event has occurred under
the Receivables Sale Agreements or (ii) an Early Amortization Event or a
Potential Early Amortization Event has occurred under the Pooling Agreement or
any Supplement thereto, for each Business Day or other specified period
(a "REPORTED PERIOD") and with respect to each Outstanding Series, the Servicer
shall submit to the Trustee and the relevant Agent, if any, no later than
1:00 p.m., New York City time, on the second Business Day following the end of
each Reported Period, a written report substantially in a form reasonably
acceptable to the Trustee (the "REQUIRED REPORT") setting forth for the Reported
Period total Collections, Receivables and Eligible Receivables created, and such
other information as the Trustee or such Agent may reasonably request and shall
deliver a copy of such report to the Company and to the Sellers under the
Receivables Sale Agreement. The Required Report may be delivered in an
electronic format mutually agreed upon by the Servicer and the Trustee, or
pending such agreement, by facsimile. By delivery of a Required Report, the
Servicer shall be deemed to have made a representation and warranty that all
information set forth therein is true and correct in all material respects.

               4.2 DELIVERY OF MONTHLY SETTLEMENT STATEMENT Unless otherwise
specified in the Supplement with respect to any Outstanding Series, the Servicer
hereby covenants and agrees that it shall deliver to the Trustee, each Agent and
each Rating Agency by 11:00 a.m., New York City time, on each Settlement Report
Date, a certificate of a Responsible Officer of the Servicer substantially in
the form attached to the related Supplement of each such Series (a "MONTHLY
SETTLEMENT

                                       13


STATEMENT") setting forth, as of the last day of the Settlement Period most
recently ended and for such Settlement Period, (a) the information described in
the form of such Monthly Settlement Statement, with such changes as may be
agreed to by the Servicer and the Trustee, subject to satisfaction of the Rating
Agency Condition (unless a Responsible Officer of the Servicer certifies that
such changes could not reasonably be expected to have a materially adverse
effect on the interests of the Trust or the Investor Certificateholders for the
applicable Series under the Transaction Documents). The delivery of such
certificate shall constitute a certification by the Servicer that, to the best
knowledge of such Responsible Officer of the Servicer, the information contained
therein is true and correct in all material respects and the Servicer has
performed in all material respects all of its obligations under each Transaction
Document throughout such preceding Settlement Period (or, if there has been a
material default in the performance of any such obligation, specifying each such
default known to such officer and the nature and status thereof). A copy of each
Monthly Settlement Statement may be obtained by any Investor Certificateholder
upon a request in writing to the Trustee addressed to the Corporate Trust
Office.

               4.3 DELIVERY OF QUARTERLY SERVICER'S CERTIFICATE The Servicer
agrees that it shall deliver to the Trustee, each Agent and each Rating Agency,
a certificate of a Responsible Officer of the Servicer, substantially in the
form of Exhibit A hereto, stating that:

                    (a) a review of the activities of each of the Company and
the Servicer during the preceding calendar quarter and of its performance under
each Transaction Document was made under the supervision of such Responsible
Officer; and

                    (b) to the best of such Responsible Officer's knowledge,
based on such review, (i) each of the Company and the Servicer has performed in
all material respects its obligations under each Transaction Document throughout
the period covered by such certificate (or, if there has been a material default
in the performance of any such obligation, specifying each such default known to
such Responsible Officer and the nature and status thereof) and (ii) each
Required Report and Monthly Settlement Statement delivered during such period
was accurate and correct in all material respects, except as specified in such
certificate.

Such certificate shall be delivered by the Servicer within 45 days after the end
of each calendar quarter commencing with the quarter ending on or about
June 30, 2001. A copy of such certificate may be obtained by any Investor
Certificateholder by a request in writing to the Trustee addressed to the
Corporate Trust Office.

                                       14


               4.4 DELIVERY OF INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORTS
The Servicer shall cause Independent Public Accountants to furnish to the
Company, the Trustee and each Rating Agency within 90 days following the last
day of each fiscal year of the Servicer (commencing with the fiscal year ending
on or about December 31, 2001) a letter to the effect that such firm has
performed certain agreed upon procedures (as set forth in Exhibit B hereto)
relating to the Servicer with respect to the Receivables and each such Person's
performance hereunder during the preceding fiscal year and describing such
firm's findings with respect to such procedures. A copy of such report may be
obtained by any Investor Certificateholder upon a request in writing to the
Trustee addressed to the Corporate Trust Office.

               4.5 NO GUARANTEE OR ASSUMPTION OF COMPANY'S LIABILITIES The
Servicer hereby covenants and agrees that it will not guarantee or assume the
obligations or liabilities of the Company under the Pooling and Servicing
Agreements, or any other obligations or liabilities of the Company, in an
aggregate amount exceeding $25,000 at any one time outstanding, it being
understood that a shareholder's capital contribution is not such a guarantee or
assumption.

               4.6 EXTENSION, AMENDMENT AND ADJUSTMENT OF RECEIVABLES, AMENDMENT
OF AND COMPLIANCE WITH POLICIES (a) The Servicer hereby covenants and agrees
with the Trustee that it shall not extend, rescind, cancel, amend or otherwise
modify, or attempt or purport to extend, rescind, cancel, amend or otherwise
modify, the terms of, or grant any Dilution Adjustment to, any Receivable, or
otherwise take any action which is intended to cause or permit an Eligible
Receivable to cease to be an Eligible Receivable, except in any such case (i) in
accordance with the terms of the Policies, (ii) as required by any Requirement
of Law or (iii) in the case of any Dilution Adjustments (whether or not
permitted by any other clause of this sentence), upon the payment by or on
behalf of the applicable Seller or USFS of a Seller Adjustment Payment pursuant
to Section 2.05 of the Receivables Sale Agreement or the USFS Receivables Sale
Agreement, as the case may be. Any Dilution Adjustment authorized to be made
pursuant to the preceding sentence shall result in the reduction, on the
Business Day on which such Dilution Adjustment arises or is identified, in the
aggregate Principal Amount of Receivables used to calculate the Aggregate
Receivables Amount. If, as a result of such a reduction, the Aggregate
Receivables Amount is less than the Aggregate Target Receivables Amount, the
Company (in addition to the obligations of the applicable Seller and USFS under
the applicable Receivables Sale Agreement in respect of such Dilution
Adjustment) shall be required to pay into the Series Principal Collection
Sub-subaccount with respect to each Outstanding Series in immediately available
funds within one Business Day of such determination such Series PRO RATA share
of the amount (the "CASH DILUTION PAYMENT") by which the Aggregate Target
Receivables Amount exceeds the Aggregate Receivables Amount.

                                       15


                    (b) The Servicer shall not make or permit to be made any
change or modification to the Policies in any material respect, except (i) if
such changes or modifications are necessary under any Requirement of Law,
(ii) if such changes or modifications would not reasonably be expected to have a
Material Adverse Effect with respect to the Servicer or (iii) if the Rating
Agency Condition is satisfied with respect thereto. The Servicer shall provide
notice to the Company, the Trustee and each Rating Agency of any modification of
the Policies.

                    (c) The Servicer shall perform its obligations in accordance
with and comply in all material respects with the Policies.

               4.7 PROTECTION OF INVESTOR CERTIFICATEHOLDERS' RIGHTS The
Servicer hereby agrees with the Trustee that it shall take no action, nor
intentionally omit to take any action, which could reasonably be expected to
materially adversely impair the rights, remedies or interests of the Investor
Certificateholders under the Transaction Documents in respect of the
Receivables, nor shall it reschedule, revise or defer payments due on any
Receivable except in accordance with the Policies or Section 4.6 above.

               4.8 SECURITY INTEREST The Servicer hereby covenants and agrees
that it shall not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien on, any Receivable sold
and assigned to the Company or the Trust, whether now existing or hereafter
created, or any interest therein, and the Servicer shall defend the right, title
and interest of the Company and the Trust in, to and under any Receivable sold
and assigned to the Company or the Trust, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Servicer or the Company; provided, HOWEVER, that nothing in this Section 4.8
shall prevent or be deemed to prohibit the Servicer from suffering to exist upon
any of the Receivables any Permitted Liens.

               4.9 LOCATION OF RECORDS The Servicer hereby covenants and agrees
that it (a) shall not move its chief executive office or any of the offices
where it keeps its records with respect to the Receivables outside of the
location specified in respect thereof on Schedule II to the Receivables Sale
Agreement or the USFS Receivables Sale Agreement, as applicable, in any such
case, without giving 15 days' prior written notice to the Company, the Trustee
and the Rating Agencies and (b) shall promptly take all actions reasonably
required (including but not limited to all filings and other acts necessary or
reasonably requested by the Trustee as being advisable under the UCC) in order
to continue the valid and enforceable interest of the Trust in all Receivables
now owned or hereafter created.

               4.10 VISITATION RIGHTS (a) The Servicer shall, at any reasonable
time during normal business hours on any Business Day and from time to time,
upon

                                       16


reasonable prior notice, according to the Servicer's normal security and
confidentiality requirements, permit (i) the Company, the Trustee, any Agent or
any of their respective agents or representatives (A) to examine and make copies
of and abstracts from the records, books of account and documents (including
computer tapes and disks) of the Servicer relating to the Receivables and
(B) following the termination of the appointment of the Servicer, to be present
at the offices and properties of the Servicer to administer and control the
collection of the Receivables and (ii) the Company, the Trustee, any Agent or
any of their respective agents or representatives to visit the properties of the
Servicer to discuss the affairs, finances and accounts of the Servicer relating
to the Receivables or the Servicer's performance hereunder or under any of the
other Transaction Documents to which it is a party with any of its officers or
directors and with its independent certified public accountants; PROVIDED that
the Company, the Trustee or such Agent, as the case may be, shall notify the
Servicer prior to any contact with such accountants and shall give the Servicer
the opportunity to participate in such discussions.

                    (b) The Servicer shall provide the Trustee with such other
information as the Trustee may reasonably request in connection with the
fulfillment of the Trustee's obligations under any Pooling and Servicing
Agreement.

               4.11 LOCKBOX AGREEMENT: LOCKBOX ACCOUNTS The Servicer shall
(a) maintain, and keep in full force and effect, each Lockbox Agreement, except
to the extent otherwise permitted under the terms of the Transaction Documents,
and (b) ensure that each related Lockbox Account shall be free and clear of, and
defend each such Lockbox Account against, any writ, order, stay, judgment,
warrant of attachment or execution or similar process.

               4.12 DELIVERY OF FINANCIAL STATEMENTS The Servicer shall furnish
to Trustee and the Rating Agencies:

                    (a) as soon as available, but in any event not later than
125 days after the end of each fiscal year of United Stationers Inc., and so
long as USFS is the Servicer, a copy of the audited consolidated balance sheets
of United Stationers Inc. as at the end of such fiscal year and the related
consolidated statements of operations, shareholders' equity and cash flows of
United Stationers Inc. for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year and accompanied by the
opinion of Ernst & Young LLP or another nationally-recognized independent public
accounting firm, which report shall state that such consolidated financial
statements present fairly the financial position and results of operations and
changes in cash flow for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by

                                       17


such accountant of any material portion of United Stationers Inc. or any of its
Subsidiaries' records; and

                    (b) as soon as practicable, but in any event not later than
50 days after the end of the first three fiscal quarters of each fiscal year, a
copy of the condensed unaudited consolidated balance sheets of United Stationers
Inc., USFS and the Sellers as at the end of such quarter and the related
condensed unaudited consolidated statements of operations, shareholders' equity
and cash flows of United Stationers Inc., USFS and the Sellers for such fiscal
quarter, and for the elapsed portion of the fiscal year then ended, certified by
an appropriate Responsible Officer as being complete and correct in all material
respects and fairly presenting the financial position and the results of
operations of United Stationers Inc., USFS and the Sellers, setting forth in
each case in comparative form the figures as of and for the corresponding dates
and periods in the previous fiscal year.

     All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods, subject to normal year-end adjustments (except as approved by such
accountants or officer, as the case may be, and disclosed therein and except
that such financial statements shall not include any footnote disclosure as may
be required by GAAP).

               4.13 NOTICES The Servicer shall furnish to the Company, the
Trustee and each Rating Agency, promptly upon a Responsible Officer of the
Servicer obtaining knowledge of the occurrence of any Purchase Termination
Event, Potential Purchase Termination Event (each as defined in the Receivables
Sale Agreement), Early Amortization Event, Potential Early Amortization Event,
Servicer Default or Potential Servicer Default, written notice thereof.

               4.14 APPLICATION OF PROCEEDS So long as Section 2.10 of that
certain Third Amended and Restated Credit Agreement dated as of June 29, 2000
(as amended, supplemented or otherwise modified and in effect from time to time,
the "CREDIT Agreement"), by and among USSC, as borrower, United Stationers Inc.,
as guarantor, The Chase Manhattan Bank, as administrative agent, and Chase
Securities Inc., as arranger, shall be in effect and shall not have been waived
in writing pursuant to the applicable waiver provisions of such Credit
Agreement, and so long as Section 1016 of that certain Indenture dated as of
May 3, 1995 (as amended, supplemented or otherwise modified and in effect from
time to time, the "INDENTURE"), among USSC, United Stationers Inc., and The Bank
of New York, as trustee, shall be in effect and shall not have been waived in
writing pursuant to the applicable waiver provisions of such Indenture, the
Servicer shall comply in all respects with the requirements of such Section 2.10
and Section 1016.

                                       18


                                   ARTICLE V

             OTHER MATTERS RELATING TO THE SERVICER AND THE SUPPORT
                                    PROVIDER

               5.1 MERGER, CONSOLIDATION, ETC. (a) The Servicer shall not
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, unless:

                       (i) the Person formed by such consolidation or into which
     the Servicer is merged or the Person which acquires by conveyance or
     transfer the properties and assets of the Servicer substantially as an
     entirety shall be a Person organized and existing under the laws of the
     United States of America or any State thereof or the District of Columbia,
     and, if the Servicer is not the surviving entity, such Person shall assume,
     without the execution or filing of any paper or any further act on the part
     of any of the parties hereto (except as may be required in the context of
     an acquisition by conveyance or transfer of the properties and assets of
     the Servicer substantially as an entirety to such other Person), the
     performance of every covenant and obligation of the Servicer hereunder; and

                       (ii) the Servicer has delivered to the Trustee an
     officer's certificate executed by a Vice President or more senior officer
     and an Opinion of Counsel addressed to the Trust and the Trustee, each
     stating (i) that such consolidation, merger, conveyance or transfer
     complies with this Section 5.1 and (ii) that all conditions precedent
     herein provided for relating to such transaction have been complied with;
     PROVIDED that such Opinion of Counsel, in the case of clause (ii) above,
     may, to the extent that such opinion concerns questions of fact, rely on
     such officer's certificate with respect to such questions of fact.

                    (b) The Support Provider covenants and agrees that, until
this Agreement is terminated pursuant to Section 7.2, the Support Provider will
continue to be the direct or indirect beneficial owner of a majority of the
issued and outstanding capital stock of the Servicer. The Support Provider shall
not enter into any transaction or merger whereby it is not the surviving entity,
nor shall it sell all or substantially all of its assets to another Person
unless it has given prior written notice thereof to the Company and the Trustee
and each of the Company and the Trustee (subject to Section 8.14 of the Pooling
Agreement) consents in writing.

                                       19


               5.2 INDEMNIFICATION OF THE TRUST AND THE TRUSTEE (a) The Servicer
hereby agrees to indemnify and hold harmless the Trust and the Trustee, for the
benefit of the Investor Certificateholders and the Trustee and its directors,
officers, agents and employees (each of the foregoing, an "INDEMNIFIED PERSON"),
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions arising
out of, or relating to, activities of the Servicer pursuant to the Pooling and
Servicing Agreements, including but not limited to any judgment, award,
settlement, reasonable attorneys' fees and other reasonable costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim; PROVIDED that the Servicer shall not so indemnify any
Indemnified Person for any such loss, liability, damage, injury, cost or expense
of such Indemnified Person (i) arising solely from a default by an Obligor with
respect to any Receivable (other than arising out of (A) any discharge, claim,
offset or defense (other than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Purchased Receivable arising from the actions of
the Servicer (including, without limitation, a defense based on such Purchased
Receivable's not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms) or (B) a failure by the
Servicer to perform its duties or obligations under this Agreement), or (ii) to
the extent that such liability, cost or expense arises from the gross
negligence, bad faith or willful misconduct of such Indemnified Person or any
other Indemnified Person (or any of their respective directors, officers, agents
or employees); PROVIDED, HOWEVER, that to the extent a determination of gross
negligence, bad faith or willful misconduct is made after the payment of any
amounts related thereto, the Servicer shall be repaid any amounts reimbursed
under the preceding clause that, due to such determination, it should not have
paid. The provisions of this indemnity shall run directly to, and be enforceable
by, an injured party and shall survive the termination of this Agreement and the
resignation or removal of the Servicer.

                    (b) In addition, the Servicer agrees to pay, indemnify and
hold each Indemnified Person harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind or nature whatsoever which may
at any time be imposed on, incurred by or asserted against such Indemnified
Person in any way relating to or arising out of the Servicer's breach of any
covenant contained in subsections 2.2(f), 2.2(g), 4.6, 4.7 or 4.8 with respect
to any Receivable which materially and adversely affects the interest of the
Trust, the parties hereto or the Investor Certificateholders pursuant to the
Transaction Documents in any Receivable or the collectibility of any Receivable
(an "INDEMNIFICATION EVENT").

                    (c) The Servicer shall indemnify the relevant Indemnified
Person for such affected Receivable pursuant to subsection 5.2(b) by depositing
into the Collection Account in immediately available funds no later than the
next

                                       20


Settlement Report Date occurring at least 30 days after receipt by the Servicer
of written notice of an Indemnification Event given by the applicable Seller,
the Company or the Trustee or upon a Responsible Officer of the Servicer
obtaining knowledge of an Indemnification Event, an amount equal to the
outstanding Principal Amount of such Receivable (the "SERVICER INDEMNIFICATION
AMOUNT"). Upon each such indemnification by the Servicer, the Trust shall
automatically and without further action be deemed to transfer, assign, and set
over, and otherwise convey to the Servicer, without recourse, representation or
warranty, all right, title and interest of the Trust in and to such Receivable,
all monies due or to become due with respect thereto and all proceeds thereof;
and such Receivable shall be treated by the Trust as collected in full as of the
date on which it was transferred. The Trustee shall execute such documents and
instruments of transfer or assignment and take such other actions as shall be
reasonably requested by the Servicer to effect the conveyance of any Receivable
pursuant to this subsection. The obligation of the Servicer to indemnify the
Trust for any such Receivables shall constitute the sole remedy respecting any
breach of the covenants set forth in subsections 2.2(f), 2.2(g), 4.6, 4.7 or 4.8
with respect to such Receivables available to Investor Certificateholders;
PROVIDED, HOWEVER, that the Servicer shall, in addition, indemnify each
Indemnified Person against all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel, which may be
asserted against or incurred by any of them as a result of third party claims
arising out of the events or facts giving rise to such breach.

               5.3 SERVICER NOT TO RESIGN The Servicer shall not resign from the
obligations and duties hereby imposed on it except (a) upon determination that
(i) the performance of its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible under
applicable law or (b) if the Servicer is terminated as Servicer pursuant to
Section 6.1. Any such determination permitting the resignation of the Servicer
shall be evidenced as to clause (a)(i) above by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until a Successor Servicer or the Trustee shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 6.2.
The Trustee, the Company and each Rating Agency shall be notified of such
resignation in writing.

               5.4 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
RECEIVABLES The Servicer will hold in trust for the Trustee at their respective
offices such computer programs, books of account and other records as are
reasonably necessary to enable the Trustee to determine at any time the status
of the Receivables and all collections and payments in respect thereof
(including, without limitation, an ability to recreate records evidencing
Receivables in the event of the destruction of the originals thereof).

                                       21


               5.5 PERFORMANCE SUPPORT OBLIGATION OF SUPPORT PROVIDER. (a) The
Support Provider hereby unconditionally and irrevocably guarantees for the
benefit of each of the Company and the Trustee, on behalf of the Investor
Certificateholders, the due and punctual performance and observance by the
Servicer and its respective successors and assigns (except for any successor and
assign which is not wholly owned by USSC) of all of the terms, covenants,
conditions, agreements, undertakings and obligations on the part of the Servicer
to be performed or observed under the Transaction Documents (all such terms,
covenants, conditions, agreements, undertakings and obligations on the part of
the Servicer to be performed or observed being collectively called the
"OBLIGATIONS"). In the event that the Servicer shall fail in any manner
whatsoever, to perform or observe any of the Obligations when the same shall be
required to be performed or observed (after giving effect to any grace period
applicable thereto), then the Support Provider will itself duly and punctually
perform and observe or cause to be duly and punctually performed or observed,
the Obligations, and it shall not be a condition to the accrual of the
obligation of the Support Provider hereunder to perform or observe any
Obligation (or to cause the same to be performed or observed) that the Company
or the Trustee, for the benefit of the Holders, shall have first made any
request of or demand upon or given any notice to the Support Provider or to the
Servicer or its respective successors and assigns or have initiated any action
or proceeding against the Support Provider or the Servicer or any of their
respective successors and assigns in respect thereof. Either the Company or the
Trustee may proceed to enforce the obligations of the Support Provider under
this subsection 5.5(a) without first pursuing or exhausting any right or remedy
which any Investor Certificateholder, the Trustee, the Company, USFS (in its
capacity as purchaser under the Receivables Sale Agreement and as seller under
the USFS Receivables Sale Agreement), the Sellers or the Funding Agent may have
against the Servicer, any other Person, the Receivables or any other property.
The Trustee, on behalf of the Investor Certificateholders, hereby acknowledges
that the Obligations shall not create recourse against the Servicer or the
Support Provider for the payment of any Receivable which is uncollectible for
credit-related reasons.

                    (b) The Support Provider agrees that its obligations under
this Agreement shall be unconditional, irrespective of (i) the validity,
enforceability, avoidance, subordination, discharge, or disaffirmance by any
Person (including a trustee in bankruptcy) of the Obligations, any Receivable,
the Receivables Sale Agreements or any other Transaction Document, (ii) the
absence of any attempt to collect any Receivables from the Obligor related
thereto or any guarantor thereof, or to collect the Obligations from the
Servicer or any other Person, (iii) the waiver, consent, extension, forbearance
or granting of any indulgence by any of the Investor Certificateholder, the
Trustee, the Company, USFS (in its capacity as purchaser under the Receivables
Sale Agreement and as seller under the USFS Receivables Sale Agreement), or the
Funding Agent with respect to any provision of any

                                       22


instrument evidencing the Obligations (including, but not limited to, the
Receivables Sale Agreements or any Receivable), (iv) any change of the time,
manner or place of performance of, or in any other term of any of the
Obligations or any Receivable, including without limitation, any amendment to or
modification of the Receivables Sale Agreements, the Pooling Agreement and any
Supplement, (v) any law, regulation or order of any jurisdiction affecting any
term of any of the Obligations, any Receivable, or rights of any Investor
Certificateholder, the Trustee, the Company, USFS (in its capacity as purchaser
under the Receivables Sale Agreement and as seller under the USFS Receivables
Sale Agreement), the Sellers or the Funding Agent with respect thereto, (vi) the
failure by any of the Trustee, the Company, USFS (in its capacity as purchaser
under the Receivables Sale Agreement and as seller under the USFS Receivables
Sale Agreement) or the any of the Sellers to take any steps to perfect and
maintain perfected its respective interest in any Receivable or other property
acquired by USFS (in its capacity as purchaser under the Receivables Sale
Agreement) from the Sellers, by the Company from USFS (in its capacity as seller
under the USFS Receivables Sale Agreement), or assigned to the Trust by the
Company, or in any security or collateral related to the Obligations, (vii) any
exchange or release of any Receivable or other property acquired by USFS (in its
capacity as purchaser under the Receivables Sale Agreement) from the Sellers, by
the Company from USFS (in its capacity as seller under the USFS Receivables Sale
Agreement), or assigned to the Trust by the Company, (viii) any failure to
obtain any authorization or approval from or other action by or to notify or
file with, any Governmental Authority or regulatory body required in connection
with the performance of the obligations hereunder by the Support Provider or
(ix) any impossibility or impracticability of performance, illegality, FORCE
MAJEURE, any act of government, or other circumstances which might constitute a
default available to, or a discharge of the Servicer or the Support Provider, or
any other circumstance, event or happening whatsoever whether foreseen or
unforeseen and whether similar to or dissimilar to anything referred to above.
The Support Provider further agrees that its obligations under this Agreement
shall not be limited by any valuation, estimation or disallowance made in
connection with any proceedings involving the Servicer filed under the
Bankruptcy Code, whether pursuant to Section 502 of the Bankruptcy Code or any
other Section thereof. The Support Provider further agrees that none of the
Investor Certificateholders, the Trustee, the Company, USFS (in its capacity as
purchaser under the Receivables Sale Agreement and as seller under the USFS
Receivables Sale Agreement) and the Funding Agent shall be under any obligation
to marshall any assets in favor of or against or in payment of any or all of the
Obligations. The Support Provider further agrees that, to the extent that the
Servicer makes a payment or payments to any of the Trustee, the Funding Agent,
the Company, USFS (in its capacity as purchaser under the Receivables Sale
Agreement and seller under the USFS Receivables Sale Agreement) or the Sellers
and such payment or payments (or any part thereof) are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to the Servicer, its

                                       23


estate, trustee or receiver or any other party, including, without limitation,
the Support Provider, under any bankruptcy law, state or federal law, common law
or equitable cause, then to the extent of such payment or repayment, the
Obligations or part thereof which had been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
such initial payment, reduction or satisfaction occurred. The Support Provider
waives all set-offs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor and notices of acceptance of this Agreement. The Support Provider's
obligations under this Agreement shall not be limited if any of the Investor
Certificateholders, the Trustee, the Funding Agent, the Company, USFS (in its
capacity as purchaser under the Receivables Sale Agreement and seller under the
USFS Receivables Sale Agreement) or the Sellers are precluded for any reason
(including without limitation, the application of the automatic stay under
Section 362 of the Bankruptcy Code) from enforcing or exercising any right or
remedy with respect to the Obligations, and the Support Provider shall pay to
Trustee, the Funding Agent, the Company, USFS (in its capacity as purchaser
under the Receivables Sale Agreement and seller under the USFS Receivables Sale
Agreement) or the Sellers, as the case may be, upon demand, the amount of the
Obligations that would otherwise have been due and payable had such rights and
remedies been permitted to be exercised.

                    (c) The Support Provider agrees that its obligations under
this Agreement shall be unconditional and irrevocable. In the event that under
applicable law (notwithstanding the Support Provider's agreement regarding the
irrevocable nature of its obligations hereunder) the Support Provider shall have
the right to revoke this Agreement, this Agreement shall continue in full force
and effect until a written revocation hereof specifically referring hereto,
signed by the Support Provider is actually received by the Company and the
Trustee. Any such revocation shall not affect the right of any of the Company or
the Trustee, for the benefit of the Holders, to enforce their respective rights
under this Agreement with respect to (i) any Obligation (including any
Obligation that is contingent or unmeasured) which arose on or prior to the date
the aforementioned revocation was received by the Company and the Trustee or
(ii) any Receivable which was a Receivable on the date the aforementioned
revocation was received by the Company and the Trustee. If any of the Investor
Certificateholders, the Trustee or the Company takes other action in reliance on
this Agreement after any such revocation by the Support Provider but prior to
the receipt by the Company and the Trustee of said written notice, the rights of
the Investor Certificateholders, the Trustee and the Company with respect
thereto shall be the same as if such revocation had not occurred. Without
limiting the foregoing, this Agreement may not be revoked at any time on or
after an Early Termination.

                                       24


                    (d) The Support Provider hereby waives promptness,
diligence, notice of acceptance, notice of default by the Servicer, notice of
the incurrence of any Obligation and any other notice with respect to any of the
Obligations and this Agreement, the Receivables Sale Agreements, and any other
Transaction Document and any requirement that the Investor Certificateholders,
the Trustee, the Funding Agent or the Company, USFS (in its capacity as
purchaser under the Receivables Sale Agreement and seller under the USFS
Receivables Sale Agreement) or the Sellers exhaust any right or take any action
against the Servicer, any other Person or any property. The Support Provider
warrants to the Investor Certificateholders, the Trustee and the Company that it
has adequate means to obtain from the Servicer on a continuing basis, all
information then known to the Servicer concerning the financial condition of the
Servicer and the collectibility of the Receivables, and that it is not relying
on the Investor Certificateholders, the Trustee or the Company to provide such
information either now or in the future.

                    (e) The Support Provider will not exercise or assert any
rights which it may acquire by way of subrogation under this Agreement unless
and until all of the Obligations shall have been observed and performed in full
and this Agreement shall have terminated in accordance with Section 7.2 hereof.
If any payment shall be made to the Support Provider on account of any
subrogation rights at any time prior to the occurrence of the events described
in the preceding sentence, each and every amount so paid will be held in trust
for the benefit of the Investor Certificateholders, the Trustee, the Funding
Agent, the Company, USFS (in its capacity as purchaser under the Receivables
Sale Agreement and seller under the USFS Receivables Sale Agreement) and the
Sellers, and forthwith be paid to the Holders, the Trustee, the Funding Agent,
the Company, USFS (in its capacity as purchaser under the Receivables Sale
Agreement and seller under the USFS Receivables Sale Agreement) and the Sellers,
as applicable, to be credited and applied to the Obligations to the extent then
unsatisfied, in accordance with the terms of the Receivables Sale Agreements,
the Pooling Agreement, any Supplement or any document delivered in connection
therewith.

                                   ARTICLE VI

                                SERVICER DEFAULTS

               6.1 SERVICER DEFAULT. If, with respect to the Servicer, any one
of the following events (a "SERVICER DEFAULT") shall occur and be continuing:

                    (a) failure by the Servicer to deliver, within two Business
Days of the earlier date set forth below in clause (i) or (ii), any Required
Report or, within three Business Days of the earlier date set forth below in
clause (i) or (ii), any

                                       25


Monthly Settlement Statement, in each case conforming in all material respects
to the requirements of Section 4.1 or 4.2, as the case may be, after the earlier
to occur of, in each case, (i) the date upon which a Responsible Officer of the
Servicer obtains knowledge of the Servicer's failure to deliver such a
conforming Required Report or Monthly Settlement Statement when due under
Section 4.1 or 4.2 and (ii) the date on which written notice of the Servicer's
failure to deliver such a conforming Required Report or Monthly Settlement
Statement when due under Section 4.1 or 4.2, requiring the same to be remedied,
shall have been given to the Servicer by the Company or the Trustee, or to the
Company, the Servicer and the Trustee by holders of Investor Certificates
evidencing 25 % or more of the Aggregate Invested Amount or by any Agent;

                    (b) failure by the Servicer to pay any amount required to be
paid by it under the Agreement or to give any direction with respect to the
allocation or transfer of funds under any Pooling and Servicing Agreement, in
each case on or before the date occurring five Business Days after the earlier
to occur of (i) the date upon which a Responsible Officer of the Servicer
obtains knowledge of such failure and (ii) the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Company or the Trustee, or to the Company, the Servicer and the
Trustee by holders of Investor Certificates evidencing 25 % or more of the
Aggregate Invested Amount or by any Agent;

                    (c) failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of the
Servicer set forth in any Pooling and Servicing Agreement, which failure has a
Material Adverse Effect on the holders of any Outstanding Series or on the
collectibility of the Receivables as a whole and which Material Adverse Effect
continues unremedied for 30 days after the earlier to occur of (i) the date upon
which a Responsible Officer of the Servicer obtains knowledge of such failure or
(ii) the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company and the Servicer by the Trustee,
or to the Company, the Servicer and the Trustee by holders of Investor
Certificates evidencing 25 % or more of the Aggregate Invested Amount or by any
Agent; PROVIDED that no Servicer Default shall be deemed to occur under this
subsection (c) if the Servicer shall have complied with the provisions of
subsections 5.2(b) and (c) with respect thereto;

                    (d) any representation, warranty or certification made by
the Servicer in any Pooling and Servicing Agreement or in any certificate
delivered pursuant thereto shall prove to have been incorrect in any material
respect when made or deemed made, which incorrectness has a Material Adverse
Effect on the holders of any Outstanding Series or on the collectibility of the
Receivables as a whole and which Material Adverse Effect continues unremedied
for 30 days after the earlier to occur of (i) the date upon which a Responsible
Officer of the Servicer

                                       26


obtains knowledge of such failure or (ii) the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Company and the Servicer by the Trustee, or to the Company, the Servicer and the
Trustee by holders of Investor Certificates evidencing 25 % or more of the
Aggregate Invested Amount or by any Agent; PROVIDED that no Servicer Default
shall be deemed to occur under this subsection (d) if the Servicer shall have
complied with the provisions of subsections 5.2(b) and (c) with respect thereto;

                    (e) (i) the Servicer shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or the Servicer shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Servicer any case, proceeding or other action of a nature referred to in clause
(i) above which remains undismissed, undischarged or unbonded for a period of
60 days or an order for relief, decree, adjudication or appointment shall occur;
or (iii) there shall be commenced against the Servicer any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 such days from
the entry thereof, or (iv) the Servicer shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clauses (i), (ii), or (iii) above; or (v) the Servicer shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or

                    (f) there shall have occurred and be continuing a Purchase
Termination Event under the Receivables Sale Agreement, except for a Purchase
Termination Event described in Section 6.01(b) of the Receivables Sale
Agreement;

                    (g) there shall have occurred one of the Early Amortization
Events described in Sections 7.1(a) or 7.1(d) of the Pooling Agreement;

                    (h) the Servicer shall have ceased to be a directly or
indirectly wholly-owned Subsidiary of United Stationers Inc.;

                    (i) the Servicer or the Support Provider shall assert in
writing that any of this Agreement, the Pooling Agreement, any Supplement
thereto,

                                       27


or the Receivables Sale Agreement shall cease, for any reason, to be in full
force and effect;

                    (j) the Servicer shall assert that the Trust ceases to have
a valid and perfected first priority undivided ownership or security interest in
the Trust Assets (subject to no other Liens other than Permitted Liens described
in clauses (i) and (iv) of the definition thereof or as otherwise specified in
the Agreement or herein);

                    (k) there shall have been filed against the Servicer (i) a
notice of federal tax Lien from the Internal Revenue Service, (ii) a notice of
Lien from the PBGC under Section 412(n) of the Internal Revenue Code or Section
302(f) of ERISA for a failure to make a required installment or other payment to
a plan to which either of such sections applies or (iii) a notice of any other
Lien the existence of which could reasonably be expected to have a material
adverse effect on the business, operations or financial condition of such
Person, and, in each case, 40 days shall have elapsed without such notice having
been effectively withdrawn or such Lien having been released or discharged; or

                    (l) any action, suit, investigation or proceeding at law or
in equity (including, without limitation, injunctions, writs or restraining
orders) shall be brought or commenced or filed by or before any arbitrator,
court or Governmental Authority against the Servicer or any properties, revenues
or rights thereof which could reasonably be expected to have a Material Adverse
Effect with respect to the Trust or any Certificateholder; then, in the event of
any Servicer Default, so long as the Servicer Default shall not have been
remedied (or waived in accordance with the terms of the Transaction Documents),
the Trustee may, and at the written direction of the holders of Investor
Certificates evidencing more than 50% of the Aggregate Invested Amount voting as
a single class, the Trustee shall, by notice then given in writing to the
Servicer, each Agent and each Rating Agency (a "TERMINATION NOTICE"), terminate
all or any part of the rights and obligations of the Servicer as Servicer under
the Pooling and Servicing Agreements. Notwithstanding anything to the contrary
in this Section 6.1, a delay in or failure of performance referred to under
clause (b) above for a period of 10 Business Days after the applicable grace
period or a delay in or failure of performance referred to under clauses
(a), (c) or (d) above for a period of 30 Business Days after the applicable
grace period shall not constitute a Servicer Default, if such delay or failure
could not have been prevented by the exercise of reasonable diligence by the
Servicer and such delay or failure was caused by a Force Majeure Delay. After
receipt by the Servicer of a Termination Notice, and on the date that a
Successor Servicer shall have been appointed by the Trustee pursuant to
Section 6.2, all authority and power of the Servicer under any Pooling and
Servicing Agreement to the extent specified in such Termination Notice shall
pass to and be vested in a Successor Servicer (a "SERVICE TRANSFER") and,
without

                                       28


limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such Service Transfer. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder,
including, without limitation, the transfer to such Successor Servicer of all
authority of the Servicer to service the Receivables provided for under the
Pooling and Servicing Agreements, including, without limitation, all authority
over all Collections which shall on the date of transfer be held by the Servicer
for deposit, or which have been deposited by a the Servicer, in the Collection
Account, or which shall thereafter be received with respect to the Receivables,
and in assisting the Successor Servicer. Upon a Service Transfer, the Servicer
shall promptly (x) assemble all of its documents, instruments and other records
(including credit files, licenses, rights, copies of all relevant computer
programs and any necessary licenses for the use thereof, related material,
computer tapes, disks, cassettes and data) that (i) evidence or will evidence or
record Receivables sold and assigned to the Trust and (ii) are otherwise
necessary or desirable to enable a Successor Servicer to effect the immediate
Collection of such Receivables, with or without the participation of the
applicable Seller and the Servicer and (y) deliver or license the use of all of
the foregoing documents, instruments and other records to the Successor Servicer
at a place designated thereby. In recognition of the Servicer's need to have
access to any such documents, instruments and other records which may be
transferred to such Successor Servicer hereunder, whether as a result of its
continuing responsibility as a servicer of accounts receivable which are not
sold and assigned to the Trust or otherwise, such Successor Servicer shall
provide to the Servicer reasonable access to such documents, instruments and
other records transferred by the Servicer to it in connection with any activity
arising in the ordinary course of the Servicer's business at any reasonable time
during normal business hours on any Business Day and from time to time, upon
reasonable prior notice, according to such Successor Servicer's normal security
and confidentiality requirements; PROVIDED that the Servicer shall not disrupt
or otherwise interfere with the Successor Servicer's use of and access to such
documents, instruments and other records. To the extent that compliance with
this Section 6.1 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer reasonably deems to be
confidential, the Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the Servicer shall deem
necessary to protect its interest. All costs and expenses incurred by the
defaulting Servicer, the Successor Servicer and the Trustee in connection with
any Service Transfer shall be for the account of such defaulting Servicer.

                                       29


               6.2 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR (a) On and after
(i) the receipt by the Servicer of a Termination Notice pursuant to Section 6.1
or (ii) the date on which the Servicer notifies the Trustee, the Company, each
Agent and each Rating Agency in writing of its resignation pursuant to Section
5.3 (the "RESIGNATION NOTICE"), the Servicer shall continue to perform all
servicing functions under the Pooling and Servicing Agreements until the earlier
of (x) the date on which a Successor Servicer is appointed and (y) 60 days after
the delivery of such Termination Notice or Resignation Notice, as the case may
be. The Trustee shall, as promptly as reasonably possible after the giving of or
receipt of a Termination Notice or Resignation Notice, as the case may be,
appoint an Eligible Successor Servicer as successor servicer (the "SUCCESSOR
SERVICER"). The Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Trustee.

                    (b) Reserved.

                    (c) Upon its appointment, the Successor Servicer shall be
the successor in all respects to the Servicer to which it is successor with
respect to servicing functions under the Pooling and Servicing Agreements (with
such changes as are agreed to between such Successor Servicer and the Trustee)
and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof, and
all references in any Pooling and Servicing Agreement to the Servicer shall be
deemed to refer to the Successor Servicer. The Successor Servicer shall manage
the servicing and administration of the Receivables, the collection of payments
due under the Receivables and the charging off of any Receivables as
uncollectible, with reasonable care, using that degree of skill and attention
that is the customary and usual standard of practice of prudent receivables
servicers with respect to all comparable receivables serviced for itself or
others. The Successor Servicer shall not be liable for, and the Servicer shall
indemnify the Successor Servicer against costs incurred by the Successor
Servicer as a result of, any acts or omissions of the Servicer or any events or
occurrences occurring prior to the Successor Servicer's acceptance of its
appointment as Successor Servicer.

                    (d) The Company and the Trustee will review any bids
obtained from Eligible Successor Servicers and the Company and the Trustee, or
the Company (with the consent of the Trustee), may appoint any Eligible
Successor Servicer submitting such a bid as a Successor Servicer for servicing
compensation not in excess of the Servicing Fee.

                    (e) All authority and power granted to the Successor
Servicer under any Pooling and Servicing Agreement shall automatically cease and
terminate on the Trust Termination Date, and shall pass to and be vested in the

                                       30


Company and, without limitation, the Company is hereby authorized and empowered
to execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact
or otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights from and after the Trust Termination Date. The
Successor Servicer agrees to cooperate with the Company in effecting the
termination of the responsibilities and rights of the Successor Servicer to
conduct servicing on the Receivables. The Successor Servicer shall transfer all
of its records relating to the Receivables to the Company in such form as the
Company may reasonably request and shall transfer all other records,
correspondence and documents to the Company in the manner and at such times as
the Company shall reasonably request. To the extent that compliance with this
Section 6.2 shall require the Successor Servicer to disclose to the Company
information of any kind which the Successor Servicer deems to be confidential,
the Company shall be required to enter into such customary licensing and
confidentiality agreements as the Successor Servicer and the Company shall
reasonably agree are reasonable and necessary to protect the Successor
Servicer's interests.

               6.3 WAIVER OF PAST DEFAULTS Holders of Investor Certificates
evidencing more than 50% of the Aggregate Invested Amount may waive any
continuing default by the Servicer or the Company in the performance of their
respective obligations hereunder and its consequences, except a default in the
failure to make any required deposits or payments in respect of any Series of
Certificates, which shall require a waiver by the holders of all of the affected
Investor Certificates. Upon any such waiver of a past default, such default
shall cease to exist, and any default arising therefrom shall be deemed to have
been remedied for every purpose of the Pooling and Servicing Agreements. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived. Either the Company
or the Servicer shall provide notice to each Rating Agency of any such waiver.

                                       31


                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

               7.1 AMENDMENT This Agreement may only be amended, supplemented or
otherwise modified from time to time if such amendment, supplement or
modification is effected in accordance with the provisions of Section 10.1 of
the Pooling Agreement and, with respect only to subsections 5.2(a) and (b) and
Section 5.5 hereof, receives the consent of USSC.

               7.2 TERMINATION The respective obligations and responsibilities
of the parties hereto shall terminate on the Trust Termination Date (unless such
obligations or responsibilities are expressly stated to survive the termination
of this Agreement).

               7.3 NOTICES All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of facsimile notice,
when received, addressed as set forth in Section 10.4 of the Pooling Agreement,
or to such other address as may be hereafter notified by the respective parties
hereto.

               7.4 COUNTERPARTS This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.

               7.5 THIRD-PARTY BENEFICIARIES This Agreement will inure to the
benefit of and be binding upon the parties hereto and the Investor
Certificateholders and their respective successors and permitted assigns. Except
as otherwise provided in this Article VII, no other person will have any right
or obligation hereunder.

               7.6 MERGER AND INTEGRATION Except as specifically stated
otherwise herein, this Agreement and the other Transaction Documents set forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement
and the other Transaction Documents. This Agreement may not be modified,
amended, waived, or supplemented except as provided herein.

                                       32


               7.7 HEADINGS The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.

               7.8 NO SET-OFF Except as expressly provided in this Agreement or
any other Transaction Document, the Servicer agrees that it shall have no right
of set-off or banker's lien against, and no right to otherwise deduct from, any
funds held in the Collection Account for any amount owed to it by the Company,
the Trust, the Trustee or any Investor Certificateholder.

               7.9 NO BANKRUPTCY PETITION The Servicer hereby covenants and
agrees that, prior to the date which is one year and one day after the Trust
Termination Date, it will not institute against, or join any other Person in
instituting against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal or
state bankruptcy or similar law.

               7.10 CONSEQUENTIAL DAMAGES In no event shall The Chase Manhattan
Bank, in its capacity as Successor Servicer (if applicable), be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including, but not limited to, lost profits), even if it has been advised of
the likelihood of such loss or damage and regardless of the form of action.

               7.11 GOVERNING LAW THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND THE RIGHTS,
OBLIGATIONS AND REMEDIES OF EACH OF THE PARTIES HERETO SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                       33


     IN WITNESS WHEREOF, the Company, the Servicer, the Support Provider and the
Trustee have caused this Agreement to be duly executed by their respective
officers as of the day and year first above written.

                                       USS RECEIVABLES COMPANY, LTD.

                                       By:
                                          --------------------------
                                       Name:
                                       Title:

                                       UNITED STATIONERS FINANCIAL
                                       SERVICES LLC,
                                            as Servicer

                                       By:
                                          --------------------------
                                       Name:
                                       Title:

                                       UNITED STATIONERS SUPPLY CO.,
                                            as Support Provider

                                       By:
                                          --------------------------
                                       Name:
                                       Title:

                                       THE CHASE MANHATTAN BANK,
                                            not in its individual
                                            capacity, but solely as
                                            Trustee

                                       By:
                                          --------------------------
                                       Name:
                                       Title:



                                                                       EXHIBIT A
                                                          TO SERVICING AGREEMENT

                    FORM OF QUARTERLY SERVICER'S CERTIFICATE

                (As required to be delivered within 45 days after
                the end of each calendar quarter of the Servicer
                         pursuant to Section 4.3 of the
                     Servicing Agreement referred to below)

                    UNITED STATIONERS FINANCIAL SERVICES LLC

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

                   UNITED STATIONERS RECEIVABLES MASTER TRUST

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

     The undersigned, a duly authorized representative of UNITED STATIONERS
FINANCIAL SERVICES LLC, as Servicer (the "Servicer") pursuant to (a) the Amended
and Restated Pooling Agreement, dated as of May 1, 2001(as further amended,
supplemented or otherwise modified from time to time, the "POOLING AGREEMENT"),
by and among USS Receivables Company, Ltd., (the "COMPANY"), the Servicer and
The Chase Manhattan Bank, as Trustee and as Securities Intermediary (the
"TRUSTEE") and (b) the Amended and Restated Servicing Agreement, dated as of
May 1, 2001 (as further amended, supplemented or otherwise modified from time to
time, the "SERVICING AGREEMENT"), by and among the Company, the Servicer, United
Stationers Supply Co., as Support Provider, and the Trustee, does hereby
certify, on behalf of the Servicer and the Company and not individually, that:

     1. United Stationers Financial Services LLC is, as of the date hereof, the
Servicer under the Pooling Agreement and Servicing Agreement.

     2. The undersigned is duly authorized pursuant to the Pooling Agreement and
Servicing Agreement to execute and deliver this Certificate to the Trustee.



     3. A review of the activities of the Company and the Servicer during the
calendar quarter ended ___________, ____ and of its performance under each
Transaction Document was conducted under my supervision.

     4. Based on such review, to the best of my knowledge, each of the Company
and the Servicer has performed in all material respects all of its obligations
under each Transaction Document and no material default in the performance of
such obligations has occurred or is continuing except as set forth in
paragraph 5 below.

     5. The following is a description of all material defaults in the
performance of the Servicer or the Company under the provisions of the
Transaction Documents known to us to have been made during the calendar quarter
ended ___________, _____, which sets forth in detail (i) the nature of each such
default, (ii) the action taken by the Servicer and/or the Company, if any, to
remedy each such default and (iii) the current status of each default:

[If applicable, insert "None."]

     6. The following is a description of each material inaccuracy known to us
to exist in any Required Report and/or Monthly Settlement Statement during the
calendar quarter ended _________, _______:

[If applicable, insert "None."]

     Capitalized terms used in this certificate have the meanings ascribed to
them in the Pooling Agreement(s) and Servicing Agreement(s).

     IN WITNESS WHEREOF, the undersigned has duly executed this Certificate this
day of ______________

                                                By:
                                                   ---------------------
                                                Name:
                                                Title:



                                                                    EXHIBIT B TO
                                                             SERVICING AGREEMENT

                         FORM OF AGREED UPON PROCEDURES

                  (See attached Report of Independent Accounts)

EX-10.4

Exhibit 10.4

                                                                  EXECUTION COPY

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


                         USS RECEIVABLES COMPANY, LTD.,
                                   as Company,


                    UNITED STATIONERS FINANCIAL SERVICES LLC,
                                  as Servicer,


                                       and


                            THE CHASE MANHATTAN BANK,
                    as Trustee and as Securities Intermediary

                            on behalf of the Holders


                   UNITED STATIONERS RECEIVABLES MASTER TRUST


                     AMENDED AND RESTATED POOLING AGREEMENT


                             Dated as of May 1, 2001


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




                                TABLE OF CONTENTS



                                                                                 PAGE

                                    ARTICLE I
                                   DEFINITIONS

                                                                             
Section 1.1  Definitions............................................................2
Section 1.2  Other Definitional Provisions.........................................34

                                   ARTICLE II
                           CONVEYANCE OF RECEIVABLES;
                            ISSUANCE OF CERTIFICATES

Section 2.1  Conveyance of Receivables.............................................35
Section 2.2  Acceptance by Trustee ................................................39
Section 2.3  Representations and Warranties of the Company Relating to the
             Company ..............................................................39
Section 2.4  Representations and Warranties of the Company Relating to the
             Receivables ..........................................................44
Section 2.5  Transfer of Ineligible Receivables....................................45
Section 2.6  Purchase of Investor Certificateholders* Interest in
             Trust Portfolio.......................................................46
Section 2.7  Affirmative Covenants of the Company..................................47
Section 2.8  Negative Covenants of the Company ....................................52

                                   ARTICLE III
                        RIGHTS OF HOLDERS AND ALLOCATION
                         AND APPLICATION OF COLLECTIONS

Section 3.1  Establishment of Collection Account and Collection Concentration
             Account; Certain Allocations .........................................57

                                   ARTICLE IV
               ARTICLE IV IS RESERVED AND MAY BE SPECIFIED IN ANY
             SUPPLEMENT WITH RESPECT TO THE SERIES RELATING THERETO

                                    ARTICLE V
                         THE CERTIFICATES AND INTERESTS


                                        i




                                                                             
Section 5.1  The Certificates .....................................................65
Section 5.2  Authentication of Certificates .......................................66
Section 5.3  Registration of Transfer and Exchange of Certificates ................66
Section 5.4  Mutilated, Destroyed, Lost or Stolen Certificates ....................70
Section 5.5  Persons Deemed Owners ................................................70
Section 5.6  Appointment of Paying Agent ..........................................71
Section 5.7  Access to List of Investor Certificateholders' Names
             and Addresses.........................................................72
Section 5.8  Authenticating Agent .................................................73
Section 5.9  Tax Treatment ........................................................74
Section 5.10  Company Exchanges ...................................................75
Section 5.11  Book-Entry Certificates .............................................78
Section 5.12  Notices to Clearing Agency ..........................................79
Section 5.13  Definitive Certificates .............................................79

                                   ARTICLE VI
                      OTHER MATTERS RELATING TO THE COMPANY

Section 6.1  Liability of the Company .............................................80
Section 6.2  Limitation on Liability of the Company ...............................80

                                   ARTICLE VII
                            EARLY AMORTIZATION EVENTS

Section 7.1  Early Amortization Events ............................................81
Section 7.2  Additional Rights Upon the Occurrence of Certain Events...............82

                                  ARTICLE VIII
                                   THE TRUSTEE

Section 8.1  Duties of Trustee ....................................................84
Section 8.2  Rights of the Trustee ................................................87
Section 8.3  Trustee Not Liable for Recitals in Certificates ......................89
Section 8.4  Trustee May Own Certificates .........................................90
Section 8.5  Trustee's Fees and Expenses ..........................................90
Section 8.6  Eligibility Requirements for Trustee .................................91
Section 8.7  Resignation or Removal of Trustee ....................................91
Section 8.8  Successor Trustee ....................................................92
Section 8.9  Merger or Consolidation of Trustee ...................................93
Section 8.10  Appointment of Co-Trustee or Separate Trustee .......................93
Section 8.11  Tax Returns .........................................................95


                                       ii




                                                                            
Section 8.12  Trustee May Enforce Claims Without Possession
              of Certificates .....................................................95
Section 8.13  Suits for Enforcement ...............................................96
Section 8.14  Rights of Investor Certificateholders to Direct Trustee .............96
Section 8.15  Trustee to Direct Company............................................97
Section 8.16  Maintenance of Office or Agency .....................................97
Section 8.17  Limitation of Liability .............................................97

                                   ARTICLE IX
                                   TERMINATION

Section 9.1  Termination of Trust; Liquidation of Receivables .....................98
Section 9.2  Clean-Up Call and Final Termination Date of Investor Certificates of
             any Series ...........................................................98
Section 9.3  Final Payment with Respect to Any Series.............................100
Section 9.4  Company's Termination Rights ........................................101

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

Section 10.1  Amendment.......................................................... 102
Section 10.2  Protection of Right, Title and Interest to Trust ...................104
Section 10.3  Limitation on Rights of Holders ....................................104
Section 10.4  Notices ............................................................105
Section 10.5  Severability of Provisions .........................................106
Section 10.6  Assignment .........................................................106
Section 10.7  Certificates Nonassessable and Fully Paid ..........................106
Section 10.8  Further Assurances .................................................107
Section 10.9  No Waiver; Cumulative Remedies .....................................107
Section 10.10  Counterparts ......................................................107
Section 10.11  Third-Party Beneficiaries .........................................107
Section 10.12  Actions by Holders ................................................107
Section 10.13  Merger and Integration ............................................108
Section 10.14  Headings ..........................................................108
Section 10.15  Security Agreement ................................................108
Section 10.16  No Set-Off ........................................................108
Section 10.17  No Bankruptcy Petition ............................................109
Section 10.18  Limitation of Liability ...........................................109
Section 10.19  Certain Information ...............................................110
Section 10.20  Governing Law .....................................................110


                                       iii


EXHIBITS

EXHIBIT A         FORM OF LOCKBOX AGREEMENT
EXHIBIT B         INTERNAL OPERATING PROCEDURES MEMORANDUM

SCHEDULES

1.   LIST OF RECEIVABLES
2.   TRUST ACCOUNTS
3.   ACTIONS WITH RESPECT TO CHATTEL PAPER
4.   LOCATION OF CHIEF EXECUTIVE OFFICE OF THE COMPANY
5.   CONTRACTUAL OBLIGATIONS

                                       iv



               AMENDED AND RESTATED POOLING AGREEMENT, dated as of May 1, 2001,
among USS RECEIVABLES COMPANY, LTD., a Cayman Islands limited liability company
(the "COMPANY"); UNITED STATIONERS FINANCIAL SERVICES LLC, an Illinois limited
liability company ("USFS"), in its capacity as servicer (the "SERVICER"); and
THE CHASE MANHATTAN BANK, a New York banking corporation ("CHASE"), not in its
individual capacity, but solely as trustee (in such capacity, the "TRUSTEE").


                              W I T N E S S E T H:

               WHEREAS, the Company, United Stationers Supply Co., an Illinois
corporation ("USSC"), and the Trustee have entered into a Pooling Agreement,
dated as of April 3, 1998 (the "ORIGINAL AGREEMENT");

               WHEREAS, pursuant to an Amended and Restated Servicing Agreement,
dated as of the date hereof (as amended, supplemented or otherwise modified and
in effect from time to time, the "SERVICING AGREEMENT"), among the Company, the
Trustee, USFS and USSC, USFS has been substituted for USSC as Servicer of the
Receivables and Related Property and USSC has agreed to act as Support Provider;

               WHEREAS, the Company, USSC and the Trustee desire to amend and
restate the Original Agreement for the purpose of, among other things,
reflecting the substitution of USFS for USSC as Servicer under the Servicing
Agreement;

               WHEREAS, USSC, USFS, and the Servicer have entered into an
Amended and Restated Receivables Sale Agreement , dated as of the date hereof
(as amended, supplemented or otherwise modified and in effect from time to time,
the "AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT"), pursuant to which USSC
has agreed to sell and USFS has agreed to purchase, among other things,
Receivables and Related Property;

               WHEREAS, USFS, the Company and the Servicer have entered into a
Receivables Sale Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified and in effect from time to time, the "USFS
RECEIVABLES SALE AGREEMENT"), pursuant to which USFS has agreed to sell and the
Company has agreed to purchase, among other things, such Receivables and Related
Property;

               WHEREAS, the parties hereto wish to enter into this Agreement
under which the Company will continue to transfer all of its right, title and
interest in, to and under the Receivables and other Trust Assets now or
hereafter owned by



the Company to the master trust created under the Original Agreement and such
master trust shall, from time to time at the direction of the Company, continue
to issue one or more Series of Investor Certificates which shall represent
interests in the Receivables and such other Trust Assets as specified herein and
in the Supplement related to such Series;

               WHEREAS, by executing and delivering (i) the Second Amended and
Restated Series 1998-1 Supplement, dated as of the date hereof, among the
Company, the Servicer, Chase, as Funding Agent (in such capacity, the "FUNDING
AGENT"), Trustee, Securities Intermediary and APA Bank, and Park Avenue
Receivables Corporation, as Initial Purchaser, or (ii) the Amended and Restated
Series 2000-2 Supplement, dated as of the date hereof, among the Company, the
Servicer, Chase, as Trustee and Securities Intermediary, Market Street Funding
Corporation, as Committed Purchaser, and PNC Bank, National Association, as
Administrator (the "ADMINISTRATOR"), as applicable, the Investor
Certificateholders consent to the execution and delivery of this Agreement.

               NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

               Section 1.1 DEFINITIONS. Whenever used in this Agreement, the
following words and phrases ----------- shall have the following meanings:

               "ACCOUNTS" shall have the meaning specified in subsection 2.1
     (a)(v) of this Agreement.

               "ADJUSTED INVESTED AMOUNT" shall have, with respect to any
     Outstanding Series, the meaning assigned to such term in the related
     Supplement for such Series.

               "ADMINISTRATOR" shall have the meaning specified in the recitals
     hereto.

               "AFFILIATE" shall mean, with respect to any specified Person, any
     other Person which, directly or indirectly, is in control of, is

                                        2


     controlled by, or is under common control with, such Person; PROVIDED that
     a Person shall not be deemed an Affiliate of another Person solely by
     reason of an individual serving as an officer or director of such other
     Person. For purposes of this definition, "control" of a Person means the
     possession, directly or indirectly, of the power to direct or cause the
     direction of the management and policies of such Person, whether through
     the ownership of voting securities or otherwise, and the terms
     "controlling" and "controlled" have meanings correlative to the foregoing.

               "AGENT" shall mean, with respect to any Series, the Person or
     Persons, if any, so designated in the related Supplement.

               "AGGREGATE ADJUSTED INVESTED AMOUNT" shall mean, with respect to
     any date of determination, the sum of the Adjusted Invested Amounts with
     respect to all Outstanding Series on such date of determination.

               "AGGREGATE ALLOCATED RECEIVABLES AMOUNT" shall mean, with respect
     to any date of determination, the sum of the Allocated Receivables Amounts
     with respect to all Outstanding Series on such date of determination.

               "AGGREGATE DAILY COLLECTIONS" shall mean, with respect to any
     Business Day, the aggregate amount of all Collections deposited into the
     Collection Account on such day.

               "AGGREGATE INVESTED AMOUNT" shall mean, at any date of
     determination, the sum of the Invested Amounts with respect to all
     Outstanding Series on such date of determination.

               "AGGREGATE OVERCONCENTRATION AMOUNT" shall mean, with respect to
     any date of determination, the sum of the Overconcentration Amounts of all
     Eligible Obligors at the end of the preceding Business Day.

               "AGGREGATE RECEIVABLES AMOUNT" shall mean, with respect to any
     date of determination, the aggregate Principal Amount of all Eligible
     Receivables in the Trust at the end of the Business Day immediately
     preceding such date less the sum of: (i) the Aggregate

                                        3


     Overconcentration Amount; (ii) the aggregate Rebate Reduction Amount; and
     (iii) the aggregate Dilution Reduction Amount.

               "AGGREGATE TARGET RECEIVABLES AMOUNT" shall mean, with respect to
     any date of determination, the sum of the Target Receivables Amounts with
     respect to all Outstanding Series on such date of determination.

               "AGREEMENT" shall mean this Amended and Restated Pooling
     Agreement and all amendments and modifications hereof and supplements
     hereto, and including, unless expressly stated otherwise, each Supplement.

               "ALLOCABLE CHARGED-OFF AMOUNT" shall have, with respect to any
     Series, the meaning specified in subsection 3.1(e) and in any Supplement
     for such Series.

               "ALLOCABLE RECOVERIES AMOUNT" shall have, with respect to any
     Series, the meaning specified in subsection 3.1(e) and in any Supplement
     for such Series.

               "ALLOCATED RECEIVABLES AMOUNT" shall mean, with respect to any
     Outstanding Series, the meaning assigned to such term in the related
     Supplement for such Series.

               "AMENDED AND RESTATED RECEIVABLES SALE AGREEMENT" shall have the
     meaning specified in the recitals hereto.

               "AMORTIZATION PERIOD" shall mean, with respect to any Outstanding
     Series, the meaning assigned to such term in the related Supplement for
     such Series.

               "APPLICANTS" shall have the meaning specified in Section 5.7.

               "AUTHORIZED NEWSPAPER" shall have the meaning specified in
     Section 7.2.

               "BANKRUPTCY CODE" shall mean Title 11 of the United States Code,
     as amended from time to time.

                                        4


               "BOOK-ENTRY CERTIFICATES" shall mean the Certificates issued to a
     Clearing Agency to facilitate the use of book entries by such Clearing
     Agency to evidence ownership of beneficial interests in the Certificates,
     transfers of which beneficial interests shall be made through book entries
     by such Clearing Agency, all as described in Section 5.11; PROVIDED,
     HOWEVER, that after the occurrence of a condition whereupon book-entry
     registration and transfer are no longer permitted and Definitive
     Certificates are issued to the Certificate Book-Entry Holders, such
     Certificates shall no longer be "Book-Entry Certificates".

               "BUSINESS DAY" shall mean any day other than (i) a Saturday or a
     Sunday or (ii) another day on which commercial banking institutions or
     trust companies in the State of New York or in the city where the Corporate
     Trust Office is located, are authorized or obligated by law, executive
     order or governmental decree to be closed; PROVIDED that, when used in
     connection with the calculation of Certificate Rates which are determined
     by reference to LIBOR, "Business Day" shall mean any Business Day on which
     dealings in Dollars between banks may be carried on in both London, England
     and New York, New York.

               "BUSINESS DAY RECEIVED" shall have the meaning specified in
     subsection 2.3(e) of the Servicing Agreement.

               "CASH DILUTION PAYMENT" shall have the meaning specified in
     subsection 4.6(a) of the Servicing Agreement.

               "CERTIFICATE" shall mean one of any Series of Investor
     Certificates.

               "CERTIFICATE BOOK-ENTRY HOLDER" shall mean, with respect to a
     Book-Entry Certificate, the Person who is listed on the books of the
     Clearing Agency, or on the books of a Person maintaining an account with
     such Clearing Agency, as the beneficial owner of such Book-Entry
     Certificate (directly or as an indirect participant, in accordance with the
     rules of such Clearing Agency).

               "CERTIFICATE RATE" shall mean, with respect to any Series and
     Class of Certificates, the percentage interest rate (or formula on the

                                        5


     basis of which such interest rate shall be determined) stated in the
     applicable Supplement.

               "CERTIFICATE REGISTER" shall mean the register maintained
     pursuant to Section 5.3, providing for the registration of the Certificates
     and transfers and exchanges thereof.

               "CERTIFICATEHOLDERS' INTEREST" shall have the meaning specified
     in subsection 3.1(b).

               "CHARGED-OFF RECEIVABLES" shall mean all Receivables (or portions
     thereof) which, in accordance with the Policies of the applicable Seller,
     have or should have been written off as uncollectible, including without
     limitation the Receivables of any Obligor which becomes the subject of any
     voluntary or involuntary bankruptcy proceeding.

               "CLASS" shall mean, with respect to any Series, any one of the
     classes of Certificates of that Series as specified in the related
     Supplement.

               "CLEAN-UP CALL PERCENTAGE" shall have, with respect to any
     Series, the meaning specified in the related Supplement for such Series.

               "CLEAN-UP CALL REPURCHASE PRICE" shall have the meaning specified
     in Section 9.2.

               "CLEARING AGENCY" shall mean each organization registered as a
     "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
     1934, as amended.

               "CLOSING DATE" shall mean May 1, 2001.

               "CLEARING AGENCY PARTICIPANT" shall mean a broker, dealer, bank,
     other financial institution or other Person for whom from time to time a
     Clearing Agency effects book-entry transfers and pledges of securities
     deposited with such Clearing Agency.

                                        6


               "COLLECTION ACCOUNT" shall have the meaning specified in
     subsection 3.1(a).

               "COLLECTION CONCENTRATION ACCOUNT" shall have the meaning
     specified in subsection 3.1(a).

               "COLLECTIONS" shall mean all collections and all amounts received
     in respect of the Receivables, including Recoveries, Seller Repurchase
     Payments, Seller Adjustment Payments, Company Seller Adjustment Payments,
     Servicer Indemnification Amounts paid by the Servicer and any other
     payments received in respect of Dilution Adjustments, together with all
     collections received in respect of the Related Property in the form of
     cash, checks, wire transfers or any other form of cash payment, and all
     proceeds of Receivables and collections thereof (including, without
     limitation, collections constituting an account or general intangible or
     evidenced by a note, instrument, security, contract, security agreement,
     chattel paper or other evidence of indebtedness or security, whatever is
     received upon the sale, exchange, collection or other disposition of, or
     any indemnity, warranty or guaranty payable in respect of, the foregoing
     and all "proceeds", as defined in Section 9-306 of the UCC, of the
     foregoing).

               "COLLECTOR" shall mean any employee employed by the Servicer to
     collect payments in respect of Receivables in accordance with the Policies
     of the Seller which generated such Receivables.

               "COMPANION SERIES" shall have the meaning specified in Section
     5.10.

               "COMPANY" shall mean USS Receivables Company, Ltd., a Cayman
     Islands limited liability company.

               "COMPANY COLLECTION SUBACCOUNT" shall have the meaning specified
     in subsection 3.1(a).

               "COMPANY EXCHANGE" shall have the meaning specified in subsection
     5.10(a).

                                        7


               "COMPANY INTEREST" shall have the meaning specified in subsection
     3.1(b).

               "COMPANY SELLER REPURCHASE PAYMENT" shall have the meaning
     specified in subjection 2.06(b) of the Amended and Restated Receivables
     Sale Agreement.

               "CONTRACTUAL OBLIGATION" shall mean, as to any Person, any
     provision of any security issued by such Person or of any agreement,
     instrument or other undertaking to which such Person is a party or by which
     it or any of its property is bound.

               "CORPORATE TRUST OFFICE" shall mean the principal office of the
     Trustee at which at any particular time its corporate trust business shall
     be administered, which office at the date of the execution of this
     Agreement is located at 450 West 33rd Street, New York, New York 10001
     (Attention: Structured Finance Services).

               "DEFAULTED RECEIVABLE" shall mean, as of any date of
     determination, any Receivable (a) that is unpaid in whole or in part for
     more than 60 days after its original due date or (b) which is, as of such
     date of determination, a Charged-Off Receivable, or (c) which is, as of
     such date of determination, a Disputed Receivable.

               "DEFINITIVE CERTIFICATES" shall have the meaning specified in
     Section 5.11.

               "DELIVER" or "DELIVERED" or "DELIVERY" means, with respect to any
     Eligible Investment, when the steps applicable to such item as specified
     below are completed:

     (i)       if such item is an instrument, delivering such instrument to the
               Trustee endorsed to the Trustee or in blank;

     (ii)      if such item is a certificated security, by delivering such
               certificated security to the Trustee in bearer form or in
               registered form issued to the Trustee or endorsed to the Trustee
               or endorsed in blank;

     (iii)     if such item is an uncertificated security, (a) the Company
               registers the Trustee as the registered owner, upon original
               issue or registration

                                        8


               of transfer or (b) the Company has agreed that it will comply
               with entitlement orders with respect to such uncertificated
               security originated by the Trustee without further consent of the
               registered owner;

     (iv)      if such item is a security entitlement other than a United
               States Security Entitlement, by causing a securities intermediary
               to indicate by book entry that such security entitlement has been
               credited to a securities account of the Trustee with such
               securities intermediary;

     (v)       if such item is a United States Security Entitlement, by
               causing a securities intermediary to indicate by book entry that
               such United States Security Entitlement has been credited to a
               securities account of the Trustee with such securities
               intermediary; and

     (vi)      if such item is a securities account, by causing the
               securities intermediary to indicate by book entry that all
               security entitlements carried in the securities account have been
               credited to such securities account.

               "DEPOSIT DATE" shall have the meaning specified in subsection
     3.1(d).

               "DEPOSITORY" shall mean, with respect to any Series, the Clearing
     Agency designated as the "Depository" in the related Supplement.

               "DEPOSITORY AGREEMENT" shall mean, with respect to any Series, an
     agreement among the Company, the Trustee and a Clearing Agency, or a letter
     of undertaking by the Company and the Trustee, in each case in a form
     reasonably satisfactory to the Trustee and the Company.

               "DILUTION ADJUSTMENTS" shall mean any rebates, discounts,
     refunds, payments or other adjustments (including, without limitation, as a
     result of the application of any special or other discounts or any
     reconciliations) in respect of any Receivable, the amount owing for any
     returns (including, without limitation, as a result of the return of any
     defective goods) or cancellations and the amount of any other reduction of
     any payment under any Receivable, in each case granted

                                        9


     or made by the applicable Seller or the Servicer to the related Obligor,
     PROVIDED that a "Dilution Adjustment" does not include any Charged-Off
     Receivable or any refund in either adjustment of any Excluded Receivable.

               "DILUTION REDUCTION AMOUNT" shall mean the sum of (i) the
     six-month rolling average of the dollar amount of credit memos issued for
     prompt payment discounts and (ii) the six-month rolling average of credit
     memos issued for customer cancellations each calculated for the period of
     six consecutive Settlement Periods ending prior to the most recent
     Settlement Report Date.

               "DISPUTED RECEIVABLE" shall mean as of any Settlement Report
     Date, the Receivables shown as such on the Seller's books and records (and
     that are not otherwise Defaulted Receivables).

               "DISTRIBUTION DATE" shall mean, except as otherwise set forth in
     the applicable Supplement, the 20th day of each calendar month, beginning
     on May 20, or if such 20th day is not a Business Day, the next succeeding
     Business Day.

               "DOLLARS," "U.S. DOLLARS", "U.S. $" and "$" shall mean dollars in
     lawful currency of the United States of America.

               "EARLY AMORTIZATION EVENT" shall have, with respect to any
     Series, the meaning specified in Section 7.1 of this Agreement (without
     taking into account any Supplements) and in any Supplement for such Series.

               "EARLY AMORTIZATION PERIOD" shall have, with respect to any
     Series, the definition assigned to such term in Section 7.1 of this
     Agreement and in any Supplement for such Series.

               "EARLY TERMINATION" shall have the meaning assigned to such term
     in the Receivables Sale Agreements.

               "ELIGIBLE INSTITUTION" shall mean a depositary institution or
     trust company (which may include the Trustee and its affiliates) organized
     under the laws of the United States of America or any one of the states
     thereof or the District of Columbia; PROVIDED, HOWEVER,

                                       10


     that at all times (i) such depositary institution or trust company is a
     member of the Federal Deposit Insurance Corporation, the certificates of
     deposit or unsecured and uncollateralized debt obligations of such
     depositary institution or trust company are rated in one of the two highest
     long-term or highest short-term rating category by each Rating Agency and
     (ii) such depositary institution or trust company has a combined capital
     and surplus of at least $100,000,000.

               "ELIGIBLE INVESTMENTS" shall mean any deposit accounts,
     securities, instruments or security entitlements with respect to:

               (a) direct obligations of, and obligations fully guaranteed as to
     timely payment by, the United States of America;

               (b) federal funds, demand deposits, time deposits or certificates
     of deposit of any depository institution or trust company incorporated
     under the laws of the United States of America or any state thereof (or any
     domestic branch of a foreign bank) and subject to supervision and
     examination by Federal or state banking or depository institution
     authorities; PROVIDED, HOWEVER, that at the time of the investment or
     contractual commitment to invest therein the commercial paper or other
     short-term unsecured debt obligations (other than such obligations the
     rating of which is based on the credit of a Person other than such
     depository institution or trust company) thereof shall have a credit rating
     from each of the Rating Agencies in the highest investment category granted
     thereby;

               (c) commercial paper rated, at the time of the investment or
     contractual commitment to invest therein, in the highest rating category by
     each Rating Agency;

               (d) investments in money market funds (including funds for which
     the Trustee or any of its Affiliates is investment manager or adviser)
     rated in the highest rating category by each Rating Agency rating such
     money market fund;

               (e) bankers' acceptances issued by any depository institution or
     trust company referred to in clause (b) above;

               (f) repurchase obligations with respect to any security that is a
     direct obligation of, or fully guaranteed by, the United States of America
     or

                                       11


     any agency or instrumentality thereof the obligations of which are backed
     by the full faith and credit of the United States of America, in either
     case entered into with a depository institution or trust company (acting as
     principal) described in clause (b) above; or

               (g) any other investment upon satisfaction of the Rating Agency
     Condition with respect thereto.

               "ELIGIBLE OBLIGOR" shall mean, as of any date of determination,
     each Obligor in respect of a Receivable that satisfies the following
     eligibility criteria:

               (a) it is a resident of the United States, its territories or
     possessions or incorporated or organized under the laws of the United
     States or any state in the United States;

               (b) it is not (i) the United States federal government, or any
     subdivision thereof, or any agency, department or instrumentality thereof,
     or (ii) a state or local government, or any subdivision thereof, or any
     agency, department, or instrumentality thereof;

               (c) it is not a Seller or an Affiliate of a Seller; and

               (d) it is not the subject of any voluntary or involuntary
     bankruptcy proceeding, unless the Obligor is a Qualifying DIP Obligor with
     established debtor in possession financing;

     PROVIDED, HOWEVER, that if 35% or more of the Principal Amount of
     Receivables of an Obligor (measured by the Principal Amount of Receivables
     of such Obligor in the Trust) is reported as being aged 90 days or more
     after the respective original due dates of such Receivables as at the end
     of the Settlement Period immediately preceding the most recent Settlement
     Report Date (commencing with the Settlement Report Date occurring in
     February 1998), such Obligor shall not be deemed an Eligible Obligor until
     such time as the Servicer furnishes the Rating Agencies with a report
     (which may be part of a Required Report or a Monthly Settlement Statement)
     indicating that less than 35 % of the Principal Amount of Receivables of
     such Obligor then in the Trust are aged 90 days or more after the
     respective original due dates of such Receivables.

                                       12


               "ELIGIBLE RECEIVABLE" shall mean, as of any date of
     determination, each Receivable owing by an Eligible Obligor that as of such
     date satisfies the following eligibility criteria:

               (a) it constitutes either (i) an account within the meaning of
     Section 9-106 of the UCC of the State the law of which governs the
     perfection of the interest granted in it or (ii) chattel paper within the
     meaning of Section 9-105 of such UCC, subject, in the case of chattel
     paper, to compliance with the procedures set forth in Schedule 3 hereto;

               (b) it is not a Defaulted Receivable;

               (c) the goods related to it shall have been shipped or the
     services related to it shall have been performed and such Receivable shall
     have been billed to the related Obligor;

               (d) it is denominated and payable only in U.S. Dollars in the
     United States;

               (e) it arose in the ordinary course of business from the sale of
     goods, products or services of the relevant Seller and in accordance with
     the Policies of such Seller and, at such date of determination, no Early
     Termination has occurred with respect to such Seller,

               (f) (i) it does not contravene any applicable law, rule or
     regulation and the applicable Seller is not in violation of any law, rule
     or regulation in connection with it, in each case which in any way renders
     such Receivable unenforceable or would otherwise impair in any material
     respect the collectibility of such Receivable and (ii) it is not subject to
     any investigation or proceeding known by such Seller that would reasonably
     be expected to adversely affect the payment or enforceability thereof;

               (g) if the Company or the Trust is not excluded from the
     definition of "investment company" pursuant to Rule 3a-7 under the 1940
     Act, it is an account receivable representing all or part of the sales
     price of merchandise, insurance or services within the meaning of Section
     3(c)(5) of the 1940 Act;

                                       13


               (h) it is not a Receivable purchased by a Seller from any Person;

               (i) it is not a Receivable for which the applicable Seller has
     established an offsetting specific reserve; PROVIDED that a Receivable
     subject only in part to the foregoing shall be an Eligible Receivable to
     the extent not so subject;

               (j) it is not a Receivable with original payment terms in excess
     of 120 days from its original invoice date, or in respect of which the
     applicable Seller has (i) altered the basis of the aging from the initial
     due date for payment such that the final due date extends to a date more
     than 120 days from its original invoice date or (ii) otherwise made any
     modification except, in the case of each of the foregoing, in the ordinary
     course of business and consistent with the Policies of such Seller;

               (k) all required consents, approvals or authorizations necessary
     for the creation and enforceability of such Receivable and the effective
     assignment and sale thereof by the applicable Seller to the Company and by
     the Company to the Trust shall have been obtained with respect to such
     Receivable;

               (l) the applicable Seller is not in default in any material
     respect under the terms of the contract, if any, from which such Receivable
     arose;

               (m) all right, title and interest in it has been validly sold to
     USFS by the applicable Seller pursuant to the Amended and Restated
     Receivables Sales Agreement and to the Company by USFS pursuant to the USFS
     Receivables Sale Agreement;

               (n) the Company or the Trust will have legal and beneficial
     ownership therein free and clear of all Liens other than such Liens
     described in clauses (i) and (iv) of the definition of Permitted Liens and
     such Receivable has been the subject of either a valid transfer from the
     Company to the Trust or, alternatively, the grant of a first priority
     perfected security interest therein to the Trust free and clear of all
     Liens other than such Liens described in clauses (i) and (iv) of the
     definition of Permitted Liens;

                                       14


               (o) it is not subject to any dispute in whole or in part or to
     any offset, counterclaim, defense, rescission, recoupment or subordination;
     PROVIDED that a Receivable subject only in part to any of the foregoing
     shall be an Eligible Receivable to the extent not so subject;

               (p) it is at all times the legal, valid and binding obligation of
     the Obligor thereon, enforceable against such Obligor to pay the full
     Principal Amount thereof in accordance with its terms, except as
     enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting the enforcement of
     creditors' rights generally and by general equitable principles (whether
     enforcement is sought by proceedings in equity or law);

               (q) as of the related Receivables Purchase Date, none of the
     Company, USFS or the applicable Seller has (i) taken any action that would
     impair the rights of the Trustee or the Investor Certificateholders therein
     or (ii) failed to take any action that was necessary to avoid impairing the
     rights therein of the Trustee or Investor Certificateholders;

               (r) each of the representations and warranties made in the
     Amended and Restated Receivables Sale Agreement by the applicable Seller
     and in the USFS Receivables Sale Agreement by USFS with respect to such
     Receivable is true and correct in all material respects; and

               (s) at the time such Receivable was sold by the applicable Seller
     under the Amended and Restated Receivables Sale Agreement and by USFS to
     the Company under the USFS Receivables Sale Agreement, no event described
     in subsection 6.01(g) of each such Receivables Sale Agreement (without
     giving effect to any requirement as to the passage of time) had occurred
     with respect to such Seller or USFS, as applicable;

               "ELIGIBLE SUCCESSOR SERVICER" shall mean a Person which, at the
     time of its appointment as Servicer, (i) is legally qualified and has the
     corporate power and authority to service the Receivables transferred to the
     Trust, (ii) has demonstrated the ability to service a portfolio of similar
     receivables in accordance with the standards set

                                       15


     forth in subsection 6.2(c) of the Servicing Agreement and (iii) has a
     combined capital and surplus of at least $5,000,000.

               "ENHANCEMENT" shall mean, with respect to any Series, (i) the
     funds on deposit in or credited to any bank account (or subaccount thereof)
     of the Trust, (ii) any surety arrangement, any letter of credit, guaranteed
     rate agreement, maturity guaranty facility, tax protection agreement,
     interest rate swap, currency swap or other contract, agreement or
     arrangement, in each case for the benefit of any Holders of such Series, as
     designated in the applicable Supplement and (iii) the subordination of one
     Class of Certificates in a Series to another class in such Series or the
     subordination of any Certificate held or interest owned by the Company to
     the Investor Certificates of such Series.

               "ERISA" shall mean the Employee Retirement Income Security Act of
     1974, as amended.

               "EXCHANGEABLE COMPANY INTEREST" shall have the meaning specified
     in subsection 3.1(b) and shall be exchangeable as provided in Section 5.10.

               "EXCHANGE DATE" shall have the meaning, with respect to any
     Series issued pursuant to a Company Exchange, specified in Section 5.10.

               "EXCHANGE NOTICE" shall have the meaning, with respect to any
     Series issued pursuant to a Company Exchange, specified in Section 5.10.

               "EXCLUDED RECEIVABLE" means any Receivable which either (A)
     arises from any Seller's advertising business; (B) is owed by a Person who
     is not a resident of the United States, its territories or possessions
     and/or a payment obligation of a Person that is not denominated and payable
     in U.S. Dollars in the United States; (C) is owed by a Governmental
     Authority; or (D) the payment for which is evidenced or required to be
     evidenced by a note or other promissory instrument; PROVIDED that in the
     event any Excluded Receivable is included in a Required Report, for the
     purposes of Section 2.01 of the Receivables Sale Agreements and Section 2.1
     hereof and the

                                       16


     definition of "Collections", such receivable shall not be an Excluded
     Receivable.

               "EXISTING COMPANION SERIES" shall have the meaning specified in
     Section 5.10.

               "FITCH" shall mean Fitch, Inc.

               "FORCE MAJEURE DELAY" shall mean, with respect to the Servicer,
     any cause or event which is beyond the control and not due to the
     negligence of the Servicer which delays, prevents or prohibits the
     Servicer's delivery of Required Reports and/or Monthly Settlement
     Statements, including, without limitation, acts of God or the elements and
     fire, but excluding strikes by the Servicer's employees; PROVIDED that no
     such cause or event shall be deemed to be a Force Majeure Delay unless the
     Servicer shall have given the Company and the Trustee written notice
     promptly after the beginning of such delay.

               "FRACTIONAL UNDIVIDED INTEREST" shall mean the fractional
     undivided interest in the Certificateholders' Interest evidenced by an
     Investor Certificate.

               "FUNDING AGENT" shall have the meaning specified in the recitals
     hereto.

               "GAAP" shall mean generally accepted accounting principles in the
     United States of America as in effect from time to time as set forth in the
     opinions and pronouncements of the Accounting Principles Board of the
     American Institute of Certified Public Accountants and the statements and
     pronouncements of the Financial Accounting Standards Board and the rules
     and regulations of the SEC, or such other statements by such other entity
     as may be in general use by significant segments of the accounting
     profession, which are applicable to the circumstances as of the date of
     determination.

               "GENERAL OPINION" shall mean, with respect to any action, an
     Opinion of Counsel, which shall not be at the expense of the Trustee, to
     the effect that (A) such action has been duty authorized by all necessary
     action on the part of the Servicer, the applicable Seller or

                                       17


     Sellers or the Company, as the case may be, (B) any agreement executed in
     connection with such action constitutes a legal, valid and binding
     obligation of the Servicer, the Support Provider, the applicable Seller or
     Sellers or the Company, as the case may be, enforceable in accordance with
     the terms thereof, except as enforceability may be limited by applicable
     bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
     or other similar laws now or hereinafter in effect, affecting the
     enforcement of creditors' rights and except as such enforceability may be
     limited by general principles of equity (whether considered in a proceeding
     at law or in equity) and (C) any condition precedent to any such action
     specified in the applicable agreement, if any, has been complied with,
     which opinion in the case of this clause (C) may, to the extent that such
     opinion concerns questions of fact, rely on an Officer's Certificate with
     respect to such questions of fact.

               "GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
     state or other political subdivision thereof and any entity exercising
     executive, legislative, judicial, regulatory or administrative functions of
     or pertaining to government.

               "HOLDERS" shall mean the collective reference to (i) the Persons
     in whose names the Certificates are registered in the Certificate Register,
     (ii) the owner of the Exchangeable Company Interest and (iii) if
     applicable, the owner of each Series Subordinated Interest.

               "INDEBTEDNESS" shall mean, with respect to any Person at any
     date, (a) all indebtedness of such Person for borrowed money, (b) any
     obligation owed for the deferred purchase price of property or services
     except trade accounts payable arising in the ordinary course of business
     which are payable according to ordinary business terms, which purchase
     price is evidenced by a note or similar written instrument, (c) notes
     payable and drafts accepted representing extensions of credit whether or
     not representing obligations for borrowed money, (d) that portion of
     obligations of such Person under capital leases which is properly
     classified as a liability on a balance sheet in conformity with GAAP and
     (e) all Indebtedness referred to in clauses (a) through (d) above secured
     by any Lien on any property

                                       18


     owned by such Person even though such Person has not assumed or otherwise
     become liable for the payment thereof.

               "INDEPENDENT PUBLIC ACCOUNTANTS" means any independent certified
     public accountants of nationally recognized standing which constitute one
     of the accounting firms commonly referred to as the "big six" accounting
     firms (or any successor thereto); PROVIDED that such firm is independent
     with respect to the Servicer within the meaning of Rule 2-01(b) of
     Regulation S-X under the Securities Act.

               "INELIGIBLE RECEIVABLE" shall have the meaning specified in
     Section 2.5(a).

               "INITIAL INVESTED AMOUNT" shall mean, with respect to any
     Outstanding Series, the meaning assigned to such term in the related
     Supplement for such Series.

               "INSOLVENCY EVENT" shall mean the occurrence of any one or more
     of the Early Amortization Events specified in paragraph (a) of Section
     7.1(a).

               "INTERNAL OPERATING PROCEDURES MEMORANDUM" shall mean the
     internal operating procedures memorandum prepared by the Trustee as set
     forth in Exhibit B hereto.

               "INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
     1986.

               "INVESTED AMOUNT" shall mean, with respect to any Outstanding
     Series, the meaning assigned to such term in the related Supplement for
     such Series.

               "INVESTED PERCENTAGE" shall mean, with respect to any Outstanding
     Series, the meaning assigned to such term in the related Supplement for
     such Series.

               "INVESTMENT EARNINGS" shall have the meaning specified in
     subsection 3.1(c).

                                       19


               "INVESTOR CERTIFICATEHOLDER" shall mean the holder of record of,
     or the bearer of, an Investor Certificate.

               "INVESTOR CERTIFICATES" shall mean the Certificates executed by
     the Company and authenticated by or on behalf of the Trustee, substantially
     in the form attached to the applicable Supplement, but shall not include
     any Certificate held by the Company.

               "ISSUANCE DATE" shall mean, with respect to any Series, the date
     of issuance of such Series, or the date of any increase to the Invested
     Amount of such Series, as specified in the related Supplement.

               "LIEN" shall mean, with respect to any asset, (a) any mortgage,
     deed of trust, lien, pledge, encumbrance, charge or security interest in or
     on such asset (including, without limitation, any lien which may arise
     under relevant state or federal law, if any), (b) the interest of a vendor
     or a lessor under any conditional sale agreement, capital lease or title
     retention agreement relating to such asset and (c) in the case of
     securities, any purchase option, call or other similar right of a third
     party with respect to such securities; PROVIDED, HOWEVER, that if a lien is
     imposed under Section 412(n) of the Internal Revenue Code or Section 302(f)
     of ERISA for a failure to make a required installment or other payment to a
     plan to which Section 412(n) of the Internal Revenue Code or Section 302(f)
     of ERISA applies, then such lien shall not be treated as a "Lien" from and
     after the time any Person who is obligated to make such payment pays to
     such plan the amount of such lien determined under Section 412(n)(3) of the
     Internal Revenue Code or Section 302(f)(3) of ERISA, as the case may be,
     and provides to the Trustee, any Agent and each Rating Agency written
     evidence reasonably satisfactory to the Rating Agencies of the release of
     such lien, or such lien expires pursuant to Section 412(n)(4)(B) of the
     Internal Revenue Code or Section 302(f)(4)(B) of ERISA.

               "LOCKBOX" shall mean the post office boxes listed on Schedule III
     to the Amended and Restated Receivables Sale Agreement to which the
     Obligors are instructed to remit payments on the

                                       20


     Receivables and/or such other post office boxes as may be established
     pursuant to Section 2.3 of the Servicing Agreement.

               "LOCKBOX ACCOUNT" shall mean the intervening account used by a
     Lockbox Processor for deposit of funds received in a Lockbox prior to their
     transfer to the Collection Concentration Account or the Collection Account.

               "LOCKBOX AGREEMENT" shall mean, with respect to each Lockbox
     Processor, a lockbox agreement (i) substantially in the forms set forth as
     Exhibit A hereto, (ii) or in such form as the lockbox processor party
     thereto employs in the ordinary course of its business for transactions of
     a type similar to the one contemplated by this Agreement and which is
     approved by the Trustee.

               "LOCKBOX PROCESSOR" shall mean the depositary institution or
     processing company (which may be the Trustee) which processes payments on
     the Receivables sent by the Obligors thereon forwarded to a Lockbox.

               "MATERIAL ADVERSE EFFECT" shall mean with respect to a Seller,
     the Support Provider, USFS, the Servicer or the Company, (a) a material
     impairment of the ability of such Seller, the Support Provider, USFS, the
     Servicer or the Company, as the case may be, to perform its obligations
     under the Transaction Documents, (b) a material impairment of the validity
     or enforceability of any of the Transaction Documents to which such Seller,
     the Support Provider, USFS, the Servicer or the Company is a party, (c) a
     material impairment of the collectibility of the Receivables taken as a
     whole or (d) a material impairment of the interests, rights or remedies of
     the Trustee or the Investor Certificateholders under or with respect to the
     Transaction Documents or the Receivables taken as a whole.

               "MONTHLY SERVICING FEE" shall have the meaning specified in
     subsection 2.5(a) of the Servicing Agreement.

               "MONTHLY SETTLEMENT STATEMENT" shall have the meaning specified
     in Section 4.2 of the Servicing Agreement.

               "MOODY'S" shall mean Moody's Investors Service, Inc.

                                       21




               "NEW SERIES" shall have the meaning specified in Section 5.10.

               "1940 ACT" shall mean the Investment Company Act of 1940, as
     amended.

               "OBLIGOR" shall mean, with respect to any Receivable, the party
     obligated to make payments with respect to such Receivable, including any
     guarantor thereof.

               "OFFICER'S CERTIFICATE" shall mean, unless otherwise specified in
     this Agreement, a certificate signed by the Chairman of the Board, Vice
     Chairman of the Board, President, Chief Financial Officer, any Vice
     President, any Secretary or any Treasurer of the Servicer, the Support
     Provider or the Company, as the case may be, or, in the case of a Successor
     Servicer, a certificate signed by a Vice President and the financial
     controller (or an officer holding an office with equivalent or more senior
     responsibilities) of such Successor Servicer.

               "OPINION OF COUNSEL" shall mean a written opinion or opinions of
     one or more counsel (who may be internal counsel) to the Company, Support
     Provider or the Servicer, designated by the Company, Support Provider or
     the Servicer, as the case may be, which is reasonably acceptable to the
     Trustee.

               "OPTIONAL TERMINATION NOTICE" shall have, with respect to any
     Series, the meaning specified in the related Supplement for such Series.

               "OUTSTANDING SERIES" shall mean, at any time, a Series issued
     pursuant to an effective Supplement for which the Series Termination Date
     for such Series has not occurred.

               "OVERCONCENTRATION AMOUNT" shall mean, at any date with respect
     to an Eligible Obligor, the Principal Amount of Eligible Receivables due
     from such Obligor at such date which, expressed as a percentage of the
     Principal Amount of all Eligible Receivables in the Trust at such date,
     exceeds the percentage set forth below for the applicable category of that
     Obligor at such date (or such higher

                                       22




     percentage after giving effect to which the Rating Agency Condition is
     satisfied):

                                 MINIMUM RATING



S&P                        FITCH                     MOODY'S           PERCENTAGE
- ---                        -----                     -------           ----------

                                                              
A-1 or A+                  A+                        P-1 or A1         15%

A-2 or BBB+                BBB+                      P-2 or Baa1       10%

A-3 or BBB-                BBB-                      P-3 or Baa3       5%

Not rated/other            Not rated/other           Not rated/other   2.5 %


; PROVIDED, HOWEVER, that all Eligible Obligors that are Affiliates of each
other shall be deemed to be a single Eligible Obligor to the extent the Servicer
knows or has reason to know of the affiliation and in that case, the applicable
debt rating for such group of Obligors shall be the debt rating of the ultimate
parent of the group; PROVIDED, FURTHER, that the debt ratings set forth under
the column headed "Moody's" or "Fitch" in the above table and the references in
the immediately succeeding paragraph to Moody's and DCR shall apply only if
either Moody's or Fitch is a Rating Agency under any Supplement for an
Outstanding Series.

The percentage applicable to any Obligor (or the ultimate parent of the
affiliated group of which such Obligor is a member, as the case may be) will be
the percentage associated with the lower of such Obligor's (or such ultimate
parent's, as the case may be) debt rating issued by S&P, Fitch, and Moody's;
PROVIDED THAT: (i) if such debt is rated only by S&P, the applicable percentage
will be the percentage associated with the rating issued by S&P and (ii) if S&P
issues no rating with respect to such Obligor (or such ultimate parent, as the
case may be), then the percentage applicable to such Obligor (or such ultimate
parent, as the case may be) shall be the percentage associated with the
categories "Not rated/other" and "Less than D-3 or BBB-/Not rated." The ratings
specified in the table are minimums for each percentage category, so that a
rating not shown in the table falls in the category associated with the highest
rating shown in the table that is lower than that rating. Notwithstanding the
above, the percentage applicable to any Special Obligor will be 5.0%.

                                       23




               "PAYING AGENT" shall mean any paying agent and co-paying agent
     appointed pursuant to Section 5.6 and, unless otherwise specified in the
     related Supplement of any Outstanding Series and with respect to such
     Series, shall initially be the Trustee.

               "PERMITTED LIENS" shall mean, at any time, for any Person:

                         (i) Liens created pursuant to this Agreement or the
     Receivables Sale Agreements;

                         (ii) Liens for taxes, assessments or other governmental
     charges or levies not yet due and payable or which are being contested in
     good faith by appropriate proceedings and with respect to which reserves in
     conformity with GAAP have been provided on the books of such Person;

                         (iii) Liens on a Receivable arising as a result of
     offsetting specific reserves and rights of set-off, counterclaim or other
     defenses with respect to such Receivable;

                         (iv) Any other Liens securing obligations not in excess
     of $50,000 in the aggregate at any one time outstanding.

               "PERSON" shall mean any individual, partnership, limited
     liability company, corporation, business trust, joint stock company, trust,
     unincorporated association, joint venture, Governmental Authority or other
     entity of whatever nature.

               "POLICIES" shall mean, with respect to each Seller, the credit
     and collection policies of such Seller, copies of which have been delivered
     to the Trustee, as the same may be amended, supplemented or otherwise
     modified from time to time in accordance with the Transaction Documents.

               "POOLING AND SERVICING AGREEMENTS" shall mean, collectively, this
     Agreement, the Servicing Agreement and each Supplement for an Outstanding
     Series.

               "POTENTIAL EARLY AMORTIZATION EVENT" shall mean an event which,
     with the giving of notice and/or the lapse of time, would

                                       24




     constitute an Early Amortization Event hereunder or under any Supplement.

               "POTENTIAL SERVICER DEFAULT" shall mean an event which, with the
     giving of notice and/or the lapse of time, would constitute a Servicer
     Default hereunder or under any Supplement.

               "PREPAYMENT REQUEST" shall have, with respect to any Series, the
     meaning specified in the related Supplement.

               "PRINCIPAL AMOUNT" shall mean, with respect to any Receivable,
     the amount due thereunder.

               "PRINCIPAL TERMS" shall have the meaning, with respect to any
     Series issued pursuant to a Company Exchange, specified in subsection
     5.10(c).

               "PUBLICATION DATE" shall have the meaning specified in Section
     7.2.

               "QUALIFYING DIP OBLIGOR" shall mean, as of any date of
     determination, an Obligor (i) that is a debtor in possession in any
     voluntary or involuntary bankruptcy proceeding, for which no trustee or
     examiner has been appointed and no application is pending for the
     appointment of a trustee or examiner, (ii) in a case under Chapter 11 of
     the Bankruptcy Code in which no motion has been made for an order
     liquidating all or any substantial portion of such debtor's assets and no
     motion has been made for the conversion of such case to a case under
     chapter 7 of the Bankruptcy Code, (iii) whose Receivables would, if
     included in the Trust Assets, account for less than 1 % of the aggregate
     Principal Amount of all Receivables included in the Trust, (iv) as to which
     no party under any Series Supplement has, in the exercise of its reasonable
     discretion, given notice to the Company and the Servicer that such Obligor
     shall not be included as an Eligible Obligor and (v) for which the Obligor
     has obtained the approval of a bankruptcy court to make payment on any
     Receivables.

               "RATING AGENCY" shall mean, with respect to each Outstanding
     Series, any rating agency or agencies designated as such in the related
     Supplement; PROVIDED that in the event that no Outstanding Series has

                                       25




     been rated, then for purposes of the definitions of "Eligible Institution"
     and "Eligible Investments," "RATING AGENCY" shall mean S&P and references
     to "each Rating Agency" shall refer solely to S&P.

               "RATING AGENCY CONDITION" shall mean, subject to the applicable
     Supplement, with respect to any action, that each Rating Agency shall have
     notified the Company, the Servicer, any Agent and the Trustee in writing
     that such action will not result in a reduction or withdrawal of the rating
     of any Outstanding Series or any Class of any such Outstanding Series with
     respect to which it is a Rating Agency.

               "REBATE REDUCTION AMOUNT" shall mean, as of any Settlement Report
     Date, the highest cumulative value of accruals at the end of a Settlement
     Period for rebates for electronic funds transfer payments over the prior 6
     consecutive Settlement Periods (including the Settlement Period ending on
     such Settlement Report Date).

               "RECEIVABLE" shall mean the indebtedness and payment obligations
     of any Person to a Seller (including, without limitation, obligations
     constituting an account or general intangible or evidenced by a note,
     instrument, contract, security agreement, chattel paper or other evidence
     of indebtedness or security) arising from a sale of products or the
     provision of service by such Seller, including, without limitation, any
     right to payment for products sold or for services rendered, and including
     the right to payment of any interest, sales taxes, finance charges,
     returned check or late charges and other obligations of such Person with
     respect thereto; PROVIDED that, except as otherwise expressly provided, for
     all purposes hereunder "Receivables" shall not include Excluded
     Receivables.

               "RECEIVABLES PURCHASE DATE" shall mean, with respect to any
     Receivable, the Business Day on which (i) USFS purchases such Receivable
     from the applicable Seller and (ii) the Company purchases such Receivable
     from USFS and transfers such Receivable to the Trust.

                                       26




               "RECEIVABLES SALE AGREEMENTS" shall mean the Amended and Restated
     Receivables Sale Agreement and the USFS Receivables Sale Agreement.

               "RECORD DATE" shall mean, with respect to any Series, the date
     specified as such in the applicable Supplement.

               "RECOVERIES" shall mean all amounts collected (net of
     out-of-pocket costs of collection) in respect of Charged-Off Receivables.

               "RELATED PROPERTY" shall mean, with respect to each Receivable:

               (a) all of the applicable Seller's interest in the goods
     (including returned goods), if any, relating to the sale which gave rise to
     such Receivable;

               (b) all other security interests or Liens, and the applicable
     Seller's interest in the property subject thereto, from time to time
     purporting to secure payment of such Receivable, together with all
     financing statements signed by an Obligor describing any collateral
     securing such Receivable; and

               (c) all guarantees, insurance, letters of credit and other
     agreements or arrangements of whatever character from time to time
     supporting or securing payment of such Receivable;

in the case of clauses (b) and (c), without limitation, whether pursuant to the
contract related to such Receivable or otherwise or pursuant to any obligations
evidenced by a note, instrument, contract, security agreement, chattel paper or
other evidence of indebtedness or security and the proceeds thereof.

               "REPORTED PERIOD" shall have the meaning specified in Section 4.1
     of the Servicing Agreement.

               "REQUIRED REPORT" shall have the meaning specified in Section 4.1
     of the Servicing Agreement.

               "REQUIREMENT OF LAW" for any Person shall mean the certificate or
     articles of incorporation or articles of association and by-laws or other
     organizational or governing documents of such

                                       27




     Person, and any law, treaty, rule or regulation, or determination of an
     arbitrator or a court or other Governmental Authority, in each case
     applicable to or binding upon such Person or any of its property or to
     which such Person or any of its property is subject.

               "RESIGNATION NOTICE" shall have the meaning specified in Section
     6.2 of the Servicing Agreement.

               "RESPONSIBLE OFFICER" shall mean (i) when used with respect to
     the Trustee, any officer within the Corporate Trust Office of the Trustee
     including any Vice President, any Assistant Vice President, Trust Officer
     or Assistant Trust Officer or any other officer of the Trustee customarily
     performing functions similar to those performed by any of the above
     designated officers and, in each case, having direct responsibility for the
     administration of this Agreement and (ii) when used with respect to any
     other Person, the Chairman of the Board, President, Chief Financial
     Officer, any Vice President, Treasurer, Assistant Treasurer, Secretary or
     Assistant Secretary of such Person.

               "REVOLVING PERIOD" shall mean, with respect to any Outstanding
     Series, the meaning assigned to such term in the related Supplement for
     such Series.

               "S&P" shall mean Standard & Poor's Ratings Services, or any
     successor thereto.

               "SECURITIES ACT" shall mean the Securities Act of 1933, as
     amended.

               "SECURITIES INTERMEDIARY" shall have the meaning specified in
     Section 3.1(c)(ii).

               "SEC" shall mean the Securities and Exchange Commission.

               "SELLERS" shall mean United Stationers Supply Co. in its capacity
     as Seller under the Amended and Restated Receivables Sale Agreement and any
     directly or indirectly wholly-owned subsidiary of United Stationers Inc.
     which has been added as a Seller in accordance with the provisions of the
     Amended and Restated Receivables Sale

                                       28




     Agreement and the other Transaction Documents (but, in each case, excluding
     any such Subsidiaries which have been terminated as Sellers in accordance
     with the provisions thereof and of the other Transaction Documents), all of
     the foregoing in their capacities as Sellers under the Amended and Restated
     Receivables Sale Agreement; each, individually, a "SELLER".

               "SELLER ADJUSTMENT PAYMENTS" shall have the meaning specified in
     Section 2.05 of the Receivables Sale Agreements.

               "SELLER REPURCHASE PAYMENTS" shall have the meaning specified in
     Section 2.06 of the Receivables Sale Agreements.

               "SERIES" shall mean any series of Investor Certificates, the
     terms of which are set forth in a Supplement.

               "SERIES ACCOUNT" shall mean any deposit, trust, escrow,
     securities, reserve or similar account maintained for the benefit of the
     Investor Certificateholders of any Series or Class, as specified in any
     Supplement.

               "SERIES COLLECTION SUBACCOUNT" shall have the meaning specified
     in subsection 3.1(a).

               "SERIES COLLECTION SUB-SUBACCOUNTS" shall have the meaning
     specified in subsection 3.1(a).

               "SERIES NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
     meaning specified in subsection 3.1(a).

               "SERIES PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
     meaning specified in subsection 3.1(a).

               "SERIES SUBORDINATED INTEREST" shall mean, with respect to any
     Series, the undivided retained interest of the Company in the Trust Assets,
     if any, which is subordinated to the Certificateholders' Interest of such
     Series, as set forth in the Supplement for such Series.

                                       29




               "SERIES TERMINATION DATE" shall mean, with respect to any
     Outstanding Series, the meaning assigned to such term in the related
     Supplement for such Series.

               "SERVICE TRANSFER" shall have the meaning specified in Section
     6.1 of the Servicing Agreement.

               "SERVICER" shall initially mean United Stationers Financial
     Services LLC in its capacity as Servicer under the Transaction Documents
     and, after any Service Transfer, the Successor Servicer.

               "SERVICER DEFAULT" shall have, with respect to any Series, the
     meaning specified in Section 6.1 of the Servicing Agreement and, if
     applicable, as supplemented by the related Supplement for such Series.

               "SERVICER INDEMNIFICATION AMOUNT" shall have the meaning
     specified in Section 5.2(c) of the Servicing Agreement.

               "SERVICER SITE REVIEW" shall mean the review performed by the
     Trustee of the servicing operations of the Servicer at its offices, as
     provided for in subsection 8.1(f) and as described in any Supplement or
     attachment thereto.

               "SERVICING AGREEMENT" shall have the meaning specified in the
     recitals hereto.

               "SERVICING FEE" shall have the meaning specified in subsection
     2.5(a) of the Servicing Agreement.

               "SERVICING FEE PERCENTAGE" shall mean 1% per annum.

               "SETTLEMENT PERIOD" shall mean commencing with May 2001, each
     calendar month.

               "SETTLEMENT REPORT DATE" shall mean, except as otherwise set
     forth in the applicable Supplement, the 15th day of each calendar month (or
     if such 15th day is not a Business Day, the next succeeding Business Day).

                                       30




               "SPECIAL ALLOCATION SETTLEMENT REPORT DATE" shall have the
     meaning specified in subsection 3.1(e).

               "SPECIAL OBLIGORS" shall mean as of any Settlement Report Date
     and continuing to but not including the next Settlement Report Date, the
     Obligors designated as such by the Company, each of which shall be an
     Obligor that is unrated or rated below "investment grade" as to which the
     concentration limit would otherwise be 2.5% but which, as to those Obligors
     designated as Special Obligors, shall be 5%. The Company may designate up
     to three Special Obligors in any one Settlement Period, which shall be
     selected from the following Companies: BT Office Products International
     Inc., Corporate Express Inc., U.S. Office Products Company, Inc., Staples
     Inc., Bestbuy Supply Depot Corp. or Boise Cascade Office Products
     Corporation.

               "SPECIFIED BANKRUPTCY OPINION PROVISIONS" shall mean the factual
     assumptions and the actions to be taken by any Seller, USFS or the Company,
     in each case as specified in the legal opinion of Weil, Gotshal & Manges
     LLP relating to certain bankruptcy matters and delivered on the Closing
     Date.

               "STANDBY LIQUIDATION SYSTEM" shall mean a system by which the
     Trustee will receive and store electronic information regarding Receivables
     from the Servicer which may be utilized in the event of a liquidation of
     the Receivables to be carried out by the Trustee established pursuant to
     subsection 8.1(f) and as described in any Supplement or attachment thereto.

               "SUBORDINATED NOTE" shall have the meaning specified in Section
     8.01 of the USFS Receivables Sale Agreement.

               "SUBSIDIARY" shall mean, as to any Person, a corporation,
     partnership or other entity of which shares of stock or other ownership
     interests having by the terms thereof ordinary voting power (other than
     stock or such other ownership interests having such power only by reason of
     the happening of a contingency) to elect a majority of the board of
     directors or other managers of such corporation, partnership or other
     entity are at the time directly or indirectly owned, or the management of
     which is otherwise controlled, through one or more intermediaries, or both,
     by such Person.

                                       31




               "SUCCESSOR SERVICER" shall have the meaning specified in Section
     6.2 of the Servicing Agreement.

               "SUPPLEMENT" shall mean, with respect to any Series, a supplement
     to this Agreement complying with the terms of Section 5.10(c), executed in
     conjunction with the issuance of any Series.

               "TARGET RECEIVABLES AMOUNT" shall mean, with respect to any
     Outstanding Series, the meaning assigned to such term in the related
     Supplement for such Series.

               "TARGETED HOLDER" shall have the meaning specified in subsection
     5.3(e).

               "TARGETED INVESTOR CERTIFICATE" shall have the meaning specified
     in subsection 5.3(d).

               "TAX OPINION" shall mean, with respect to any action, an Opinion
     of Counsel, which shall not be at the expense of the Trustee, to the effect
     that, for federal income tax purposes, (1) such action will not adversely
     affect the characterization as debt or as debt or an interest in a
     partnership (other than a partnership taxable as a corporation), as the
     case may be, of any Investor Certificates of any Outstanding Series or
     Class not retained by the Company, (ii) following such action, the Trust
     will not be classified as an association or a publicly traded partnership
     taxable as a corporation, (iii) such action will not cause or constitute a
     taxable event in which gain or loss would be recognized by any Investor
     Certificateholder or the Trust and (iv) in the case of Section 5.9, the
     Investor Certificates of the new Series which are not retained by the
     Company will be characterized as debt or as an interest in a partnership
     (other than a partnership taxable as a corporation).

               "TERMINATION NOTICE" shall have the meaning specified in Section
     6.1 of the Servicing Agreement.

               "TRANSACTION DOCUMENTS" shall mean the collective reference to
     this Agreement, the Servicing Agreement, each Supplement with respect to
     any Outstanding Series, the Receivables Sale Agreements,

                                       32




     the Lockbox Agreements, the Certificates and any other documents delivered
     pursuant to or in connection therewith.

               "TRANSFER AGENT AND REGISTRAR" shall have the meaning specified
     in Section 5.3 and shall initially be the Trustee.

               "TRANSFER DEPOSIT AMOUNT" shall have the meaning specified in
     subsection 2.5(b).

               "TRANSFER OBLIGATION DATE" shall have the meaning specified in
     subsection 2.5(a).

               "TRANSFERRED AGREEMENTS" shall have the meaning specified in
     subsection 2.1(b).

               "TRUST" shall mean the United Stationers Receivables Master Trust
     created by this Agreement.

               "TRUST ACCOUNT" shall have the meaning, with respect to any
     Series, specified in the applicable Supplement for such Series.

               "TRUST ASSETS" shall have the meaning specified in Section 2.1.

               "TRUST TERMINATION DATE" shall have the meaning specified in
     subsection 9.1(a).

               "TRUSTEE" shall mean the institution executing this Agreement as
     trustee, or its successor in interest or any successor trustee appointed as
     herein provided.

               "UCC" shall mean the Uniform Commercial Code, as amended from
     time to time, as in effect in any specified jurisdiction or if no
     jurisdiction is specified, as in effect in the State of New York.

               "UNITED STATES REGULATIONS" means 31 C.F.R. Part 357; 12 C.F.R.
     Part 615, Subpart O; 12 C.F.R. Part 912; 12 C.F.R. Part 1511; 24 C.F.R.
     Part 81; 31 C.F.R. Part 354; and 18 C.F.R. Part 1314.

               "UNITED STATES SECURITIES ENTITLEMENT" means a "Security
     Entitlement" as defined in a United States Regulation.

                                       33




               "USFS RECEIVABLES SALE AGREEMENT" shall have the meaning
     specified in the recitals hereto.

               "USSC" shall have the meaning specified in the recitals hereto.

               Section 1.2 OTHER DEFINITIONAL PROVISIONS. (a) All terms defined
in this Agreement, the Servicing Agreement or in any Supplement shall have such
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

                    (b) All capitalized terms used herein and not otherwise
defined have the meanings assigned to such terms in Section 1.01 of the
Receivables Sale Agreements.

                    (c) As used herein and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
Section 1.1, and accounting terms partly defined in Section 1.1 to the extent
not defined, shall have the respective meanings given to them under GAAP. To the
extent that the definitions of accounting terms herein are inconsistent with the
meanings of such terms under GAAP, the definitions contained herein shall
control.

                    (d) The words "hereof," "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references to Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified. (e) The definitions contained in Section
1.1 are applicable to the singular as well as the plural forms of such terms and
to the masculine as well as to the feminine and neuter genders of such terms.

                    (f) Where a definition contained in Section 1.1 specifies
that such term shall have the meaning set forth in the related Supplement, the
definition of such term set forth in the related Supplement may be preceded by a
prefix indicating (or include in its definition) the specific Series or Class to
which such definition shall apply.

                                       34




                    (g) Where reference is made in this Agreement or any related
Supplement to the principal amount of Receivables, such reference shall, unless
explicitly stated otherwise, be deemed a reference to the Principal Amount (as
such term is defined in Section 1.1) of such Receivables.

                    (h) Any reference herein or in any other Transaction
Document to a provision of the Internal Revenue Code or ERISA shall be deemed a
reference to any successor provision thereto.

                    (i) To the extent that any provision of this Agreement or
any other Transaction Document requires that a calculation be performed with
respect to a date occurring prior to the effective date of such Transaction
Document, such calculation shall be performed as provided therein as though such
Transaction Document had been effective on and as of such prior date.

                                   ARTICLE II

                           CONVEYANCE OF RECEIVABLES;
                            ISSUANCE OF CERTIFICATES

               Section 2.1 CONVEYANCE OF RECEIVABLES.

                    (a) By execution and delivery of this Agreement, the Company
does hereby transfer, assign, set over and otherwise convey to the Trustee, for
the benefit of the Holders, without recourse (except as specifically provided
herein), all of its present and future right, title and interest in, to and
under:

                         (i) all Receivables, including those existing at the
          close of business on the Initial Closing Date and all Receivables
          thereafter arising from time to time until but not including the Trust
          Termination Date;

                         (ii) the Related Property;

                         (iii) all Collections;

                         (iv) all rights (including rescission, replevin or
          reclamation) relating to any Receivable or arising therefrom;

                                       35




                         (v) the Collection Concentration Account, each Lockbox
          and each Lockbox Account (collectively, the "ACCOUNTS"), including (A)
          all funds and other evidences of payment held -------- therein and all
          certificates and instruments, if any, from time to time representing
          or evidencing any of such Accounts or any funds and other evidences of
          payment held therein, (B) all investments of such funds held in such
          Accounts and all certificates and instruments from time to time
          representing or evidencing such investments, (C) all Eligible
          Investments, (D) all notes, certificates of deposit and other
          instruments from time to time hereafter delivered or transferred to,
          or otherwise possessed by, the Trustee for and on behalf of the
          Company in substitution for any of the then existing Accounts and (E)
          all interest, dividends, cash, instruments and other property from
          time to time held in any and all of the then existing Accounts; and

                         (vi) all monies due or to become due and all amounts
          received with respect to the items listed in clauses (i) through (v)
          and all proceeds (including, without limitation, whatever is received
          upon the sale, exchange, collection or other disposition of the
          foregoing and all "proceeds" as defined in Section 9-306 of the UCC as
          in effect in the State of New York) thereof, including all Recoveries
          relating thereto;

                    (b) The Company hereby transfers, assigns, sets over and
otherwise conveys to the Trustee, for the benefit of the Holders, and grants to
the Trustee, for the benefit of the Holders, a first priority perfected security
interest in, all its right, title and interest in, to and under the following:
each Receivables Sale Agreement and the Servicing Agreement, including in
respect of each such agreement, (A) all property assigned thereunder and all
rights of the Company to receive monies due and to become due under or pursuant
to such agreement, whether payable as fees, expenses, costs or otherwise, (B)
all rights of the Company to receive proceeds of any insurance, indemnity,
warranty or guaranty with respect to such agreement, (C) claims of the Company
for damages arising out of or for breach of or default under such agreement, (D)
the right of the Company to amend, waive or terminate such agreement, to perform
thereunder and to compel performance and otherwise exercise all remedies
thereunder, (E) all other rights, remedies, powers, privileges and claims of the
Company under or in connection with such agreement (whether arising pursuant to
such agreement or otherwise available to the Company at law or in equity),
including the rights of the Company to enforce such agreement

                                       36




and to give or withhold any and all consents, requests, notices, directions,
approvals, extensions or waivers under or in connection therewith and (F) all
monies due or to become due and all amounts received with respect to the items
listed in clauses (A) through (F) and all proceeds (including, without
limitation, whatever is received upon the sale, exchange, collection or other
disposition of the foregoing and all "proceeds" as defined in Section 9-306 of
the UCC as in effect in the State of New York) thereof, including all Recoveries
relating thereto (all of the foregoing set forth in subclauses (A)-(F),
inclusive, the "TRANSFERRED AGREEMENTS");

Such property described in the foregoing paragraphs (a) and (b), together with
all investments and all monies on deposit in any other bank account or accounts
maintained for the benefit of any Holders for payment to Holders shall
constitute the assets of the Trust (the "TRUST ASSETS").

               Subject to Section 5.9, although it is the intent of the parties
to this Agreement that the conveyance of the Company*s right, title and interest
in, to and under the Receivables and the other Trust Assets described in
paragraph (a) pursuant to this Agreement shall constitute either a purchase and
sale or a loan, in the event that such conveyance is deemed to create a loan,
the Company hereby grants to the Trustee, for the benefit of the Holders, a
perfected first priority security interest in all of the Company's present and
future right, title and interest in, to and under the Receivables and such other
Trust Assets to secure the payment of the applicable Invested Amounts, interest
thereon and the other fees and expenses due to the Holders, and that this
Agreement shall constitute a security agreement under applicable law in favor of
the Trustee, for the benefit of the Holders.

                    (c) The assignment, set over and conveyance to the Trust
pursuant to Section 2.1(a) shall be made to the Trustee, on behalf of the Trust,
and each reference in this Agreement to such assignment, set over and conveyance
shall be construed accordingly. In connection with the foregoing assignment,
except as expressly provided otherwise in the Transaction Documents, the
Company, the Servicer agrees to deliver to the Trustee each Trust Asset
(including any original documents or instruments included in the Trust Assets as
are necessary to effect such assignment) in which the transfer of an interest is
perfected under the UCC or otherwise solely by possession and not by filing a
financing statement or similar document.

               Notwithstanding the assignment of the Transferred Agreements set
forth in Section 2.1(b), the Company does not hereby assign or delegate any of
its

                                       37




duties or obligations under the USFS Receivables Sale Agreement to the Trust or
the Trustee and neither the Trust nor the Trustee accepts such duties or
obligations, and the Company shall continue to have the right and the obligation
to purchase Receivables from USFS from time to time. The foregoing assignment,
set-over and conveyance does not constitute and is not intended to result in a
creation or an assumption by the Trust, the Trustee, any Investor
Certificateholder or the Company, in its capacity as a Holder, of any obligation
of the Servicer, USFS, the Company, any Seller or any other Person in connection
with the Receivables or under any agreement or instrument relating thereto,
including, without limitation, any obligation to any Obligor.

               In connection with such assignment, the Company agrees to record
and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable) or, where
applicable, registrations in the appropriate records, (i) with respect to the
Receivables now existing and hereafter created, including those conveyed to it
pursuant to the USFS Receivables Sale Agreement and (ii) with respect to any
other Trust Assets a security interest in which may be perfected under the
relevant UCC, legislation or similar statute by such filing or registration, as
the case may be, in each case meeting the requirements of applicable law in such
manner and in such jurisdictions as are necessary to perfect and maintain
perfection of the assignment of the Receivables and such other Trust Assets
(excluding returned merchandise) to the Trust, and to deliver a file-stamped
copy or certified statement of such financing statement or registration or other
evidence of such filing or registration to the Trustee on or prior to the date
of issuance of any Certificates. The Trustee shall be under no obligation
whatsoever to file such financing statement, or a continuation statement to such
financing statement, or to make any other filing or other registration under the
UCC, other relevant legislation or similar statute in connection with such
transfer. The Trustee shall be entitled to rely conclusively on the filings or
registrations made by or on behalf of the Company without any independent
investigation and the Company*s obligation to make such filings as evidence that
such filings have been made.

               In connection with such assignment, the Company further agrees,
at its own expense, on or prior to the Initial Closing Date (a) to indicate, or
to cause to be indicated, in its computer files containing its master database
of Receivables and to cause USFS and each Seller to indicate in its records
containing its master database of Receivables that Receivables have been
conveyed to USFS or Company, as the case may be, pursuant to the applicable
Receivables Sale Agreement or

                                       38




conveyed to the Trust for the benefit of the Holders pursuant to this Agreement
and (b) to deliver, or cause to be delivered, to the Trustee computer tapes or
disks containing a true and complete list of all Receivables transferred to the
Trust specifying for each such Receivable, as of the Closing Date, (i) the
identification or reference number assigned to such Receivables by the Company
and (ii) the Principal Amount of such Receivables. Such tapes or disks shall be
marked as Schedule 1 to this Agreement and are hereby incorporated into and made
a part of this Agreement.

               Section 2.2 ACCEPTANCE BY TRUSTEE. (a) The Trustee hereby
acknowledges its acceptance on behalf of the Trust of all right, title and
interest to the property, now existing and hereafter created, assigned to the
Trust pursuant to Section 2.1 and declares that it shall maintain such right,
title and interest, upon the trust herein set forth, for the benefit of all
Holders.

                    (b) The Trustee shall have no power to create, assume or
incur indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.

               Section 2.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
RELATING TO THE COMPANY. The Company hereby represents and warrants to the
Trustee and the Trust, for the benefit of the holders of Certificates of each
Outstanding Series, as of the Issuance Date of such Series, that:

                    (a) CORPORATE EXISTENCE: COMPLIANCE WITH LAW. The Company
(i) is a limited liability company duly formed, validly existing and in good
standing under the laws of the Cayman Islands, (ii) has all requisite power and
authority and all legal right to own and operate its properties, to lease the
properties it operates as lessee and to conduct its business as now conducted
and proposed to be conducted, (iii) is duly qualified as a foreign limited
liability company and is in good standing under the laws of each jurisdiction in
which its business or activities requires such qualification, except where the
failure to so qualify and be in good standing would not reasonably be likely to
cause a Material Adverse Effect, and (iv) is in compliance with all material
Requirements of Law. The Company does not engage in activities prohibited by the
Transaction Documents or its memorandum and articles of association.

                    (b) CORPORATE POWER: AUTHORIZATION. The Company has the
requisite power and authority, and the legal right, to execute, deliver and
perform this Agreement and the other Transaction Documents to which it is a
party and has

                                       39




taken all necessary action to authorize the execution, delivery and performance
of this Agreement and the other Transaction Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement and the other Transaction Documents to which it is a party by
or against the Company other than (1) those which have duly been obtained or
made and are in full force and effect on the Initial Closing Date, (ii) any
filings of UCC-1 financing statements or similar documents necessary to perfect
the Company*s or the Trust*s interest in the Trust Assets and (iii) those that
may be required under state securities or "blue sky" laws in connection with the
offering or sale of certificates. This Agreement and each other Transaction
Document to which the Company is a party have been duly executed and delivered
on behalf of the Company.

                    (c) ENFORCEABILITY. This Agreement and each of the other
Transaction Documents to which the Company is a party (i) constitute the legal,
valid and binding obligations of the Company enforceable against it in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect affecting the
enforcement of creditors* rights generally and except as such enforceability may
be limited by general principles of equity (whether considered in a proceeding
at law or in equity) and (ii) are effective and all action has been taken to
cause compliance with paragraph (n) of the definition of Eligible Receivables.

                    (d) NO LEGAL BAR. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which the Company is a
party will not violate any Requirement of Law, and will not result in, or
require, the creation or imposition of any Lien (other than Liens contemplated
or permitted hereby) on any of its properties or revenues pursuant to any such
Requirement of Law or Contractual Obligation.

                    (e) NO MATERIAL LITIGATION. There are no actions, suits,
investigations or proceedings at law or in equity (including, without
limitation, injunctions, writs or restraining orders) by or before any
arbitrator, court or Governmental Authority now pending or, to the knowledge of
the Company, threatened against or affecting the Company or any material
properties, revenues or rights of the Company which (i) involve this Agreement
or any of the other Transaction Documents or any of the transactions
contemplated hereby or thereby, or

                                       40




(ii) could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect with respect to the Company. The transactions
contemplated hereunder and the use of the proceeds thereof will not violate any
Requirement of Law.

                    (f) NO DEFAULT. The Company is not in default under or with
respect to any of its Contractual Obligations. No Early Amortization Event or
Potential Early Amortization Event has occurred and is continuing.

                    (g) TAX RETURNS. The Company has filed or caused to be filed
all Federal and all other tax returns which are required to have been filed by
it and has paid or caused to be paid all taxes shown thereon to be due and
payable, and any material assessments made against it or any of its property. No
tax Lien has been filed, and, to the knowledge of the Company, no material claim
is being asserted, with respect to any such taxes. For purposes of this
paragraph, "taxes" shall mean any present or future tax, levy, impost, duty,
charge, assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any Governmental Authority.

                    (h) LOCATION OF RECORDS: CHIEF EXECUTIVE OFFICE. The offices
at which the Company keeps its records concerning the Receivables either (x) are
located at the addresses set forth on Schedule II of the Amended and Restated
Receivables Sale Agreements or (y) have been reported to the Trustee in
accordance with the provisions of subsection 2.8(1) of this Agreement. The chief
executive office of the Company is located at one of the addresses set forth on
Schedule 4 and is the place where the Company is "located" for the purposes of
Section 9-103(3)(d) of the UCC as in effect in the State of New York. The state
and county where the chief executive office of the Company is "located" for the
purposes of Section 9-103(3)(d) of the UCC has not changed in the past four
months.

                    (i) SOLVENCY. Both prior to and after giving effect to the
transactions occurring on each Issuance Date, (i) the fair value of the assets
of the Company at a fair valuation will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Company; (ii) the present fair
salable value of the property of the Company will be greater than the amount
that will be required to pay the probable liabilities of the Company on its
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; (iii) the Company will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute

                                       41




and matured; and (iv) the Company will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted. For all purposes of clauses (i)
through (iv) above, the amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability. The Company does not intend to, nor does
it believe that it will, incur debts beyond its ability to pay such debts as
they mature, taking into account the timing of and amounts of cash to be
received by it and the timing of and amounts of cash to be payable in respect of
its Indebtedness.

                    (j) INVESTMENT COMPANY. Each of the Company and the Trust is
either not an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or is exempt from all provisions of such act.

                    (k) OWNERSHIP, SUBSIDIARIES. All of the issued and
outstanding shares of the Company are owned, legally and beneficially, by USFS
or a nominee for USFS. The Company will remain at all times a two-member limited
liability company and USFS will not transfer its ownership interest in the
Company at any time (except to a nominee who is an independent director of the
Company). The Company has no Subsidiaries.

                    (l) NAMES. The legal name of the Company is as set forth in
this Agreement. The Company has not had, nor does it have, any trade names,
fictitious names, assumed names or "doing business as" names.

                    (m) LIABILITIES. Other than, (i) the liabilities,
commitments or obligations (whether absolute, accrued, contingent or otherwise)
arising under or in respect of the Transaction Documents and (ii) immaterial
amounts due and payable in the ordinary course of business of a special-purpose
company, the Company does not have any liabilities, commitments or obligations
(whether absolute, accrued, contingent or otherwise), whether due or to become
due.

                    (n) USE OF PROCEEDS; FEDERAL RESERVE BOARD REGULATION. No
proceeds of the issuance of any Investor Certificates will be used by the
Company to purchase or carry any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time to
time). The Company is in compliance with all applicable regulations of the Board
of Governors of the Federal Reserve System (including, without limitation,
Regulation U and with respect to "margin stock").

                                       42




                    (o) COLLECTION PROCEDURES. The Company, USFS and each Seller
have in place procedures pursuant to the Transaction Documents which are either
necessary or advisable to ensure the timely collection of Receivables.

                    (p) LOCKBOX ACCOUNTS. Except to the extent otherwise
permitted under the terms of this Agreement (i) each Lockbox Agreement to which
the Company is party is in full force and effect and (ii) each Lockbox Account
set forth in Schedule III to the Amended and Restated Receivables Sales
Agreement is free and clear of any Lien (other than any right of set-off
expressly provided for in the applicable Lockbox Agreement).

                    (q) NO CONFLICT. The execution and delivery of this
Agreement and the USFS Receivables Sale Agreement, the performance of the
transactions contemplated hereby and thereby and the fulfillment of the terms
hereof and thereof will not conflict with, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any indenture, contract, agreement, mortgage,
deed of trust, or other instrument to which the Company is a party or by which
it or any of its property is bound.

                    (r) ALL CONSENTS REQUIRED. All appraisals, authorizations,
consents, orders or other similar actions of any Person or of any governmental
body or official required in connection with the execution and delivery of this
Agreement, the USFS Receivables Sale Agreement and the Certificates, the
performance of the transactions contemplated hereby and thereby, and the
fulfillment of or terms hereof and thereof, have been obtained.

                    (s) BULK SALES. The execution, delivery and performance of
this Agreement do not require compliance with any "bulk sales" law by the
Company.

               The representations and warranties set forth in this Section 2.3
shall survive after the date made and the transfer and assignment of the Trust
Assets to the Trust. Upon discovery by a Responsible Officer of the Company or
the Servicer or by a Responsible Officer of the Trustee of a breach of any of
the foregoing representations and warranties with respect to any Outstanding
Series as of the Issuance Date of such Series, the party discovering such breach
shall give prompt written notice to the other parties and to each Agent with
respect to all Outstanding Series. The Trustee's obligations in respect of any
breach are limited as provided in subsection 8.2(g).

                                       43




               Section 2.4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
RELATING TO THE RECEIVABLES. The Company hereby represents and warrants to the
Trustee and the Trust, for the benefit of the holders of Certificates of each
Outstanding Series, (x) as of the Closing Date, and (y) with respect to each
Receivable transferred to the Trust after the Closing Date, as of the related
Receivables Purchase Date, unless, in either case, otherwise stated in the
applicable Supplement or unless such representation or warranty expressly
relates only to a prior date, that:

                    (a) Schedule 1 to this Agreement sets forth in all material
respects an accurate and complete listing as of the Closing Date of all
Receivables to be transferred to the Trust as of the Closing Date and the
information contained therein with respect to the identity and Principal Amount
of each such Receivable is true and correct in all material respects as of the
Closing Date. As of the Closing Date, the aggregate amount of Receivables owned
by the Company is accurately set forth in Schedule 1 hereto.

                    (b) Each Receivable existing on the Initial Closing Date or,
in the case of Receivables transferred to the Trust after the Initial Closing
Date, on the date that each such Receivable shall have been transferred to the
Trust, has been conveyed to the Trust free and clear of any Lien, except for
Permitted Liens specified in clauses (i) and (iv) of the definition thereof.

                    (c) On the Initial Closing Date, each Receivable transferred
to the Trust that was included in the calculation of the initial Aggregate
Receivables Amount was an Eligible Receivable and, in the case of Receivables
transferred to the Trust after the Initial Closing Date, on the date such
Receivable shall have been transferred to the Trust, each such Receivable that
is included in the calculation of the Aggregate Receivables Amount on such date
is an Eligible Receivable. Each Receivable classified as an "Eligible
Receivable" by the Company in any document or report delivered hereunder
satisfies the requirements of eligibility contained in the definition of
Eligible Receivable.

                    (d) The Company has made an election to be treated as a
disregarded entity for United States federal income tax purposes.

                    (e) The representations and warranties of USFS in the USFS
Receivables Sale Agreement are true and correct in all material respects.

                                       44




               The representations and warranties set forth in this Section 2.4
shall survive after the date made and the transfer and assignment of the Trust
Assets to the Trust. Upon discovery by a Responsible Officer of the Company or
the Servicer or a Responsible Officer of the Trustee of a breach of any of the
representations and warranties with respect to each Outstanding Series as of the
Issuance Date of such Series, the party discovering such breach shall give
prompt written notice to the other parties and to each Agent with respect to all
Outstanding Series. The Trustee*s obligations in respect of any breach are
limited as provided in Section 8.2(g).

               Section 2.5 TRANSFER OF INELIGIBLE RECEIVABLES. (a) TRANSFER
OBLIGATION. If (i) any representation or warranty under subsections 2.4(a), (b)
or (c) is not true and correct in any material respect as of the date specified
therein with respect to any Receivable transferred to the Trust, (ii) there is a
breach of any covenant under subsection 2.8(c) with respect to any Receivable
and such breach has a material adverse effect on the Certificateholders'
Interest in such Receivable or (iii) the Trust*s interest in any Receivable is
not a first priority perfected ownership or security interest at any time as a
result of any action taken by, or any failure to take action by, the Company
(any Receivable as to which the conditions specified in any of clauses (i), (ii)
or (iii) of this subsection 2.5(a) exists is referred to herein as an
"INELIGIBLE RECEIVABLE") then, upon the earlier (the date on which such earlier
event occurs, the "TRANSFER OBLIGATION DATE") of the discovery by the Company of
any such event which continues unremedied or receipt by the Company of written
notice given by the Trustee or the Servicer of any such event which continues
unremedied, the Company shall become obligated to deposit or cause to be
deposited into the Collection Account the Transfer Deposit Amount with respect
to such Ineligible Receivable in order to transfer such Ineligible Receivables
on the terms and conditions set forth in subsection 2.5(b).

                    (b) TRANSFER OF RECEIVABLES. Subject to the last sentence of
this subsection 2.5(b), the Company shall, with respect to each Ineligible
Receivable required to be transferred pursuant to subsection 2.5(a), deposit or
cause to be deposited in the Collection Account in immediately available funds
on the Business Day following the related Transfer Obligation Date an amount
equal to the lesser of (x) the amount by which the Aggregate Target Receivables
Amount exceeds the Aggregate Receivables Amount (after giving effect to the
reduction thereof by the Principal Amount of such Ineligible Receivable) and (y)
the aggregate outstanding Principal Amount of each such Ineligible Receivable
(the "TRANSFER DEPOSIT AMOUNT"). Upon transfer or deposit of the Transfer
Deposit Amount, the Trust shall automatically and without further action be
deemed to transfer, assign, set over and

                                       45




otherwise convey to the Company, without recourse, representation or warranty,
all the right, title and interest of the Trust in and to such Ineligible
Receivable, all monies due or to become due with respect thereto and all
proceeds thereof; and such transferred Ineligible Receivable shall be treated by
the Trust as collected in full as of the date on which it was transferred. The
Trustee shall execute such documents and instruments of transfer or assignment
prepared by and at the expense of the Company and take such other actions as
shall reasonably be requested by the Company to effect the conveyance of such
Receivables pursuant to this subsection free and clear of the lien of this
Agreement and all other liens created by the Trustee. Except as otherwise
specified in any Supplement, the obligation of the Company to deposit or cause
to be deposited the Transfer Deposit Amount with respect to any Ineligible
Receivable shall constitute the sole remedy respecting the event giving rise to
such obligation available to Investor Certificateholders (or the Trustee on
behalf of Investor Certificateholders).

               Section 2.6 PURCHASE OF INVESTOR CERTIFICATEHOLDERS* INTEREST IN
TRUST PORTFOLIO. (a) Upon the actual knowledge of a breach of any of the
representations and warranties set forth in paragraphs (a), (b), (c), (d),
(e)(i) or (q) of Section 2.3, which breach has a material adverse effect on the
interests of the holders of an Outstanding Series (without giving effect to any
Enhancement) under or with respect to the Transaction Documents, then the
Trustee, at the written direction of holders evidencing more than 50% of the
Invested Amount of such Outstanding Series, subject to Section 8.2 hereof, shall
notify the Company to purchase such Outstanding Series and the Company shall be
obligated to make such purchase on the next Distribution Date occurring at least
five Business Days after receipt of such notice on the terms and conditions set
forth in subsection 2.6(b) below; PROVIDED, HOWEVER, that no such purchase shall
be required to be made if, by such Distribution Date, the representations and
warranties contained in paragraphs (a), (b), (c), (d), (e)(i) or (q) of Section
2.3 shall be satisfied in all material respects and any material adverse effect
on the holders of such Outstanding Series caused thereby shall have been cured.

                    (b) As required under subsection 2.6(a) above, the Company
shall deposit into the Collection Account for credit to the applicable
subaccount of the Collection Account on the Business Day preceding such
Distribution Date an amount equal to the purchase price (as described in the
next succeeding sentence) for the Certificateholders* Interest for such
Outstanding Series on such day. The purchase price for any such purchase will be
equal to (i) the Adjusted Invested Amount of such Outstanding Series on the date
on which the purchase is made plus

                                       46




(ii) an amount equal to all interest accrued but unpaid on such Series up to the
Distribution Date on which the distribution of such deposit is scheduled to be
made pursuant to Section 9.2 plus (iii) any other amount required to be paid in
connection therewith pursuant to any Supplement. Notwithstanding anything to the
contrary in this Agreement, the entire amount of the purchase price deposited in
the Collection Account shall be distributed to the related Investor
Certificateholders on such Distribution Date pursuant to Section 9.2. If the
Trustee gives notice directing the Company to purchase the Certificates of an
Outstanding Series as provided above, except as otherwise specified in any
Supplement, the obligation of the Company to purchase such Certificates pursuant
to this Section 2.6 shall constitute the sole remedy respecting an event of the
type specified in the first sentence of this Section 2.6 available to the
applicable Investor Certificateholders (or the Trustee on behalf of such
Investor Certificateholders).

               Section 2.7 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company
hereby covenants that, until the Trust Termination Date occurs, the Company
shall:

                    (a) FINANCIAL STATEMENTS. Furnish to the Trustee, each Agent
and the Rating Agencies, as soon as available, but in any event within 125 days
after the end of each fiscal year of the Company, a copy of the audited balance
sheet and statement of operations of the Company as at the end of such year, all
in reasonable detail and certified by an appropriate Responsible Officer as
correct and fairly presenting the financial position and results of operations
of the Company.

                    (b) PAYMENT OF OBLIGATIONS: COMPLIANCE WITH OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever nature
(including, without limitation, all taxes, assessments, levies and other
governmental charges imposed on it), except where the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of the Company. The Company shall defend the right, title and interest of
the Holders in, to and under the Receivables and the other Trust Assets, whether
now existing or hereafter created, against all claims of third parties claiming
through or under the Company, any Seller or the Servicer. The Company will duly
fulfill all material obligations on its part to be fulfilled under or in
connection with each Receivable and will do nothing to impair the rights of the
Holders in such Receivable. The Company shall pay any property, excise, transfer
or similar taxes arising with respect to the

                                       47




Receivables or on account of the transactions contemplated by the Transaction
Documents.

                    (c) INSPECTION OF PROPERTY: BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and accounts in which full, true and correct
entries in conformity in all material respects with GAAP and all Requirements of
Law shall be made of all dealings and transactions in relation to its business
and activities; and permit representatives of the Trustee upon reasonable
advance notice (i) to visit and inspect any of its properties and examine and
make abstracts from any of its books and records during normal business hours on
any Business Day and as often as may reasonably be desired subject to the
Company*s normal security and confidentiality requirements and (ii) to discuss
the business, operations, properties and financial and other condition of the
Company with officers and employees of the Company and with its Independent
Public Accountants; PROVIDED, that the Trustee shall notify the Company prior to
any contact with such Independent Public Accountants and shall give the Company
the opportunity to participate in such discussions.

                    (d) COMPLIANCE WITH LAW AND POLICIES. (i) Comply in all
material respects with all Requirements of Law applicable to the Company; and

                         (ii) Cause each Seller to perform its obligations in
     accordance with, and comply in all material respects with, the applicable
     Policies in regard to the Receivables and the Related Property.

                    (e) PURCHASE OF RECEIVABLES. Purchase Receivables solely
pursuant to (i) the USFS Receivables Sale Agreement or (ii) this Agreement.

                    (f) DELIVERY OF COLLECTIONS. In the event that the Company
receives Collections directly from Obligors, deposit such Collections into the
applicable Lockbox Account within one Business Day after receipt thereof by the
Company.

                    (g) NOTICES. Promptly (and, in any event, within five
Business Days after a Responsible Officer of the Company becomes aware of such
event) give written notice to the Trustee, each Rating Agency and each Agent for
any Outstanding Series of:

                         (i) the occurrence of any Early Amortization Event or
     Potential Early Amortization Event; and

                                       48




                         (ii) any Lien not permitted by subsection 2.8(c) on any
     Receivable or any other Trust Assets.

                    (h) LOCKBOXES. (i) Maintain, and keep in full force and
effect, each Lockbox Agreement to which the Company is a party, except to the
extent otherwise permitted under the terms of this Agreement and the other
Transaction Documents; and

                         (ii) ensure that each related Lockbox Account shall be
     free and clear of, and defend each such Lockbox Account against, any writ,
     order, stay, judgment, warrant of attachment or execution or similar
     process.

                    (i) SEPARATE CORPORATE EXISTENCE.

                         (i) Maintain its own deposit, securities or other
     account or accounts, separate from those of any Affiliate, with commercial
     banking institutions or broker-dealers and ensure that the funds of the
     Company will not be diverted to any other Person or for other than
     corporate uses of the Company, nor will such funds be commingled with the
     funds (other than funds consisting of (i) Excluded Receivables Payments or
     (ii) Collections remitted to a Collector pursuant to subsection 2.3(a) of
     the Servicing Agreement; PROVIDED that, in each case, such funds shall not
     be commingled for more than two (2) Business Days) of any Seller, USFS, or
     any other Subsidiary or Affiliate of any Seller or USFS;

                         (ii) To the extent that it shares the same officers or
     other employees as any of its members or Affiliates, the salaries of and
     the expenses related to providing benefits to such officers and other
     employees shall be fairly allocated among such entities, to the extent
     practicable, on the basis of such entities* actual share of such costs and
     to the extent such allocation is not practicable, on a basis reasonably
     related to such entities* fair share of the salary and benefit costs
     associated with all such common officers and employees;

                         (iii) To the extent that it jointly contracts with any
     of its members or Affiliates to do business with vendors or service
     providers or to share overhead expenses, the costs incurred in so doing
     shall be allocated fairly among such entities, to the extent

                                       49




     practicable, on the basis of such entities* actual share of such costs and
     to the extent such allocation is not practicable, on a basis reasonably
     related to such entities* fair share of such costs. To the extent that the
     Company contracts or does business with vendors or service providers where
     the goods and services provided are partially for the benefit of any other
     Person, the costs incurred in so doing shall be fairly allocated to or
     among such entities for whose benefit the goods or services are provided,
     to the extent practicable, on the basis of such entities* actual share of
     such costs and to the extent such allocation is not practicable, on a basis
     reasonably related to such entities* fair share of such costs. All material
     transactions between the Company and any of its Affiliates, whether
     currently existing or hereafter entered into, shall be only on an
     arm's-length basis, it being understood and agreed that the transactions
     contemplated in the Transaction Documents meet the requirements of this
     clause (iii);

                         (iv) Maintain a principal executive office at a
     separate address from the address of United Stationers Supply Co., USFS,
     and their Affiliates; PROVIDED that reasonably segregated offices in the
     same building shall constitute separate addresses for purposes of this
     clause (iv). To the extent that the Company and any of its members or
     Affiliates have offices in the same location, there shall be a fair and
     appropriate allocation of overhead costs among them, and each such entity
     shall bear its fair share of such expenses;

                         (v) Issue separate financial statements prepared not
     less frequently than annually and prepared in accordance with GAAP;

                         (vi) Conduct its affairs in its own name and strictly
     in accordance with its articles of association and observe all necessary,
     appropriate and customary limited liability company formalities, including,
     but not limited to, holding all regular and special members* and directors*
     meetings appropriate to authorize all limited liability company action,
     keeping separate and accurate minutes of its meetings, passing all
     resolutions or consents necessary to authorize actions taken or to be
     taken, and maintaining accurate and separate books, records and accounts,
     including, but not limited to, payroll and intercompany transaction
     accounts;

                                       50




                         (vii) Not assume or guarantee any of the liabilities of
     any Seller, USFS, the Support Provider, the Servicer or any Affiliate of
     any thereof, it being understood that a shareholder's capital contribution
     is not such a guarantee or assumption; and

                         (viii) Take, or refrain from taking, as the case may
     be, all other actions that are necessary to be taken or not to be taken in
     order to (x) ensure that the assumptions and factual recitations set forth
     in the Specified Bankruptcy Opinion Provisions remain true and correct in
     all material respects with respect to the Company and (y) comply with those
     procedures described in such provisions which are applicable to the
     Company.

                    (j) PRESERVATION OF CORPORATE EXISTENCE. (i) Preserve and
maintain its existence as a limited liability company, and its rights,
franchises and privileges in the jurisdiction of its formation and (ii) qualify
and remain qualified in good standing as a foreign limited liability company in
each jurisdiction where the ownership of its properties and the conduct of its
business require such qualification.

                    (k) NET WORTH. Maintain at all times a consolidated net
worth inclusive of its interest in the Receivables and the Related Property, as
determined in accordance with GAAP, at least equal to $45 million.

                    (l) OPTIONAL TERMINATION. If the Company shall deliver an
Optional Termination Notice to the Trustee with respect to any Outstanding
Series, the Company shall deliver an Optional Termination Notice to the Trustee
with respect to all Outstanding Series.

                    (m) MAINTENANCE OF PROPERTY. Keep all material tangible
property useful and necessary in its business in good working order and
condition (normal wear and tear excepted), except to the extent that the failure
to do any of the foregoing with respect to any such property would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect with respect to the Company.

                    (n) FURTHER ASSURANCES. File, or cause to be filed, as
necessary from time to time, at the applicable Seller's expense and in
accordance with the provisions of the UCC of the applicable jurisdiction, duly
completed and executed continuation statements with respect to all financing
statements filed in

                                       51




connection with the transactions contemplated by the USFS Receivables Sale
Agreement.

                    (o) PERFECTION OPINION. Deliver, within five Business Days
after the Closing Date, an opinion of counsel, in form and substance reasonably
acceptable to the Trustee, the Funding Agent and the Administrator, regarding
the perfection and priority of the security interest granted to the Trust by
this Agreement under the law of the State of Illinois.

               Section 2.8 NEGATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants that, until the Trust Termination Date occurs, it shall not directly
or indirectly:

                    (a) ACCOUNTING OF TRANSFERS. Prepare any financial
statements which shall account for the transactions contemplated hereby in any
manner other than as a transfer of Receivables and the other Trust Assets by the
Company to the Trust or in any other respect account for or treat the
transactions under this Agreement (including for financial accounting purposes,
except as required by law) in any manner other than as transfers of Receivables
and the other Trust Assets by the Company to the Trust; PROVIDED, HOWEVER, that
this subsection shall not apply for any tax or tax accounting purposes.

                    (b) LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except: (i) Indebtedness evidenced by the
Subordinated Note or the Contributed Note; (ii) Indebtedness representing fees,
expenses and indemnities payable pursuant to and in accordance with the
Transaction Documents; and (iii) Indebtedness for services supplied or furnished
to the Company in an amount not to exceed $10,000 at any one time outstanding;
PROVIDED that any Indebtedness permitted hereunder and described in clauses (i)
and (iii) shall be payable by the Company solely from funds available to the
Company which are not otherwise needed to be applied to the payment of any
amounts by the Company pursuant to any Pooling and Servicing Agreements and
shall be non-recourse other than with respect to proceeds in excess of the
proceeds needed to be so applied.

                    (c) LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for Permitted Liens, it being understood that no
Permitted Lien under clause (ii) of the definition thereof shall cover any of
the Trust Assets

                                       52




(except to the limited extent permitted by clause (iv) of the definition of
Permitted Liens).

                    (d) LIMITATION ON GUARANTEE OBLIGATIONS. Become or remain
liable, directly or contingently, in connection with any Indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other than
endorsements of negotiable instruments for deposit or collection in the ordinary
course of business and reimbursement and indemnification obligations in favor of
the Trustee or the Investor Certificateholders as provided for under this
Agreement and the other Transaction Documents), agreement to purchase or
repurchase, agreement to supply or advance funds, or otherwise, except in
connection with indemnification obligations of the Company to the limited extent
provided in the Company*s memorandum and articles of association; PROVIDED that
any such indemnification shall be paid solely from funds available to the
Company which are not otherwise needed to be applied to the payment of any
amounts pursuant to any Pooling and Servicing Agreements, shall be non-recourse
other than with respect to proceeds in excess of the proceeds necessary to make
such payment, and shall not constitute a claim against the Company to the extent
that insufficient proceeds exist to make such payment.

                    (e) LIMITATION ON FUNDAMENTAL CHANGES. Enter into any
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or make any material change in its
present method of conducting business, or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets other than the assignments and transfers contemplated hereby.

                    (f) LIMITATION ON DIVIDENDS AND OTHER PAYMENTS. Declare or
pay any dividend on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of capital stock of
the Company, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Company (any of the foregoing, a
"restricted payment"), unless (i) at the date such restricted payment is made,
the Company shall have made all payments in respect of its repurchase
obligations pursuant to this Agreement outstanding at such date and (ii) such
restricted payment is made no more frequently than on a monthly basis and is
effected in accordance with all organizational and legal formalities applicable
to the Company; PROVIDED, HOWEVER, that (A) no

                                       53




restricted payment shall be made on any date if (x) a Potential Early
Amortization Event of a type referred to in clause (a)(ii) or (a)(iii) of
Section 7.1 or (y) an Early Amortization Event has occurred and is continuing
(or would occur as a result of such payment) on such date and (B) all restricted
payments made on any date shall be payable by the Company solely from funds
available to the Company which are not otherwise needed on such date to be
applied to the payment of any amounts by the Company pursuant to any Pooling and
Servicing Agreement.

                    (g) BUSINESS OF THE COMPANY. Engage at any time in any
business or business activity other than the acquisition of Receivables and
Related Property pursuant to the USFS Receivables Sale Agreement, the
assignments and transfers hereunder and the other transactions contemplated by
the Transaction Documents, and any activity incidental to the foregoing and
necessary or convenient to accomplish the foregoing, or enter into or be a party
to any agreement or instrument other than in connection with the foregoing,
except those agreements or instruments permitted under subsection 2.8(i) or set
forth on Schedule 5.

                    (h) LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes. debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except for (i) any Exchangeable Company Interest, any Series Subordinated
Interest, the Receivables, the Certificates and the other Trust Assets, (ii) the
Subordinated Note and the Contributed Note and (iii) any other advance or loan
made to USFS, PROVIDED, HOWEVER, that in the case of the preceding clause (iii),
(A) no (x) Potential Early Amortization Event of a type referred to in clause
(a)(ii) or (a)(iii) of Section 7.1 or (y) Early Amortization Event has occurred
and is continuing at the time any such investment is made (or would occur as a
result of such investment), (B) no amounts are outstanding under the
Subordinated Note and the Contributed Note, (C) the loan made is a demand loan
at a market rate of interest and (D) any such investment shall be made by the
Company solely from funds available to the Company which are not otherwise
needed to be applied to the payment of any amounts by the Company pursuant to
any Pooling and Servicing Agreement.

                    (i) AGREEMENTS. (i) Become a party to, or permit any of its
properties to be bound by, any indenture, mortgage, instrument, contract,
agreement, lease or other undertaking, except the Transaction Documents, leases
of office space, equipment or other facilities for use by the Company in its
ordinary course of business, employment agreements, service agreements,
agreements relating to shared

                                       54




employees and the other Transaction Documents and agreements reasonably
necessary or desirable to perform its obligations under the Transaction
Documents, (ii) issue any power of attorney (except to the Trustee or the
Servicer or except for the purpose of permitting any Person to perform any
ministerial functions on behalf of the Company that are not prohibited by or
inconsistent with the terms of the Transaction Documents), or (iii) amend,
supplement, modify or waive any of the provisions of the USFS Receivables Sale
Agreement or any Lockbox Agreement or request, consent or agree to or suffer to
exist or permit any such amendment, supplement, modification or waiver or
exercise any consent rights granted to it thereunder unless such amendment,
supplement, modification or waiver or such exercise of consent rights would not
be reasonably likely to have a Material Adverse Effect and, in the case of the
USFS Receivables Sale Agreement, the Rating Agency Condition shall have been
satisfied with respect to any such amendments, supplements, modifications or
waivers.

                    (j) POLICIES. Make any change or modification (or permit any
change or modification to be made) in any material respect to the Policies,
except (i) if such changes or modifications are necessary under any Requirement
of Law, (ii) if such changes or modifications would not reasonably be likely to
have a Material Adverse Effect with respect to the Company or (iii) if the
Rating Agency Condition is satisfied with respect thereto; PROVIDED, HOWEVER,
that if any change or modification, other than a change or modification
permitted pursuant to clause (i) or (ii) above, would be reasonably likely to
have a Material Adverse Effect on the interests of the Investor
Certificateholders of a Series which is not rated by a Rating Agency, the
consent of the applicable Agent (or as specified in the related Supplement)
shall be required to effect such change or modification.

                    (k) RECEIVABLES NOT TO BE EVIDENCED BY INSTRUMENTS. Subject
to the delivery requirement set forth in subsection 2.1(c), take any action to
cause any Receivable to be evidenced by any "instrument" other than, provided
that the procedures set forth in Schedule 3 are fully implemented with respect
thereto, an instrument which alone or together with a security agreement
constitutes "chattel paper" (each as defined in the UCC as in effect in any
state in which the Company*s or the applicable Seller*s chief executive office
or books and records relating to such USFS's Receivable are located), except in
connection with its enforcement or collection of a Defaulted Receivable.

                    (l) OFFICES. Move outside or within the state where such
office is now located the location of its chief executive office or of any of
the offices

                                       55




where it keeps its records with respect to the Receivables without (i) in the
case of moves outside such state, giving 30 days* prior written notice to the
Trustee and each Rating Agency, (ii) in the case of moves within such state,
giving the Trustee prompt notice of a change within the state where such office
is now located of the location of its chief executive office or any office where
it keeps its records with respect to the Receivables and (iii) taking all
actions reasonably requested by the Trustee (including but not limited to all
filings and other acts necessary or advisable under the UCC or similar statute
of each relevant jurisdiction) in order to continue the Trust*s first priority
perfected ownership or security interest in all Receivables now owned or
hereafter created; PROVIDED, HOWEVER, that the Company shall not change the
location of its chief executive office to outside of the United States, or to a
state which is within the Tenth Circuit unless (a) it delivers an Opinion of
Counsel reasonably acceptable to the Rating Agencies to the effect that OCTAGON
GAS SYSTEMS, INC. V. RIMMER, 995 F.2d 948 (10th Cir. 1993) ("Octagon") is no
longer controlling precedent in the Tenth Circuit or (b) state law has amended
the UCC to overrule Octagon.

                    (m) CHANGE IN NAME. Change its name, identity or corporate
structure in any manner which would or might make any financing statement or
continuation statement (or other similar instrument) filed in accordance with
subsection 10.2(a) seriously misleading within the meaning of Section 9-402(7)
of the UCC as in effect in any applicable jurisdiction in which UCC filings have
been made in respect of the Trust Assets without 30 days* prior written notice
to the Trustee and each Rating Agency.

                    (n) CHARTER. Amend or make any change or modification to its
memorandum and articles of association without first satisfying the Rating
Agency Condition (other than an amendment, change or modification made pursuant
to changes in law of the state of its formation or amendments to change the
Company*s name (subject to compliance with clause (m) above), resident agent or
address of resident agent).

                    (o) RESERVED.

                                       56




                                   ARTICLE III

                              RIGHTS OF HOLDERS AND
                    ALLOCATION AND APPLICATION OF COLLECTIONS

                    THE FOLLOWING PORTION OF THIS ARTICLE III
                           IS APPLICABLE TO ALL SERIES
                         EXCEPT TO THE EXTENT EXPRESSLY
                            PROVIDED OTHERWISE IN THE
                             SUPPLEMENT RELATING TO
                                  SERIES 1998-1

               Section 3.1 ESTABLISHMENT OF COLLECTION ACCOUNT AND COLLECTION
CONCENTRATION ACCOUNT; CERTAIN ALLOCATIONS. (a) (i) The Trustee, for the benefit
of the Holders as their interests appear in this Agreement, shall cause to be
established and maintained in the name of the Trust with an Eligible Institution
or with the corporate trust department of the Trustee or an affiliate of the
Trustee, a segregated trust account (the "COLLECTION ACCOUNT"), bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Holders. Schedule 2, which is hereby incorporated into and made a
part of this Agreement, identifies the Collection Account by setting forth the
account number of such account, the account designation of such account and the
name of the institution with which such account has been established. The
Collection Account shall be divided into individual subaccounts for each
Outstanding Series (each, respectively, a "SERIES COLLECTION SUBACCOUNT" and,
collectively, the "SERIES COLLECTION Subaccounts") and for the Company (the
"COMPANY COLLECTION SUBACCOUNT"). For administrative purposes only, the Trustee
shall establish or cause to be established for each Series, so long as such
Series is an Outstanding Series, sub-subaccounts of the Series Collection
Subaccounts with respect to such Series (respectively, the "SERIES PRINCIPAL
COLLECTION SUB-SUBACCOUNT" and "SERIES NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT"
and, collectively, the "SERIES COLLECTION Sub-subaccounts").

                    (ii) The Trustee also shall establish an intervening deposit
     account with an Eligible Institution or with the corporate trust department
     of the Trustee or an affiliate of the Trustee (the "COLLECTION
     CONCENTRATION ACCOUNT") in the name of the Company, which account, so long
     as no Potential Early Amortization Event or Early Amortization Event has
     occurred, shall be used for the receipt of Collections transferred from the
     Lockbox Accounts (to the

                                       57




     extent so provided in the Servicing Agreement) prior to the deposit of such
     Collections into the Collection Account. The Trustee shall have the right,
     upon the occurrence of and during the continuance of an Early Amortization
     Event or Potential Early Amortization Event with respect to any Outstanding
     Series, to give irrevocable standing instructions governing the transfer of
     available funds on deposit in the Collection Concentration Account.

                    (b) AUTHORITY OF THE TRUSTEE IN RESPECT OF THE COLLECTION
ACCOUNT AND THE COLLECTION CONCENTRATION ACCOUNT AND HOLDERS* INTERESTS THEREIN.
(i) The Trustee, on behalf of the Holders, shall possess all right, title and
interest in all funds on deposit from time to time in the Collection Account and
in all proceeds thereof. The Collection Account shall be under the sole dominion
and control of the Trustee for the benefit of the Investor Certificateholders
and, to the extent set forth in any Supplement, any owner of any Series
Subordinated Interest. If, at any time, the Servicer has actual notice or
knowledge that any institution holding the Collection Account is other than the
corporate trust department of the Trustee or an affiliate of the Trustee, or
that the institution holding the Collection Account or the Collection
Concentration Account has ceased to be an Eligible Institution, the Servicer
shall direct the Trustee in writing to establish within 30 days a substitute
account therefor with an Eligible Institution, transfer any cash and/or any
instruments to such new account and from the date any such substitute accounts
are established, such account shall be the Collection Account (or the Collection
Concentration Account, as the case may be). Neither the Company nor the
Servicer, nor any person or entity claiming by, through or under the Company or
Servicer, shall have any right title or interest in, except to the extent
expressly provided under the Transaction Documents, or any right to withdraw any
amount from, the Collection Account. Pursuant to the authority granted to the
Servicer in subsection 2.2(a) of the Servicing Agreement, the Servicer shall
have the power, revocable by the Trustee, to instruct the Trustee in writing to
make withdrawals from and payments to the Collection Account and/or the
Collection Concentration Account for the purposes of carrying out the Servicer*s
or the Trustee*s duties hereunder.

                         (ii) Each Series of Investor Certificates shall
     represent a Fractional Undivided Interest in the Trust as indicated in the
     Supplement (including any Enhancement applicable to such Series as
     specified in the related Supplement) relating to such Series and the right
     to receive Collections and other amounts at the times and in the amounts
     specified in this Article III (as supplemented by the

                                       58




     Supplement related to such Series) to be deposited in the Collection
     Account and any other accounts maintained for the benefit of the Investor
     Certificateholders or paid to the Investor Certificateholders (with respect
     to all outstanding Series, the "CERTIFICATEHOLDERS' INTEREST"). The
     "EXCHANGEABLE COMPANY INTEREST" shall be the interest in the Trust not
     represented by any Series of Investor Certificates then outstanding or
     Series Subordinated Interests then in existence, including the right to
     receive Collections and other amounts at the times and in the amounts
     specified in this Article III to be paid to the Company (the "COMPANY
     INTEREST"), and each Series Subordinated Interest, if any, shall be the
     interest specified as such pursuant to the related Supplement; PROVIDED,
     HOWEVER, that no such Exchangeable Company Interest or Series Subordinated
     Interest shall include any interest in any Trust Account or any other
     accounts maintained for the benefit of the Investor Certificateholders,
     except as specifically provided in this Article III.

                    (c) ADMINISTRATION OF THE COLLECTION ACCOUNT. (i) At the
written direction of the Servicer, funds on deposit in the Collection Account
available for investment shall be invested by the Trustee in Eligible
Investments selected by the Company. In the absence of written direction from
the Servicer, funds in the Collection Account shall remain uninvested. All such
Eligible Investments shall be delivered to the Trustee in accordance with the
definition of "Delivery" and shall be held by the Trustee or its nominee
(including the Securities Intermediary) for the benefit of the Investor
Certificateholders or such Eligible Investments shall be promptly credited to a
securities account maintained by the Trustee with a securities intermediary.
Amounts on deposit in each Series Non-Principal Collection Sub-subaccount shall,
if applicable, be invested in Eligible Investments that will mature, or that are
payable or redeemable upon demand of the holder thereof, so that such funds will
be available on or before the Business Day immediately preceding the next
Distribution Date. None of such Eligible Investments shall be disposed of prior
to the maturity date with respect thereto unless such disposition is reasonably
necessary to prevent a loss. All interest and investment earnings (net of losses
and investment expenses) (the "INVESTMENT Earnings") on funds deposited in a
Series Non-Principal Collection Sub-subaccount shall be deposited in such
sub-subaccount. Amounts on deposit in the Series Principal Collection
Sub-subaccounts and any other sub-subaccounts as specified in the related
Supplement shall be invested in Eligible Investments that mature, or that are
payable or redeemable upon demand of the holder thereof, so that such funds will
be

                                       59




available not later than the date which is specified in any Supplement. The
Trustee, or its nominee or custodian, shall maintain possession of the
instruments or securities, if any, evidencing any Eligible Investments from the
time of purchase thereof until the time of sale or maturity. Any Investment
Earnings on such invested funds in a Series Principal Collection Sub-subaccount
and any other subsubaccounts as specified in the related Supplement will be
deposited in the related Series Non-Principal Collection Sub-subaccount. Any
Investment Earnings shall be included by the Company in its gross income for all
income tax purposes.

                         (ii) Any securities intermediary (as that term is
     defined in Article 8 of the UCC) maintaining a securities account for the
     Trustee for the benefit of the Purchasers (the "SECURITIES INTERMEDIARY"),
     and The Chase Manhattan Bank as initial Securities Intermediary, hereby
     represents that it is as of the date hereof and shall be for so long as it
     is the Securities Intermediary hereunder a bank or broker-dealer that (a)
     in the ordinary course of its business maintains securities accounts for
     others and is acting in that capacity hereunder and (b) maintains a
     Participant*s Securities Account (as defined in the United States
     Regulations) with a Federal Reserve Bank. The Securities Intermediary shall
     agree (and The Chase Manhattan Bank as initial Securities Intermediary
     hereby agrees) with the parties hereto that (x) the Collection Account
     (including any sub-accounts thereof) is a securities account to which
     financial assets may be credited, (y) the Trustee shall be entitled to
     exercise rights that comprise such financial assets and to exercise the
     ordinary rights of an entitlement holder, (z) the "securities
     intermediary*s jurisdiction" as defined in the UCC of the Securities
     Intermediary with respect to the Eligible Investments credited to the
     Collection Account (including any sub-accounts thereof) shall be the State
     of New York. The Securities Intermediary shall represent and covenant (and
     The Chase Manhattan Bank hereby represents and covenants) that it is not
     and will not be (as long as it is the Securities Intermediary hereunder) a
     party to any agreement that is inconsistent with the provisions of this
     Agreement. The Securities Intermediary shall covenant (and The Chase
     Manhattan Bank hereby covenants) that it will not take any action
     inconsistent with the provisions of this Agreement applicable to it. It is
     the intent of the Trustee, the Servicer and the Company that the Collection
     Account (including any sub-accounts thereof) shall be a securities account
     of the Trustee and not an account of the Company

                                       60




     or the Servicer. If despite such intent, the Collection Account (including
     any sub-accounts thereof) is determined to be an account of the Company or
     the Servicer, then the Securities Intermediary agrees to comply with
     entitlement orders originated by the Trustee without further consent by the
     Company or the Servicer.

                    (d) DAILY COLLECTIONS. (i) Promptly following its receipt of
Collections in the form of available funds in the Lockbox Accounts, but in no
event later than the Business Day following such receipt, the Servicer shall
transfer, or cause to be transferred, all Collections on deposit (less the
aggregate amount of set-offs permitted to be retained pursuant to any applicable
Lockbox Agreement) in the form of immediately available funds in the Lockbox
Accounts directly to the Collection Concentration Account, provided that in the
event of and continuance of an Potential Early Amortization Period or Early
Amortization Period, such funds shall be deposited directly into the Collection
Account, without first being deposited into the Collection Concentration
Account, and the Trustee shall instruct any Lockbox Processor to transfer all
Collections in any Lockbox Account directly to the Collection Account.

                         (ii) Promptly, but in no event later than the date of
     deposit (unless received after 3:00 p.m., New York City time, on such date,
     then on the next Business Day) (the "DEPOSIT DATE"), the Trustee shall
     transfer amounts on deposit in the Collection Concentration Account into
     the Collection Account.

                         (iii) No later than the Business Day following each
     Deposit Date, the Trustee shall (in accordance with the written directions
     received from the Servicer pursuant to subsection (h) below, upon which the
     Trustee may conclusively rely) transfer from Aggregate Daily Collections
     deposited into the Collection Account pursuant to subsection (d)(i) or
     (d)(ii) above on such Deposit Date, to the respective Series Collection
     Subaccount, an amount equal to the product of (x) the applicable Invested
     Percentage for such Outstanding Series and (y) such Aggregate Daily
     Collections.

                         (iv) No later than the Business Day following each
     Deposit Date, the Trustee shall (in accordance with the written directions
     received from the Servicer pursuant to subsection (h) below, upon which the
     Trustee may conclusively rely) allocate

                                       61




     funds transferred to the Series Collection Subaccount for each Outstanding
     Series pursuant to subsection (d)(iii) above to the Series Non-Principal
     Collection Sub-subaccount, the Series Principal Collection Sub-subaccount
     and such other Sub-subaccounts of each such Series in accordance with the
     related Supplement for such Series.

                         (v) No later than the Business Day following each
     Deposit Date, except as otherwise provided in a Supplement, the Trustee
     shall (in accordance with the written directions received from the Servicer
     pursuant to subsection (h) below, upon which the Trustee may conclusively
     rely) transfer to the Company Collection Subaccount from Aggregate Daily
     Collections deposited into the Collection Account pursuant to subsection
     (d)(ii) above on such Deposit Date, the remaining funds (less an amount
     equal to the costs and expenses, if any, incurred by the Trustee with
     respect to the sale of the Receivables pursuant to subsection 7.2(a) or
     9.1(b) and reimbursable to the Trustee as provided in Section 8.5), if any,
     on deposit in the Collection Account on such date after giving effect to
     transfers to be made pursuant to subsection (d)(iii) above.

                    (e) CERTAIN ALLOCATIONS DURING AN AMORTIZATION PERIOD. (i)
If, on any Settlement Report Date, an Amortization Period has commenced and is
continuing with respect to any Outstanding Series and at such Settlement Report
Date, a Revolving Period is still in effect with respect to any other
Outstanding Series (a "SPECIAL ALLOCATION SETTLEMENT REPORT DATE"), then the
Servicer shall make the following calculations:

               (A) the amount (the "ALLOCABLE CHARGED-OFF AMOUNT") equal to the
               excess, if any, of (I) the aggregate Principal Amount of
               Charged-Off Receivables for the related Settlement Period over
               (II) the aggregate Principal Amount of Recoveries received during
               the related Settlement Period;

               (B) the amount (the "ALLOCABLE RECOVERIES AMOUNT") equal to the
               excess, if any, of (I) the aggregate Principal Amount of
               Recoveries received during the related Settlement Period over
               (II) the aggregate Principal Amount of Charged-Off Receivables
               for the related Settlement Period; and

                                       62




                         (ii) If, on any Special Allocation Settlement Report
     Date, any of the Allocable Charged-Off Amount or the Allocable Recoveries
     Amount is greater than zero for the related Settlement Period, the Trustee
     shall (in accordance with written directions received pursuant to
     subsection (b)(i) above, upon which the Trustee may conclusively rely) make
     (A) a PRO RATA allocation to each Outstanding Series (based on the Invested
     Percentage for such Series) of a portion (as determined in clause (iii)
     below) of each such positive amount and (B) an allocation to the
     Exchangeable Company Interest of the remaining portion of each such
     positive amount.

                         (iii) With respect to each portion of the Allocable
     Charged-Off Amount and the Allocable Recoveries Amount which is allocated
     to an Outstanding Series pursuant to subsection 3.1 (e)(ii), the Trustee
     shall apply each such amount to such Series in accordance with the related
     Supplement for such Series.

                    (f) ALLOCATIONS FOR THE EXCHANGEABLE COMPANY INTEREST. (i)
Until the commencement and continuance of an Early Amortization Period, on each
Business Day and, after the occurrence and continuance of an Early Amortization
Period and until the Trust Termination Date, on each Distribution Date, after
making all allocations required pursuant to subsection 3.1(d), the Trustee shall
(in accordance with the written direction of the Servicer, upon which the
Trustee may conclusively rely) transfer to the owner of the Exchangeable Company
Interest the remaining amount on deposit in the Company Collection Subaccount.

                    (g) SET-OFF. (i) In addition to the provisions of Section
8.5, if the Company shall fail to make a payment as provided in this Agreement
or any Supplement, the Servicer or the Trustee may set off and apply any amounts
otherwise payable to the Company under any Pooling and Servicing Agreement. The
Company hereby waives demand, notice or declaration of such set-off and
application; PROVIDED that notice will promptly be given to the Company of such
set-off; PROVIDED FURTHER that failure to give such notice shall not affect the
validity of such set-off.

                         (ii) In addition to the provisions of Section 8.5, in
     the event the Servicer shall fail to make a payment as provided in any
     Pooling and Servicing Agreement, the Trustee may set off and

                                       63




     apply any amounts otherwise payable to the Servicer in its capacity as
     Servicer under the Transaction Documents on account of such obligation. The
     Servicer hereby waives demand, notice or declaration of such set-off and
     application; PROVIDED that notice will promptly be given to the Servicer of
     such set-off; PROVIDED FURTHER that failure to give such notice shall not
     affect the validity of such set-off.

                    (h) ALLOCATION AND APPLICATION OF FUNDS. The Servicer shall
direct the Trustee in writing in a timely manner to apply all Collections with
respect to the Receivables as described in this Article III and in the
Supplement with respect to each Outstanding Series. The Servicer shall direct
the Trustee in writing to pay Collections to the owner of the Exchangeable
Company Interest to the extent such Collections are allocated to the
Exchangeable Company Interest under subsection 3.1(f) and as otherwise provided
in this Article III. Notwithstanding anything in this Agreement, any Supplement
or any other Transaction Document to the contrary, to the extent that the
Trustee receives any Required Report and immediately available funds prior to
2:00 p.m., New York City time, on any Business Day, the Trustee shall make any
applications of funds required thereby on the same Business Day and otherwise on
the next succeeding Business Day.

                    (i) DAILY SETTLEMENTS. Subject to the express terms of any
Supplement, but notwithstanding anything in this Agreement to the contrary or
the Servicing Agreement, for so long as USFS remains the Servicer and no Early
Amortization Event or Potential Early Amortization Event with respect to any
Outstanding Series shall have occurred and be continuing, the Servicer shall not
be required to make daily deposits of Collections from the Collection
Concentration Account into the Collection Account as provided in subsection
3.1(d), but may withdraw such funds from the Collection Concentration Account
and make a single deposit of immediately available funds into the Collection
Account not later than 1:00 p.m., New York City time on any Business Day in an
amount equal to the aggregate amount of Collections required (determined without
regard to this section) to be deposited into the Series Non-Principal Collection
Sub-subaccount, the Series Principal Collection Sub-subaccount (less amounts
that may be paid to or at the direction of the Company pursuant to the
applicable Supplement) and such other Sub-subaccounts of each Series in
accordance with the related Supplement for such Series or such greater amount as
determined by the Servicer. To the extent that the amount deposited by the
Servicer is greater than the amount required, the excess shall be applied on
each Business Day thereafter to satisfy the deposit requirements of the
preceding sentence up to the amount of such excess.

                                       64




                 THE REMAINDER OF ARTICLE III SHALL BE SPECIFIED
                 IN THE SUPPLEMENT WITH RESPECT TO EACH SERIES.
                 SUCH REMAINDER SHALL BE APPLICABLE ONLY TO THE
                   SERIES RELATING TO THE SUPPLEMENT IN WHICH
                             SUCH REMAINDER APPEARS.


                                   ARTICLE IV

                             ARTICLE IV IS RESERVED
                     AND MAY BE SPECIFIED IN ANY SUPPLEMENT
                   WITH RESPECT TO THE SERIES RELATING THERETO

                                    ARTICLE V
                         THE CERTIFICATES AND INTERESTS

               Section 5.1 THE CERTIFICATES. The Investor Certificates of each
Series and any Class thereof shall be in fully registered form and shall be
substantially in the form of the exhibits with respect thereto attached to the
applicable Supplement. The Certificates shall, upon issue, be executed and
delivered by the Company to the Trustee for authentication and redelivery as
provided in Section 5.2. Except as otherwise set forth in the related
Supplement, the Investor Certificates shall be issued in minimum denominations
of $1,000,000 and in integral multiples of $100,000 in excess thereof unless
otherwise specified in any Supplement for any Series and Class. Unless otherwise
specified in any Supplement for any Series, the Investor Certificates shall be
issued upon initial issuance as a single global certificate in an original
principal amount equal to the Initial Invested Amount with respect to such
Series. The Company is hereby authorized to execute and deliver each Certificate
on behalf of the Trust. Each Certificate shall be executed by manual or
facsimile signature on behalf of the Company by a Responsible Officer.
Certificates bearing the manual or facsimile signature of the individual who
was, at the time when such signature was affixed, authorized to sign on behalf
of the Company or the Trustee shall not be rendered invalid, notwithstanding
that such individual has ceased to be so authorized prior to or on the date of
the authentication and delivery of such Certificates or does not hold such
office at the date of such Certificates. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless there appears
on such Certificate a certificate of authentication substantially in the form
provided for herein executed by or on behalf of the Trustee by the manual
signature of a duly authorized

                                       65




signatory, and such certificate of authentication upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication but failure to do so shall not render them invalid.

               Section 5.2 AUTHENTICATION OF CERTIFICATES. The Trustee shall
authenticate and deliver the initial Series of the Investor Certificates that is
issued upon original issuance, upon the written order of the Company in a form
reasonably satisfactory to the Trustee, to the holders of the initial Series of
Investor Certificates, against payment to the Company of the Initial Invested
Amount. The Investor Certificates shall be duly authenticated by or on behalf of
the Trustee in authorized denominations equal to (in the aggregate) the Initial
Invested Amount and the interests evidenced thereby, together with any Series
Subordinated Interest and the Exchangeable Company Interest, shall constitute
the entire ownership of the Trust. Upon a Company Exchange as provided in
Section 5.10 and the satisfaction of certain other conditions specified therein,
the Trustee shall authenticate and deliver the Certificates of additional Series
(with the designation provided in the applicable Supplement) (or, if provided in
any Supplement, the additional Investor Certificates of an existing Series),
upon the written order of the Company, to the Persons designated in such
Supplement. Upon the order of the Company, the Investor Certificates of any
Series shall be duly authenticated by or on behalf of the Trustee, in authorized
denominations equal to (in the aggregate) the Initial Invested Amount of such
Series of Investor Certificates.

               Section 5.3 REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES. (a) The Trustee shall cause to be kept at the office or agency to
be maintained by a transfer agent and registrar (which may be the Trustee) (the
"TRANSFER AGENT AND REGISTRAR") in accordance with the provisions of Section
8.16 a register (the "CERTIFICATE REGISTER") in which, subject to such
reasonable regulations as the Trustee may prescribe, the Transfer Agent and
Registrar shall provide for the registration of the Investor Certificates and of
transfers and exchanges of the Investor Certificates as herein provided. The
Company hereby appoints the Trustee as the initial Transfer Agent and Registrar
for the purpose of registering the Investor Certificates and transfers and
exchanges of the Investor Certificates as herein provided. The Company, or the
Trustee, as agent for the Company, may revoke such appointment as Transfer Agent
and Registrar and remove the then-acting Transfer Agent and Registrar if the
Trustee or the Company (as applicable) determines in its sole discretion that
the then-acting Transfer Agent and Registrar has failed to perform its
obligations under this Agreement in any material respect. The then-acting
Transfer

                                       66




Agent and Registrar shall be permitted to resign as Transfer Agent and
Registrar upon 30 days' written notice to the Company, the Trustee and the
Servicer; PROVIDED, HOWEVER, that such resignation shall not be effective and
the Trustee shall continue to perform its duties as Transfer Agent and Registrar
until the Trustee has appointed a successor Transfer Agent and Registrar
reasonably acceptable to the Company and such successor Transfer Agent and
Registrar has accepted such appointment. The provisions of Sections 8.1, 8.2,
8.3, 8.5 and 10.19 shall apply to the Trustee also in its role as Transfer Agent
and Registrar for so long as the Trustee shall act as Transfer Agent and
Registrar.

               The Company hereby agrees to provide the Trustee from time to
time sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to the
Transfer Agent and Registrar for its services under this Section 5.3. The
Company, Trustee and Transfer Agent and Registrar shall agree on such
compensation in writing. The Trustee hereby agrees that, upon the receipt of
such funds from the Company, it shall promptly pay the Transfer Agent and
Registrar such amounts.

               Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Company shall execute, and, upon the written
request of the Company, the Trustee shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Investor
Certificates in authorized denominations of the same Series representing like
aggregate Fractional Undivided Interests and which bear numbers that are not
contemporaneously outstanding.

               At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same Series
in authorized denominations of like aggregate Fractional Undivided Interests,
bearing numbers that are not contemporaneously outstanding, upon surrender of
the Investor Certificates to be exchanged at any such office or agency of the
Transfer Agent and Registrar maintained for such purpose.

               Whenever any Investor Certificates of any Series are so
surrendered for exchange, the Company shall execute, and, upon the written
request of the Company, the Trustee shall authenticate and (unless the Transfer
Agent and Registrar is different from the Trustee, in which case the Transfer
Agent and Registrar shall) deliver, the Investor Certificates of such Series
which the Investor Certificateholder making the exchange is entitled to receive.
Every Investor

                                       67




Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer substantially in the
form attached to the form of such Investor Certificate and duly executed by the
holder thereof or his attorney-in-fact duly authorized in writing delivered to
the Trustee (unless the Transfer Agent and Registrar is different from the
Trustee, in which case to the Transfer Agent and Registrar) and complying with
any requirements set forth in the applicable Supplement.

               No service charge shall be made for any registration of transfer
or exchange of Investor Certificates, but the Transfer Agent and Registrar may
require any Investor Certificateholder that is transferring or exchanging one or
more Certificates to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Investor Certificates.

               All Investor Certificates surrendered for registration of
transfer and exchange shall be cancelled and disposed of in a customary manner
satisfactory to the Trustee.

               The Company shall execute and deliver Certificates to the Trustee
or the Transfer Agent and Registrar in such amounts and at such times as are
necessary to enable the Trustee and the Transfer Agent and Registrar to fulfill
their respective responsibilities under this Agreement and the Certificates.

               No interest of any Investor Certificateholder in the Receivables
may be transferred other than by means of a transfer of an Investor Certificate.

                    (b) The Transfer Agent and Registrar will maintain at its
expense in the Borough of Manhattan, The City of New York and, subject to
subsection 5.3(a), if specified in the related Supplement for any Series, any
other city designated in such Supplement, an office or offices or agency or
agencies where Investor Certificates may be surrendered for registration or
transfer or exchange.

                    (c) Unless otherwise stated in any related Supplements,
registration of transfer of Certificates containing a legend relating to
restrictions on transfer of such Certificates (which legend shall be set forth
in the Supplement relating to such Investor Certificates) shall be effected only
if the conditions set forth in the related Supplement are complied with.

               Certificates issued upon registration or transfer of, or in
exchange for, Certificates bearing the legend referred to above shall also bear
such legend unless

                                       68




the Company, the Servicer, the Trustee and the Transfer Agent and Registrar
receive an Opinion of Counsel satisfactory to each of them, to the effect that
such legend may be removed.

                    (d) (i) The Company may not transfer, assign, exchange or
otherwise pledge or convey the Series Subordinated Interest of any Series or the
Exchangeable Company Interest except, with respect to the Exchangeable Company
Interest, pursuant to Section 5.10.

                         (ii) Neither the Company nor the Servicer shall at any
     time participate in the listing of any Targeted Investor Certificate (as
     defined below) on an "established securities market" within the meaning of
     Section 7704(b)(1) of the Internal Revenue Code and any proposed, temporary
     or final treasury regulation thereunder as of the date hereof, including,
     without limitation, an over-the-counter or interdealer quotation system
     that regularly disseminates firm buy or sell quotations. "TARGETED INVESTOR
     CERTIFICATE" shall mean any Certificate representing a right to receive
     interest or principal with respect to any Class or Series of Investor
     Certificates with respect to which an Opinion of Counsel has not been
     rendered that such Certificates will be treated as debt for federal income
     tax purposes (it being understood that any Certificate with respect to
     which an Opinion of Counsel has been rendered that such Certificate will be
     treated either as debt or as an interest in a partnership for federal
     income tax purposes shall be a Targeted Investor Certificate).

                    (e) (i) No transfer of a Targeted Investor Certificate or
grant of a participation therein shall be permitted if (A) such transfer or
grant would cause the number of Targeted Holders (as defined below) to exceed 75
or (B) the transferee or grantee, as the case may be, is a trust, partnership or
"S corporation" (within the meaning of Section 1361(a) of the Code) (a
"FLOW-THROUGH ENTITY"), unless such flow-through entity represents that less
than 50% of the aggregate value of such flow-through entity's assets consist of
Targeted Investor Certificates. "TARGETED HOLDER" shall mean each Holder of or
participant in a Targeted Investor Certificate; PROVIDED, HOWEVER, that any
Person holding more than one interest with respect to the Investor Certificates
or the Trust, each of which separately would cause such Person to be a Targeted
Holder, shall be treated as a single Targeted Holder.

                                       69




                         (ii) Any determination by the Transfer Agent and
     Registrar (in accordance with the information contained in the Certificate
     Register and the certifications made by each transferee and participant
     pursuant to the applicable Supplement, upon which information the Transfer
     Agent and Registrar may conclusively rely) that the event described in
     either clause (i)(A) or (i)(B) of this subsection 5.3(e) would occur as the
     result of a transfer of a Targeted Investor Certificate or the grant of a
     participation therein shall be (X) communicated in writing to the
     transferring or granting Investor Certificateholder prior to the effective
     date set out in the notice of transfer or participation required by, or
     otherwise provided for under, the related Supplement and (Y) binding upon
     the parties absent manifest error.

               Section 5.4 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If
(a) any mutilated Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence in the form of
a certification by the holder thereof of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be required by them to save the
Trust and each of them harmless, then, in the absence of actual notice to a
Responsible Officer of the Trustee or Transfer Agent and Registrar that such
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and, upon the written request of the Company, the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate Fractional Undivided Interest and bearing a number that is not
contemporaneously outstanding. In connection with the issuance of any new
Certificate under this Section 5.4, the Trustee or the Transfer Agent and
Registrar may require the payment by the Holder of a sum sufficient to cover any
tax or other governmental expenses (including the fees and expenses of the
Trustee and Transfer Agent and Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 5.4 shall constitute conclusive and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.

               Section 5.5 PERSONS DEEMED OWNERS. At all times prior to due
presentation of a Certificate for registration of transfer, the Company, the
Trustee, the Paying Agent, the Transfer Agent and Registrar, any Agent and any
agent of any of them may treat the Person in whose name any Certificate is
registered as the

                                       70




owner of such Certificate for the purpose of receiving distributions pursuant to
Article IV of the related Supplement and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar, any
Agent nor any agent of any of them shall be affected by any notice to the
contrary. Notwithstanding the foregoing provisions of this Section 5.5, in
determining whether the holders of the requisite Fractional Undivided Interests
have given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Certificates owned by the Company, the Servicer or any
Affiliate thereof shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver; only
Certificates which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Certificates so owned by the Company, the
Servicer or any Affiliate thereof which have been pledged in good faith shall
not be disregarded and may be regarded as outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Company, the Servicer or an
Affiliate thereof.

               Section 5.6 APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make distributions to Investor Certificateholders from the Collection Account
(and/or any other account or accounts maintained for the benefit of Holders as
specified in the related Supplement for any Series) pursuant to Articles III and
IV. The Trustee may revoke such power and remove the Paying Agent if the Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect. Unless
otherwise specified in the related Supplement for any Series and with respect to
such Series, the Paying Agent shall initially be the Trustee and, if the Trustee
so chooses, any co-paying agent chosen by the Trustee. Each Paying Agent shall
have a combined capital and surplus of at least $50,000,000. The Paying Agent
shall be permitted to resign upon 30 days' written notice to the Trustee. In the
event that the Paying Agent shall so resign, the Trustee shall appoint a
successor to act as Paying Agent (which shall be a depositary institution or
trust company) reasonably acceptable to the Company which appointment shall be
effective on the date on which the Person so appointed gives the Trustee written
notice that it accepts the appointment. Any resignation or removal of the Paying
Agent and appointment of successor Paying Agent pursuant to this Section 5.6
shall not become effective until acceptance of appointment by the successor
Paying Agent, as provided in this Section 5.6. The Trustee shall cause such
successor Paying Agent or any additional Paying Agent appointed by the Trustee
to execute and deliver to the Trustee an instrument in which such successor

                                       71




Paying Agent or additional Paying Agent shall agree with the Trustee that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Investor Certificateholders in
trust for the benefit of the Investor Certificateholders entitled thereto until
such sums shall be paid to such Holders. The Paying Agent shall return all
unclaimed funds to the Trustee and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Trustee. The
provisions of Sections 8.1, 8.2, 8.3, 8.5 and 10.19 shall apply to the Trustee
also in its role as Paying Agent, for so long as the Trustee shall act as Paying
Agent. Any reference in this Agreement to the Paying Agent shall include any
co-paying agent, if any, unless the context requires otherwise.

                  The Company hereby agrees to provide the Trustee from time to
time sufficient funds, on a timely basis and in accordance with and subject to
Section 8.5, for the payment of any reasonable compensation payable to the
Paying Agent for its services under this Section 5.6. The Trustee hereby agrees
that, upon the receipt of such funds from the Company, it shall promptly pay the
Paying Agent such amounts.

               Section 5.7 ACCESS TO LIST OF INVESTOR CERTIFICATEHOLDERS' NAMES
AND ADDRESSES. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Company, the Servicer or the Paying Agent, within ten
Business Days after receipt by the Trustee of a written request therefor from
the Company, the Servicer or the Paying Agent, respectively, in writing, a list
of the names and addresses of the Investor Certificateholders as then recorded
by or on behalf of the Trustee. If three or more Investor Certificateholders of
record or any Investor Certificateholder of any Series or a group of Investor
Certificateholders of record representing Fractional Undivided Interests
aggregating not less than 10% of the Invested Amount of the related Outstanding
Series (the "APPLICANTS") apply in writing to the Trustee, and such application
states that the Applicants desire to communicate with other Investor
Certificateholders of any Series with respect to their rights under this
Agreement or under the Investor Certificates and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Trustee, after
having been adequately indemnified by such Applicants for its costs and
expenses, shall transfer or shall cause the Transfer Agent and Registrar to
transmit, such communication to the Investor Certificateholders reasonably
promptly after the receipt of such application.

               Every Investor Certificateholder, by receiving and holding an
Investor Certificate, consents to the disclosure of its name and address as
provided above and agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar,

                                       72




nor any of their respective agents, officers, directors or employees shall be
held accountable by reason of the disclosure or mailing of any such information
as to the names and addresses of the Investor Certificateholders hereunder,
regardless of the sources from which such information was derived.

               As soon as practicable following each Record Date, the Trustee
shall provide to the Paying Agent or its designee, a list of Investor
Certificateholders in such form as the Paying Agent may reasonably request.

               Section 5.8 AUTHENTICATING AGENT. (a) The Trustee may appoint one
or more authenticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the Certificates in
connection with the issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication on
behalf of the Trustee by an authenticating agent and a certificate of
authentication executed on behalf of the Trustee by an authenticating agent.
Each authenticating agent must be acceptable to the Company.

                    (b) Any institution succeeding to the corporate trust
business of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such authenticating agent.

                    (c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee. Upon the receipt by the Trustee of
any such notice of resignation and upon the giving of any such notice of
termination by the Trustee, the Trustee shall immediately give notice of such
resignation or termination to the Company. Any resignation of an authenticating
agent shall not become effective until acceptance of appointment by the
successor authenticating agent as provided in this Section 5.8. The Trustee may
at any time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time an authenticating
agent shall cease to be acceptable to the Trustee or the Company, the Trustee
promptly shall appoint a successor authenticating agent. Any successor
authenticating agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an

                                       73




authenticating agent. No successor authenticating agent (other than an Affiliate
of the Trustee) shall be appointed unless reasonably acceptable to the Trustee
and the Company.

                    (d) The Company hereby agrees to provide the Trustee from
time to time sufficient funds, on a timely basis and in accordance with and
subject to Section 8.5, for the payment of any reasonable compensation payable
to each authenticating agent for its services under this Section 5.8. The
Trustee hereby agrees that, upon the receipt of such funds from the Company it
shall pay each authenticating agent such amounts.

                    (e) The provisions of Sections 8.1, 8.2, 8.3 and 8.5 shall
be applicable to any authenticating agent.

                    (f) Pursuant to an appointment made under this Section 5.8,
the Certificates may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in substantially
the following form:

               "This is one of the Certificates described in the Amended and
     Restated Pooling Agreement, dated as of May 1, 2001, among USS Receivables
     Company, Ltd., United Stationers Financial Services LLC, as Servicer, and
     The Chase Manhattan Bank, as Trustee.


as Authenticating Agent
for the Trustee

           By___________________________
             Authorized Signatory"

               Section 5.9 TAX TREATMENT. It is the intent of the Servicer, the
Company, the Investor Certificateholders and the Trustee that, for federal,
state and local income and franchise tax purposes, the Investor Certificates be
treated as evidence of indebtedness secured by the Trust Assets and the Trust
not be characterized as a "publicly traded partnership" or an association
taxable as a corporation. The Company and the Trustee, by entering into this
Agreement, and each Investor Certificateholder, by its acceptance of its
Investor Certificate, agree to

                                       74




treat the Investor Certificates for federal, state and local income and
franchise tax purposes as indebtedness. The parties hereto agree that they shall
not cause or permit the making, as applicable, of any election under Treasury
Regulation Section 301.7701-3 whereby the Trust or any portion thereof would be
treated as a corporation for federal income tax purposes and, except as required
by Section 8.11, shall not file tax returns or obtain any federal employer
identification number for the Trust but shall treat the Trust as a security
device for such purposes. The provisions of this Agreement and all related
Transaction Documents shall be construed to further these intentions of the
parties. This Section 5.9 shall survive the termination of this Agreement and
shall be binding on all transferees of any of the foregoing persons.

               Section 5.10 COMPANY EXCHANGES

                    (a) The Company may, in accordance with the procedures set
forth below, call for an adjustment of the Exchangeable Company Interest in
exchange for (i) an increase in the Invested Amount of a Class of Investor
Certificates of an Outstanding Series and an increase in the related Series
Subordinated Interest or (ii) one or more newly issued Series of Investor
Certificates and the related newly created Series Subordinated Interest (a "NEW
SERIES") (any such exchange, a "COMPANY EXCHANGE"). The Company may perform a
Company Exchange by notifying the Trustee, in writing at least 30 days in
advance (an "EXCHANGE NOTICE") of the date upon which the Company Exchange is to
occur (an "EXCHANGE DATE"). Any Exchange Notice shall state the designation of
any Series (and/or Class, if applicable) to be issued (or supplemented) on the
Exchange Date and, with respect to each such Series (and/or Class, if
applicable): (a) its additional or Initial Invested Amount, as the case may be,
if any, which in the aggregate at any time may not be greater than the current
value of the Exchangeable Company Interest, if any, at such time, (b) its
Certificate Rate (or the method for allocating interest payments or other cash
flow to such Series), if any, and (c) whether such New Series will be a
companion series to an Outstanding Series (an "EXISTING COMPANION SERIES"; and
together with the New Series, a "COMPANION SERIES"). On the Exchange Date, the
Trustee shall, upon the written order of the Company, authenticate and deliver
any Certificates evidencing an increase in the Invested Amount of a Class of
Investor Certificates or a newly issued Series only upon delivery by the Company
to the Trustee of the following (together with the delivery by the Company to
the Trustee of any additional agreements, instruments or other documents as are
specified in the related Supplement): (a) a Supplement executed by the Company
and specifying the Principal Terms of such Series (PROVIDED that no

                                       75




such Supplement shall be required for any increase in the Invested Amount of a
Class of Investor Certificates unless it is so required by the related
Supplement), (b) a Tax Opinion addressed to the Trustee and the Trust, (c) a
General Opinion addressed to the Trustee and the Trust and (d) written
confirmation from each Rating Agency that the Company Exchange will not result
in the Rating Agency's reducing or withdrawing its rating on any then
Outstanding Series rated by it. Upon the delivery of the items listed in clauses
(a) through (d) above, the existing Exchangeable Company Interest and the
applicable Series Subordinated Interests, as the case may be, shall be deemed
cancelled, the Trustee shall issue the applicable Series of Investor
Certificates, dated the Exchange Date, and the applicable Series Subordinated
Interests and the new Exchangeable Company Interest shall be deemed duly
created, in each case as provided above. There is no limit to the number of
Company Exchanges that the Company may perform under this Agreement. If the
Company shall, on any Exchange Date, retain any Investor Certificates issued on
such Exchange Date, it shall, prior to transferring any such Certificates to
another Person, obtain a Tax Opinion. Additional restrictions relating to a
Company Exchange may be set forth in any Supplement.

                    (a) Upon any Company Exchange, the Trustee, in accordance
with the written directions of the Company, shall issue to the Company under
Section 5.1, for execution and redelivery to the Trustee for authentication
under Section 5.2, (i) one or more Certificates representing an increase in the
Invested Amount of an Outstanding Series or (ii) one or more new Series of
Investor Certificates. Any such Certificates shall be substantially in the form
specified in the applicable Supplement and each shall bear, upon its face, the
designation for such Series to which each such certificate belongs so selected
by the Company.

                    (b) In conjunction with a Company Exchange, the parties
hereto shall, except as otherwise provided in subsection (a) above, execute a
supplement to this Agreement, which shall define, with respect to any additional
Investor Certificates or newly issued Series, as the case may be: (i) its name
or designation, (ii) its additional or initial principal amount, as the case may
be (or method for calculating such amount), (iii) its coupon rate (or formula
for the determination thereof), (iv) the interest payment date or dates and the
date or dates from which interest shall accrue, (v) the method for allocating
Collections to Holders, including the applicable Investor Percentage, (vi) the
names of any accounts to be used by such Series and the terms governing the
operation of any such accounts, (vii) the issue and term of a letter of credit
or other form of Enhancement, if any, with respect thereto, (viii) the terms, if
any, on which the Certificates of such

                                       76




Series may be repurchased by the Company or may be remarketed to other
investors, (ix) the Series Termination Date, (x) any deposit account maintained
for the benefit of Holders, (xi) the number of Classes of such Series, and if
more than one Class, the rights and priorities of each such Class, (xii) the
rights of the owner of the Exchangeable Company Interest that have been
transferred to the holders of such Series, (xiii) the designation of any Series
Accounts and the terms governing the operation of any such Series Accounts,
(xiv) provisions acceptable to the Trustee concerning the payment of the
Trustee's fees and expenses and (xv) other relevant terms (all such terms, the
"PRINCIPAL TERMS" of such Series). The Supplement executed in connection with
the Company Exchange shall contain administrative provisions which are
reasonably acceptable to the Trustee.

                    (c) In order for a New Series to be part of a Companion
Series, the Supplement for the related Existing Companion Series must provide
for or permit the Amortization Period to commence on the Issuance Date for such
New Series, and on or prior to the Issuance Date for the New Series the Servicer
and the Company shall take all actions, if any, necessary to cause the
Amortization Period for such Existing Companion Series to commence on such
Issuance Date. The proceeds from the issuance of the New Series shall be
deposited in the applicable Series Principal Collection Sub-subaccount and the
Company shall, on the Issuance Date for such New Series, deposit into the
applicable Series Non-Principal Sub-subaccount the amount of interest that will
accrue on the New Series over a period specified in the related Supplement for
such New Series. On each day on which principal is paid to the holders of the
Existing Companion Series, the Trustee shall distribute to the Company from the
applicable Series Principal Collection Sub-subaccount of the New Series an
amount (up to the amount of available funds in such account) equal to the amount
distributed on such day to the Investor Certificateholders of any Existing
Companion Series; PROVIDED that, after giving effect to such distributions, the
Aggregate Receivables Amount shall equal or exceed the sum of (i) the Target
Receivables Amount with respect to such Existing Companion Series on such day,
PLUS (ii) the Target Receivables Amount with respect to the New Series on such
day, PLUS (iii) the Target Receivables Amount with respect to any other
Outstanding Series on such day; PROVIDED further that the Trustee may
conclusively rely on the calculations of the Servicer of such amounts.

                    (d) Except as specified in any Supplement for a related
Series, all Investor Certificates of any Series shall be equally and ratably
entitled as provided herein to the benefits hereof without preference, priority
or distinction on

                                       77




account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the applicable
Supplement.

               Section 5.11 BOOK-ENTRY CERTIFICATES. If specified in any related
Supplement, the Investor Certificates, or any portion thereof, upon original
issuance, shall be issued in the form of one or more typewritten Certificates
representing the Book-Entry Certificates, to be delivered to the depository
specified in such Supplement (the "DEPOSITORY") which shall be the Clearing
Agency, specified by, or on behalf of, the Company for such Series. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of such Clearing Agency, and no Certificate Book-Entry
Holder will receive a definitive certificate representing such Certificate
Book-Entry Holder's interest in the Investor Certificates, except as provided in
Section 5.13. Unless and until definitive, fully registered Investor
Certificates ("DEFINITIVE CERTIFICATES") have been issued to Holders pursuant to
Section 5.13 or the related Supplement:

                    (a) the provisions of this Section 5.11 shall be in full
force and effect;

                    (b) the Company, the Servicer and the Trustee may deal with
each Clearing Agency for all purposes (including the making of distributions on
the Investor Certificates) as the Holder without respect to whether there has
been any actual authorization of such actions by the Certificate Book-Entry
Holders with respect to such actions;

                    (c) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Agreement, the provisions of this
Section 5.11 shall control; and

                    (d) the rights of Certificate Book-Entity Holders shall be
exercised only through the Clearing Agency and the related Clearing Agency
Participants and shall be limited to those established by law and agreements
between such related Certificate Book-Entry Holders and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository Agreement,
the initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal and
interest on the Investor Certificates to such Clearing Agency Participants.

Notwithstanding the foregoing, no Class or Series of Investor Certificates may
be issued as Book Entry Certificates (but, instead, shall be issued as
Definitive

                                       78




Certificates) unless at the time of issuance of such Class or Series the Company
and the Trustee receive an opinion of independent counsel that the Certificates
of such Class or Series will be treated as indebtedness for federal income tax
purposes.

               Section 5.12 NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Holders is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Certificate Book-Entry Holders
pursuant to Section 5.13, the Trustee shall give all such notices and
communications specified herein to be given to the Investor Certificateholders
to the Clearing Agencies.

               Section 5.13 DEFINITIVE CERTIFICATES. If (a) (i) the Company
advises the Trustee in writing that any Clearing Agency is no longer willing or
able to properly discharge its responsibilities under the applicable Depository
Agreement, and (ii) the Company is unable to locate a qualified successor, (b)
the Company, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (c) after the
occurrence of a Servicer Default, Certificate Book-Entry Holders representing
Fractional Undivided Interests aggregating more than 50% of the Invested Amount
held by such Certificate Book-Entry Holders of each affected Series then issued
and outstanding advise the Clearing Agency through the Clearing Agency
Participants in writing, and the Clearing Agency shall so notify the Trustee,
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of the Certificate Book-Entry Holders, the Trustee
shall notify the Clearing Agency, which shall be responsible to notify the
Certificate Book-Entry Holders, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Book-Entry Holders
requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall issue the
Definitive Certificates. Neither the Company nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions.

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                                   ARTICLE VI

                             OTHER MATTERS RELATING
                                 TO THE COMPANY

               Section 6.1 LIABILITY OF THE COMPANY. The Company shall be liable
for all obligations, covenants, representations and warranties of the Company
arising under or related to this Agreement or any Supplement. Except as provided
in the preceding sentence and otherwise herein, the Company shall be liable only
to the extent of the obligations specifically undertaken by it hereunder.

               Section 6.2 LIMITATION ON LIABILITY OF THE COMPANY. Except as
provided in Sections 6.1 or otherwise provided herein, neither the Company nor
any of its directors or officers or employees or agents, in their capacity as
transferor of, or in connection with the transfer of, Receivables and Related
Property hereunder, shall be under any liability to the Trust, the Trustee, the
Holders or any other Person for any action taken or for refraining from the
taking of any action pursuant to this Agreement, whether or not such action or
inaction arises from express or implied duties under this Agreement; PROVIDED,
HOWEVER, that this provision shall not protect the Company against any liability
which would otherwise be imposed by reason of wilful misconduct, bad faith or
gross negligence in the performance of any duties or by reason of reckless
disregard of any obligations and duties hereunder; PROVIDED, FURTHER, that this
provision shall not protect any such director, officer, employee or agent
against any liability which would otherwise be imposed on such Person pursuant
to applicable law or the Company's memorandum or articles of association by
reason of wilful misconduct, bad faith or gross negligence in the performance of
such Person's duties or by reason of reckless disregard of such Person's
obligations and duties hereunder. The Company and any director or officer or
employee or agent of the Company may rely in good faith on any document of any
kind PRIMA FACIE properly executed and submitted by any Person (other than, in
the case of the Company, the Company or the Servicer) respecting any matters
arising hereunder.

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                                  ARTICLE VII

                            EARLY AMORTIZATION EVENTS

               Section 7.1 EARLY AMORTIZATION EVENTS. Unless modified with
respect to any Series of Investor Certificates by any related Supplement, if any
one of the following events (each, an "EARLY AMORTIZATION EVENT") shall occur:

                    (a) the Company shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or the Company shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Company any case, proceeding or other action of a nature referred to in clause
(i) above which remains undismissed, undischarged or unbonded for a period of 60
days or an order for relief, decree, adjudication or appointment shall occur; or
(iii) there shall be commenced against the Company any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 such days from the
entry thereof; or (iv) the Company shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) the Company shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due;

                    (b) the Trust or the Company shall become an "investment
company" within the meaning of the Investment Company Act of 1940, as amended;

                    (c) the Trust is characterized for federal income tax
purposes as a "publicly traded partnership" or as an association taxable as a
corporation;

                    (d) the Trustee shall be appointed as Successor Servicer
pursuant to subsection 6.2(b) of the Servicing Agreement; or

                                       81




                    (e) there shall have been a breach of the covenant contained
in subsection 2.7(o) hereof;

                    (f) there shall have been a breach of the covenant contained
in subsection 5.1(u) of either of the Receivables Sale Agreements, without
regard for any applicable grace or cure period.

then, an "EARLY AMORTIZATION PERIOD" with respect to all Outstanding Series
shall commence without any notice or other action on the part of the Trustee or
any Investor Certificateholder immediately upon the occurrence of such event.
The Servicer shall notify each Rating Agency and the Trustee in writing of the
occurrence of any Early Amortization Period, specifying the cause thereof.
Further, upon the commencement against the Company of a case, proceeding or
other action described in clause (a)(ii) or (iii) above, the Company shall not
purchase Receivables from any Seller, or transfer Receivables to the Trust,
until such time, if any, as such case, proceeding or other action is vacated,
discharged, or stayed or bonded pending appeal.

               Additional Early Amortization Events and the consequences thereof
may be set forth in each Supplement with respect to the Series relating thereto.

               Section 7.2 ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN
EVENTS. (a) If an Insolvency Event with respect to the Company occurs, the
Company shall immediately cease to transfer Receivables to the Trust and shall
promptly give notice to the Trustee of such occurrence.

Notwithstanding any cessation of the transfer to the Trust of additional
Receivables, Receivables transferred to the Trust prior to the occurrence of
such Insolvency Event and Collections in respect of such Receivables and
interest, whenever created, accrued in respect of such Receivables, shall
continue to be a part of the Trust. Within 15 days of receipt by a Responsible
Officer of the Trustee of written notice of the occurrence of an Insolvency
Event in accordance with Section 7.1, if the Aggregate Invested Amount and all
accrued and unpaid interest thereon have not been paid to the Investor
Certificateholders, then the Trustee shall (i) publish a notice in a newspaper
with a national circulation (an "AUTHORIZED NEWSPAPER") that an Insolvency Event
has occurred and that the Trustee intends to sell, dispose of or otherwise
liquidate the Receivables and the other Trust Assets in a commercially
reasonable manner and (ii) send written notice to the Investor
Certificateholders and

                                       82




request instructions from such holders, which notice shall request each Investor
Certificateholder to advise the Trustee in writing that it elects one of the
following options: (A) the Investor Certificateholder wishes the Trustee not to
sell, dispose of or otherwise liquidate the Receivables and the other Trust
Assets, or (B) the Investor Certificateholder wishes the Trustee to sell,
dispose of or otherwise liquidate the Receivables and the other Trust Assets and
to instruct the Servicer to reconstitute the Trust upon the same terms and
conditions set forth herein, or (C) the Investor Certificateholder refuses to
advise the Trustee as to the specific action the Trustee to take. If after 60
days from the day notice pursuant to clause (i) above is first published (the
"PUBLICATION DATE") the Trustee shall not have received written instructions of
(x) holders of Certificates representing undivided interests in the Trust
aggregating in excess of 50% of the related Invested Amount of each Series (or
in the case of a series having more than one Class of Investor Certificates,
each Class of such series) selecting option (A) above and (y) if the owners of
the Exchangeable Company Interest do not include the Company (and following the
delivery of written notice in the form referred to above by the Company to such
owners), the owners thereof representing undivided interests in the Trust
aggregating in excess of 50% of the Company Interest, the Trustee shall instruct
the Servicer to proceed to sell, dispose of, or otherwise liquidate the
Receivables and the other Trust Assets in a commercially reasonable manner and
on commercially reasonable terms, which shall include the solicitation of
competitive bids, and the Servicer shall proceed to consummate the sale,
liquidation or disposition of the Receivables and the other Trust Assets as
provided above with the highest bidder therefor; PROVIDED, HOWEVER, that if the
allocable sale price, less all reasonable fees, expenses and other amounts due
hereunder to the Trustee, its agents and counsel to the Trustee, to be realized
from such sale, liquidation or disposition would be less than the Aggregate
Invested Amount plus accrued and unpaid interest thereon through the
Distribution Date next succeeding the date of such sale, the Trustee must
receive the prior unanimous consent of all the Investor Certificateholders to
such sale, liquidation or disposition. The Company or any of its Affiliates
shall be permitted to bid for the Receivables and the other Trust Assets. In
addition, the Company or any of its Affiliates shall have the right to match any
bid by a third person and be granted the right to purchase the Receivables and
the other Trust Assets at such matched bid price. The Trustee may obtain a prior
determination from any such conservator, receiver or liquidator that the terms
and manner of any proposed sale, disposition or liquidation are commercially
reasonable. The provisions of Sections 7.1 and 7.2 shall be cumulative. The
costs and expenses incurred by the Trustee in such sale shall be reimbursable to
the Trustee as provided in Section 8.5.

                                       83




                    (b) The proceeds from the sale, liquidation or disposition
of the Receivables and the other Trust Assets pursuant to subsection (a) above
shall be treated as Collections on the Receivables and such proceeds will be
distributed to holders of each Series after immediately being deposited in the
Collection Account, in accordance with the provisions of subsection 3.1(d) and
the related Supplement for such Series. After giving effect to all such
deposits, the remaining funds, if any, shall be (i) paid to the Trustee in an
amount equal to the amount of any expenses incurred by the Trustee acting in its
capacity either as Trustee or as liquidating agent pursuant to subsection 7.2(a)
above which have not otherwise been reimbursed prior thereto and (ii) after
giving effect to the transfer to be made pursuant to the preceding clause (i),
if applicable, the remainder, if any, shall be allocated to the Company Interest
and shall be released to the owner of the Exchangeable Company Interest upon
cancellation thereof.


                                  ARTICLE VIII

                                   THE TRUSTEE

               Section 8.1 DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of a Servicer Default or Early Amortization Event of which a
Responsible Officer of the Trustee has actual knowledge and after the curing of
all Servicer Defaults and Early Amortization Events which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in the Pooling and Servicing Agreements or any Supplement and no implied
covenants or obligations shall be read into such Pooling and Servicing
Agreements against the Trustee. After the occurrence of a Servicer Default or
Early Amortization Event to the actual knowledge of a Responsible Officer of the
Trustee (which has not been cured or waived), the Trustee shall exercise such of
the rights and powers vested in it in its capacity as Trustee by any Pooling and
Servicing Agreement and any Supplement and shall use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. The provisions of
this Section shall be applicable to the Trustee in its capacity as Trustee
hereunder. If the Trustee shall have succeeded to the obligations of the
Servicer, the provisions of the Servicing Agreement shall govern the actions of
the Trustee as Successor Servicer.

                    (b) The Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein upon
resolutions,

                                       84




certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee and believed by it to be genuine and to
have been signed or presented to it pursuant to any Pooling and Servicing
Agreement by the proper party or parties and the Trustee shall not be
responsible for the accuracy of or verification of any information contained in
any report, including any calculation contained therein, provided to it pursuant
to this Agreement; PROVIDED in the case of any of the above which are
specifically required to be furnished to the Trustee pursuant to any provision
of the Pooling and Servicing Agreements, the Trustee shall, subject to Section
8.2, examine them to determine whether they substantially conform to the
requirements of this Agreement.

                    (c) Subject to subsection 8.1(a), no provision of this
Agreement or any Supplement shall be construed to relieve the Trustee, from
liability for its own negligent action, its own negligent failure to act or its
own misconduct; PROVIDED, HOWEVER, that:

                         (i) The Trustee shall not in its individual capacity be
     liable for an error of judgment unless it shall be proved that the Trustee
     was negligent, or acted in bad faith, in ascertaining the pertinent facts;

                         (ii) The Trustee shall not in its individual capacity
     be liable with respect to any action taken, suffered or omitted to be taken
     by it in good faith in accordance with this Agreement or at the direction
     of the Servicer or the holders of Investor Certificates evidencing in
     excess of 50% (or such lesser percentage as set forth in any applicable
     provision) of the Aggregate Invested Amount;

                         (iii) The Trustee shall not be charged with knowledge
     of any failure by the Servicer to comply with any of its obligations,
     unless a Responsible Officer of the Trustee receives written notice of such
     failure from the Servicer, any Agent or any Investor Certificateholder;

                         (iv) The Trustee shall not be charged with knowledge of
     a Servicer Default or Early Amortization Event unless a Responsible Officer
     shall have received written notice of such default or event from the
     Servicer, any Agent or any Investor Certificateholder. In the absence of
     receipt of such notice, the Trustee

                                       85




     may conclusively assume that there is no Servicer Default or Early
     Amortization Event;

                         (v) So long as the Trustee has followed the
     instructions of the Servicer, the Trustee shall not in any way be held
     liable by reason of any insufficiency in any Account or subaccount thereof
     held by or on behalf of the Trustee resulting from any investment loss on
     any Eligible Investment included therein; and

                         (vi) The Trustee shall have no duty to monitor the
     performance of the Servicer, nor shall it have any liability in connection
     with malfeasance or nonfeasance by the Servicer. The Trustee shall have no
     liability in connection with compliance of the Servicer or the Company with
     statutory or regulatory requirements related to the Receivables.

                    (d) The Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties under any Pooling and Servicing Agreement or in the exercise of
any of its rights or powers, if the Trustee has reason to believe that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in any
Pooling and Servicing Agreement shall in any event require the Trustee to
perform, or be responsible for the manner of performance of, any obligations of
the Servicer under such Agreement except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Servicer in accordance with the terms of such Agreement.

                    (e) Except as expressly provided in any Pooling and
Servicing Agreement, the Trustee shall have no power to vary the corpus of the
Trust.

                    (f) Provided that the Servicer and the Company shall have
provided to the Trustee promptly upon request all books, records and other
information reasonably requested by the Trustee and shall have provided the
Trustee with all necessary access to the properties, books and records of the
Servicer and the Company pursuant to subsection 2.7(d) which the Trustee may
reasonably require, then, if so provided by the express terms of any Supplement,
the Trustee shall within the time provided by such Supplement have (i) completed
the Servicer Site Review, subject to Section 4.10 of the Servicing Agreement and
(ii) established the Standby

                                       86




Liquidation System, and shall have notified the Servicer, each Rating Agency and
each Investor Certificateholder of such events.

                    (g) The Trustee shall deliver the Internal Operating
Procedures Memorandum to the Company and the Servicer on the Initial Closing
Date. From and after such date, the Trustee shall take such actions as are set
forth in the Internal Operating Procedures Memorandum unless prevented from
doing so through no fault of the Trustee.

                    (h) Subject to the other provisions of this Agreement and
without limiting the generality of this Section 8.1, the Trustee shall have no
duty (i) to see to any insurance with respect to the Trust Assets, or (ii) to
see to the payment or discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Trust Assets other than from funds available in
the Collection Account.

                    (i) The right of the Trustee to perform any discretionary
act enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act.

                    (j) The Trustee shall not be required to give any bond or
surety in respect of the execution of the Trust created hereby or the powers
granted hereunder.

               Section 8.2 RIGHTS OF THE TRUSTEE. Except as otherwise provided
in Section 8.1:

                    (a) The Trustee may conclusively rely on and shall be
protected in acting on, or in refraining from acting in accord with, any
resolution, Officer's Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, bond, note or other paper or document believed by it
to be genuine and to have been signed or presented to it pursuant to any Pooling
and Servicing Agreement by the proper party or parties;

                    (b) The Trustee may consult with counsel of its choice (at
the Company's expense) and any Opinion of Counsel or any advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken

                                       87




or suffered or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel;

                    (c) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by any Pooling and Servicing Agreement, or
to institute, conduct or defend any litigation hereunder or in relation hereto,
at the request, order or direction of any of the Holders, pursuant to the
provisions of any Pooling and Servicing Agreement, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; PROVIDED,
HOWEVER, that nothing contained herein shall relieve the Trustee of the
obligations, upon the occurrence of a Servicer Default or Early Amortization
Event of which a Responsible Officer of the Trustee has written notice (which
has not been cured), to exercise such of the rights and powers vested in it by
any Pooling and Servicing Agreement, and to use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. The right of the
Trustee to perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and the Trustee shall not be answerable for other than
its negligence or willful misconduct in the performance of any such act;

                    (d) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by any
Pooling and Servicing Agreement; PROVIDED that the Trustee shall be liable for
its negligence or willful misconduct;

                    (e) The Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, direction, order,
approval, bond, note or other paper or document, or to recompute the amount of
any allocations or distributions contained in any direction from the Servicer
provided for under the Agreement, unless requested in writing so to do by the
holders of Investor Certificates evidencing Fractional Undivided Interests
aggregating more than 50% of the Invested Amount of any Series which could be
adversely affected if the Trustee does not perform such acts; PROVIDED, HOWEVER,
that such holders of Investor Certificates shall reimburse the Trustee for any
reasonable expense resulting from any such investigation requested by them;
PROVIDED, FURTHER, that the Trustee shall be entitled to make such further
inquiry or investigation into such facts or matters as it may reasonably see
fit, and if the Trustee shall determine to make such further

                                       88




inquiry or investigation, it shall be entitled to examine the books and records
of the Company pursuant to subsection 2.7(d), personally or by agent or
attorney, at the sole cost and expense of the Company;

                    (f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
affiliates, agents or attorneys or a custodian or nominee, and the Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such affiliate, agent, attorney, custodian or nominee
appointed with due care by it hereunder;

                    (g) The Trustee shall not be required to make any initial or
periodic examination of any documents or records related to the Receivables or
the Accounts for the purpose of establishing the presence or absence of defects,
the compliance by the Company with its representations and warranties or for any
other purpose; and

                    (h) In the event that the Trustee is also acting as Paying
Agent or Transfer Agent and Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article VIII shall also be afforded to
such Paying Agent or Transfer Agent and Registrar.

               Section 8.3 TRUSTEE NOT LIABLE FOR RECITALS IN CERTIFICATES. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). The Trustee makes no representations as to the validity or
sufficiency of any Pooling and Servicing Agreement or of the Certificates (other
than the certificate of authentication on the Certificates) or of any Receivable
or related document. The Trustee shall not be accountable for the use or
application by the Company of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Company in
respect of the Receivables or deposited in or withdrawn from the Accounts or
other accounts hereafter established to effectuate the transactions contemplated
herein and in accordance with the terms of any Pooling and Servicing Agreement.

               The Trustee shall not be accountable for the use or application
by the Servicer of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Servicer in
respect of the Receivables or deposited in or withdrawn from the Accounts or any
Lockbox by or at the direction of the Servicer or the Lockbox Processor, in each
case unless the Trustee, acting in

                                       89




its capacity as Successor Servicer, itself makes such use or application. The
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable.

               Section 8.4 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity (a) may become the owner or pledgee of Investor
Certificates with the same rights as it would have if it were not the Trustee
and (b) may transact any banking and trust business with the Company, the
Servicer or any Seller as it would were it not the Trustee.

               Section 8.5 TRUSTEE'S FEES AND EXPENSES. The Trustee shall be
entitled to an annual fee agreed upon in writing prior to the Initial Closing
Date to be paid by Park Avenue Receivables Corporation ("PARCO") (which annual
fee shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust) pursuant to a separate fee letter between
PARCO and the Trustee. The Trustee also shall be entitled to reimbursement from
the Servicer or the Company upon the Trustee's request for all reasonable
expenses (including, without limitation, expenses incurred in connection with
notices, requests for documentation or other communications to or directions
from Holders), disbursements, losses, liabilities, damages and advances incurred
or made by the Trustee in accordance with any of the provisions of any Pooling
and Servicing Agreement or by reason of its status as Trustee under any Pooling
and Servicing Agreement (including the reasonable fees and expenses of its
agents, any co-trustee and counsel) except any such expense, disbursement, loss,
liability, damage or advance as may arise from its negligence or bad faith or
willful misconduct; PROVIDED that any payments made by the Company in respect of
any of the foregoing items shall be made solely from funds available to the
Company which are not otherwise needed to be applied to the payment of any
amounts pursuant to any Pooling and Servicing Agreements, shall be non-recourse
other than with respect to proceeds in excess of the proceeds necessary to make
such payment, and shall not constitute a claim against the Company to the extent
that insufficient proceeds exist to make such payment. Notwithstanding anything
in this Agreement to the contrary, in no event shall the Trustee be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action. To the extent that the Trustee has not been paid for any of the
foregoing items (including pursuant to the first sentence of this Section 8.5),
the Trustee shall be entitled to be paid for such items from amounts which
otherwise would be distributable to the Company under

                                       90




Article III of this Agreement. The Trustee shall be entitled to reimbursement
for any reasonable out-of-pocket costs or expenses incurred in connection with
the review, negotiation, preparation, execution and delivery of any of the
Transaction Documents or in connection with the issuance of any Certificates on
the Initial Closing Date. If the Trustee is appointed Successor Servicer in
accordance with the Servicing Agreement, the Trustee, in its capacity as
Successor Servicer, shall also be entitled to be paid the Servicing Fee and any
other compensation to which the Servicer is expressly entitled hereunder. The
provisions of this Section 8.5 shall apply to the reasonable expenses,
disbursements and advances made or incurred by the Trustee, or any other Person,
in its capacity as liquidating agent, to the extent not otherwise paid. The
covenants and agreements contained in this Section 8.5 (including, without
limitation, the covenants to pay the expenses, disbursements, losses,
liabilities, damages and advances provided for in this Section 8.5) shall
survive the termination of any Pooling and Servicing Agreement and shall be
binding, as applicable, on (i) the Servicer and any Successor Servicer and (ii)
the Company.

               Section 8.6 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or any state thereof and authorized
under such laws to exercise corporate trust powers, having (or having a holding
company parent with) a combined capital and surplus of at least $100,000,000 and
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purpose of this Section 8.6, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.6, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.7.

               Section 8.7 RESIGNATION OR REMOVAL OF TRUSTEE. (a) Subject to
paragraph (c) below, the Trustee may at any time resign and be discharged from
the trust hereby created by giving written notice thereof to the Company, the
Servicer and the Rating Agencies. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation,

                                       91




the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee acceptable to the Company (which acceptance
will not unreasonably be withheld); PROVIDED that such right of the Company to
approve a successor trustee shall terminate upon the occurrence of an Early
Amortization Event.

                    (b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.6 hereof and shall fail to resign
after written request therefor by the Servicer, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
if a receiver of the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Company may remove the Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.

                    (c) Any resignation or removal of the Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section 8.7 shall not become effective until acceptance of appointment by the
successor trustee as provided in Section 8.8.

                    (d) The obligations of the Company described in Section 8.5
hereof and the obligations of the Servicer described in Section 8.5 hereof and
Section 5.2 of the Servicing Agreement shall survive the removal or resignation
of the Trustee as provided in this Agreement.

                    (e) No Trustee under this Agreement shall be personally
liable for any action or omission of any successor trustee.

               Section 8.8 SUCCESSOR TRUSTEE. (a) Any successor trustee
appointed as provided in Section 8.7 shall execute, acknowledge and deliver to
the Company and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee herein. The predecessor Trustee shall
deliver to the successor trustee all documents or copies thereof, at the expense
of the Servicer, and statements held by it hereunder; and the Company and the
predecessor Trustee shall execute and deliver

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such instruments and do such other things as may reasonably be required for
fully and certainly vesting and confirming in the successor trustee all such
rights, power, duties and obligations.

                    (b) No successor trustee shall accept appointment as
provided in this Section 8.8 unless at the time of such acceptance such
successor trustee shall be eligible under the provisions of Section 8.6.

                    (c) Upon acceptance of appointment by a successor trustee as
provided in this Section 8.8, such successor trustee shall mail notice of such
succession hereunder to each Rating Agency and to all Holders at their addresses
as shown in the Certificate Register.

               Section 8.9 MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, PROVIDED such corporation shall be eligible under the
provisions of Section 8.6, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee (unless the Trustee is The Chase Manhattan
Bank) shall promptly give notice (except to the extent prohibited under any
Requirement of Law or Contractual Obligation), but in no event less than ten
days prior to any such merger or consolidation, to the Company, the Servicer and
the Rating Agencies upon any such merger or consolidation of the Trustee.

               Section 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of any Pooling and Servicing Agreement, at
any time, for the purpose of meeting any legal requirements of any jurisdiction
in which any part of the Trust may at the time be located, the Trustee shall
have the power and may execute and deliver all instruments to appoint one or
more persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Holders, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.6 and no notice to Holders of the appointment of any co-

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trustee or separate trustee shall be required under Section 8.8. The Trustee
shall promptly notify each Rating Agency of the appointment of any co-trustee.

                    (b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:

                         (i) all rights, powers, duties and obligations
     conferred or imposed upon the Trustee shall be conferred or imposed upon
     and exercised or performed by the Trustee and such separate trustee or
     co-trustee jointly (it being understood that such separate trustee or
     co-trustee is not authorized to act separately without the Trustee joining
     in such act), except to the extent that under any statute of any
     jurisdiction in which any particular act or acts are to be performed
     (whether as Trustee hereunder or as successor to the Servicer hereunder),
     the Trustee shall be incompetent or unqualified to perform such act or
     acts, in which event such rights, powers, duties and obligations (including
     the holding of title to the Trust or any portion thereof in any such
     jurisdiction) shall be exercised and performed singly by such separate
     trustee or co-trustee, but solely at the direction of the Trustee;

                         (ii) no trustee hereunder shall be personally liable by
     reason of any act or omission of any other trustee hereunder; and

                         (iii) the Trustee may at any time accept the
     resignation of or remove any separate trustee or co-trustee.

                    (c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of any Pooling and Servicing Agreement, specifically including every provision
of any Pooling and Servicing Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the

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Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Company.

                    (d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to any Pooling and Servicing Agreement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.

               Section 8.11 TAX RETURNS. In the event the Trust shall be
required to file tax returns, the Company shall prepare and file or shall cause
to be prepared and filed (including, without limitation, by the Servicer) any
tax returns required to be filed by the Trust and shall remit such returns to
the Trustee for signature at least five Business Days before such returns are
due to be filed. The Trustee is hereby authorized to sign any such return on
behalf of the Trust. The Company shall also prepare or shall cause to be
prepared (including, without limitation, by the Servicer) all tax information
required by law to be distributed to Holders and shall deliver such information
to the Trustee at least five Business Days prior to the date it is required by
law to be distributed to the Holders. The Trustee, upon written request, will
furnish the Company, or the Company's designee, with all such information known
to the Trustee as may be reasonably required in connection with the preparation
of all tax returns of the Trust, and shall, upon request, execute such returns.
In no event shall the Trustee in its individual capacity be liable for any
liabilities, costs or expenses of the Trust, the Holders, the Company or the
Servicer arising under any tax law or regulation, including, without limitation,
federal, state or local income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto or arising
from any failure to comply therewith) and the Company hereby indemnifies and
holds the Trust harmless for any such liabilities, costs and expenses.

               Section 8.12 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under any Pooling and Servicing
Agreement or the Certificates may be prosecuted and enforced by the Trustee
without the possession of any of the Certificates or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any recovery of judgment
shall, after

                                       95




provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders in respect of which such judgment has been
obtained, in the manner specified in Article III hereof.

               Section 8.13 SUITS FOR ENFORCEMENT. If a Servicer Default shall
occur and be continuing, the Trustee may, as provided in Section 6.1 of the
Servicing Agreement, proceed to protect and enforce its rights and the rights of
the Holders under this Agreement or any other Transaction Document by suit,
action or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or any
other Transaction Document or in aid of the execution of any power granted in
this Agreement or any other Transaction Document or for the enforcement of any
other legal, equitable or other remedy as the Trustee, being advised by counsel,
shall deem most effectual to protect and enforce any of the rights of the
Trustee or the Holders. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Investor Certificateholder any plan of reorganization, arrangement, adjustment
or composition affecting the Certificates or the rights of any holder thereof,
or authorize the Trustee to vote in respect of the claim of any Investor
Certificateholder in any such proceeding.

               Section 8.14 RIGHTS OF INVESTOR CERTIFICATEHOLDERS TO DIRECT
TRUSTEE. Investor Certificateholders evidencing more than 50% of the Invested
Amount of any Series affected by the conduct of any proceeding or the exercise
of any right conferred on the Trustee shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; PROVIDED,
HOWEVER, that, subject to Section 8.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee being advised by counsel
determines that the action so directed may not lawfully be taken, or if the
Trustee in good faith shall, by a Responsible Officer or Responsible Officers of
the Trustee, determine that the proceedings so directed would be illegal or
expose it to personal liability or be unduly prejudicial to the rights of
Investor Certificateholders not party to such direction; and PROVIDED, FURTHER,
that nothing in any Pooling and Servicing Agreement shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction of the Investor Certificateholders.

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               Section 8.15 TRUSTEE TO DIRECT COMPANY. Subject to Section 8.14
above, the Trustee on behalf of the Investor Certificateholders shall direct the
Company as follows:

                    (a) pursuant to Section 9.13 of the USFS Receivables Sale
Agreement, to direct USFS to agree to or deny the request of any Subsidiary of
United Stationers Inc. desiring to become an additional Seller under the Amended
and Restated Receivables Sale Agreement pursuant to Section 9.13 thereof;
PROVIDED, HOWEVER, that any action by the Trustee pursuant to this Section 8.15
shall be conditioned upon the Trustee's receipt of any written request from a
Subsidiary of United Stationers Inc. delivered in accordance with Section 9.13
of the Amended and Restated Receivables Sale Agreement.

                    (b) pursuant to Section 9.14 of the USFS Receivables Sale
Agreement and subject to the third proviso of subsection 9.14(b) of the Amended
and Restated Receivables Sale Agreement, to direct USFS to consent to or deny
any Seller Termination Request made pursuant to subsection 9.14(b) of the
Amended and Restated Receivables Sale Agreement.

               Section 8.16 MAINTENANCE OF OFFICE OR AGENCY. The Trustee will
maintain at its expense in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where notices and demands to or upon the
Trustee in respect of the Certificates and the Pooling and Servicing Agreements
may be served. The Trustee will give prompt written notice to the Company, the
Servicer and the Holders of any change in the location of the Certificate
Register or any such office or agency.

               Section 8.17 LIMITATION OF LIABILITY. The Certificates are
executed by the Trustee, not in its individual capacity but solely as Trustee of
the Trust, in the exercise of the powers and authority conferred and vested in
it by this Agreement. Each of the undertaking and agreements made on the part of
the Trustee in the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the purpose
of binding only the Trust.

                                   ARTICLE IX

                                   TERMINATION

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               Section 9.1 TERMINATION OF TRUST; LIQUIDATION OF RECEIVABLES. (a)
The Trust and the respective obligations and responsibilities of the Company,
the Servicer and the Trustee created hereby (other than the obligation of the
Trustee to make payments to Holders as hereafter set forth or of the Company to
prepare or cause to be prepared and filed tax or information reports as provided
in Section 8.11 hereof) shall terminate, except with respect to any such
obligations or responsibilities expressly stated to survive such termination, on
the earliest of (i) April 1, 2018 (ii) at the option of the Company, at any time
where the Aggregate Invested Amount is zero (unless an Early Amortization Event
as specified in Section 7.1 of this Agreement shall have occurred and be
continuing, in which case the Company shall be deemed to elect to terminate the
Trust pursuant to this clause (ii)) and (iii) upon completion of distribution of
the amounts referred to in subsection 7.2(b) (the "TRUST TERMINATION DATE").

                    (b) If on the Distribution Date in the month immediately
preceding the month in which the Trust Termination Date described in clause
(a)(i) above occurs (after giving effect to all transfers, withdrawals, deposits
and drawings to occur on such date and the payment of principal on any Series of
Certificates to be made on the related Distribution Date pursuant to Article
III) the Invested Amount of any Series would be greater than zero, the Trustee,
at the written direction of the Servicer, shall sell within 30 days of such
Distribution Date all of the Receivables and other Trust Assets. The proceeds of
such sale shall be treated as Collections on the Receivables and shall be
allocated in accordance with Article III. During such 30-day period, the
Servicer shall continue to collect Collections on the Receivables and allocate
Collections in accordance with the provisions of Article III. The costs and
expenses incurred by the Trustee in such sale shall be reimbursable to the
Trustee as provided in Section 8.5.

               Section 9.2 CLEAN-UP CALL AND FINAL TERMINATION DATE OF INVESTOR
CERTIFICATES OF ANY SERIES. (a) On the Distribution Date during the Amortization
Period with respect to any Series on which the Invested Amount (or such other
amount as may be set forth in the related Supplement) of such Series is reduced
to an amount equal to or less than the Clean-Up Call Percentage of the Invested
Amount for such Series as of the day preceding the beginning of such
Amortization Period (or such other amount as may be set forth in the related
Supplement), the Servicer shall have the option to repurchase, and to the extent
set forth in the related Supplement, shall repurchase, the entire
Certificateholders' Interest of such Series, at a purchase price equal to (i)
the outstanding Invested Amount of the Investor Certificates of such Series PLUS
(ii) accrued and unpaid interest through the date of

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such purchase (after giving effect to any payment of principal and monthly
interest on such date of purchase) PLUS (iii) all other amounts payable to all
Investor Certificateholders of such Series under the related Supplement (such
purchase price, the "CLEAN-UP CALL REPURCHASE PRICE"). The amount of the
Clean-Up Call Repurchase Price will be deposited into the Collection Account for
credit to the Series Collection Subaccount for such Series on the Business Day
prior to such Distribution Date in immediately available funds and will be
passed through in full to the applicable Investor Certificateholders. Following
any such repurchase, such Certificateholders' Interest in the Trust Assets shall
terminate and such interest therein will be allocated to the Company Interest
and such Holders will have no further rights with respect thereto. In the event
that the Servicer fails for any reason to deposit the Clean-Up Call Repurchase
Price for such Receivables, the Certificateholders' Interest in the Receivables
and the other Trust Assets will continue and monthly payments will continue to
be made to the Holders.

                    (b) The amount deposited pursuant to subsection 9.2(a) shall
be paid to the Investor Certificateholders of the related Series pursuant to
Article III on the Distribution Date following the date of such deposit. All
Certificates of a Series which are purchased by the Servicer pursuant to
subsection 9.2(a) shall be delivered by the Servicer upon such purchase to, and
be canceled by (in accordance with the written directions of the Servicer), the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Servicer.

                    (c) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any Series of Certificates
is greater than zero on its Series Termination Date (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on such date and the
payment of principal to be made on such Series on such date), the Trustee will
sell or cause to be sold, in accordance with the directions of Investor
Certificateholders representing more than 50% of the Invested Amount of such
Series, and pay the proceeds to all Holders of such Series PRO RATA (except that
unless expressly provided to the contrary in the related Supplement, no payment
shall be made to Holders of any Class of any Series that is by its terms
subordinated to any other Class until such senior Class of Certificates has been
paid in full) in final payment of all principal of and accrued interest on such
Series of Certificates, an amount of Receivables or interests in Receivables up
to the Invested Amount of such Series at the close of business on such date.
Absent such direction from Investor Certificateholders representing more than
50% of the Invested Amount

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of such Series the Trustee shall continue to hold the Trust Assets in respect of
such Series in accordance with the terms of the Pooling and Servicing Agreements
until the Trust Termination Date (or until Investor Certificateholders
representing more than 50% of the Invested Amount of such Series shall otherwise
direct the Trustee); PROVIDED that the terms of this Agreement, the related
Supplement and the Servicing Agreement shall be deemed to remain in full force
and effect, except that no additional Receivables shall be allocated with
respect to such Series. The reasonable costs and expenses incurred by the
Trustee in such sale shall be reimbursable to the Trustee as provided in Section
8.5. Any proceeds of such sale in excess of such principal and interest paid
shall be paid to the holder of the Exchangeable Company Interest, unless and to
the extent otherwise specified in any applicable Supplement. Upon such Series
Termination Date with respect to the applicable series of Certificates, final
payment of all amounts allocable to any Investor Certificates of such Series
shall be made in the manner provided in this Section 9.2.

               Section 9.3 FINAL PAYMENT WITH RESPECT TO ANY SERIES. (a) Written
notice of any termination, specifying the Distribution Date upon which the
Investor Certificateholders of any Series may surrender their Investor
Certificates for payment of the final distribution with respect to such Series
and cancellation, shall be given (subject to at least 30 days' (or such shorter
period as is acceptable to the Trustee as determined in its sole and absolute
discretion) prior written notice from the Servicer to the Trustee containing all
information required for the Trustee's notice) by the Trustee to Investor
Certificateholders of such Series, mailed not later than the fifth Business Day
of the month of such final distribution and specifying (i) the Distribution Date
upon which final payment of the Investor Certificates will be made upon
presentation and surrender of Investor Certificates at the office or offices
therein designated, (ii) the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Investor
Certificates at the office or offices therein specified. The Servicer's notice
to the Trustee in accordance with the preceding sentence shall be accompanied by
an Officer's Certificate setting forth the information specified in Section 4.3
of the Servicing Agreement covering the period during the then current calendar
year through the date of such notice. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the time such notice is
given to such Investor Certificateholders.

                    (b) Notwithstanding the termination of the Trust pursuant to
subsection 9.1(a) or the occurrence of the Series Termination Date with respect
to any Series pursuant to Section 9.2, all funds then on deposit in the
Collection

                                       100




Account (but only to the extent necessary to pay all outstanding and unpaid
amounts to Certificateholders) shall continue to be held in trust for the
benefit of the Certificateholders, and the Paying Agent or the Trustee shall pay
such funds to the Certificateholders upon surrender of their Certificates in
accordance with the terms hereof. Any Certificate not surrendered on the date
specified in subsection 9.3(a)(i) shall cease to accrue any interest provided
for such Certificate from and after such date. In the event that all of the
Investor Certificateholders shall not surrender their Certificates for
cancellation within six months after the date specified in the above mentioned
written notice, the Trustee shall give a second written notice to the remaining
Investor Certificateholders of such Series to surrender their Certificates for
cancellation and receive the final distribution will respect thereto. If within
one year after the second notice all the Investor Certificates of such Series
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Investor Certificateholders of such Series concerning surrender of
their Certificates, and the cost thereof shall be paid out of the funds in the
Collection Account held for the benefit of such Investor Certificateholders. The
Trustee and the Paying Agent shall pay to the Company upon request any monies
held by them for the payment of principal or interest that remains unclaimed for
two years. After payment to the Company, Holders entitled to the money must look
to the Company for payment as general creditors unless an applicable abandoned
property law designates another Person.

                    (c) All Certificates surrendered for payment of the final
distribution with respect to such Certificates and cancellation shall be
canceled by the Transfer Agent and Registrar and be disposed of in a customary
manner satisfactory to the Trustee.

               Section 9.4 COMPANY'S TERMINATION RIGHTS. Upon the termination of
the Trust pursuant to Section 9.1 and the surrender of the Exchangeable Company
Interest and payment to the Trustee (in its capacity as such and/or in its
capacity as Successor Servicer) of all amounts owed to it under any Pooling and
Servicing Agreement, the Trustee shall assign and convey to the Company (without
recourse, representation or warranty) in exchange for the Exchangeable Company
Interest all right, title and interest of the Trust in the Trust Assets, whether
then existing or thereafter created, and all proceeds thereof except for amounts
held by the Trustee pursuant to subsection 9.3(b). The Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without
recourse, representation or warranty,

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as shall be reasonably requested by the Company to vest in the Company all
right, title and interest which the Trust had in the Trust Assets.

                                   ARTICLE X
                            MISCELLANEOUS PROVISIONS

               Section 10.1 AMENDMENT. (a) (a) Any Pooling and Servicing
Agreement, including any schedule or exhibit thereto, may be amended in writing
from time to time by the Servicer, the Company and the Trustee, without the
consent of any holder of any outstanding Certificate, (i) to cure any ambiguity
therein, (ii) to correct or supplement any provisions therein which may be
inconsistent with any other provisions therein or (iii) to add any other
provisions thereto to change in any manner or eliminate any of the provisions
with respect to matters or questions raised under any Pooling and Servicing
Agreement which shall not be inconsistent with the provisions of any other
Pooling and Servicing Agreement; PROVIDED, HOWEVER, that such action shall not,
as evidenced by an Officer's Certificate from the Company and, to the extent, in
the reasonable view of the Company, a question of law exists, supported by an
Opinion of Counsel delivered to the Trustee, adversely affect in any material
respect the interests of the Investor Certificateholders. The Trustee may, but
shall not be obligated to, enter into any such amendment pursuant to this
paragraph or paragraph (b) below which affects the Trustee's rights, duties or
immunities under any Pooling and Servicing Agreement or otherwise.

                    (b) Any Pooling and Servicing Agreement and any schedule or
exhibit thereto may also be amended in writing from time to time by the
Servicer, the Company and the Trustee with the consent of Investor
Certificateholders evidencing more than 50% of the Invested Amount of any Series
adversely affected by the amendment (or, if any such Series shall have more than
one Class of Investor Certificates adversely affected by the amendment, 50% or
more of the Invested Amount of each such Class) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
such Pooling and Servicing Agreement or of modifying in any manner the rights of
holders of any Series then issued and outstanding; PROVIDED, HOWEVER, that no
such amendment shall (i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Investor Certificate of
such Series without the consent of such Investor Certificateholder of such
Series; (ii) change the definition of or the manner of calculating the interest
of any Investor Certificateholder of such Series without the consent of such
Investor Certificateholder; or (iii) reduce the aforesaid percentage of
Fractional Undivided Interests the holders of which are required to consent to
any

                                       102




such amendment in each case without the consent of all Holders of each Series
adversely affected in any material respect.

                    (c) Notwithstanding anything in this Section 10.1 to the
contrary, the Supplement with respect to any Series may be amended on the terms
and with the procedures provided in such Supplement.

                    (d) The Company or the Servicer shall deliver any proposed
amendment to each Agent at least five days prior to the execution and delivery
thereof.

                    (e) Promptly after the execution of any such amendment or
consent the Trustee shall furnish written notification of the substance of such
amendment to each Holder of each Outstanding Series (or with respect to an
amendment of a Supplement, of the applicable Series), and the Servicer shall
furnish written notification of the substance of such amendment to each Rating
Agency. No such amendment (including, without limitation, the amendment of any
Supplement, notwithstanding anything to the contrary contained in any
Supplement) shall be effective until the Rating Agency Condition has been
satisfied with respect thereto.

                    (f) It shall not be necessary for the consent of Investor
Certificateholders under this Section 10.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Investor Certificateholders shall be
subject to such reasonable requirements as the Trustee may prescribe.

                    (g) In executing or accepting any amendment pursuant to this
Section 10.1, the Trustee shall, upon request, be entitled to receive and rely
upon (i) an Opinion of Counsel (A) stating that such amendment is authorized
pursuant to a specific provision of a Pooling and Servicing Agreement and
complies with such provision, and (B) stating that all conditions precedent to
the execution and delivery of such amendment shall have been satisfied in full,
which opinion in the case of this clause (B) may, to the extent that such
opinion concerns questions of fact, rely on an Officer's Certificate with
respect to such questions of fact, (ii) a certificate from a Responsible Officer
of the Company stating that such amendment does not adversely affect the
interests of the holders of any outstanding Certificates in any material respect
except for holders of the Series whose consent to such amendment has been
obtained in accordance with clause (b) of this Section 10.1 and (iii) a Tax
Opinion.

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               Section 10.2 PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST.
(a) The Servicer shall cause this Agreement, any Supplement, all amendments
hereto and/or all financing statements and continuation statements and any other
necessary documents covering the Certificateholders' and the Trustee's right,
title and interest to the Trust to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect the
right, title and interest of the Trustee hereunder to all property comprising
the Trust. The Servicer shall deliver to the Trustee file-stamped copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing.
The Company shall cooperate fully with the Servicer in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this subsection 10.2(a).

                    (b) With respect to any prospective changes in its name,
identity or corporate structure, the Company shall comply fully with subsection
2.8(m) hereof and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Trust's security interest in the
Receivables and the proceeds thereof. If the Company determines that no refining
is required, it shall provide to the Trustee an Opinion of Counsel so stating.

               Section 10.3 LIMITATION ON RIGHTS OF HOLDERS. (a) The death or
incapacity of any Holder shall not operate to terminate this Agreement or the
Trust, nor shall such death or incapacity entitle such Holder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.

                    (b) Except with respect to the Investor Certificateholders
as expressly provided in any Pooling and Servicing Agreement, no Investor
Certificateholder, solely by virtue of its status as an Investor
Certificateholder, shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall any Investor Certificateholder be under any liability
to any third person by reason of any action taken by the parties to this
Agreement pursuant to any provision hereof.

                    (c) No Investor Certificateholder, solely by virtue of its
status as an Investor Certificateholder, shall have any right by virtue of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at

                                       104




law upon or under or with respect to this Agreement, unless such Investor
Certificateholders previously shall have given to the Trustee written request to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Investor Certificateholder with every other
Investor Certificateholder and the Trustee, that no one or more Holders shall
have any right in any manner whatever by virtue of or by availing itself or
themselves of any provisions of the Pooling and Servicing Agreements to affect,
disturb or prejudice the rights of any other of the Investor Certificateholders,
or to obtain or seek to obtain priority over or preference to any other such
Investor Certificateholder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Investor Certificateholders. For the protection and enforcement of the
provisions of this Section 10.3, each and every Investor Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.

                    (d) By their acceptance of Certificates pursuant to this
Agreement and the applicable Supplement, the Holders agree to the provisions of
this Section 10.3.

               Section 10.4 NOTICES. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by facsimile), and, unless otherwise expressly provided herein, shall
be deemed to have been duty given or made when delivered by hand, or three days
after being deposited in the mail, postage prepaid, or, in the case of facsimile
notice or overnight courier service, when received, addressed as follows or to
such other address as may be hereafter notified by the respective parties
hereto:

         The Company:      USS Receivables Company, Ltd.
                           2200 E. Golf Road
                           Des Plaines, Illinois 60016
                           Attention: Treasurer
                           Facsimile: 847-699-0027

                                       105




               with a copy to the Servicer:

         The Servicer:     United Stationers Financial Services LLC
                           2001 Rand Road
                           Des Plaines, Illinios 60016
                           Attention: Nick Martisek


         The Trustee:      The Chase Manhattan Bank
                           450 West 33rd Street
                           New York, New York 10001
                           Attention: Structured Finance Services
                           Facsimile: 212-946-3916

Any notice required or permitted to be mailed to an Investor Certificateholder
shall be given by first-class mail, postage prepaid, or by overnight courier
service, at the address of such Investor Certificateholder as shown in the
Certificate Register. Any notice so given within the time prescribed in any
Pooling Agreement or Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Investor Certificateholder receives such
notice.

               Section 10.5 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of any Pooling Agreement or
Servicing Agreement shall for any reason whatsoever be held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of such Pooling and
Servicing Agreement and shall in no way affect the validity or enforceability of
the other provisions of any Pooling and Servicing Agreement or of the
Certificates or rights of the Holders.

               Section 10.6 ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Section 5.3 of the Servicing Agreement,
no Pooling and Servicing Agreement may be assigned by the Company or the
Servicer without the prior written consent of the Trustee acting at the
direction of the holders of 66-2/3% of the Invested Amount of each Outstanding
Series and without the Rating Agency Condition's having been satisfied with
respect to such assignment.

               Section 10.7 CERTIFICATES NONASSESSABLE AND FULLY PAID. It is the
intention of the parties to each Pooling and Servicing Agreement that the
Investor

                                       106




Certificateholders shall not be personally liable for obligations of the Trust,
that the interests in the Trust represented by the Investor Certificates shall
be nonassessable for any losses or expenses of the Trust or for any reason
whatsoever and that Investor Certificates upon authentication thereof by the
Trustee pursuant to Section 5.2 are and shall be deemed fully paid.

               Section 10.8 FURTHER ASSURANCES. The Company and the Servicer
agree to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of each Pooling and Servicing Agreement, including,
without limitation, the execution of any financing statements or continuation
statements relating to the Receivables for filing under the provisions of the
UCC of any applicable jurisdiction.

               Section 10.9 NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and privileges provided by law.

               Section 10.10 COUNTERPARTS. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.

               Section 10.11 THIRD-PARTY BENEFICIARIES. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the Holders and
their respective successors and permitted assigns. Except as otherwise provided
in this Article X, no other Person will have any right or obligation hereunder.
No Obligor shall be notified of the transfers made pursuant to this Agreement or
any Supplement.

               Section 10.12 ACTIONS BY HOLDERS. (a) Wherever in any Pooling and
Servicing Agreement a provision is made that an action may be taken or a notice,
demand or instruction given by Investor Certificateholders, such action, notice
or instruction may be taken or given by any Investor Certificateholders of any

                                       107




Series, unless such provision requires a specific percentage of Investor
Certificateholders of a certain Series or all Series.

                    (b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by an Investor Certificateholder shall bind such
Investor Certificateholder and every subsequent holder of such Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done or omitted to be done by the Trustee,
the Company or the Servicer in reliance thereon, whether or not notation of such
action is made upon such Certificate.

               Section 10.13 MERGER AND INTEGRATION. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement and the Servicing Agreement.
This Agreement and the Servicing Agreement may not be modified, amended, waived,
or supplemented except as provided herein.

               Section 10.14 HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.

               Section 10.15 SECURITY AGREEMENT. (a) The Company hereby grants
to the Trustee, for the benefit of the Holders, a perfected first priority
security interest in all of the Company's right, title and interest in, to and
under the Receivables and the other Trust Assets now existing and hereafter
created, all monies due or to become due and all amounts received with respect
thereto and all "proceeds" thereof (including Recoveries), to secure all of the
Company's and the Servicer's obligations hereunder, including, without
limitation, the Company's obligation to sell or transfer Receivables hereafter
created to the Trust.

                    (b) This Agreement shall constitute a security agreement
under applicable law.

               Section 10.16 NO SET-OFF. Except as expressly provided in this
Agreement and specifically in Section 3.1(g), the Trustee agrees that it shall
have no right of set-off or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account for any amount owed to it
by the Company, the Servicer or any Investor Certificateholder.

                                       108




               Section 10.17 NO BANKRUPTCY PETITION. The Servicer hereby
covenants and agrees that, prior to the date which is one year and one day after
the date of the end of the Amortization Period with respect to all Outstanding
Series, it will not institute against, or join any other Person in instituting
against, the Company any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy law or Cayman Islands bankruptcy law or similar law.

               Section 10.18 LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that (a) each Pooling and Servicing Agreement
is executed and delivered by the Trustee, not individually or personally but
solely as Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) the representations, undertakings and agreements
herein made on the part of the Trust are made and intended not as personal
representations, undertakings and agreements by the Trustee, but are made and
intended for the purpose of binding only the Trust, (c) nothing herein contained
shall be construed as creating any liability of the Trustee, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties who
are signatories to this Agreement and by any Person claiming by, through or
under such parties; provided, however, the Trustee shall be liable in its
individual capacity for its own willful misconduct, bad faith or negligence and
(d) under no circumstances shall the Trustee be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under any Pooling and Servicing Agreement; provided
further, that the foregoing clauses (a) through (d) shall survive the
resignation or removal of the Trustee.

               The Company hereby agrees to indemnify and hold harmless the
Trustee and the Trust for the benefit of the Holders (each, an "INDEMNIFIED
PERSON") from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of any acts, omissions or alleged acts or
omissions arising out of, or relating to, activities of the Company pursuant to
any Pooling and Servicing Agreement to which it is a party, including but not
limited to any judgment, award, settlement, reasonable attorneys' fees and other
reasonable costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim, except to the extent such
loss, liability, expense, damage or injury resulted from the negligence, bad
faith or willful misconduct of an indemnified person; PROVIDED that any payments
made by the Company pursuant to this subsection shall

                                       109




be made solely from funds available to the Company which are not otherwise
needed to be applied to the payment of any amounts pursuant to any Pooling and
Servicing Agreements, shall be non-recourse other than with respect to proceeds
in excess of the proceeds to make such payment, and shall not constitute a claim
against the Company to the extent that insufficient proceeds exist to make such
payment.

               Section 10.19 CERTAIN INFORMATION. The Servicer and the Company
shall promptly provide to the Trustee such information in computer tape, hard
copy or other form regarding the Receivables as the Trustee may reasonably
request to perform its obligations hereunder.

               Section 10.20 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

                                       110




               IN WITNESS WHEREOF, the Company, the Servicer and the Trustee
have caused this Agreement to be duly executed by their respective officers as
of the day and year first above written.


                                    USS RECEIVABLES COMPANY, LTD.


                                    By:
                                         ---------------------------------------
                                         Name:
                                         Title:


                                    UNITED STATIONERS FINANCIAL
                                    SERVICES LLC, as Servicer


                                    By:
                                         ---------------------------------------
                                         Name:
                                         Title:


                                    THE CHASE MANHATTAN BANK, not in its
                                    individual capacity but solely as Trustee
                                    and as Securities Intermediary


                                    By:
                                         ---------------------------------------
                                         Name:
                                         Title:





Agreed to and accepted by:


UNITED STATIONERS SUPPLY CO.


By:
     --------------------------------------------
Name:
Title:



                                                                       EXHIBIT A
                                       TO AMENDED AND RESTATED POOLING AGREEMENT


FORM OF LOCKBOX AGREEMENT



               FORM OF [AMENDED AND RESTATED]1 LOCKBOX AGREEMENT

               THIS [AMENDED AND RESTATED] LOCKBOX AGREEMENT dated as of
___________, 2001 (this "AGREEMENT") is entered into among UNITED STATIONERS
FINANCIAL SERVICES LLC, an Illinois limited liability company (together with its
successors and assigns, the "COMPANY"), USS RECEIVABLES COMPANY, LTD., a Cayman
Islands limited liability company (together with its successors and assigns,
"USSRECCO"), THE CHASE MANHATTAN BANK, a New York banking corporation, as
Trustee under the below-referenced Pooling Agreement (in such capacity, together
with its successors in such capacity, the "TRUSTEE"), [UNITED STATIONERS SUPPLY
CO., an Illinois corporation, solely for purposes of acknowledging and agreeing
to Section 1 hereof]2 and ______________________ a ____________________, as
lockbox agent and the provider of certain collection services hereunder (the
"LOCKBOX AGENT").

               WHEREAS, United Stationers Supply Co. ("USSC"), certain other
subsidiaries of United Stationers, Inc. (together with USSC, the "SELLERS"),
USSRecCo, as purchaser, and USSC, as servicer, entered into that certain
Receivables Sale Agreement dated as of April 3, 1998 (the "ORIGINAL SALE
AGREEMENT"), pursuant to which the Sellers sold certain of their Receivables (as
defined therein) and certain other related property (including the right to
Collections) to USSRecCo;

               WHEREAS, USSRecCo, USSC, as servicer, and the Trustee entered
into that certain Pooling Agreement dated as of April 3, 1998 (the "ORIGINAL
POOLING AGREEMENT"), pursuant to which USSRecCo conveyed all of the assets
purchased from the Sellers to the Trustee, for the benefit of the United
Stationers Receivables Master Trust (the "TRUST");

               [WHEREAS, in connection with the Original Pooling Agreement,
USSC, USSRecCo, the Trustee and the Lockbox Agent entered into that certain
Lockbox Agreement dated as of April 3, 1998, pursuant to which the Lockbox and
the Lockbox Accounts were established in the name of USSC;]

- ----------

(1) Only applies to lockbox agreements executed in connection with the Original
    Pooling Agreement.

(2) USSC should only be a party to amendments and restatements of the lockbox
    agreements executed in connection with the Original Pooling Agreement.



               WHEREAS, USSC, the Sellers, and the Company, as purchaser, and
the Company, as servicer, have amended and restated the Original Sale Agreement
pursuant to that certain Amended and Restated Receivables Sale Agreement dated
as of May 1, 2001 (the "TIER I SALE AGREEMENT"), pursuant to which the Sellers
have sold (and will continue to sell) all of their Receivables (as defined
therein) and certain other related property (including the right to Collections)
to the Company;

               WHEREAS, the Company, as seller, USSRecCo, as purchaser, and the
Company, as servicer, have entered into that certain USFS Receivables Sale
Agreement dated as of May 1, 2001 (the "TIER II SALE AGREEMENT"), pursuant to
which the Company has sold (and will continue to sell) substantially all of the
Receivables and other property acquired from the Sellers pursuant to the Tier I
Sale Agreement to USSRecCo;

               WHEREAS, USSRecCo, the Company, as servicer, and the Trustee have
amended and restated the Original Pooling Agreement pursuant to that certain
Amended and Restated Pooling Agreement dated as of May 1, 2001 (as modified and
supplemented and in effect from time to time, the "POOLING AGREEMENT";
capitalized terms used herein without definition shall have the meanings set
forth in the Pooling Agreement), pursuant to which USSRecCo will convey the
receivables acquired by it from the Company to the Trustee, for the benefit of
the Trust; and

               [WHEREAS, in connection with the transactions contemplated by the
agreements described above, the parties to the Original Lockbox Agreement desire
to amend and restate the rights, duties and obligations under the Original
Lockbox Agreement, including a transfer of the ownership of the right, title and
interest in and to the Lockbox and the Lockbox Account from USSC to USSRecCo;]3

               WHEREAS, in connection with the Pooling Agreement, the Company
has requested the Lockbox Agent, and the Lockbox Agent has agreed, to establish
in the name of USSRecCo and to maintain and operate, pursuant to the Lockbox
Processing Procedures attached hereto as EXHIBIT B (the "LOCKBOX PROCEDURES"),
for the benefit of the Trustee, a payment processing arrangement for all
remittances (including wire transfers and ACH credits) from account debtors of
the Sellers, which remittances will be deposited for collection into and cleared
through (or credited to) a bank account (the "LOCKBOX ACCOUNT") maintained, in
the name of USSRecCo, by the Lockbox Agent at its branch located at

- ----------

(3) For use only if amending and restating a lockbox agreement executed in
    connection with the Original Pooling Agreement.



__________________________ (the "BRANCH OFFICE"). The Lockbox Account is account
#______________.

               NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the [Original Lockbox
Agreement is hereby amended and restated in its entirety] parties hereto agree
as follows:

               Section 1. THE LOCKBOX. The Lockbox Agent shall [transfer the
ownership of the Lockbox from USSC to USSRecCo] rent a post office box on behalf
of USSRecCo in the Lockbox Agent's name (the "LOCKBOX"). The Lockbox Agent shall
process mail delivered to the Lockbox in accordance with the Lockbox Procedures.
The Lockbox Agent shall advise the Company and the Trustee of the establishment
of the Lockbox (identifying the same) and of how mail is to be addressed in
order to be delivered to the Lockbox.

               Section 2. ACCESS TO LOCKBOX. The Lockbox Agent shall have
unrestricted and exclusive access to the Lockbox for the purpose of retrieving
and processing the contents thereof in accordance with the procedures specified
herein.

               Section 3. BAILMENT. The removal of checks, drafts, notes, money
orders or other orders for payment (hereinafter referred to collectively as
"ITEMS") or cash from the Lockbox shall create a bailment, with the Lockbox
Agent as bailee and the Trustee as bailor, and such bailor-bailee relationship
shall continue until such Items or cash are received at the Branch Office and
deposited for collection into the Lockbox Account in accordance with this
Agreement, at which time the Trustee shall be a depositor of the Lockbox Agent
with respect to the Lockbox Account. The bailor-bailee relationship described
above shall also apply to the contents removed from the Lockbox other than cash
or Items.

               Section 4. PROCEDURES. The Lockbox Agent will remove the
envelopes received in the Lockbox, and will open such envelopes and remove the
contents thereof, at the frequency and times specified in SECTION 6 hereof.
Items contained in the envelopes will be inspected and handled in accordance
with the Lockbox Procedures unless otherwise instructed in writing by the
Trustee (with notice to the Company five (5) Business Days prior to the
implementation of such changes).

               Items that are not acceptable for deposit under this SECTION 4
will not be deposited into the Lockbox Account, but will be handled as provided
in the Lockbox Procedures.



               Section 5. DEPOSIT OF ITEMS. Each Item acceptable for deposit
under SECTION 4 hereof and all cash will be deposited, for collection, into the
Lockbox Account, and the proceeds of such collection will be credited to the
Lockbox Account upon receipt. In accordance with the Lockbox Procedures, a
photocopy will be taken of each Item and attached to the corresponding envelope
and accompanying papers. Photocopies of Items will be accompanied by an adding
machine tape or other detailed listing for each deposit.

               Section 6. FREQUENCY OF DEPOSIT. In order to maximize daily
receipts and funds availability, the Lockbox Agent will retrieve and open the
mail delivered to the Lockbox as provided in the Lockbox Procedures, provided
that the Lockbox Agent will retrieve and open such mail at least once each local
business day and shall promptly deposit into the Lockbox Account, for collection
in accordance with this Agreement, the Items contained in such mail in
accordance with the Lockbox Procedures. Each deposit will correspond to an
individual total shown on the Lockbox Account statement. Deposits will be made
in anticipation of major check clearing deadlines.

               Section 7. MICROFILMING OF ITEMS. For reference purposes, all
Items deposited by the Lockbox Agent will be microfilmed in accordance with the
Lockbox Agent's normal procedures. Copies thereof will be made available to the
Company or, upon request of the Trustee, to the Trustee, for the period required
by applicable state or Federal law for record retention purposes.

               Section 8. ENDORSEMENT OF ITEMS. The following endorsement will
be applied by the Lockbox Agent to each Item deposited for collection into the
Lockbox Account in accordance with the Lockbox Procedures:

               "Credited to the account of the within-named payee, absence of
endorsement guaranteed (Lockbox Agent)."

               Section 9. TREATMENT OF NON-DEPOSITED ITEMS; OTHER MAIL. The
following Items will be batched separately and will be forwarded with the daily
remittance materials as provided in SECTION 10 hereof:

         A.    Items which, pursuant to the Lockbox Procedures, are not
               deposited for collection into the Lockbox Account, and
               accompanying papers and envelopes; and

         B.    Envelopes which contain only correspondence, but no cash or
               Items.



               Section 10. BATCHING OF ITEMS. All remittance papers, envelopes,
adding machine tapes and deposit ticket copies (one (1) for each deposit), and
all photocopies made pursuant to SECTION 5 hereof, will be batched by deposit so
that all related papers are together, and handled in accordance with the Lockbox
Procedures. These batches, and all Items which have been deposited into the
Lockbox Account, and the other documents described herein will be sent to the
Company and, if the Trustee shall so notify the Lockbox Agent, with a copy to
the Trustee, by express mail (or other overnight delivery service) to the
appropriate address set forth on EXHIBIT A hereto.

               Section 11. INSUFFICIENT FUNDS. In accordance with the Lockbox
Procedures, in the event that an Item deposited into the Lockbox Account is
returned unpaid because of "insufficient funds" or "uncollected funds", the
Lockbox Agent will redeposit such Item unless such Item has twice been returned
unpaid. If redeposit of an Item is not possible because an Item is returned with
an "Account Closed", "Payment Stopped" or similar notation, the Lockbox Agent
will charge the Lockbox Account and send such Item with debit advice to the
Company with a copy to the Trustee (unless Trustee shall otherwise notify the
Lockbox Agent), by express mail (or other overnight delivery service) to the
appropriate address set forth on EXHIBIT A hereto. In addition, the Lockbox
Agent will provide the Company and, if the Trustee shall so notify the Lockbox
Agent, the Trustee, with telephonic notice of Items that are returned unpaid.

               Section 12. FUND TRANSFERS. None of the Sellers, the Company nor
USSRecCo shall have any right of withdrawal over the Lockbox Account. The
Lockbox Agent shall, (i) by 9:00 a.m. on each day on which the Branch Office is
open, wire transfer collected funds standing to the credit of the Lockbox
Account or (ii) by 4:00 p.m. initiate an automated clearing house credit on each
day on which the Branch Office is open for credit on the succeeding Business Day
(in each case net of returns and a base balance not to exceed $20,000 in
collected funds) to account number 323094481 maintained by the Trustee at its
office at 450 West 33rd Street, New York, NY 10001, or to such other account as
the Trustee shall notify the Lockbox Agent in writing with a copy of such notice
to the Company. USSRecCo hereby agrees to indemnify the Lockbox Agent from, and
hold the Lockbox Agent harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by the Lockbox Agent arising out of or by
reason of the remittance to the Trustee of any uncollected funds representing
anticipated proceeds of the collection of an Item that shall fail for any reason
to ultimately be collected or the return or dishonor of any Item deposited in
the Lockbox Account.



               Section 13. LOCKBOX AGENT FEES. The Lockbox Agent fees, together
with out-of-pocket expenses such as post office box rental, postage, express
mail or overnight delivery, and non-par check charges, are the sole and
exclusive responsibility of the Company; PROVIDED, that the Trustee may, but
shall be under no obligation to, pay any such fees and expenses that the Company
shall fail to pay on any Distribution Date to the extent of available funds.

               Section 14. NOTIFICATION OF ACCOUNT DEBTORS. Promptly following
the execution and delivery hereof, the Company will, or will cause the
applicable Seller to, notify each account debtor that has not already been so
notified to send remittances owing to the Company to the Lockbox (unless such
account debtor has otherwise been notified to send such remittance to another
lockbox pursuant to another lockbox agreement with the Trustee). Remittances
sent directly to the Company's office, together with any accompanying papers and
the original envelopes, shall be placed by the Company into another envelope
addressed to the Lockbox Agent and hand delivered to the Lockbox.

               Section 15. AUTHORITY TO CREDIT AND DEBIT LOCKBOX ACCOUNT. The
Lockbox Agent shall have the right to credit or debit the Lockbox Account to
correct any processing irregularity. Copies of credit or debit advice will be
sent to the Company and, if the Trustee shall so notify the Lockbox Agent, with
a copy to the Trustee, by express mail (or other overnight delivery service) or
facsimile to the appropriate address set forth on EXHIBIT A hereto. From time to
time, the Company or the Trustee, as the case may be, may wish to communicate
processing irregularities or requests to the Lockbox Agent. Such inquiries must
be made to the Lockbox Agent within a period of two (2) years after the
respective irregularity shall occur.

               Section 16. RESPONSIBILITY OF LOCKBOX AGENT. Each of the parties
hereby agrees that the Lockbox Agent's responsibility to it under this Agreement
shall be limited to the exercise of due professional care and skill as would be
exercised by a commercial bank offering the services contemplated by this
Agreement (including without limitation, the Lockbox Procedures) for a fee. In
no event shall the Lockbox Agent be liable to the Company or the Trustee for
failure to follow any of the procedures set forth herein, including, without
limitation, failure to perform any service within the time provided therefor, if
such failure is due to the occurrence of any of the following events: any act or
failure to act by the Company or the Trustee, as the case may be; a power
failure; strikes or lock-outs; fire or other casualty; riot or civil commotion;
earthquakes, floods, or other acts of God; delay in transportation; or any other
event beyond the control of the Lockbox Agent,



provided, however such failure did not result from the negligence or misconduct
of the Lockbox Agent).

THE LOCKBOX AGENT SERVES AT THE PLEASURE OF THE TRUSTEE AND CAN BE REPLACED AT
ANYTIME AT THE SOLE DISCRETION OF THE TRUSTEE. ANY REPLACEMENT OF THE LOCKBOX
AGENT SHALL BE SELECTED BY THE TRUSTEE WHICH IN TURN SHALL SERVE AT THE
TRUSTEE'S PLEASURE.

               Section 17. LIEN OF TRUSTEE. Each of the Company and the Lockbox
Agent hereby agrees that the Trustee shall have a continuing first priority lien
on, and security interest in, the Lockbox, the contents thereof, and all funds
standing to the credit of the Lockbox Account and that the Lockbox Agent shall
be the Trustee's agent for the purpose of holding and collecting such collateral
security. As provided herein, the Lockbox Account shall be under the control of
the Trustee, and the Lockbox Agent (as agent for the Trustee), and none of the
Sellers, the Company or USSRecCo shall have any right to withdraw or transfer
any amount from the Lockbox Account.

               Section 18. NOTICES. Unless otherwise provided in the Lockbox
Procedures, notices relating to this Agreement shall be in writing and
telecopied or delivered to the intended recipient at its "Address for Notices"
specified opposite its name on EXHIBIT A hereto or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.

               Section 19. GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement shall be governed by and construed in accordance with the law of the
State of New York. Each of the parties hereto hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of the Supreme Court of the State of New York sitting in New York
County (including its Appellate Division), and of any other appellate court in
the State of New York, for the purposes of all legal proceedings arising out of
or relating to this Agreement or the transactions contemplated hereby. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any objection that it may now or hereafter have to the laying of
the venue of any such proceeding brought in such court and any claim that any
such proceeding brought in such court has been brought in an inconvenient forum.



               Section 20. MISCELLANEOUS. This Agreement shall be effective as
of the date first above written, upon the due execution of this Agreement by
each party hereto. Neither this Agreement nor any provision hereof may be
modified or waived orally, but only by an instrument in writing signed by the
parties hereto; provided that the Company and the Lockbox Agent may, with
written notice to the Trustee, modify the Lockbox Procedures unless such
modification has an adverse effect on the rights of the Trustee hereunder. In
the event of any conflict between the provisions of this Agreement and the
Lockbox Procedures, the provisions of this Agreement shall control. This
Agreement shall terminate upon the earlier of (i) the expiration or earlier
termination of the Pooling Agreement or (ii) written notice to the Lockbox Agent
with consent by the Trustee, such consent not to be unreasonably withheld. This
Agreement may be terminated at any time by the Lockbox Agent or the Trustee upon
thirty (30) days advance written notice to the other parties to this Agreement.
The obligations and agreements as to payments, reimbursement and indemnification
set forth in this Agreement shall survive the termination of this Agreement.
This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK



               IN WITNESS WHEREOF, the parties hereto have caused this [Amended
and Restated] Lockbox Agreement to be duly executed and delivered as of the date
first above written.


                                    UNITED STATIONERS FINANCIAL SERVICES
                                    LLC


                                    By:
                                       ----------------------------------------
                                    Name: ____________________________________
                                    Title: _____________________________________


                                    USS RECEIVABLES COMPANY, LTD.


                                    By:
                                       -----------------------------------------
                                    Name: ____________________________________
                                    Title: _____________________________________


                                    THE CHASE MANHATTAN BANK,
                                     as TRUSTEE


                                    By:
                                       -----------------------------------------
                                    Name: ____________________________________
                                    Title: _____________________________________



                                    [INSERT NAME OF LOCKBOX AGENT],
                                     as Lockbox Agent


                                    By:
                                       -----------------------------------------
                                    Name: ____________________________________
                                    Title: _____________________________________


[ACKNOWLEDGED AND AGREED
TO AS OF THE DATE FIRST
SET FORTH ABOVE, SOLELY FOR
PURPOSES OF SECTION 1 HEREOF.


UNITED STATIONERS SUPPLY CO.


By:
   --------------------------------------------------
Name:
     ------------------------------------------------
Title:
      -----------------------------------------------(4)

- ----------

(4) For use only in amending and restating lockbox agreements established
    pursuant to the Original Pooling Agreement.



                                                                       EXHIBIT A
                                                                              to
                                                               Lockbox Agreement


ADDRESSES

COMPANY:                                    UNITED STATIONERS FINANCIAL
- -------
                                            SERVICES LLC
                                            2001 Rand Road
                                            Des Plaines, Illinois 60016
                                            Telecopier No.:
                                                             -------------------
                                            Telephone No.:
                                                          ----------------------
                                            Attention:
                                                        ------------------------

USSRECCO:                                   USS RECEIVABLES COMPANY, LTD.
- --------
                                            2200 East Golf Road
                                            Des Plaines, Illinois 60016
                                            Telecopier No.:
                                                             -------------------
                                            Telephone No.:
                                                          ----------------------
                                            Attention:  Treasurer

TRUSTEE:                                    THE CHASE MANHATTAN BANK,
- -------
                                            as Trustee
                                            1 Chase Manhattan Plaza
                                            New York, New York 10081
                                            Telecopier No.:  (718) 242-6910
                                            Telephone No.:  (718) 242-7979
                                            Attention:  New York Agency

LOCKBOX AGENT:                              ______________________________
- -------------
                                            ______________________________
                                            ______________________________
                                            ______________________________
                                            Telecopier No.:  (_) ___-______
                                            Telephone No.:  (_) ___-______
                                            Attention: ______________________



                                                  Exhibit B to Lockbox Agreement

LOCKBOX PROCESSING PROCEDURES
UNITED STATIONERS FINANCIAL SERVICES LLC

Lockbox Remittance Banking Section will pick up mail, including remittances,
several times each day from the assigned P.O. Box.

Envelopes will be opened by the Bank and checks will be examined for regularity
of date, amount, signature, and payee.

I.       Check Acceptance/Rejection

        A.       ACCEPT:

                1.       All checks made payable to:

                           United Stationers/Financial/Services/(LLC)
                           USFS (LLC)
                           United Stationers/Supply/(Co.)
                           United Stationers Furniture Div.
                           USSC or USSCO
                           MicroUnited/(Inc.)
                           MicroUnited Computer Products
                           MicroUnited Business Products
                           Stationers Distribution Co.
                           SDC
                           United Facility Supply
                           Associated Stationers, Inc.
                           Associated
                           ASI
                           All Value Office Products [Add as appropriate for
                           Additional Sellers] Or any reasonable derivation of
                           the above.
        B.       REJECT:

                1.       Stale or post dated checks.

                2.       Foreign Items.

                3.       Third party checks.

        C.       EXCEPTIONS:



                1.       No Signature.

                    (a)  Add "signature guaranteed" endorsement.

                    (b)  Notify the [Corporate Cash Control Assistant] at

                        (847) _________________.

                2.       Differences between the numerical and longhand amounts.

                    (a)  Look at invoice or remittance advice for a total that
                         matches either the longhand or the numerical amount.

                    (b)  If either amount matches the invoice or remittance
                         advice, use that amount.

                    (c)  If neither amount matches the invoice or remittance
                         amount, use the longhand amount and deposit the check.

                    (d)  Do not call the Cash Control Assistant if both check
                         amounts are the same but do not match the invoice or
                         remittance advice. Process the check as is.

                    (e)  If there is no invoice available, use the longhand
                         amount.

                3.       Checks bearing the notation "Paid in Full".

                         Call Corporate Cash Control Assistant. Either the
                         Corporate Cash Control Assistant, Cash Manager, or
                         Treasurer will give authorization to either deposit or
                         return the check.

II.  All remittances in good order will be processed and deposited in batches of
     no more than twenty-five (25) checks.

III. The Bank will deposit the amount of these items into the appropriate United
     Stationers lockbox account.

IV.  All checks processed will be microfilmed and properly endorsed.

     NOTE: Microfilm will be retained by the Bank for possible future reference.

V.   Advice of Deposit

     Each day send the following deposit related information via overnight
     courier service:

                1.       Duplicate deposit ticket.



                2.       Photocopies of each check deposited, stapled to the
                         attached detail.

                3.       Envelopes, rejects, correspondence, memos, etc. (NOTE:
                         Please include the Federal Express envelope for all
                         checks received via Federal Express.)

         [To:     UNITED STATIONERS
                  Attn:  Front Door Receptionist
                  Centralized Accounts Receivable Dept.
                  1661 Feehanville Suite 400
                  Mount Prospect, IL  60056]

VI.  Returned Items

        A.         FOR ALL* CHECKS RETURNED AFTER THE FIRST PRESENTMENT.
                   [*Includes NSF, Uncollected Funds, Stop Payment, Account
                   Closed, Improper Endorsements, Refer to Maker, date,
                   Signature, Other]

        For ALL checks which are returned for the first time, the Corporate Cash
        Control Assistant should be notified by telephone IMMEDIATELY,
        regardless of the amount of the check or the reason for the return. The
        Corporate Cash Control Assistant's telephone number is (847)
        ______________.

        The Corporate Cash Control Assistant will instruct the bank to either
        redeposit or return the item to United Stationers. The bank SHOULD NOT
        automatically redeposit or return any items without first notifying the
        Corporate Cash Control Assistant.

        If your call is answered by our voice mail system, please leave the
        following information on the recorder (you have up to 2 minutes so
        please speak slowly):

                   Caller's name, phone number with area code, and the bank
                   represented, payee, reason for return, first or second
                   return, maker, the maker's city and state, check number,
                   check date, deposit date (or dates if check is a second
                   return), and the makers bank.

        All bankable checks (i.e. NSF, uncollected, endorsement missing) should
        be.

        Please state whether the check will be redeposited or returned.



        *NOTE: Voice mail is available 24 hours a day. If a return item comes in
        after 5:00 PM Central time, please leave all information as mentioned
        above.

        B.         NO SIGNATURE ITEMS.

        After the bank has notified the Corporate Cash Control Assistant, the
        bank should redeposit these items with a "signature guaranteed"
        endorsement.

        C.         NO ENDORSEMENT BY UNITED STATIONERS.

        After the bank has notified the Corporate Cash Control Assistant, the
        bank should guarantee the endorsement and redeposit these items.

        D.         REFER TO MAKER CHECKS.

        After the bank has notified the Corporate Cash Control Assistant, the
        bank should return the item to United Stationers.

        E.         FOR ALL * CHECKS RETURNED AFTER THE SECOND  PRESENTMENT.

        [*Includes NSF, Uncollected Funds, Stop Payment, Account Closed,
        Improper Endorsements, Date, Signature, Other]

        For ALL checks returned on the second presentment, the bank should
        IMMEDIATELY telephone the Corporate Cash Control Assistant regardless of
        the amount of the check or the reason for return.

        Our voice mail is available after our regular business hours. Please
        leave the following information on the recording:

        Caller's name, phone number with area code, and the bank represented,
        payee, reason for return, first or second return, maker, the maker's
        city and state, check number, check date, deposit date (or dates if
        check is a second return), and the makers bank.

        F.         AUTHORIZED ITEMS RETURNED TO UNITED STATIONERS.

        ONLY after the Corporate Cash Control Assistant has approved the return
        of an item or the information has been left on voice mail can it be sent
        back to United Stationers.



        The mailing address for all authorized returns is:

United Stationers Financial Services LLC
[Treasury Department]
2001 Rand Road
Des Plaines, IL  60016-1267

        G.         FOR ALL* AUTOMATED CLEARING HOUSE ITEMS.
                   ---------------------------------------

        [*Includes NSF, Uncollected Funds, Stop Payment, Account Closed,
        Improper Endorsements, Refer to Maker, Date, Signature, Other]

        For ALL checks which are returned for the first time, the Corporate Cash
        Control Assistant should be notified by telephone IMMEDIATELY,
        regardless of the amount of the ACH or the reason for the return. The
        Corporate Cash Control Assistant's telephone number is (847)
        ________________.

        As ACH items are normally redeposited immediately, whenever possible,
        please be sure to inform the Corporate Cash Control Assistant if the
        item has been redeposited or is being returned.

        If your call is answered by our voice mail system, please see section A
        for information to leave on the recorder.



        H.         FEDERAL REGULATION CC.

        All items returned outside of the guidelines specified by Regulation CC
        will be sent back for a "late return".



                                                                       EXHIBIT B
                                                            TO POOLING AGREEMENT

INTERNAL OPERATIONS PROCEDURES MEMORANDUM
[to be provided as required under additional series]



                                                                      Schedule 1
                                       TO AMENDED AND RESTATED POOLING AGREEMENT

RECEIVABLES

Tape to be delivered by the Company to the Trustee.



                                                                      Schedule 2
                                       TO AMENDED AND RESTATED POOLING AGREEMENT

TRUST ACCOUNTS

                                                                    

ACCOUNT NAME                                                           ACCOUNT NUMBER
Collection Account


Series 1998-1
ACCOUNT NAME                                                           ACCOUNT NUMBER

USS Receivables 1998-1 Collection Subaccount                           180323.1
USS Receivables 1998-1 Principal Collection
Sub-Subaccount                                                         180323.3
USS Receivables 1998-1 Non-Principal Collection
Sub-Subaccount                                                         180323.2
USS Receivables 1998-1 Accrued Interest
Sub-Subaccount                                                         180323.4


Series 2000-2
ACCOUNT NAME                                                           ACCOUNT NUMBER

USS Receivables 2000-2 Collection Subaccount                           180322.2
USS Receivables 2000-2 Principal Collection
Sub-Subaccount                                                         180322.4
USS Receivables 2000-2 Non-Principal Collection
Sub-Subaccount                                                         180322.3
USS Receivables 2000-2 Accrued Interest
Sub-Subaccount                                                         180322.1





                                                                      Schedule 3
                                       TO AMENDED AND RESTATED POOLING AGREEMENT

ACTIONS WITH RESPECT TO CHATTEL PAPER

         Each Seller and the Servicer, in each case acting as custodian for the
Company, and the Company, shall immediately take all of the following actions
(in addition to all other actions set forth or reasonably requested as described
in the Transaction Documents and in all documents executed in connection with
the sale of an interest in the Receivables and the grant of a security interest
therein to other Persons) to protect or more fully evidence the security
interest granted by the Company in chattel paper evidencing Receivables pursuant
to agreements and documents entered into after the Closing Date (such chattel
paper being the "CHATTEL PAPER").

                  (a) Wherever it is located, maintain all Chattel Paper in
segregated storage cabinets, which cabinets will contain no other documents;

                  (b) Conspicuously mark each such storage cabinet to indicate
that the documents contained therein are Chattel Paper evidencing Receivables of
the Company;

                  (c) Stamp in red the original of each document constituting
Chattel Paper with a legend to read as follows:

                           "THIS DOCUMENT AND ALL RIGHTS HEREUNDER HAVE BEEN
                           SOLD TO UNITED STATIONERS FINANCIAL SERVICES LLC,
                           WHICH HAS SOLD THIS DOCUMENT AND ALL RIGHTS HEREUNDER
                           TO USS RECEIVABLES COMPANY, LTD. AND ARE SUBJECT TO A
                           SECURITY INTEREST IN FAVOR OF THE CHASE MANHATTAN
                           BANK, AS TRUSTEE."

or such other legend that is reasonably acceptable to the Trustee; PROVIDED that
at any time that an Early Amortization Event has occurred and is continuing,
such Seller or the Servicer shall, at the request of the Trustee, stamp any
Chattel Paper with the above legend prior to sending it to other parties for
execution.



                                                                      SCHEDULE 4
                                       TO AMENDED AND RESTATED POOLING AGREEMENT

LOCATION OF RECORDS

2200 E. Golf Road
Des Plaines, Illinois  60016
(Cook County)

CHIEF EXECUTIVE OFFICE

Same



                                                                      SCHEDULE 5
                                       TO AMENDED AND RESTATED POOLING AGREEMENT

CONTRACTUAL OBLIGATIONS

None

EX-10.5

Exhibit 10.5

                                                                  EXECUTION COPY

================================================================================

                          USS RECEIVABLES COMPANY, LTD.

                    UNITED STATIONERS FINANCIAL SERVICES LLC,
                                  as Servicer,

                            THE CHASE MANHATTAN BANK,
                                as Funding Agent,

                      PARK AVENUE RECEIVABLES CORPORATION,
                              as Initial Purchaser,

                            THE CHASE MANHATTAN BANK,
                                 as an APA Bank

                                       AND

                            THE CHASE MANHATTAN BANK,
                    as Trustee and as Securities Intermediary

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

                           SECOND AMENDED AND RESTATED
                            SERIES 1998-1 SUPPLEMENT

                             Dated as of May 1, 2001

                                       to

                     AMENDED AND RESTATED POOLING AGREEMENT

                             Dated as of May 1, 2001

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

                   UNITED STATIONERS RECEIVABLES MASTER TRUST

================================================================================



                                TABLE OF CONTENTS



                                                                               PAGE

                                    ARTICLE I
                                   DEFINITIONS

                                                                          
SECTION 1.1.    Definitions......................................................2

                                   ARTICLE II
                          DESIGNATION OF CERTIFICATES;
                    PURCHASE AND SALE OF THE VFC CERTIFICATES

SECTION 2.1.    Designation.....................................................27
SECTION 2.2.    The Series 1998-1 Interests.....................................27
SECTION 2.3.    Purchases of Interests in the VFC Certificates..................27
SECTION 2.4.    Delivery........................................................28
SECTION 2.5.    Procedure for Increasing the Series 1998-1 Invested Amount......29
SECTION 2.6.    Sales by the Initial Purchaser of its Series 1998-1 Purchaser
                Invested Amount to the APA Banks................................31
SECTION 2.7.    Procedure for Decreasing the Series 1998-1 Invested Amount;
                Optional Termination............................................34
SECTION 2.8.    Reductions of the Commitments...................................35
SECTION 2.9.    Interest, Fees..................................................36
SECTION 2.10.   Indemnification by the Company and the Servicer.................37

                                   ARTICLE III
                          ARTICLE III OF THE AGREEMENT

SECTION 3A.2.   Establishment of Trust Accounts.................................38
SECTION 3A.3.   Allocations.....................................................41
SECTION 3A.4.   Determination of Interest.......................................42
SECTION 3A.5.   Determination of Series 1998-1 Monthly Principal................44
SECTION 3A.6.   Applications....................................................45


                                        i




                                   ARTICLE IV
                            DISTRIBUTIONS AND REPORTS

                                                                          
SECTION 4A.1.   Distributions...................................................47
SECTION 4A.2.   Reserved........................................................48
SECTION 4A.3.   Statements and Notices..........................................48

                                    ARTICLE V
                      ADDITIONAL EARLY AMORTIZATION EVENTS

SECTION 5.1.    Additional Early Amortization Events............................49

                                   ARTICLE VI
                                  SERVICING FEE

SECTION 6.1.    Servicing Compensation..........................................53

                                   ARTICLE VII
                             CHANGE IN CIRCUMSTANCES

SECTION 7.1.    Illegality......................................................53
SECTION 7.2.    Increased Costs.................................................54
SECTION 7.3.    Taxes...........................................................55
SECTION 7.4.    Break Funding Payments..........................................57
SECTION 7.5.    Alternate Rate of Interest......................................58
SECTION 7.6.    Mitigation Obligations..........................................58

                                  ARTICLE VIII
                    REPRESENTATIONS AND WARRANTIES, COVENANTS

SECTION 8.1.    Representations and Warranties of the
                Company and the Servicer........................................59
SECTION 8.2.    Covenants of the Company and the Servicer.......................60
SECTION 8.3.    Covenants of the Servicer.......................................60
SECTION 8.4.    Obligations Unaffected..........................................61

                                   ARTICLE IX
                              CONDITIONS PRECEDENT

SECTION 9.1.    Conditions Precedent to Effectiveness of Supplement.............61


                                       ii




                                    ARTICLE X
                                THE FUNDING AGENT

                                                                          
SECTION 10.1.   Appointment.....................................................64
SECTION 10.2.   Delegation of Duties............................................65
SECTION 10.3.   Exculpatory Provisions..........................................65
SECTION 10.4.   Reliance by Funding Agent.......................................66
SECTION 10.5.   Notice of Servicer Default or Early Amortization Event or Close
                Up Potential Early Amortization Event...........................66
SECTION 10.6.   Non-Reliance on the Funding Agent and Other Purchasers..........67
SECTION 10.7.   Indemnification.................................................67
SECTION 10.8.   The Funding Agent in Its Individual Capacity....................68
SECTION 10.9.   Successor Funding Agent.........................................68

                                   ARTICLE XI
                                  MISCELLANEOUS

SECTION 11.1.   Ratification of Agreement.......................................68
SECTION 11.2.   Governing Law...................................................69
SECTION 11.3.   Further Assurances..............................................69
SECTION 11.4.   Payments........................................................69
SECTION 11.5.   Costs and Expenses..............................................69
SECTION 11.6.   No Waiver, Cumulative Remedies..................................70
SECTION 11.7.   Amendments......................................................70
SECTION 11.8.   Severability....................................................71
SECTION 11.9.   Notices.........................................................71
SECTION 11.10.  Successors and Assigns..........................................72
SECTION 11.11.  Securities Laws; Participations; Assignments....................73
SECTION 11.12.  Adjustments; Set-off............................................75
SECTION 11.13.  Counterparts....................................................76
SECTION 11.14.  No Bankruptcy Petition..........................................76
5SECTION 11.15.  Confidentiality.................................................77
SECTION 11.16.  Limited Recourse................................................77
SECTION 11.17.  Consents of Investor Certificateholders.........................78

                                   ARTICLE XII
                              FINAL DISTRIBUTIONSs

SECTION 12.1.   Certain Distributions...........................................79


                                       iii




SCHEDULES

             
Schedule 1      Commitments


                                       iv


          This SECOND AMENDED AND RESTATED SERIES 1998-1 SUPPLEMENT, dated as of
May 1, 2001 (as further amended, supplemented or otherwise modified from time to
time, this "SUPPLEMENT"), is by and among USS RECEIVABLES COMPANY, LTD., a
Cayman Islands limited liability company (together with its permitted successors
and assigns, the "COMPANY"), UNITED STATIONERS FINANCIAL SERVICES LLC, an
Illinois limited liability company (together with its successors and assigns,
"USFS"), as servicer (except where otherwise noted) (together with its
successors and assigns in such capacity, the "SERVICER"), PARK AVENUE
RECEIVABLES CORPORATION, a Delaware corporation (including its successors and
assigns but excluding the APA Banks as assignees pursuant to Section 2.6, the
"INITIAL PURCHASER"), the several banks or financial institutions parties to
this Supplement as of the Effective Date (as defined below) and the other banks
or financial institutions from time to time parties hereto pursuant to Section
11.11 (c) (collectively, the "APA BANKS"; each, individually, an "APA BANK"),
THE CHASE MANHATTAN BANK, a New York banking corporation ("CHASE"), in its
capacity as Funding Agent (the "FUNDING AGENT"), and THE CHASE MANHATTAN BANK,
in its capacity as trustee (together with its successors and assigns in such
capacity, the "TRUSTEE") and as Securities Intermediary (together with its
successors and assigns in such capacity, the "SECURITIES INTERMEDIARY") under
the Agreement (as defined below).


                              W I T N E S S E T H:

          WHEREAS, the Company, the Servicer and the Trustee have entered into
an Amended and Restated Pooling Agreement, dated as of May 1, 2001 (as amended,
supplemented or otherwise modified from time to time, the "AGREEMENT";
capitalized terms used herein and not otherwise defined are used as defined in
the Agreement);

          WHEREAS, the Company, the Servicer, the Trustee, the Initial Purchaser
and the APA Banks have entered into an Amended and Restated Series 1998-1
Supplement dated as of April 3, 1998 (as amended, supplemented or otherwise
modified to the date hereof, the "ORIGINAL SUPPLEMENT");

          WHEREAS, the Company, the Servicer, the Trustee, the Initial Purchaser
and the APA Banks desire to amend and restate the Original Supplement on the
terms and conditions set forth herein;

                                        1


          WHEREAS, the Agreement provides, among other things, that the Company,
the Servicer and the Trustee may at any time and from time to time enter into
supplements to the Agreement for the purpose of authorizing the issuance on
behalf of the Trust by the Company for execution and redelivery to the Trustee
for authentication of one or more Series of Investor Certificates; and

          WHEREAS, the Company, the Servicer, the Trustee, the Initial Purchaser
and the APA Banks wish to supplement the Agreement as hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereto agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.1. DEFINITIONS. (a) The following words and phrases shall
have the following meanings with respect to Series 1998-1 and the definitions of
such terms are applicable to the singular as well as the plural form of such
terms and to the masculine as well as the feminine and neuter genders of such
terms:

          "ACCRUAL PERIOD" shall mean the period from and including a
Distribution Date, to but excluding the succeeding Distribution Date.

          "ACCRUED EXPENSE AMOUNT" shall mean, for each Business Day during an
Accrual Period, the sum of (i) the Daily Interest Deposit for such Business Day,
(ii) the Daily Commitment Fee Deposit for such Business Day, (iii) the Daily
Utilization Fee Deposit for such Business Day, (iv) the Daily Servicing Fee
Deposit for such Business Day and (v) all Program Costs which have accrued since
the preceding Business Day.

          "ACQUIRING APA BANK" shall have the meaning assigned in Section
11.11(c).

          "ADDITIONAL INTEREST" shall have the meaning assigned in Section
3A.4(b).

                                        2


          "ADJUSTED LIBO RATE" shall mean, with respect to each day during each
Eurodollar Period pertaining to a portion of the Series 1998-1 Invested Amount
allocated to a Eurodollar Tranche, an interest rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) equal to the LIBO Rate for such
Eurodollar Period multiplied by the Statutory Reserve Rate.

          "ADJUSTED LIQUIDITY PRICE" shall mean, in determining the Purchase
Price of the Purchase Amount on an APA Bank Purchase Date prior to the
occurrence of an Early Amortization Event, an amount equal to:

     IP X [OC + NDR]

     where:

     IP                      =             the Invested Percentage on such
                                           APA Bank Purchase Date;

     OC                      =             the product of (i) the APA Bank
                                           Purchase Percentage for such Purchase
                                           Date MULTIPLIED by (ii) the sum of
                                           (A) any and all amounts due and owing
                                           to the Company or the Trust in
                                           respect of Seller Repurchase Payments
                                           and Seller Adjustment Payments
                                           pursuant to the Transaction Documents
                                           and any, (B) all amounts due and
                                           owing to the Trust as Transfer
                                           Deposit Amounts pursuant to
                                           Section 2.5(b) of the Agreement on
                                           such APA Bank Purchase Date and (C)
                                           all collections received by the
                                           Sellers, the Company or the Trust
                                           which are due and owing to the
                                           Initial Purchaser under the
                                           Transaction Documents which have not
                                           yet been remitted to the Initial
                                           Purchaser; and

                                        3


     NDR                     =             the product of (i) the APA Bank
                                           Purchase Percentage for such APA Bank
                                           Purchase Date MULTIPLIED BY (ii)
                                           aggregate outstanding Principal
                                           Amount of all Receivables that are
                                           not Defaulted Receivables as of such
                                           APA Bank Purchase Date.

     Each of the foregoing shall be determined as of the most recent Settlement
Report Date.

          "AGED RECEIVABLES RATIO" shall mean, as of the last day of each
Settlement Period, the percentage equivalent of a fraction, the numerator of
which shall be the sum of (a) the aggregate unpaid balance of Receivables
originated by the Sellers that were 60 to 89 days past due and (b) the aggregate
amount of Receivables of such Sellers that were charged off as uncollectible
prior to the day that is 60 days after its original due date during such
Settlement Period, and the denominator of which shall be the aggregate Principal
Amount of Receivables originated by the Sellers during the third prior
Settlement Period (including the Settlement Period ended on such day).

          "AGGREGATE COMMITMENT AMOUNT" shall mean the aggregate amount of the
Commitments of all APA Banks, as reduced from time to time pursuant to Section
2.8; PROVIDED that at all times the Aggregate Commitment Amount shall be no less
than 102% of the Maximum Invested Amount.

          "AGREEMENT" shall have the meaning specified in the recitals hereto.

          "ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.

          "APA BANKS" shall have the meaning specified in the introductory
paragraph hereto.

          "APA BANK PURCHASE DATE" shall mean the date of any Purchase.

                                        4


          "APA BANK PURCHASE PERCENTAGE" shall mean, for any APA Bank Purchase
Date, the percentage equivalent of a fraction, the numerator of which is the
Purchase Amount for such APA Bank Purchase Date and the denominator of which is
the Series 1998-1 Invested Amount on such APA Bank Purchase Date.

          "APPLICABLE MARGIN" shall mean on any date of determination (i) for
each Eurodollar Tranche, 1.50% per annum and (ii) for each Floating Tranche,
0.25% per annum; PROVIDED, HOWEVER that, after the Commitment Expiry Date or the
occurrence of an Early Amortization Event, the Applicable Margin shall mean on
any date of determination for each Eurodollar Tranche or the Floating Tranche,
the applicable rate per annum set forth below under the caption "Eurodollar
Spread" or "Floating Rate Spread," as the case may be, based upon the Pricing
Leverage Ratio (as defined in, and determined in accordance with, the Credit
Agreement under the definition of Letter of Credit Fee Rate, as in effect on the
date hereof) as of the most recent determination date:



                LEVERAGE                               EURODOLLAR    FLOATING RATE
CATEGORY        RATIO                                  SPREAD        SPREAD
- --------        --------                               ----------    -------------
                                                            
Category 1      greater than 4.50 to 1.00              2.00%         0.75%
Category 2      greater than 4.00 to 1.00 and less     1.75%         0.50%
                than or equal to 4.50 to 1.00
Category 3      greater than 3.50 to 1.00 and less     1.50%         0.25%
                than or equal to 4.00 to 1.00
Category 4      greater than 3.00 to 1.00 and less     1.25%         0.00%
                than or equal to 3.50 to 1.00
Category 5      less than or equal to 3.00 to 1.00     1.00%         0.00%


          "ASSIGNMENT/PARTICIPATION CERTIFICATION" shall mean an assignment or
participation certification, as the case may be, in substantially the form of
Exhibit B hereto.

          "AVAILABLE PRICING AMOUNT" shall mean, on any Business Day, the sum of
(i) the Unallocated Balance PLUS (ii) the Increase, if any, on such date.

          "BENEFITTED PURCHASER" shall have the meaning assigned in Section
11.12.

          "BOARD" shall mean the Board of Governors of the Federal Reserve
System of the United States.

                                        5


          "CARRYING COST RESERVE RATIO" shall mean, as of any Settlement Report
Date and continuing until (but not including) the next Settlement Report Date,
an amount (expressed as a percentage) equal to (a) the product of (i) 2.0 times
Days Sales Outstanding as of such day and (ii) 1.30 times the Alternate Base
Rate in effect as of such day divided by (b) 365.

          "CHANGE IN LAW" shall mean (a) the adoption of any law, rule or
regulation after the Issuance Date, (b) any change in law, rule or regulation or
in the interpretation or application thereof by any Governmental Authority after
the Issuance Date or (c) compliance by any Purchaser with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the Issuance Date.

          "CHASE" shall have the meaning specified in the introductory paragraph
hereto.

          "CLAIM" shall have the meaning assigned in Section 2.10(a).

          "COMMERCIAL PAPER" shall mean the short-term promissory notes of the
Initial Purchaser issued in the United States commercial paper market.

          "COMMITMENT" shall mean, as to any APA Bank, its obligation to
purchase an interest in the VFC Certificate on and after the Issuance Date, to
acquire a PRO RATA share of the Initial Purchaser's VFC Certificate and to
maintain and, subject to certain conditions, increase, its Series 1998-1
Purchaser Invested Amount, in each case, in an aggregate amount not to exceed at
any one time outstanding the amount set forth opposite such APA Bank's name on
Schedule 1 under the caption "Commitment", as such amount may be reduced from
time to time as provided herein; collectively, as to all APA Banks, the
"COMMITMENTS".

          "COMMITMENT EXPIRY DATE" shall mean March 29, 2002 (as may be extended
for an additional period of time up to 364 days from time to time in writing by
PARCO, the Funding Agent and the APA Banks).

          "COMMITMENT FEE" shall have the meaning assigned in Section 2.9(b).

          "COMMITMENT FEE RATE" shall have the meaning assigned in the Fee
Letter.

                                        6


          "COMMITMENT PERIOD" shall mean the period commencing on the Issuance
Date and terminating on the Commitment Termination Date.

          "COMMITMENT REDUCTION" shall have the meaning assigned in Section
2.8(a).

          "COMMITMENT TERMINATION DATE" shall mean the earlier to occur of (i)
the date on which the Aggregate Commitment Amount has been reduced to zero
pursuant to Section 2.8 of this Agreement and (ii) the Commitment Expiry Date.

          "COMMITMENT TRANSFER SUPPLEMENT" shall have the meaning assigned in
Section 11.11(c).

          "COMPANY" shall have the meaning specified in the introductory
paragraph hereto.

          "COMPANY INDEMNIFIED PERSON" shall have the meaning assigned in
Section 2.10(a).

          "CP RATE" shall mean for any day the weighted average of the interest
rates (or if issued at a discount, the weighted average of the rates, after
converting to interest-bearing equivalents) on all outstanding Commercial Paper
issued by the Initial Purchaser to fund the Initial Purchaser's Series 1998-1
Purchaser Invested Amount, together with related dealer fees and commissions.

          "CP RATE PERIOD" shall mean the period from and including a
Distribution Date to but excluding the next succeeding Distribution Date.

          "CP TRANCHE" shall mean a portion of the Series 1998-1 Invested Amount
for which the Series 1998-1 Monthly Interest is calculated by reference to a
particular Discount and a particular CP Rate Period.

          "CREDIT AGREEMENT" shall mean that certain Third Amended and Restated
Credit Agreement, dated as of June 29, 2000, among USSC, as borrower, United
Stationers Inc., as guarantor, The Chase Manhattan Bank, as administrative
agent, and Chase Securities Inc., as arranger, as the same may be amended,
supplemented or otherwise modified and in effect from time to time.

                                        7


          "DAILY COMMITMENT FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Commitment Fee Expense for each day
since the preceding Business Day plus (ii) the aggregate amount of all
previously accrued Daily Commitment Fee Expense that has not yet been deposited
in the Series 1998-1 Non-Principal Collection Sub-subaccount.

          "DAILY COMMITMENT FEE EXPENSE" shall mean, for any day in any Accrual
Period, the product of (A) the excess of the Aggregate Commitment Amount over
the aggregate Series 1998-1 Purchaser Invested Amounts of the APA Banks on such
day multiplied by (B) the Commitment Fee Rate divided by 360.

          "DAILY INTEREST DEPOSIT" shall mean, for any Business Day, an amount
equal to (i) the amount of Daily Interest Expense for each day since the
preceding Business Day PLUS (ii) the aggregate amount of a previously accrued
Daily Interest Expense that has not yet been deposited in the Series 1998-1
Non-Principal Collection Sub-subaccount PLUS (iii) the aggregate amount of all
Additional Interest for each day since the preceding Business Day.

          "DAILY INTEREST EXPENSE" shall mean (i) for any portion of the Series
1998-1 Invested Amount held by the Initial Purchaser during an Accrual Period,
the product of (A) the Initial Purchaser's Series 1998-1 Purchaser Invested
Amount divided by 360 and (B) the CP Rate for such day and (ii) for any portion
of the Series 1998-1 Invested Amount held by the APA Banks during an Accrual
Period, the sum of (A) the product of (x) the sum of (a) the portion of the APA
Banks' Series 1998-1 Purchaser Invested Amount (calculated with respect to all
APA Banks without regard to clauses (d) and (e) of the definition of Series
1998-1 Purchaser Invested Amount) allocable to the Floating Tranche on such day
and (b) for any day during the period from and including an APA Bank Purchase
Date to but excluding the Distribution Date immediately succeeding an APA Bank
Purchase Date, the Unaccrued Discount divided by 365 (or 366, as the case may
be) and (y) the Alternate Base Rate plus the Applicable Margin in effect on such
day, (B) the product of (x) the portion of the Series 1998-1 Invested Amount
(calculated with respect to all APA Banks without regard to clauses (d) and (e)
of the definition of Series 1998-1 Purchaser Invested Amount) allocable to
Eurodollar Tranches on such day divided by 360 and (y) the weighted average
Adjusted LIBO Rate plus the Applicable Margin on such day in effect with respect
thereto and (C) on an APA Bank Purchase Date, the Unaccrued Discount; PROVIDED,
HOWEVER, that for any such day during the continuance of an Early Amortization
Period, the "Daily Interest Expense" for such day shall be equal to the greater
of (i) the sum of the amounts calculated pursuant to clause (ii) above and (ii)
the product of (x) the Series 1998-1

                                        8


Invested Amount on such day divided by 365 (or 366, as the case may be) and (y)
the Alternate Base Rate plus the Applicable Margin in effect on such day plus
2.00%.

          "DAILY SERVICING FEE DEPOSIT" shall mean, for any Business Day, an
amount equal to (i) the amount of Daily Servicing Fee Expense for each day since
the preceding Business Day PLUS (ii) the aggregate amount of all previously
accrued Daily Servicing Fee Expense that has not yet been deposited in the
Series 1998-1 Non-Principal Collection Sub-subaccount.

          "DAILY SERVICING FEE EXPENSE" shall mean, for any day in any Accrual
Period the Series 1998-1 Interests' PRO RATA portion (determined in accordance
with Section 6.1) of the Servicing Fee accruing for such day.

          "DAILY UTILIZATION FEE DEPOSIT" shall mean an amount equal to (i) the
amount of Daily Utilization Fee Expense for each day since the preceding
Business Day PLUS (ii) the aggregate amount of all previously accrued Daily
Utilization Fee Expense that has not yet been deposited in the Series 1998-1
Non-Principal Collection Sub-subaccount.

          "DAILY UTILIZATION FEE EXPENSE" shall mean, for any day in any Accrual
Period on which the Initial Purchaser holds a Series 1998-1 Purchaser Invested
Amount, the product of (A) such Series 1998-1 Purchaser Invested Amount on such
day multiplied by (B) the Utilization Fee Rate divided by 360.

          "DAYS SALES OUTSTANDING" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date, the
number of days equal to the product of (a) 91 and (b) the amount obtained by
dividing (i) the aggregate Principal Amount of Eligible Receivables by (ii) the
aggregate Principal Amount of Receivables generated by the Seller for the three
Settlement Periods immediately preceding such earlier Settlement Report Date.

          "DECREASE" shall have the meaning assigned in Section 2.7(a).

          "DEFAULTING APA BANK" shall have the meaning assigned in Section
2.6(c).

          "DEFAULT RATIO" shall mean, for any Settlement Period, a ratio
(expressed as a percentage) equal to the quotient of (a) the sum of (i) the
aggregate outstanding Principal Amount of all Receivables which are unpaid in
whole or in

                                        9


part for more than 91 days after their respective due dates on the last day of
such Settlement Period and (ii) the aggregate amount of Disputed Receivables;
and (b) the aggregate outstanding Principal Amount of all Receivables on such
last day.

          "DILUTION PERIOD" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
quotient of (i) the product of (A) the aggregate Principal Amount of Receivables
that were originated by the Sellers during the Settlement Period preceding such
earlier Settlement Report Date and (B) the quotient of (1) Days Sales
Outstanding as of such Settlement Report Date and (2) 30 and (ii) the Aggregate
Receivables Amount as of the last day of the Settlement Period preceding such
earlier Settlement Report Date.

          "DILUTION RATIO" shall mean, as of the last day of each Settlement
Period, an amount (expressed as a percentage) equal to (i) the difference
between (A) the aggregate amount of Dilution Adjustments made during such
Settlement Period and (B) the Dilution Reduction Amount divided by (ii) the
average aggregate Principal Amount of Receivables that were originated by the
Sellers during the last two Settlement Periods (including the Settlement Period
ending on such day).

          "DILUTION RESERVE RATIO" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date, an
amount (expressed as a percentage) that is calculated as follows:

          DRR = [ (c * d) + (e-d) * (e/d) ] * f

     Where:

          DRR = Dilution Reserve Ratio;

          c = 2.00;

          d = the average of the Dilution Ratio that occurred during the period
of twelve consecutive Settlement Periods ending immediately prior to such
earlier Settlement Report Date;

          e = the highest average of the Dilution Ratio that occurred during the
period of twelve consecutive Settlement Periods ending prior to such earlier
Settlement Report Date; and

                                       10


          f = the Dilution Period.

          "DISCOUNT" shall mean, for purposes of this Agreement, the amount of
interest or discount to accrue on or in respect of Commercial Paper allocated,
in whole or in part, by the Funding Agent to fund the purchase or maintenance of
the Initial Purchaser's Series 1998-1 Purchaser Invested Amount (including
related commercial paper placement agent costs and commissions and odd-lot
amounts).

          "EARLY AMORTIZATION DATE BALANCE" shall mean, on the date of any
occurrence of an Early Amortization Event, an amount equal to:

                                 IP X [OC + NDR]

where:

          IP   =      the Invested Percentage on such date;

          OC   =      the sum of (i) any and all amounts due and
                      owing to the Company or the Trust in respect
                      of Seller Repurchase Payments and Seller
                      Adjustment Payments pursuant to the
                      Transaction Documents, (ii) all amounts due
                      and owing to the Trust as Transfer Deposit
                      Amounts pursuant to Section 2.5(b) of the
                      Agreement on such date and (iii) all
                      collections received by the Sellers, the
                      Company and/or the Trust which are due and
                      owing to the Initial Purchaser under the
                      Transaction Documents which have not yet
                      been remitted to the Initial Purchaser;

          NDR  =      the aggregate outstanding Principal Amount
                      of all Receivables that are not Defaulted
                      Receivables as of such date.

          Each of the foregoing shall be determined from the Settlement Report
delivered to the Funding Agent on or immediately prior to the date of occurrence
of such Early Amortization Event.

          "EARLY AMORTIZATION EVENT" shall have the meanings assigned in Section
5.1 of this Supplement and Section 7.1 of the Agreement.

                                       11


          "EARLY AMORTIZATION PERIOD" shall have the meaning assigned in Section
5.1 of this Supplement and Section 7.1 of the Agreement.

          "EFFECTIVE DATE" shall have the meaning assigned in Section 9.1.

          "ELIGIBLE ASSIGNEE" shall mean any financial institution that is a
United States Person (within the meaning of Section 7701(a)(30) of the Internal
Revenue Code) and that has a short-term debt rating of at least A-1 from S&P and
P-1 from Moody's.

          "EURODOLLAR PERIOD" shall mean, with respect to any Eurodollar
Tranche, prior to the Scheduled Revolving Termination Date, a period of one,
two, three, four, five or six months requested by the Company commencing on a
Business Day requested by the Company and agreed to by the Funding Agent;
PROVIDED, HOWEVER, that each such Eurodollar Period shall expire on a
Distribution Date.

          "EURODOLLAR TRANCHE" shall mean a portion of the Series 1998-1
Invested Amount for which the Series 1998-1 Monthly Interest is calculated by
reference to an Adjusted LIBO Rate determined by reference to a particular
Eurodollar Period.

          "EXCLUDED TAXES" shall mean, with respect to the Funding Agent, any
Purchaser or any other recipient of any payment to be made by or on account of
any increased obligation of the Company hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income (i) by the United States of America,
or (ii) by the jurisdiction under the laws of which such recipient is organized
or in which its principal office is located, managed or controlled, or, in the
case of any APA Bank, in which its applicable lending office is located, or
(iii) by reason of any connection between the jurisdiction imposing such tax and
the Funding Agent, such recipient or such office other than a connection arising
solely from this Agreement or any other Transaction Document or any transaction
hereunder or thereunder, and (b) any branch profits imposed by the United States
of America or any similar tax imposed by any other jurisdiction in which the
Company is located.

          "FEE LETTER" shall mean, collectively, those certain Fee Letters,
dated as of the date hereof, among the Company, the Funding Agent and the
Initial Purchaser, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.

                                       12


          "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day of such
transactions received by the Funding Agent from three Federal funds brokers of
recognized standing selected by it.

          "FLOATING TRANCHE" shall mean, for any portion of the Series 1998-1
Invested Amount that is held by the APA Banks, that portion of the Series 1998-1
Invested Amount not allocated to a Eurodollar Tranche for which the Series
1998-1 Monthly Interest is calculated by reference to the Alternate Base Rate.

          "FUNDING AGENT" shall have the meaning specified in the introductory
paragraph hereto.

          "INCREASE" shall have the meaning assigned in Section 2.5(a).

          "INCREASE AMOUNT" shall have the meaning assigned in Section 2.5(a).

          "INCREASE DATE" shall have the meaning assigned in Section 2.5(a).

          "INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.

          "INITIAL PURCHASER" shall have the meaning specified in the
introductory paragraph hereto.

          "INITIAL SERIES 1998-1 INVESTED AMOUNT" shall mean the initial
invested amount applicable to Series 1998-1.

          "INTEREST SHORTFALL" shall have the meaning assigned in Section
3A.4(b).

          "INVESTED PERCENTAGE" shall mean, with respect to any Business Day (i)
during the Series 1998-1 Revolving Period, the percentage equivalent of a
fraction, the numerator of which is the Series 1998-1 Allocated Receivables
Amount

                                       13


as of the end of the immediately preceding Business Day and the denominator of
which is the Aggregate Receivables Amount with respect to such Business Day and
(ii) during the Series 1998-1 Amortization Period, the percentage equivalent of
a fraction, the numerator of which is the Series 1998-1 Allocated Receivables
Amount as of the end of the last Business Day of the Series 1998-1 Revolving
Period (PROVIDED THAT if during the Series 1998-1 Amortization Period, the
amortization periods of all other Outstanding Series which were outstanding
prior to the commencement of the Series 1998-1 Amortization Period commence,
then, from and after the date the last of such Series commences its Amortization
Period, the numerator shall be the Series 1998-1 Allocated Receivables Amount as
of the end of the Business Day preceding such date) and the denominator of which
is the greater of (A) the Aggregate Receivables Amount with respect to such
Business Day and (B) the sum of the numerators used to calculate the Invested
Percentage for all Outstanding Series on the Business Day for which such
percentage is determined.

          "ISSUANCE DATE" shall mean April 3, 1998.

          "LIBO RATE" shall mean, with respect to each day during each
Eurodollar Period pertaining to a Eurodollar Tranche, the rate appearing on Page
3750 of the Telerate Service (or on any successor or substitute page of such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Funding Agent from time to time
for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m. (London
time) on the second Business Day prior to the commencement of such Eurodollar
Period, as the rate for dollar deposits with a maturity comparable to the
Eurodollar Period applicable to such Eurodollar Tranche. In the event that such
rate is not available at such time for any reason, then the "LIBO RATE" with
respect to each day during such Eurodollar Period pertaining to such Eurodollar
Tranche shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Eurodollar Period are offered by the principal
London office of the Funding Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m. (London time) on the second
Business Day prior to the commencement of such Eurodollar Period.

          "LOSS RESERVE RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, an amount
(expressed as a percentage) that is calculated as follows:

                                       14


          LRR = (a * b)/c * d * e

     Where:

          LRR = Loss Reserve Ratio;

          a = the aggregate Principal Amount of Receivables originated by the
Sellers during the three Settlement Periods immediately preceding such earlier
Settlement Report Date;

          b = the highest three-month rolling average of the Aged Receivables
Ratio that occurred during the period of twelve consecutive Settlement Periods
ending prior to such earlier Settlement Report Date;

          c = the Aggregate Receivables Amount as of the last day of the
Settlement Period immediately preceding such earlier Settlement Report Date; and

          d = 2.00.

          e = Payment Terms Factor

          "LOSS-TO-LIQUIDATION RATIO" shall mean, for any Settlement Period, a
ratio (expressed as a percentage) equal to the quotient of (a) the difference,
if any, between (i) the aggregate Principal Amount of Charged-Off Receivables
with respect to such Settlement Period and the immediately preceding two
Settlement Periods and (ii) the aggregate amount of Recoveries during such two
Settlement Periods, and (b) the aggregate amount of Collections during such two
Settlement Periods.

          "MAJORITY PURCHASERS" shall mean (i) on any day on which the Initial
Purchaser shall hold an interest in the Series 1998-1 Certificates, the Initial
Purchaser and the Required APA Banks and (ii) on any day on which the Initial
Purchaser shall not hold an interest in the Series 1998-1 Certificates, the
Required APA Banks.

          "MAXIMUM COMMITMENT AMOUNT" shall mean $81,600,000.

          "MAXIMUM INVESTED AMOUNT" shall mean $80,000,000.

                                       15


          "MINIMUM RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the sum of
(i) 10% and (ii) 2.5% for each customer designated as a Special Obligor.

          "MONTHLY INTEREST PAYMENT" shall have the meaning assigned in Section
3A.6(a).

          "NON-DEFAULTING APA BANK" shall have the meaning assigned in Section
2.6(c).

          "OPTIONAL TERMINATION DATE" shall have the meaning assigned in Section
2.7(d).

          "OPTIONAL TERMINATION NOTICE" shall have the meaning assigned in
Section 2.7(d).

          "OTHER TAXES" shall mean any and all current or future stamp or
documentary taxes or other excise or property taxes, charges or similar levies
arising from any payment made under the Transaction Documents or from the
execution, delivery or enforcement of, or otherwise with respect to, any
Transaction Document.

          "PARCO" shall mean Park Avenue Receivables Corporation, a Delaware
corporation, and its permitted successors and assigns.

          "PARCO INSOLVENCY EVENT" shall mean the occurrence of any one or more
of the following: (i) any proceeding shall have been instituted by the Initial
Purchaser seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of any
order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property, or (ii) any proceeding
of the type described in the foregoing clause (i) shall be instituted against
the Initial Purchaser and shall have remained undismissed for a period of sixty
(60) consecutive days, or an order granting relief requested in any such
proceeding shall be entered.

          "PARCO INTEREST" shall mean all of the Initial Purchaser's right,
title and interest in the Series 1998-1 Purchaser Invested Amount.

                                       16


          "PARCO TERMINATION EVENT" shall mean that the providers of the Initial
Purchaser's program liquidity and/or letter of credit facilities shall have
given notice to the Initial Purchaser that an event of default has occurred and
is continuing under their respective agreements with the Initial Purchaser.

          "PARTICIPANTS" shall have the meaning assigned in Section 11.11(b).

          "PAYMENT TERMS FACTOR" shall mean 1.017.

          "PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.

          "PRIME RATE" shall mean the rate of interest per annum publicly
announced from time to time by the Funding Agent as its prime rate in effect at
its principal office in New York, New York; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as
being effective.

          "PROGRAM COSTS" shall mean, for any Business Day, the sum of (i) all
expenses, indemnities and other amounts due and payable to the Purchasers and
the Funding Agent under the Agreement or this Supplement (including, without
limitation, any Article VII Costs) and (ii) the product of (A) all unpaid fees
and expenses due and payable to counsel to, and independent auditors of, the
Company (other than fees and expenses payable on or in connection with the
closing of the issuance of the Series 1998-1 Interests) and (B) a fraction, the
numerator of which is the Aggregate Commitment Amount on such Business Day and
the denominator of which is the sum of (x) the Aggregate Invested Amounts on
such Business Day (other than the Series 1998-1 Invested Amount and the Invested
Amount in respect of any variable funding certificate of any other Outstanding
Series) and (y) the Aggregate Commitment Amount on such Business Day plus the
Aggregate Commitment Amount for any variable funding certificate of any other
Outstanding Series; PROVIDED, HOWEVER, that the amount of Program Costs payable
pursuant to Section 3A.6(b)(iv) shall not exceed $75,000 in the aggregate in any
fiscal year of the Servicer.

          "PRO RATA SHARE" shall mean, on any date of determination, with
respect to any APA Bank, the ratio (expressed as a percentage) of such APA
Bank's Commitment to the Aggregate Commitment Amount at such time; PROVIDED
that, on

                                       17


any date after the Commitment Expiry Date, the Pro Rata Share of any APA Bank
shall be such APA Bank's Pro Rata Share on the Commitment Expiry Date.

          "PURCHASE" shall mean the assignment by the Initial Purchaser to the
APA Banks of any portion of the Initial Purchaser's Series 1998-1 Purchaser
Invested Amount pursuant to Section 2.6.

          "PURCHASE AMOUNT" shall mean, for any APA Bank Purchase Date, the
amount of the Initial Purchaser's Series 1998-1 Purchaser Invested Amount
specified in the Sale Notice for such APA Bank Purchase Date.

          "PURCHASE PERCENTAGE" shall mean, for any APA Bank Purchase Date, the
percentage equivalent of a fraction, the numerator of which is the Purchase
Amount for such APA Bank Purchase Date and the denominator of which is the
Initial Purchaser's Series 1998-1 Purchaser Invested Amount on such APA Bank
Purchase Date.

          "PURCHASE PRICE" shall mean either:

               (a) on any APA Bank Purchase Date on or prior to the occurrence
     of an Early Amortization Event, an amount equal to the lesser of (i) the
     Purchase Amount for such APA Bank Purchase Date and (ii) the Adjusted
     Liquidity Price with respect to such Purchase Amount, as clauses (a)(i) and
     (a)(ii) shall be increased by the sum of (A) the Purchase Percentage of all
     accrued and unpaid Discount PLUS (B) the Unaccrued Discount; and

               (b) on any APA Bank Purchase Date after the occurrence of an
     Early Amortization Event, an amount equal to (i) the Purchase Amount for
     such APA Bank Purchase Date PLUS (ii) the sum of (A) the Purchase
     Percentage of all accrued and unpaid Discount PLUS (B) the Unaccrued
     Discount with respect to such Purchase Amount; PROVIDED that, if on the
     date of occurrence of such Early Amortization Event, the Series 1998-1
     Invested Amount exceeded the Early Amortization Date Balance (the amount of
     such excess, the "LOSS AMOUNT"), the amount in clause (b)(i) above on any
     APA Bank Purchase Date occurring after the occurrence of such Early
     Amortization Event shall be reduced by an amount equal to the APA Bank
     Purchase Percentage of the Loss Amount for such APA Bank Purchase Date.

                                       18


          "PURCHASE PRICE DEFICIT" shall have the meaning assigned in Section
2.6(c).

          "PURCHASER" shall mean, at any time, either the Initial Purchaser,
each APA Bank or each Acquiring APA Bank, as applicable.

          "RATING AGENCY" and "RATING AGENCIES" shall mean Moody's, S&P or any
other nationally recognized statistical rating organization from which a rating
for the Commercial Paper was requested by the Initial Purchaser and is currently
in effect.

          "RATING AGENCY CONDITION" shall mean, with respect to any action, that
(i) each Rating Agency shall have been given 10 days' (or such shorter period as
shall be acceptable to each Rating Agency) prior notice thereof and that each of
the Rating Agencies shall have notified the Initial Purchaser and the Funding
Agent in writing that such action will not result in a reduction or withdrawal
of the then current rating of the Commercial Paper and (ii) the Required APA
Banks shall have given their prior written consent to such action.

          "RECORD DATE" shall mean the first Business Day prior to each
Distribution Date.

          "REDUCTION PERCENTAGE" shall mean the percentage equivalent of a
fraction, the numerator of which is the PARCO Residual Amount and the
denominator of which is the sum of the PARCO Residual Amount and the Adjusted
Liquidity Price or the Early Amortization Date Balance, as applicable, on the
related APA Bank Purchase Date.

          "REGISTER" shall mean a register maintained by the Funding Agent for
recording transfers of the Commitments.

          "REQUIRED APA BANKS" shall mean APA Banks having Pro Rata Shares in
the aggregate at least equal to 66-2/3% or, if the Commitments have been
terminated, holding at least 66-2/3% of the outstanding Series 1998-1 Invested
Amount; PROVIDED that the Commitment of any Defaulting APA Bank that has not
paid all amounts due and owing by it in respect of the purchase it was obligated
to make shall not be included in the Aggregate Commitment Amount for purposes of
this definition.

                                       19


          "REPORTED PERIOD" shall mean, with respect to Series 1998-1, each
Business Day.

          "SALE NOTICE" shall mean an irrevocable written notice given by an
authorized signatory or authorized officer of the Initial Purchaser (or on
behalf of the Initial Purchaser by Chase, in its capacity as the Initial
Purchaser's administrative agent) to the Funding Agent committing to sell,
assign and transfer to the APA Banks, on the basis of their Pro Rata Shares, all
or a portion of the Initial Purchaser's Series 1998-1 Purchaser Invested Amount,
which notice shall designate (i) the APA Bank Purchase Date, (ii) the Series
1998-1 Invested Amount and the Initial Purchaser's Series 1998-1 Purchaser
Invested Amount, (iii) the Purchase Price (including details showing calculation
of the Purchase Price), (iv) the Purchase Amount, (v) the Purchase Percentage
and the APA Bank Purchase Percentage for such APA Bank Purchase Date, (vi) that
no PARCO Insolvency Event has occurred and (vii) wire transfer instructions
specifying the account(s) into which the proceeds of the Purchase Price shall be
deposited.

          "SCHEDULED COMMITMENT EXPIRATION DATE" shall mean, with respect to the
obligation of the APA Banks to make Purchases from the Initial Purchaser, March
29, 2002 (as may be extended for an additional period of time up to 364 days
from time to time in writing by PARCO, the Funding Agent and the APA Banks).

          "SCHEDULED REVOLVING TERMINATION DATE" shall mean the last day of the
Settlement Period ending on or immediately before the Commitment Expiry Date.

          "SECURITIES INTERMEDIARY" shall have the meaning specified in the
introductory paragraph hereto.

          "SERIES 1998-1" shall mean Series 1998-1, the Principal Terms of which
are set forth in this Supplement.

          "SERIES 1998-1 ACCRUED INTEREST SUB-SUBACCOUNT" shall have the meaning
assigned in Section 3A.2(a).

          "SERIES 1998-1 ADJUSTED INVESTED AMOUNT" shall mean, as of any date of
determination, (i) the Series 1998-1 Invested Amount on such date, MINUS (ii)
the amount on deposit in the Series 1998-1 Principal Collection Sub-subaccount
on such date.

                                       20


          "SERIES 1998-1 ALLOCABLE CHARGED-OFF AMOUNT" shall mean, with respect
to any Special Allocation Settlement Report Date, the "Allocable Charged-Off
Amount", if any, which has been allocated to Series 1998-1.

          "SERIES 1998-1 ALLOCABLE RECOVERIES AMOUNT" shall mean, with respect
to any Special Allocation Settlement Report Date, the "Allocable Recoveries
Amount", if any, which has been allocated to Series 1998-1.

          "SERIES 1998-1 ALLOCATED RECEIVABLES AMOUNT" shall mean, on any date
of determination, the lower of (i) the Series 1998-1 Target Receivables Amount
on such day and (ii) the product of (x) the Aggregate Receivables Amount on such
day and (y) the percentage equivalent of a fraction the numerator of which is
the Series 1998-1 Target Receivables Amount on such day and the denominator of
which is the Aggregate Target Receivables Amount on such day.

          "SERIES 1998-1 AMORTIZATION PERIOD" shall mean the period commencing
on the Business Day following the earliest to occur of (i) the date on which an
Early Amortization Period is declared to commence or automatically commences,
(ii) the Optional Termination Date and (iii) the Scheduled Revolving Termination
Date and ending on the earlier of (i) the date when the Series 1998-1 Invested
Amount shall have been reduced to zero and all accrued interest and other
amounts owing on the VFC Certificates and to the Funding Agent and the
Purchasers hereunder shall have been paid in full and (ii) the Series 1998-1
Termination Date.

          "SERIES 1998-1 COLLECTION SUBACCOUNT" shall have the meaning assigned
in Section 3A.2(a).

          "SERIES 1998-1 INTERESTS" shall mean, collectively, the VFC
Certificates and the Series 1998-1 Subordinated Interest.

          "SERIES 1998-1 INVESTED AMOUNT" shall mean, as of any date of
determination, the sum of the Series 1998-1 Purchaser Invested Amounts of all
Purchasers on such date.

          "SERIES 1998-1 MONTHLY INTEREST" shall have the meaning assigned in
Section 3A.4(a).

          "SERIES 1998-1 MONTHLY PRINCIPAL PAYMENT" shall have the meaning
assigned in Section 3A.5.

                                       21


          "SERIES 1998-1 NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in Section 3A.2(a).

          "SERIES 1998-1 PERIODIC SERVICING FEE" shall have the meaning assigned
in Section 6.1.

          "SERIES 1998-1 PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have the
meaning assigned in Section 3A.2(a).

          "SERIES 1998-1 PURCHASER INVESTED AMOUNT" shall mean, with respect to
the Initial Purchaser or, in the aggregate, the APA Banks, in each case on any
date of determination, an amount equal to (a) the Initial Purchaser's or the APA
Banks' Series 1998-1 Purchaser Invested Amount, as applicable, on the
immediately preceding Business Day (or, with respect to the day as of which
another Purchaser acquires an interest in the Series 1998-1 Invested Amount,
whether pursuant to Section 2.6, by executing a counterpart hereof, a Commitment
Transfer Supplement or otherwise, the portion of the transferor's Series 1998-1
Purchaser Invested Amount being purchased), PLUS (b) the amount of any increases
in the Initial Purchaser's or the APA Banks' Series 1998-1 Purchaser Invested
Amount, as applicable, pursuant to Section 2.5 made on such day, MINUS (c) the
amount of any distributions to such Purchaser in respect of principal received
and applied on such day minus (d) the aggregate Series 1998-1 Allocable
Charged-Off Amount applied to such Purchaser on or prior to such date pursuant
to Section 3A.5(b)(ii) and PLUS (e) (but only to the extent of any unreimbursed
reductions made pursuant to clause (d) above) the aggregate Series 1998-1
Allocable Recoveries Amount applied to such Purchaser on or prior to such date
pursuant to Section 3A.5(c)(i).

          "SERIES 1998-1 RATIO" shall mean, as of any Settlement Report Date and
continuing until (but not including) the next Settlement Report Date, the
greater of (i) the sum of the Loss Reserve Ratio and the Dilution Reserve Ratio
and (ii) the Minimum Ratio, in each case, then in effect.

          "SERIES 1998-1 REQUIRED RESERVES" shall mean, (x) as of any date of
determination during the Series 1998-1 Revolving Period, an amount equal to the
sum of:

               (a) an amount equal to the product of (i) the Series 1998-1
     Adjusted Invested Amount on such day (after giving effect to any increase
     or decrease thereof on such day) and (ii) the percentage equivalent of a
     fraction,

                                       22


     the numerator of which is the Series 1998-1 Ratio and the denominator of
     which is one MINUS the Series 1998-1 Ratio;

               (b) the product of (i) the Series 1998-1 Invested Amount on such
     day (after giving effect to any increase or decrease thereof on such day),
     (ii) the Carrying Cost Reserve Ratio in effect on such day and (iii) the
     percentage equivalent of a fraction, the numerator of which is one and the
     denominator of which is one MINUS the Series 1998-1 Ratio; and

               (c) the product of (i) the aggregate Principal Amount of
     Receivables in the Trust on such day, (ii) the Series 1998-1 Invested
     Amount on such day (after giving effect to any increase or decrease thereof
     on such day) DIVIDED BY the Aggregate Invested Amount on such day, (iii)
     the Servicing Reserve Ratio in effect on such day and (iv) the percentage
     equivalent of a fraction, the numerator of which is one and the denominator
     of which is one MINUS the Series 1998-1 Ratio;

and (y) on any date of determination during the Series 1998-1 Amortization
Period, an amount equal to the Series 1998-1 Required Reserves on the last
Business Day of the Series 1998-1 Revolving Period; PROVIDED, in each case, that
such amount shall be adjusted on each Special Allocation Settlement Report Date,
if any, to the extent required as set forth in Section 3A.5(b)(i) and Section
3A.5(c)(ii).

          "SERIES 1998-1 REVOLVING PERIOD" shall mean the period commencing on
the Issuance Date and terminating on the earliest to occur of the close of
business on (i) the date on which an Early Amortization Period is declared to
commence or automatically commences, (ii) the Optional Termination Date and
(iii) the Commitment Termination Date.

          "SERIES 1998-1 SUBORDINATED INTEREST" shall have the meaning assigned
in Section 2.2(b).

          "SERIES 1998-1 SUBORDINATED INTEREST AMOUNT" shall mean, for any date
of determination, an amount equal to (i) the Series 1998-1 Allocated Receivables
Amount MINUS (ii) the Series 1998-1 Adjusted Invested Amount.

          "SERIES 1998-1 SUBORDINATED INTEREST REDUCTION AMOUNT" shall have the
meaning assigned in Section 2.7(b).

                                       23


          "SERIES 1998-1 TARGET RECEIVABLES AMOUNT" shall mean, on any date of
determination, the greater of (i) the sum of (A) the Series 1998-1 Adjusted
Invested Amount on such day and (B) the Series 1998-1 Required Reserves for such
day and (ii) $350,000.

          "SERIES 1998-1 TERMINATION DATE" shall mean the Distribution Date that
occurs on October 2, 2002.

          "SERIES 1998-1 TRANSACTION DOCUMENTS" shall mean this Supplement, the
Receivables Sale Agreements, the Agreement and the Servicing Agreement.

          "SERVICER" shall have the meaning specified in the introductory
paragraph hereto.

          "SERVICER INDEMNIFIED PERSON" shall have the meaning assigned in
Section 2.10(b).

          "SERVICING RESERVE RATIO" shall mean, as of any Settlement Report Date
and continuing until (but not including) the next Settlement Report Date, an
amount (expressed as a percentage) equal to (i) the product of (A) the Servicing
Fee Percentage and (B) 2.0 TIMES Days Sales Outstanding as of such earlier
Settlement Report Date, DIVIDED BY (ii) 360.

          "STATUTORY RESERVE RATE" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Funding Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to Regulation D. Eurodollar Tranches shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Purchaser under such Regulation D or comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in the reserve percentage.

          "SUPPLEMENT" shall have the meaning specified in the introductory
paragraph hereto.

                                       24


          "TAXES" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.

          "THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 A.M., New York City time, on
such day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Funding Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.

          "TRANSACTION PARTIES" shall have the meaning assigned in Section
2.6(d).

          "TRANSFER ISSUANCE DATE" shall mean the date on which a Commitment
Transfer Supplement becomes effective pursuant to the terms of such Commitment
Transfer Supplement.

          "TRANSFEREE" shall have the meaning assigned in Section 11.11(f).

          "TRUST ACCOUNTS" shall have the meaning assigned in Section 3A.2(a).

          "TRUSTEE" shall have the meaning specified in the introductory
paragraph hereto.

          "UCC CERTIFICATE" shall mean a certificate substantially in the form
of Exhibit D to this Supplement.

          "UNACCRUED DISCOUNT" shall mean, on any APA Bank Purchase Date with
respect to any Purchase Amount, the Discount that would have accrued on the
Commercial Paper allocated, in whole or in part, by the Funding Agent to fund

                                       25


the purchase or maintenance of such Purchase Amount subsequent to such APA Bank
Purchase Date to the maturity date thereof if the related reduction in the
Initial Purchaser's Series 1998-1 Purchaser Invested Amount had not occurred.

          "UNALLOCATED BALANCE" shall mean, on any Business Day with respect to
the APA Banks and the APA Banks' Series 1998-1 Purchaser Invested Amount, the
sum of (A) the portion of the Series 1998-1 Invested Amount for which interest
is then being calculated by reference to the Alternate Base Rate and (B) the
portion of the Series 1998-1 Invested Amount allocated to any Eurodollar Tranche
the Eurodollar Period in respect of which expires on such Business Day.

          "USI CHANGE IN CONTROL" shall have the meaning assigned to the term
"Change of Control" in Section 1.01 of the Credit Agreement.

          "USCC" shall mean United Stationers Supply Co., an Illinois
corporation.

          "UTILIZATION FEE" shall have the meaning assigned in Section 2.9(c).

          "UTILIZATION FEE RATE" shall have the meaning assigned in the Fee
Letter.

          "VFC CERTIFICATE" shall mean a VFC Certificate, Series 1998-1,
executed by the Company and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.

          "VFC CERTIFICATEHOLDERS" shall mean the Purchasers.

          "VFC CERTIFICATEHOLDERS' INTEREST" shall have the meaning assigned in
Section 2.2(a).

          (b) If any term or provision contained herein conflicts with or is
inconsistent with any term, definition or provision contained in the Agreement,
the terms and provisions of this Supplement shall govern. All Article, Section
or subsection references herein shall mean Article, Section or subsections of
this Supplement, except as otherwise provided herein. Unless otherwise stated
herein, the context otherwise requires or such term is otherwise defined in the
Agreement, each capitalized term used or defined herein shall relate only to the
Series 1998-1 Interests and no other Series of Investor Certificates issued by
the Trust. All

                                       26


capitalized terms used herein and not otherwise defined have the meanings
assigned to such terms in Section 1.1 of the Agreement.

                                   ARTICLE II

                 DESIGNATION OF CERTIFICATES; PURCHASE AND SALE
                             OF THE VFC CERTIFICATES

          SECTION 2.1. DESIGNATION. The Certificates and interests created and
authorized pursuant to the Agreement and this Supplement shall be divided into
two Classes, which shall be designated respectively as (i) the "VFC
Certificates, Series 1998-1" and (ii) an interest designated as the "Series
1998-1 Subordinated Interest."

          SECTION 2.2. THE SERIES 1998-1 INTERESTS. (a) The VFC Certificates
shall represent fractional undivided interests in the Trust, including the right
to receive (i) the Invested Percentage (expressed as a decimal) of Collections
received with respect to the Receivables and all other funds on deposit in the
Collection Account and (ii) all other funds on deposit in the Series Collection
Subaccounts and any subaccounts thereof (collectively, the "VFC
CERTIFICATEHOLDERS' INTEREST").

          (b) The "SERIES 1998-1 SUBORDINATED INTEREST" shall be a fractional
undivided interest in the Trust retained by the Company, consisting of the right
to receive Collections with respect to the Receivables allocated to the VFC
Certificateholders' Interest and not required to be distributed to or for the
benefit of the Purchasers. The Exchangeable Company Interest and any other
Series of Investor Certificates outstanding shall represent the ownership
interest in the remainder of the Trust not allocated pursuant hereto to the VFC
Certificateholders' Interest or the Series 1998-1 Subordinated Interest.

          (c) The VFC Certificates shall be substantially in the form of Exhibit
A and shall, upon issue, be executed and delivered by the Company to the Trustee
for authentication and redelivery as provided in Section 2.4 hereof and Section
5.2 of the Agreement.

          SECTION 2.3. PURCHASES OF INTERESTS IN THE VFC CERTIFICATES. (a)
INITIAL PURCHASE. Subject to the terms and conditions of this Supplement,
including delivery of notice in accordance with Section 2.4 and 2.5, (i) on and
after the

                                       27


Issuance Date, (A) the Initial Purchaser may, in its sole discretion, purchase a
VFC Certificate in an amount equal to the Initial Series 1998-1 Invested Amount
or (B) if the Initial Purchaser shall have notified the Funding Agent that it
has elected not to purchase all or a portion of a VFC Certificate on the
Issuance Date, each APA Bank hereby severally agrees to purchase on the Issuance
Date a VFC Certificate in an amount equal to such APA Bank's Pro Rata Share of
the Initial Series 1998-1 Invested Amount and (ii) thereafter, (A) if the
Initial Purchaser shall have purchased a VFC Certificate on the Issuance Date,
the Initial Purchaser may, in its sole discretion, maintain its VFC Certificate,
subject to increase or decrease during the Series 1998-1 Revolving Period, in
accordance with the provisions of this Supplement and (B) if the APA Banks shall
have purchased VFC Certificates on the Issuance Date or, in any case, on or
after the APA Bank Purchase Date, the APA Banks hereby severally agree to
maintain their respective VFC Certificates, subject to increase or decrease
during the Series 1998-1 Revolving Period, in accordance with the provisions of
this Supplement. The Company hereby agrees to maintain ownership of the Series
1998-1 Subordinated Interest, subject to increase or decrease during the Series
1998-1 Revolving Period, in accordance with the provisions of this Supplement.
Payments by the Initial Purchaser or the APA Banks, as the case may be, in
respect of the VFC Certificates shall be made in immediately available funds on
the applicable Business Day to the Funding Agent for payment to the Company.

          (b) SUBSEQUENT PURCHASES. Subject to the terms and conditions of this
Supplement, each Acquiring APA Bank hereby severally agrees to maintain its VFC
Certificate, subject to increase or decrease during the Series 1998-1 Revolving
Period, in accordance with the provisions of this Supplement.

          (c) MAXIMUM SERIES 1998-1 PURCHASER INVESTED AMOUNT. Notwithstanding
anything to the contrary contained in this Supplement, at no time shall the
Series 1998-1 Purchaser Invested Amount (calculated without regard to clauses
(d) and (e) of the definition thereof) of any APA Bank exceed such APA Bank's
Commitment at such time.

          SECTION 2.4. DELIVERY. On the Issuance Date, the Company shall sign,
on behalf of the Trust, and shall direct the Trustee in writing pursuant to
Section 5.2 of the Agreement to duly authenticate, and the Trustee, upon
receiving such direction, shall so authenticate the VFC Certificates in such
names and such denominations and deliver such VFC Certificates to the Funding
Agent, on behalf of the Initial Purchaser, or the APA Banks, as the case may be,
in accordance with such written directions. The VFC Certificates shall be issued
in minimum denominations of $1,000,000 and in integral multiples of $100,000 in
excess thereof. The Trustee

                                       28


shall mark on its books the actual Series 1998-1 Invested Amount and Series
1998-1 Subordinated Interest Amount outstanding on any date of determination,
which, absent manifest error, shall constitute PRIMA FACIE evidence of the
outstanding Series 1998-1 Invested Amount and Series 1998-1 Subordinated
Interest Amount from time to time.

          SECTION 2.5. PROCEDURE FOR INCREASING THE SERIES 1998-1 INVESTED
AMOUNT. (a) Subject to Section 2.5(c), on any Business Day during the Commitment
Period, the Initial Purchaser may agree, in its sole discretion, and each APA
Bank hereby agrees that the Series 1998-1 Invested Amount may be increased by
increasing such Purchaser's Series 1998-1 Purchaser Invested Amount (an
"INCREASE"), upon the request of the Servicer or the Company on behalf of the
Trust (each date on which an increase in the Series 1998-1 Invested Amount
occurs hereunder being herein referred to as the "INCREASE DATE" applicable to
such Increase); PROVIDED, HOWEVER, that the Servicer or the Company, as the case
may be, shall have given the Funding Agent (with a copy to the Trustee)
irrevocable written notice (effective upon receipt), substantially in the form
of Exhibit E hereto, of such request no later than (i) 11:00 a.m., New York City
time, two Business Days prior to the Increase Date in the case of any Increase
to be priced by reference to the CP Rate or (ii) (x) if the Increase Amount is
to be priced with reference to the Alternate Base Rate, on or prior to 12:00
noon, New York City time, on the Increase Date, or (y) if all or a portion of
the Initial Series 1998-1 Invested Amount or Increase Amount is to be allocated
to a Eurodollar Tranche, 1:00 p.m., New York City time, three Business Days
prior to the Increase Date; PROVIDED, FURTHER, that the provisions of this
Section shall not restrict the allocations of Collections pursuant to Article
III. Such notice shall state (x) the Increase Date, (y) the proposed amount of
such Increase (the "INCREASE AMOUNT") and (z) what portions thereof will be
allocated to Commercial Paper, a Eurodollar Tranche and a Floating Tranche.

          (b) If the Initial Purchaser elects not to fund any portion of a
requested Increase, the Initial Purchaser shall notify the Funding Agent thereof
and deliver a Sale Notice in accordance with Section 2.6 and each APA Bank shall
purchase its Pro Rata Share of the Initial Purchaser's Series 1998-1 Purchaser
Invested Amount in accordance with Section 2.6 and fund such Increase in an
amount equal to its Pro Rata Share of such Increase; PROVIDED, HOWEVER that an
APA Bank shall not be obligated to fund any portion of an Increase that would
cause its Series 1998-1 Purchaser Invested Amount to exceed its unused
Commitment.

                                       29


          (c) On and after the Effective Date, the Purchasers shall not be
required to increase their respective Series 1998-1 Purchaser Invested Amounts
on any Increase Date hereunder unless:

               (i) the related aggregate initial purchase amount or Increase
     Amount is equal to $1,000,000 or an integral multiple of $100,000 in excess
     thereof;

               (ii) after giving effect to the Increase Amount, (A) the Series
     1998-1 Invested Amount would not exceed either the Maximum Invested Amount
     or the Maximum Commitment Amount on such Increase Date and (B) the Series
     1998-1 Allocated Receivables Amount would not be less than the Series
     1998-1 Target Receivables Amount on such Increase Date;

               (iii) no Early Amortization Event or Potential Early Amortization
     Event shall have occurred and be continuing;

               (iv) in the case of a purchase by the Initial Purchaser, the
     Initial Purchaser shall have consented to such purchase in its sole
     discretion; and

               (v) all of the representations and warranties made by each of the
     Company, USFS, the Servicer and the Seller in each Transaction Document to
     which it is a party are true and correct in all material respects on and as
     of such Increase Date as if made on and as of such date (except to the
     extent such representations and warranties are expressly made as of another
     date).

The Company's acceptance of funds in connection with each Increase occurring on
any Increase Date shall constitute a representation and warranty by the Company
to the Purchasers as of such Increase Date (except to the extent such
representations and warranties are expressly made as of another date), as the
case may be, that all of the conditions contained in this Section 2.5(c) have
been satisfied.

          (d) After receipt by the Funding Agent of the notice required by
Section 2.5(a) from the Servicer or the Company on behalf of the Trust, the
Funding Agent shall, so long as the conditions set forth in Sections 2.5(a) and
(c) are satisfied, promptly provide telephonic notice to the Initial Purchaser
and, to the extent the Initial Purchaser elects in its sole discretion not to
fund a portion of the Increase, the

                                       30


APA Banks, of the Increase Date and of the portion of the Increase Amount
allocable to the Initial Purchaser and each such APA Bank (which shall equal
each such APA Bank's Pro Rata Share of the Increase Amount), as applicable. If
the Initial Purchaser elects to fund an Increase, the Initial Purchaser agrees
to pay in immediately available funds the amount of such Increase on the related
Increase Date to the Funding Agent for payment to the Trust for deposit in the
Series 1998-1 Principal Collection Sub-subaccount. In the event the APA Banks
shall purchase a portion of the Series 1998-1 Invested Amount, each APA Bank
agrees to pay in immediately available funds such APA Bank's Pro Rata Share of
each Increase on the related Increase Date to the Funding Agent for payment to
the Trust for deposit in the Series 1998-1 Principal Collection Sub-subaccount.

          SECTION 2.6. SALES BY THE INITIAL PURCHASER OF ITS SERIES 1998-1
PURCHASER INVESTED AMOUNT TO THE APA BANKS. (a) On any date during the
Commitment Period, the Initial Purchaser may, solely in its own discretion, and
the Initial Purchaser shall, on the Scheduled Commitment Expiration Date or upon
the occurrence of a PARCO Termination Event, in each case, by delivering a Sale
Notice to the Funding Agent, the Company and the Trustee, sell to the APA Banks
(in accordance with their respective Pro Rata Shares), and each APA Bank hereby
agrees to purchase its Pro Rata Share of the Purchase Percentage of the PARCO
Interest. The Purchase Amount set forth in the Sale Notice delivered by the
Initial Purchaser on the Scheduled Commitment Expiration Date or upon the
occurrence of a PARCO Termination Event shall equal 100% of the PARCO Interest.
Any Sale Notice shall be delivered by the Initial Purchaser to the Funding
Agent, the Company and the Trustee prior to 12:30 p.m., New York City time, on
the related APA Bank Purchase Date and shall constitute an irrevocable offer by
the Initial Purchaser to sell the Purchase Percentage of the PARCO Interest. Any
Sale Notice shall be deemed to be a representation and warranty by the Initial
Purchaser that no PARCO Insolvency Event shall have occurred and be continuing.
Each APA Bank hereby agrees to purchase from the Initial Purchaser such APA
Bank's Pro Rata Share of the PARCO Interest for a purchase price equal to such
APA Bank's Pro Rata Share of the Purchase Price on the related APA Bank Purchase
Date (which date, subject to Section 2.6(b), may be the same as the date of the
Sale Notice). Notwithstanding anything to the contrary set forth in this
Supplement, no APA Bank shall have any obligation to purchase all or any portion
of the PARCO Interest if, on such APA Bank Purchase Date, any PARCO Insolvency
Event shall have occurred and be continuing.

          (b) If, at or prior to 12:30 p.m. New York City time, on any Business
Day, the Initial Purchaser delivers the Sale Notice to the Funding Agent

                                       31


specifying that the related APA Bank Purchase Date shall be the same date as the
date of the Sale Notice, the Funding Agent shall, by no later than 1:00 p.m.,
New York City time, notify (by telecopy or by telephone call promptly confirmed
in writing by telecopy) each APA Bank of the receipt and content of the Sale
Notice. Each APA Bank shall purchase its Pro Rata Share of the Purchase
Percentage of the PARCO Interest by depositing its Pro Rata Share of the
Purchase Price in immediately available funds into the account(s) specified by
the Initial Purchaser in the Sale Notice no later than 2:00 p.m., New York City
time. If the Initial Purchaser delivers the Sale Notice to the Funding Agent
after 12:30 p.m., New York City time, on any Business Day or the Initial
Purchaser delivers the Sale Notice to the Funding Agent specifying that the
related APA Bank Purchase Date shall be a date other than the date of the Sale
Notice, the Funding Agent shall promptly advise (by telecopy or by telephone
call promptly confirmed in writing by telecopy) each APA Bank of the receipt and
content of the Sale Notice. Notwithstanding the fact that the APA Bank Purchase
Date may occur on a date which is later than the date on which the Sale Notice
is delivered to the Funding Agent, the several obligations of each APA Bank to
make such purchase and to make payment of the amounts required to be paid by it
pursuant to Section 2.6(a) shall arise immediately upon receipt by the Funding
Agent of the Sale Notice. Upon payment of the Purchase Price as provided herein
and delivery to the Trustee by the Funding Agent of the Initial Purchaser's VFC
Certificate, the Company shall sign, on behalf of the Trust, and shall direct
the Trustee in writing to duly authenticate, and the Trustee, upon receiving
such direction, shall so authenticate, a new VFC Certificate in the name of each
APA Bank and in a denomination equal to such APA Bank's Pro Rata Share as set
forth in such written direction and shall deliver such VFC Certificate to each
such APA Bank in accordance with such written direction.

          (c) If, by 2:00 p.m., New York City time, one or more APA Banks (each,
a "DEFAULTING APA BANK," and each APA Bank other than the Defaulting APA Bank(s)
being referred to as a "NON-DEFAULTING APA BANK") fails to make its Pro Rata
Share of the Purchase Price available to the Funding Agent pursuant to Section
2.6(b) (the aggregate amount not so made available to the Funding Agent being
herein called the "PURCHASE PRICE DEFICIT"), then the Funding Agent shall, by no
later than 2:30 p.m., New York City time, instruct each Non-Defaulting APA Bank
to pay, by no later than 3:00 p.m., New York City time, in immediately available
funds, to the account designated by the Funding Agent, an amount equal to the
lesser of (x) such Non-Defaulting APA Bank's proportionate share (based upon the
relative Commitments of the Non-Defaulting APA Banks) of the Purchase Price
Deficit and (y) its unused Commitment. A Defaulting APA Bank shall forthwith,
upon demand, pay to the Funding Agent for the ratable benefit of the
Non-Defaulting

                                       32


APA Banks all amounts paid by each Non-Defaulting APA Bank on behalf of such
Defaulting APA Bank, together with interest thereon, for each day from the date
a payment was made by a Non-Defaulting APA Bank until the date such
Non-Defaulting APA Bank has been paid such amounts in full, at a rate per annum
equal to the sum of the Federal Funds Effective Rate plus 2%. In addition,
without prejudice to any other rights that the Initial Purchaser may have under
applicable law, each Defaulting APA Bank shall pay to the Initial Purchaser
forthwith upon demand, the difference between the Defaulting APA Bank's unpaid
Pro Rata Share of the Purchase Price and the amount paid with respect thereto by
the Non-Defaulting APA Banks, together with interest thereon, for each day from
the date of the Funding Agent's request for such Defaulting APA Bank's Pro Rata
Share of the Purchase Price pursuant to Section 2.6(b) until the date the
requisite amount is paid to the Initial Purchaser in full, at a rate per annum
equal to the sum of the Federal Funds Effective Rate plus 2%.

          (d) The transfer of the Initial Purchaser's VFC Certificate pursuant
to this Section 2.6 shall be without recourse or warranty, express or implied,
except that such VFC Certificate is free and clear of adverse claims created by
or arising as a result of claims against the Initial Purchaser. By executing and
delivering a Sale Notice pursuant to Section 2.6(a), (i) the Initial Purchaser
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the VFC Certificate or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the VFC Certificate, or any other
agreement, instrument or other document furnished pursuant thereto or in
connection therewith, including without limitation any Transaction Document, and
(ii) the Initial Purchaser makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Trust, the
Trustee, the Seller, USFS, the Servicer or any Obligor (collectively, the
"TRANSACTION PARTIES") or the Funding Agent, or the performance or observance by
the Transaction Parties of any of their respective obligations under the VFC
Certificate or the Transaction Documents.

          (e) If the Adjusted Liquidity Price or the Early Amortization Date
Balance, as applicable, on the APA Bank Purchase Date is less than the Series
1998-1 Invested Amount on the APA Bank Purchase Date (the amount of such
insufficiency, the "PARCO RESIDUAL AMOUNT"), each APA Bank agrees that (i) on
each Distribution Date after the APA Bank Purchase Date on which interest is
distributed to VFC Certificateholders pursuant to subsection 3A.6(a), the
Funding Agent shall distribute to the Initial Purchaser its Reduction Percentage
of such interest payments and (ii) on each Distribution Date after the APA Bank
Purchase

                                       33


Date on which amounts in reduction of the Series 1998-1 Invested Amount are
distributed to VFC Certificateholders pursuant to Section 2.7 or subsection
3A.6(c), the Funding Agent shall distribute to the Initial Purchaser its
Reduction Percentage of such amounts only after the Series 1998-1 Invested
Amount has been paid in full.

          SECTION 2.7. PROCEDURE FOR DECREASING THE SERIES 1998-1 INVESTED
AMOUNT; OPTIONAL TERMINATION. (a) On any Business Day during the Series 1998-1
Revolving Period or the Series 1998-1 Amortization Period (except for
Distribution Dates during the Series 1998-1 Amortization Period (which shall be
governed by Section 3A.6(c)), upon the written request of the Servicer or the
Company on behalf of the Trust to the Trustee, the Series 1998-1 Invested Amount
may be reduced (a "DECREASE") by the distribution by the Trustee to the Funding
Agent for the PRO RATA benefit of the Purchasers in accordance with their
respective Series 1998-1 Purchaser Invested Amount of funds on deposit in the
Series 1998-1 Principal Collection Sub-subaccount on such day in an amount not
to exceed the amount of such funds on deposit on such day; PROVIDED that the
Servicer shall have given the Funding Agent (with a copy to the Trustee)
irrevocable written notice (effective upon receipt), prior to 1:00 p.m., New
York City time, (i) on the second Business Day prior to such Decrease, in the
case of any Decrease occurring prior to an APA Bank Purchase Date and (ii) (A)
if the Decrease relates solely to a Floating Tranche, on the Business Day of
such Decrease or (B) if all or any portion of the Decrease relates to a
Eurodollar Tranche, on the Business Day that is three Business Days prior to
such Decrease, in the case of any Decrease occurring prior to an APA Bank
Purchase Date, and which notice shall state the amount of such Decrease;
PROVIDED, FURTHER, that (x) such Decrease shall be in an amount equal to
$1,000,000 and integral multiples of $100,000 in excess thereof and (y) prior to
an APA Bank Purchase Date, such Decrease shall be in an amount no greater than
the Unallocated Balance on such day.

          (b) Simultaneously with any such Decrease during the Series 1998-1
Revolving Period, the Series 1998-1 Subordinated Interest Amount shall be
reduced by an amount (the "SERIES 1998-1 SUBORDINATED INTEREST REDUCTION
AMOUNT") such that the Series 1998-1 Subordinated Interest Amount shall equal
the Series 1998-1 Required Reserves after giving effect to such Decrease. During
the Series 1998-1 Revolving Period, after the distribution described in Section
(a) above has been made, and the Series 1998-1 Subordinated Interest Amount
shall have been reduced by the Series 1998-1 Subordinated Interest Reduction
Amount, a distribution shall be made to the owner of the Series 1998-1
Subordinated Interest out of remaining funds on deposit in the Series 1998-1
Principal Collection Sub-subaccount in an amount equal to the lesser of (x) the
Series 1998-1 Subordinated Interest

                                       34


Reduction Amount and (y) the amount of such remaining funds on deposit in the
Series 1998-1 Principal Collection Sub-subaccount.

          (c) On or after any APA Bank Purchase Date, any reduction in the
Series 1998-1 Invested Amount on any Business Day shall be allocated first to
reduce the Unallocated Balance and then to reduce the portion of the Series
1998-1 Invested Amount allocated to Eurodollar Tranches in such order as the
Company may select in order to minimize costs payable pursuant to Section 7.4.

          (d) (i) On any Business Day unless the Scheduled Revolving Termination
Date, an Early Amortization Event or a Potential Early Amortization Event shall
have occurred and be continuing, the Company shall have the right to deliver an
irrevocable written notice (an "OPTIONAL TERMINATION NOTICE") to the Trustee,
the Servicer and the Rating Agencies in which the Company declares that the
Series 1998-1 Revolving Period shall terminate on the date (the "OPTIONAL
TERMINATION DATE") set forth in such notice (which date, in any event, shall be
the last day of a Settlement Period which is not less than 10 days from the date
on which such notice is delivered).

               (ii) From and after the Optional Termination Date, the Series
     1998-1 Amortization Period shall commence for all purposes under this
     Agreement and the other Transaction Documents. The Trustee shall give
     prompt written notice of its receipt of an Optional Termination Notice to
     the Purchasers.

          SECTION 2.8. REDUCTIONS OF THE COMMITMENTS. (a) On any Business Day
during the Series 1998-1 Revolving Period, the Company, on behalf of the Trust,
may, upon three Business Days prior written notice to the Funding Agent
(effective upon receipt) (with copies to the Servicer and the Trustee) reduce or
terminate the Commitments (a "COMMITMENT REDUCTION") in a minimum aggregate
amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof;
PROVIDED that no such termination or reduction shall be permitted if, after
giving effect thereto and to any reduction in the Series 1998-1 Invested Amount
on such date, the Series 1998-1 Invested Amount would exceed the Maximum
Invested Amount then in effect. Each APA Bank's Commitment shall be reduced by
such APA Bank's Pro Rata Share of the amount of such Commitment Reduction.

          (b) If an Early Amortization Period has commenced, the Aggregate
Commitment Amount shall be reduced to 102% of the Maximum Invested Amount, and
the Maximum Invested Amount shall be reduced to the Series 1998-1

                                       35


Invested Amount. Each APA Bank's commitment shall be reduced by such APA Bank's
Pro Rata Share of the amount of such reduction.

          (c) Once reduced, the Commitments may not be subsequently reinstated.
Upon effectiveness of any such reduction, the Funding Agent shall prepare a
revised Schedule 1 to reflect the reduced Commitment of each APA Bank and
Schedule 1 of this Supplement shall be deemed to be automatically superseded by
such revised Schedule 1. The Funding Agent shall distribute such revised
Schedule 1 to the Company, the Servicer, the Trustee and each APA Bank.

          SECTION 2.9. INTEREST, FEES. (a) Interest shall be payable on the VFC
Certificates on each Distribution Date pursuant to Section 3A.6(a).

          (b) The Trustee (acting at the written direction of the Servicer upon
which the Trustee may conclusively rely) shall distribute pursuant to Section
3A.6(b), from amounts on deposit in the Series 1998-1 Non-Principal Collection
Sub-subaccount, to the Funding Agent, for the PRO RATA account of the APA Banks
in accordance with their respective Pro Rata Shares, on each Distribution Date,
a commitment fee with respect to each Accrual Period ending on such date (the
"COMMITMENT FEE") (i) during the Series 1998-1 Revolving Period at the
Commitment Fee Rate of the average daily excess of the Aggregate Commitment
Amount OVER the average aggregate Series 1998-1 Purchaser Invested Amounts of
the APA Banks during such Accrual Period and (ii) during the Series 1998-1
Amortization Period at the Commitment Fee Rate of the average daily Series
1998-1 Invested Amount during such Accrual Period. The Commitment Fee shall be
payable (i) monthly in arrears on each Distribution Date and (ii) on the
Commitment Termination Date. To the extent that funds on deposit in the Series
1998-1 Non-Principal Collection Sub-subaccount at any such date are insufficient
to pay the Commitment Fee due on such date, the Servicer shall so notify the
Company and the Company shall immediately pay the Funding Agent the amount of
any such deficiency.

          (c) The Trustee (acting at the written direction of the Servicer upon
which the Trustee may conclusively rely) shall distribute pursuant to Section
3A.6(b), from amounts on deposit in the Series 1998-1 Non-Principal Collection
Sub-subaccount, to the Funding Agent, for the account of the Initial Purchaser,
on each Distribution Date with respect to which the Initial Purchaser held a
portion of the Series 1998-1 Invested Amount during the Accrual Period ending on
such date, a utilization fee (the "UTILIZATION FEE") with respect to such
Accrual Period at the Utilization Fee Rate of the average Series 1998-1 Invested
Amount during such period. The Utilization Fee shall be payable monthly in
arrears on each Distribution

                                       36


Date. To the extent that funds on deposit in the Series 1998-1 Non-Principal
Collection Sub-subaccount at any such date are insufficient to pay the
Utilization Fee due on such date, the Servicer shall so notify the Company and
the Company shall immediately pay the Funding Agent the amount of any such
deficiency.

          (d) Calculations of per annum rates and fees under this Supplement
shall be made on the basis of a 360- (or 365-/366-, in the case of interest on
the Floating Tranche based on the Prime Rate) day year with respect to
Commitment Fees, Utilization Fees and interest rates. Each determination of the
Adjusted LIBO Rate by the Funding Agent shall be conclusive and binding upon
each of the parties hereto in the absence of manifest error.

          SECTION 2.10. INDEMNIFICATION BY THE COMPANY AND THE SERVICER. (a) The
Company agrees to indemnify and hold harmless the Trustee, the Funding Agent,
each APA Bank, each Purchaser and each of their respective officers, directors,
agents and employees (each, a "COMPANY INDEMNIFIED PERSON") from and against any
loss, liability, expense, damage or injury suffered or sustained by (a "CLAIM")
such Company indemnified person by reason of (i) any acts, omissions or alleged
acts or omissions arising out of, or relating to, activities of the Company
pursuant to any Pooling and Servicing Agreement or the other Transaction
Documents to which it is a party, (ii) a breach of any representation or
warranty made or deemed made by the Company (or any of its officers) in any
Pooling and Servicing Agreement or other Transaction Document or (iii) a failure
by the Company to comply with any applicable law or regulation or to perform its
covenants, agreements, duties or obligations required to be performed or
observed by it in accordance with the provisions of any Pooling and Servicing
Agreement or the other Transaction Documents, including, but not limited to, any
judgment, award, settlement, reasonable attorneys' fees and other reasonable
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim, except to the extent such loss,
liability, expense, damage or injury (A) resulted from the gross negligence, bad
faith or wilful misconduct of such Company indemnified person or its officers,
directors, agents, principals, employees or employers, (B) resulted solely from
a default by an Obligor with respect to any Receivable or (C) include any income
or franchise taxes imposed on (or measured by) any Company indemnified person's
net income; PROVIDED that any payments made by the Company pursuant to this
Section shall be made solely from funds available to the Company which are not
otherwise needed to be applied to the payment of any amounts (other than amounts
payable to the Company) pursuant to any Pooling and Servicing Agreements, shall
be non-recourse other than with respect to proceeds in excess of

                                       37


the proceeds needed to make such payment, and shall not constitute a claim
against the Company to the extent that insufficient proceeds exist to make such
payment.

          (b) The Servicer agrees to indemnify and hold harmless the Trustee,
the Funding Agent, each APA Bank, each Purchaser and each of their respective
officers, directors, agents and employees (each, a "SERVICER INDEMNIFIED
PERSON") from and against any Claim by reason of (i) any acts, omissions or
alleged acts or omissions arising out of, or relating to, activities of the
Servicer pursuant to any Pooling and Servicing Agreement or the other
Transaction Documents to which it is a party, (ii) a material breach of any
representation or warranty made or deemed made by the Servicer (or any of its
officers) in any Pooling and Servicing Agreement or other Transaction Document
or (iii) a failure by the Servicer to comply in any material respect with any
applicable law or regulation or to perform its covenants, agreements, duties or
obligations required to be performed or observed by it in accordance with the
provisions of any Pooling and Servicing Agreement or the other Transaction
Documents, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other reasonable costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or
claim, except to the extent such loss, liability, expense, damage or injury (A)
resulted from the gross negligence, bad faith or wilful misconduct of such
Servicer indemnified person or its officers, directors, agents, principals,
employees or employers, (B) resulted solely from a default by an Obligor with
respect to any Receivable or (C) include any income or franchise taxes imposed
on (or measured by) any Servicer indemnified person's net income.

                                   ARTICLE III

                          ARTICLE III OF THE AGREEMENT

          Section 3.1 of the Agreement and each other section of Article III of
the Agreement relating to another Series shall read in their entirety herein as
provided in the Agreement. Article III of the Agreement (except for Section 3.1
thereof and any portion thereof relating to another Series) shall read in its
entirety herein as follows and shall be exclusively applicable to the Series
1998-1 Interests:

          SECTION 3A.2. ESTABLISHMENT OF TRUST ACCOUNTS. (a) The Trustee shall
cause to be established and maintained in the name of the Trustee, on behalf of
the Trust, (i) for the benefit of the Purchasers and (ii) in the case of clauses
(A) and (B) below, for the benefit, subject to the prior and senior interest of
the

                                       38


Purchasers, of the owner of the Series 1998-1 Subordinated Interest, (A) a
subaccount of the Collection Account (the "SERIES 1998-1 COLLECTION
SUBACCOUNT"), which subaccount is the Series Collection Subaccount with respect
to Series 1998-1; (B) two subaccounts of the Series 1998-1 Collection
Subaccount: (1) the Series 1998-1 Principal Collection Sub-subaccount and (2)
the Series 1998-1 Non-Principal Collection Sub-subaccount (respectively, the
"SERIES 1998-1 PRINCIPAL COLLECTION SUB-SUBACCOUNT" and the "SERIES 1998-1
NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT") and (C) a subaccount of the Series
1998-1 Non-Principal Collection Sub-subaccount (the "SERIES 1998-1 ACCRUED
INTEREST SUB-SUBACCOUNT"; all accounts established pursuant to this Section
3A.2(a), collectively, the "TRUST ACCOUNTS"), each Trust Account to bear a
designation indicating that the funds deposited therein are held for the benefit
of the Persons (and, for each such Person, to the extent) set forth in clauses
(i) and (ii) above. The Trustee shall possess all right, title and interest in
all funds from time to time on deposit in, and all Eligible Investments credited
to, the Trust Accounts and in all proceeds thereof. The Trust Accounts shall be
under the sole dominion and control of the Trustee for the exclusive benefit of
the Persons (and, for each such Person, to the extent) set forth in clauses (i)
and (ii) above.

          (b) All Eligible Investments in the Trust Accounts shall be delivered
to the Trustee in accordance with the definition of "Delivery" and shall be held
by the Trustee or its nominee (including the Securities Intermediary) for the
exclusive benefit of the Purchasers and, subject to the prior interest of the
Purchasers, the owner of the Series 1998-1 Subordinated Interest; PROVIDED,
HOWEVER, that funds on deposit in a Trust Account which is a sub-subaccount of a
Collection Account may, at the direction of the Servicer, be invested together
with funds held in other sub-subaccounts of the Collection Account. After giving
effect to any distribution to the Company pursuant to Section 3A.3(b), amounts
on deposit and available for investment in the Series 1998-1 Principal
Collection Sub-subaccount shall be invested by the Trustee at the written
direction of the Servicer in Eligible Investments that mature, or that are
payable or redeemable upon demand of the holder thereof, (i) in the case of any
such investment made during the Series 1998-1 Revolving Period, on or prior to
the next Business Day and (ii) in the case of any such investment made during
the Series 1998-1 Amortization Period, on or prior to the Business Day
immediately preceding the next Distribution Date. Amounts on deposit and
available for investment in the Series 1998-1 Non-Principal Collection
Sub-subaccount and the Series 1998-1 Accrued Interest Sub-subaccount shall be
invested by the Trustee at the written direction of the Servicer in Eligible
Investments that mature, or that are payable or redeemable upon demand of the
holder thereof, on or prior to the Business Day immediately preceding the next
Distribution Date. As of the Business Day immediately preceding such next
Distribution Date,

                                       39


(x) all interest and other investment earnings (net of losses and investment
expenses) on funds deposited in the Series 1998-1 Accrued Interest
Sub-subaccount shall be deposited in the Series 1998-1 Non-Principal Collection
Sub-subaccount and (y) all interest and investment earnings (net of losses and
investment expenses) on funds deposited in the Series 1998-1 Principal
Collection Sub-subaccount shall be deposited in the Series 1998-1 Non-Principal
Collection Sub-subaccount. If the Servicer fails to give the Trustee investment
instructions with respect to amounts on deposit in any Series 1998-1 Collection
Subaccount or any subaccount thereof, such amounts shall remain uninvested.

          (c) Any securities intermediary maintaining a securities account for
the Trustee for the benefit of the Purchasers, and The Chase Manhattan Bank as
initial Securities Intermediary, hereby represents that it is as of the date
hereof and shall be for so long as it is the Securities Intermediary hereunder a
bank or broker-dealer that (i) in the ordinary course of its business maintains
securities accounts for others and is acting in that capacity hereunder and (ii)
maintains a Participant's Securities Account (as defined in the United States
Regulations) with a Federal Reserve Bank. The Securities Intermediary shall
agree (and The Chase Manhattan Bank as initial Securities Intermediary hereby
agrees) with the parties hereto that (x) the Collection Account (including any
sub-accounts thereof) is a securities account to which financial assets may be
credited, (y) the Trustee shall be entitled to exercise rights that comprise
such financial assets and to exercise the ordinary rights of an entitlement
holder, (z) the "securities intermediary's jurisdiction" as defined in the UCC
of the Securities Intermediary with respect to the Eligible Investments credited
to the Collection Account (including any sub-accounts thereof) shall be the
State of New York. The Securities Intermediary shall represent and covenant (and
The Chase Manhattan Bank hereby represents and covenants) that it is not and
will not be (as long as it is the Securities Intermediary hereunder) a party to
any agreement that is inconsistent with the provisions of this Agreement. The
Securities Intermediary shall covenant (and The Chase Manhattan Bank hereby
covenants) that it will not take any action inconsistent with the provisions of
this Agreement applicable to it. It is the intent of the Trustee, the Servicer
and the Company that the Collection Account (including any sub-accounts thereof)
shall be a securities account of the Trustee and not an account of the Company
or the Servicer. If despite such intent, the Collection Account (including any
sub-accounts thereof) is determined to be an account of the Company or the
Servicer, then the Securities Intermediary agrees to comply with entitlement
orders originated by the Trustee without further consent by the Company or the
Servicer.

                                       40


          SECTION 3A.3. ALLOCATIONS. In accordance with the written direction of
the Servicer, upon which the Trustee may conclusively rely:

          (a) The portion of the Aggregate Daily Collections allocated to the
Series 1998-1 Interests pursuant to Article III of the Agreement shall be
allocated and distributed as set forth in this Article III by the Trustee as
follows:

               (i) on each Business Day, an amount equal to the Accrued Expense
     Amount for such day (or, during the Series 1998-1 Revolving Period, such
     greater amount as the Company may request in writing) shall be transferred
     from the Series 1998-1 Collection Subaccount to the Series 1998-1
     Non-Principal Collection Sub-subaccount; and

               (ii) following the transfers pursuant to clause (i) above, any
     remaining funds on deposit in the Series 1998-1 Collection Subaccount shall
     be transferred by the Trustee to the Series 1998-1 Principal Collection
     Sub-subaccount.

          (b) (i) On each Business Day that is not a Distribution Date during
the Series 1998-1 Revolving Period, after giving effect to (x) all allocations
of Aggregate Daily Collections and (y) any deposit resulting from an Increase,
if any, pursuant to Section 2.5(c) on such Business Day, amounts on deposit in
the Series 19981 Principal Collection Sub-subaccount shall be distributed by the
Trustee to such accounts or such persons as the Company may direct in writing
(which directions may consist of standing instructions provided by the Company
that shall remain in effect until changed by the Company in writing); PROVIDED
that such distribution shall be made only if no Early Amortization Event or
Potential Early Amortization Event has occurred and is continuing and only to
the extent that, if after giving effect to such distribution, the Series 1998-1
Target Receivables Amount would not exceed the Series 1998-1 Allocated
Receivables Amount; PROVIDED FURTHER that if the Company or the Servicer, on
behalf of the Company, shall have given the Funding Agent irrevocable written
notice (effective upon receipt) (A) at least two Business Days prior to such
day, in the case of any notice given to the Initial Purchaser, (B) on such day,
in the case of any notice given to the APA Banks with respect to the Floating
Tranche, or (C) at least three Business Days prior to such day, in the case of
any notice given to the APA Banks with respect to a Eurodollar Tranche, the
Company or the Servicer may instruct the Trustee in writing (specifying the
related amount) to withdraw all or a portion of such amounts on deposit in the
Series 1998-1 Principal Collection Sub-subaccount and apply such withdrawn

                                       41


amounts toward the reduction of the Series 1998-1 Invested Amount and the Series
1998-1 Subordinated Interest Amount in accordance with Section 2.6.

               (ii) On each Business Day during the Series 1998-1 Amortization
     Period (including Distribution Dates), funds deposited in the Series 1998-1
     Principal Collection Sub-subaccount shall be invested in Eligible
     Investments, at the written direction of the Servicer pursuant to Section
     3A.2(b), that mature on or prior to the Business Day immediately preceding
     the next Distribution Date and shall be distributed on such Distribution
     Date in accordance with Section 3A.6(c). Except as set forth in Section
     3A.6(c), no amounts on deposit in the Series 1998-1 Principal Collection
     Sub-subaccount shall be distributed by the Trustee to the Company or the
     owner of the Series 1998-1 Subordinated Interest during the Series 1998-1
     Amortization Period.

          (c) On each Business Day, an amount equal to the Daily Interest
Deposit for such day shall be transferred by the Trustee from the Series 1998-1
Non-Principal Collection Sub-subaccount to the Series 1998-1 Accrued Interest
Sub-subaccount.

          (d) The allocations to be made pursuant to this Section 3A.3 are
subject to the provisions of Sections 2.5, 2.6, 7.2, 9.1 and 9.4 of the
Agreement.

          SECTION 3A.4. DETERMINATION OF INTEREST. (a) (i) The amount of
interest distributable with respect to the VFC Certificates ("SERIES 1998-1
MONTHLY INTEREST") on each Distribution Date shall be the amount of Daily
Interest Expense accrued during the Accrual Period ending on such Distribution
Date as calculated by the Servicer.

               (ii) If a change in the CP Rate, the weighted average Adjusted
     LIBO Rate or the Alternate Base Rate on or after any Settlement Report Date
     results in a change in Series 1998-1 Monthly Interest for the Accrual
     Period ending on the Distribution Date immediately succeeding such
     Settlement Report Date, the Servicer shall amend the Monthly Settlement
     Statement to reflect the adjustment in the Series 1998-1 Monthly Interest
     for such Accrual Period caused by such change and any consequent
     adjustments and the Servicer shall also provide written notification to the
     Trustee of any such change. Any amendment to the Monthly Settlement
     Statement pursuant to this Section 3A.4(a)(ii) shall be completed by 1:00
     p.m. on the day preceding the next Distribution Date.

                                       42


          (b) On each Distribution Date, the Servicer shall determine the
excess, if any (the "INTEREST SHORTFALL"), of (i) the Series 1998-1 Monthly
Interest for the Accrual Period ending on such Distribution Date OVER (ii) the
amount which will be available to be distributed to the Purchasers on such
Distribution Date in respect thereof pursuant to this Supplement. If the
Interest Shortfall with respect to any Distribution Date is greater than zero,
an additional amount ("ADDITIONAL INTEREST") equal to the product of (A) the
number of days until such Interest Shortfall shall be repaid DIVIDED BY 365 (or
366, as the case may be), (B) the Alternate Base Rate PLUS 2.0% and (C) such
Interest Shortfall (or the portion thereof which has not been paid to the
Purchasers) shall be payable as provided herein with respect to the VFC
Certificates on each Distribution Date following such Distribution Date, to but
excluding the Distribution Date on which such Interest Shortfall is paid to the
VFC Certificateholders.

          (c) On any Business Day, the Company may, subject to Section 3A.4(e),
elect to allocate all or any portion of the Available Pricing Amount (i) to
Commercial Paper commencing on such Business Day by giving the Funding Agent
irrevocable written or telephonic (confirmed in writing) notice thereof, which
notice must be received by the Funding Agent prior to 1:00 p.m., New York City
time, two Business Days prior to such Business Day (PROVIDED that the selection
of CP Tranches in respect of which shall be at the sole discretion of the
Funding Agent) or (ii) to one or more Eurodollar Tranches with Eurodollar
Periods commencing on such Business Day by giving the Funding Agent irrevocable
written or telephonic (confirmed in writing) notice thereof, which notice must
be received by the Funding Agent prior to 1:00 p.m., New York City time, three
Business Days prior to such Business Day. Such notice shall specify (i) the
applicable Business Day, (ii) the Available Pricing Amount that shall be
allocable to Commercial Paper, if any and (iii) the Eurodollar Period and the
Available Pricing Amount for each Eurodollar Tranche to which a portion of the
Available Pricing Amount is to be allocated, if any. With respect to any
Eurodollar Tranche or portion of the Series 1998-1 Invested Amount held by the
APA Banks at the Alternate Base Rate, the Funding Agent shall notify each APA
Bank of the contents of each such notice promptly upon receipt thereof.

          (d) Any reduction in the Series 1998-1 Invested Amount on any Business
Day shall be allocated in the following order of priority:

          FIRST, to reduce the Unallocated Balance, as appropriate; and

                                       43


          SECOND, to reduce the portion of the Series 1998-1 Invested Amount
allocated to Eurodollar Tranches in such order as the Company may select in
order to minimize costs payable pursuant to Section 7.4.

          (e) Notwithstanding anything to the contrary contained in this Section
3A.4, (i) if the Initial Purchaser has a Series 1998-1 Purchaser Invested
Amount, the Initial Purchaser shall approve the portion of the Series 1998-1
Invested Amount allocated to Commercial Paper and (ii) if the APA Banks have a
Series 1998-1 Purchaser Invested Amount, (A) the portion of the Series 1998-1
Invested Amount allocable to each Eurodollar Tranche must be in an amount equal
to $500,000 or an integral multiple of $500,000 in excess thereof, (B) no more
than five Eurodollar Tranches shall be outstanding at any one time, (C) after
the occurrence and during the continuance of any Early Amortization Event or
Potential Early Amortization Event, the Company may not elect to allocate any
portion of the Available Pricing Amount to a Eurodollar Tranche and (D) after
the end of the Series 1998-1 Revolving Period, the Company may not select any
Eurodollar Period that does not end on or prior to the next succeeding
Distribution Date.

          SECTION 3A.5. DETERMINATION OF SERIES 1998-1 MONTHLY PRINCIPAL. (a)
PAYMENTS OF SERIES 1998-1 PRINCIPAL. The amount (the "SERIES 1998-1 MONTHLY
PRINCIPAL PAYMENT") distributable from the Series 1998-1 Principal Collection
Sub-subaccount on each Distribution Date during the Series 1998-1 Amortization
Period, as determined by the Servicer, shall be equal to the amount on deposit
in such account on the immediately preceding Settlement Report Date; PROVIDED,
HOWEVER, that the Series 1998-1 Monthly Principal Payment on any Distribution
Date shall not exceed the Series 1998-1 Invested Amount on such Distribution
Date after giving effect to the reductions and increases pursuant to paragraphs
(b) and (c) below. Further, on any other Business Day during the Series 1998-1
Amortization Period, funds may be distributed from the Series 1998-1 Principal
Collection Sub-subaccount to the Purchasers in accordance with Section 2.7 of
this Supplement.

          (b) REDUCTIONS TO SERIES 1998-1 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 1998-1 Allocable Charged-Off
Amount is greater than zero for the related Settlement Period, the Trustee shall
(in accordance with written directions from the Servicer, upon which the Trustee
may conclusively rely) make the following allocations of such amounts in the
following order of priority:

                                       44


               (i) the Series 1998-1 Required Reserves shall be reduced (but not
     below zero) by an amount equal to the Series 1998-1 Allocable Charged-Off
     Amount (which shall also be reduced by the amount so applied);

               (ii) then, to the extent that the Series 1998-1 Allocable
     Charged-Off Amount is greater than zero following the application in clause
     (i) above, the Series 1998-1 Invested Amount shall be reduced (but not
     below zero) by such remaining Series 1998-1 Allocable Charged-Off Amount
     (which shall also be reduced by the amount so applied).

          (c) INCREASES TO SERIES 1998-1 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 1998-1 Allocable Recoveries Amount
is greater than zero for the related Settlement Period, the Trustee shall (in
accordance with written directions from the Servicer upon which the Trustee may
conclusively rely) make the following allocations (after giving effect to the
applications in paragraph (b) of such amount in the following order of
priority):

               (i) the Series 1998-1 Invested Amount shall be increased (but
     only to the extent of any previous reductions of the Series 1998-1 Invested
     Amount pursuant to Section 3A.5(b)(ii)) by the amount of the Series 1998-1
     Allocable Recoveries Amount (which shall also be reduced by the amount so
     applied);

               (ii) then, to the extent that the Series 1998-1 Allocable
     Recoveries Amount is greater than zero following the applications in clause
     (i) above, the Series 1998-1 Required Reserves shall be increased (but only
     to the extent of any previous reductions of the Series 1998-1 Required
     Reserves pursuant to Section 3A.5(b)(i)) by such remaining Series 1998-1
     Allocable Recoveries Amount (which shall also be reduced by the amount so
     applied).

          SECTION 3A.6. APPLICATIONS. (a) The Trustee (acting at the written
direction of the Servicer upon which the Trustee may conclusively rely) shall on
each Distribution Date distribute to the Purchasers, from amounts on deposit in
the Series 1998-1 Accrued Interest Sub-subaccount, an amount equal to the Series
1998-1 Monthly Interest payable on such Distribution Date (such amount, the
"MONTHLY INTEREST PAYMENT"), PLUS the amount of any Monthly Interest Payment
previously due but not distributed to the Purchasers on a prior Distribution
Date, PLUS the amount of any Additional Interest for such Distribution Date and
any Additional Interest previously due but not distributed to the Purchasers on
a prior Distribution Date.

                                       45


          (b) On each Distribution Date, the Trustee shall apply funds on
deposit in the Series 1998-1 Non-Principal Collection Sub-subaccount in the
following order of priority to the extent funds are available:

               (i) an amount equal to the Commitment Fee for the Accrual Period
     ending on such Distribution Date shall be withdrawn from the Series 1998-1
     Non-Principal Collection Sub-subaccount by the Trustee and paid to the
     Funding Agent, for the PRO RATA account of the APA Banks, in accordance
     with their respective Pro Rata Shares;

               (ii) an aggregate amount equal to the Utilization Fee for the
     Accrual Period ending on such Distribution Date shall be withdrawn from the
     Series 1998-1 Non-Principal Collection Sub-subaccount by the Trustee and
     paid to the Funding Agent, for the account of the Initial Purchaser;

               (iii) an amount equal to any amounts owing to the Trustee
     pursuant to Section 8.5 of the Agreement, shall be withdrawn from the
     Series 1998-1 Non-Principal Collection Sub-subaccount by the Trustee and
     paid to itself;

               (iv) an amount equal to the Series 1998-1 Periodic Servicing Fee
     for the Accrual Period ending on such Distribution Date shall be withdrawn
     from the Series 1998-1 Non-Principal Collection Sub-subaccount by the
     Trustee and paid to the Servicer or, if USFS or any Affiliate thereof is
     not the Servicer, an amount equal to the Series 1998-1 Periodic Servicing
     Fee shall be paid to the Person acting as Successor Servicer (less, in each
     case, any amounts payable to the Trustee pursuant to Section 8.5 of the
     Agreement, which shall be paid to the Trustee); and

               (v) an amount equal to any unpaid Program Costs due and payable
     shall be withdrawn from the Series 1998-1 Non-Principal Collection
     Sub-subaccount by the Trustee and paid to the Persons owed such amounts.

Any remaining amounts on deposit in the Series 1998-1 Non-Principal Collection
Sub-subaccount (in excess of the Accrued Expense Amount as of such day) not
allocated pursuant to clauses (i) through (v) above shall be paid to the owner
of the Series 1998-1 Subordinated Interest; PROVIDED, HOWEVER, that during the
Series 1998-1 Amortization Period, such remaining amounts shall be deposited in
the Series

                                       46


1998-1 Principal Collection Sub-subaccount for distribution in accordance with
Section 3A.6(c).

          (c) During the Series 1998-1 Amortization Period, the Trustee shall
apply, on each Distribution Date, amounts on deposit in the Series 1998-1
Principal Collection Sub-subaccount in the following order of priority:

               (i) an amount equal to the Series 1998-1 Monthly Principal
     Payment for such Distribution Date shall be distributed from the Series
     1998-1 Principal Collection Sub-subaccount to the Purchasers;

               (ii) if, following the repayment in full of the Series 1998-1
     Invested Amount, any amounts are owed to the Trustee, the Purchasers or any
     other Person hereunder, such amounts shall be transferred from the Series
     1998-1 Principal Collection Sub-subaccount and paid to the Trustee, the
     Purchasers or such other Person; and

               (iii) following the repayment in full of the Series 1998-1
     Invested Amount and of all of the amounts set forth in clause (ii), the
     remaining amount on deposit in the Series 1998-1 Principal Collection
     Sub-subaccount on such Distribution Date, if any, shall be distributed to
     the owner of the Series 1998-1 Subordinated Interest.


                                   ARTICLE IV

                            DISTRIBUTIONS AND REPORTS

          Article IV of the Agreement (except for any portion thereof relating
to another Series) shall read in its entirety herein as follows and the
following shall be exclusively applicable to the VFC Certificates:

          SECTION 4A.1. DISTRIBUTIONS. (a) on each Distribution Date, the
Trustee shall distribute to each Purchaser its applicable PRO RATA share (based
on each such Purchaser's Series 1998-1 Invested Amount) of the amount to be
distributed to the Purchasers pursuant to Article III.

          (b) All allocations and distributions hereunder shall be in accordance
with the Monthly Settlement Statement, upon which the Trustee may conclusively

                                       47


rely, and shall be made in accordance with the provisions of Section 11.4 hereof
and subject to Section 3.1(h) of the Agreement.

          SECTION 4A.2. Reserved.

          SECTION 4A.3. STATEMENTS AND NOTICES. (a) MONTHLY SETTLEMENT
STATEMENTS. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and the Funding Agent (commencing with the Settlement Report Date
occurring on April 15, 1998) a Monthly Settlement Statement in the Form of
Exhibit F setting forth, among other things, the Loss Reserve Ratio, the
Dilution Reserve Ratio, the Minimum Ratio, the Carrying Cost Reserve Ratio, the
Servicing Reserve Ratio and the components of the calculation thereof, the
Series 1998-1 Monthly Interest, the Additional Interest, the Series 1998-1
Periodic Servicing Fee, the Commitment Fee and the Series 1998-1 Monthly
Principal Payment, each as recalculated for the period until the next succeeding
Settlement Report Date. The Funding Agent shall forward a copy of each Monthly
Settlement Statement to any Purchaser upon request by such Purchaser. The
Trustee shall have no obligation whatsoever to verify the accuracy of any
information contained within the Monthly Settlement Statement, including any
calculations contained therein. A copy of any such items may be obtained by any
holder of a Certificate upon a written request delivered to the Trustee at the
Corporate Trust Office.

          Where the Servicer is required to provide written instructions to the
Trustee in respect of the distributions and allocations to be made on a
Distribution Date, the delivery by the Servicer to the Trustee of the Monthly
Settlement Statement with all such instructions contained therein on the
Settlement Report Date shall satisfy the Servicer's obligation to provide
written instructions.

          (b) ANNUAL CERTIFICATEHOLDERS' TAX STATEMENT. On or before January 31
of each calendar year (or such earlier date as required by applicable law),
beginning with calendar year 2001, the Company on behalf of the Trustee shall
furnish, or cause to be furnished, to each Person who at any time during the
preceding calendar year was a Purchaser, a statement prepared by the Company
containing the aggregate amount distributed to such Person for such calendar
year or the applicable portion thereof during which such Person was a Purchaser,
together with such other information as is required to be provided by an issuer
of indebtedness under the Internal Revenue Code and such other customary
information as the Company deems necessary or desirable to enable the Purchasers
to prepare their tax returns. Such obligation of the Company shall be deemed to
have been satisfied to the extent that substantially comparable information
shall have been prepared by the

                                       48


Servicer and provided to the Trustee or the Funding Agent and to the Purchasers,
in each case pursuant to any requirements of the Internal Revenue Code as from
time to time in effect.

          (c) EARLY AMORTIZATION EVENT/DISTRIBUTION OF PRINCIPAL NOTICES. Upon
the occurrence of an Early Amortization Event with respect to Series 1998-1, the
Company or the Servicer, as the case may be, shall give prompt written notice
thereof to the Trustee and the Funding Agent. As promptly as reasonably
practicable after its receipt of notice of the occurrence of an Early
Amortization Event with respect to Series 1998-1, the Trustee shall give notice
to the Funding Agent, who in turn shall give notice to each Purchaser. In
addition, on the Business Day preceding each day on which a distribution of
principal is to be made during the Series 1998-1 Amortization Period, the
Servicer shall direct the Funding Agent to send notice to each Purchaser, which
notice shall set forth the amount of principal to be distributed on the related
date to the Purchasers with respect to the outstanding VFC Certificates.

                                    ARTICLE V

                      ADDITIONAL EARLY AMORTIZATION EVENTS

          SECTION 5.1. ADDITIONAL EARLY AMORTIZATION EVENTS. If any one of the
events specified in Section 7.1 of the Agreement (after the expiration of any
grace periods or consents applicable thereto) or any one of the following events
(each, an "EARLY AMORTIZATION EVENT") shall occur during the Series 1998-1
Revolving Period with respect to the Series 1998-1 Interests:

          (a) (i) failure on the part of the Servicer to direct any payment or
deposit to be made or failure of any payment or deposit to be made in respect of
interest owing on any VFC Certificates or the Commitment Fee within two Business
Days of the date such interest or Commitment Fee is due or (ii) failure on the
part of the Servicer to direct any payment or deposit to be made or of the
Company to make any payment or deposit in respect of any other amounts owing by
the Company under any Pooling and Servicing Agreement within five Business Days
of the date such other amount is due or such deposit is required to be made;

          (b) (i) failure on the part of the Company to duly observe or perform
in any material respect any of the covenants or agreements of the Company set
forth in Section 2.7 and 2.8 of the Agreement or (ii) failure on the part of the

                                       49


Company duly to observe or perform in any material respect any other covenants
or agreements of the Company set forth in any Pooling and Servicing Agreement,
which failure continues unremedied until 30 days after the earlier of the date
on which a Responsible Officer of the Company or the Servicer has knowledge
thereof and the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Company by the Trustee, or to the
Company and the Trustee by the Funding Agent or Purchasers representing 25% or
more of the Series 1998-1 Invested Amount;

          (c) any representation or warranty made or deemed made by the Company
in any Pooling and Servicing Agreement to or for the benefit of the Purchasers
(i) proves to have been incorrect in any material respect when made or when
deemed made and (ii) continues to be materially incorrect until 30 days after
the earlier of the date on which a Responsible Officer of the Company or the
Servicer has knowledge thereof and the date on which notice of such failure,
requiring the same to be remedied, has been given by the Trustee to the Company
or by Purchasers representing 25% or more of the Series 1998-1 Invested Amount
to the Company and the Trustee; PROVIDED, HOWEVER, that an Early Amortization
Event with respect to the Series 1998-1 Interests shall not be deemed to have
occurred under this paragraph if the incorrectness of such representation or
warranty gives rise to an obligation to repurchase the related Receivables and
the Company has repurchased the related Receivable or all such Receivables, if
applicable, in accordance with the provisions of the Pooling and Servicing
Agreements within ten Business Days of the day on which the Company was
obligated to do so;

          (d) a Servicer Default with respect to the Servicer shall have
occurred and be continuing or the Servicer shall have resigned;

          (e) a Purchase Termination Event (as defined in any Receivables Sale
Agreement) shall have occurred and be continuing under such Receivables Sale
Agreement;

          (f) a USI Change in Control shall have occurred, or any Seller or the
Servicer shall cease to be a directly or indirectly wholly-owned, Subsidiary of
United Stationers Inc.;

          (g) USFS, USI or any one of USI's wholly-owned direct or indirect
subsidiaries shall cease to own 100% of the ordinary shares of the Company;
PROVIDED, that 30% of the voting rights with respect to such shares shall be
held by the independent director as nominee.

                                       50


          (h) any of the Agreement, the Servicing Agreement, this Supplement or
the Receivables Sale Agreements shall cease, for any reason, to be in full force
and effect, or the Company, the Seller or the Servicer or any Affiliate of any
thereof shall so assert in writing;

          (i) the Trust shall for any reason cease to have a valid and perfected
first priority undivided ownership or security interest in the Trust Assets, as
a whole (subject to no other Liens other than Permitted Liens), or any of USSC,
USFS, the Company or any Affiliate of any one thereof shall so assert in
writing;

          (j) there shall have been filed against USSC, USFS, the Company or the
Trust (i) a notice of federal tax Lien from the Internal Revenue Service, (ii) a
notice of Lien from the PBGC under Section 412(n) of the Internal Revenue Code
or Section 302(f) of ERISA for a failure to make a required installment or other
payment to a plan to which either of such sections applies or (iii) a notice of
any other Lien the existence of which could reasonably be expected to have a
Material Adverse Effect on the business, operations or financial condition of
such Person, and, in each case, 40 days shall have elapsed without such notice
having been effectively withdrawn or such Lien having been released or
discharged;

          (k) an Event of Default under the Credit Agreement shall have occurred
and the lender parties thereto shall have caused the indebtedness thereunder to
come due prior to its stated maturity;

          (l) any action, suit, investigation or proceeding at law or in equity
(including, without limitation, injunctions, writs or restraining orders) shall
be brought or commenced or filed by or before any arbitrator, court or
Governmental Authority against the Company or the Servicer or any properties,
revenues or rights of either thereof which could reasonably be expected to have
a Material Adverse Effect with respect to such Person;

          (m)(i) one or more judgments for the payment of money (to the extent
not bonded or covered by insurance to the reasonable satisfaction of the
Required APA Banks) shall be rendered against the Company (A) in an aggregate
amount greater than $50,000 or (B) that, individually or in the aggregate, have
resulted or could reasonably be expected to result in a Material Adverse Effect
or (ii) one or more judgments for the payment of money (to the extent not bonded
or covered by insurance to the reasonable satisfaction of the Funding Agent)
shall be rendered against the Servicer, any Seller or any combination thereof
(A) in an

                                       51


aggregate amount greater than $7,500,000 or (B) that, individually or in the
aggregate, have resulted or could reasonably be expected to result in a Material
Adverse Effect and, in either case, the same shall remain undischarged for a
period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to levy upon
assets or properties of the Company, the Servicer or any Seller to enforce any
such judgment;

          (n) as at the end of any Settlement Period, the average
Loss-to-Liquidation Ratio for the two preceding Settlement Periods (including
such Settlement Period then ended) shall exceed 1.0%;

          (o) as at the end of any Settlement Period, the average Default Ratio
for the two preceding Settlement Periods (including such Settlement Period then
ended) shall exceed 2.75%;

          (p) as at the end of any Settlement Period, the average Dilution Ratio
for the two preceding Settlement Periods (including such Settlement Period then
ended) shall exceed 4.25%;

          (q) for any Settlement Period, Days Sales Outstanding shall be more
than 40 days; or

          (r) the Series 1998-1 Allocated Receivables Amount shall be less than
the Series 1998-1 Target Receivables Amount for a period of two consecutive
Business Days.

then, in the case of (x) any event described in Section 7.1 of the Agreement,
after the applicable grace period (if any) set forth in such Section, and
paragraphs (i) and (j) above automatically without any notice or action on the
part of the Trustee or Purchasers, an early amortization period shall
immediately commence or (y) any other event described above, after the
expiration of the applicable grace period (if any) set forth in such Sections,
the Funding Agent may, and at the written direction of the Required APA Banks
shall, by written notice then given to the Company and the Servicer, declare
that an early amortization period has commenced as of the date of such notice
with respect to Series 1998-1 (any such period under clause (x) or (y) above, an
"EARLY AMORTIZATION PERIOD"); PROVIDED that in the case of any waiver of the
Early Amortization Event specified in Section 5.1(r), the Funding Agent shall
provide prompt written notice of such waiver to the Rating Agencies.

                                       52


          Notwithstanding the foregoing, a delay or failure in performance
referred to in clause (a) above for a period of five Business Days after the
expiration of the applicable grace period, or in clause (b) above for a period
of 30 Business Days after the expiration of the applicable grace period, will
not constitute an Early Amortization Event if such delay or failure could not
have been prevented by the exercise of reasonable diligence by the Company and
such delay or failure was caused by a Force Majeure Delay. The Company will
nevertheless be required to use its best efforts to perform its obligations in a
timely manner in accordance with the terms of the Transaction Documents, and the
Company shall promptly give the Trustee an Officer's Certificate notifying it of
any such delay or failure.

                                   ARTICLE VI

                                  SERVICING FEE

          SECTION 6.1. SERVICING COMPENSATION. A periodic servicing fee (the
"SERIES 1998-1 PERIODIC SERVICING FEE") shall be payable to the Servicer on each
Distribution Date for the preceding Settlement Period in an amount equal to the
product of (a) the Servicing Fee and (b) a fraction the numerator of which is
the daily average Aggregate Commitment Amount for such Settlement Period and the
denominator of which is the sum of (i) the Aggregate Invested Amounts (other
than the Series 1998-1 Invested Amount and the Invested Amount in respect of any
variable funding certificate of any other Outstanding Series) on the first day
of such Settlement Period and (ii) the Aggregate Commitment Amount on the first
day of such Settlement Period plus the aggregate Commitment amount for any
variable funding certificate of any other Outstanding Series; PROVIDED, HOWEVER,
that if an Early Amortization Event has occurred and is continuing and USFS or
any Affiliate thereof is Servicer, payment of the Series 1998-1 Periodic
Servicing Fee shall be deferred until the Series 1998-1 Invested Amount has been
paid in full.

                                   ARTICLE VII

                             CHANGE IN CIRCUMSTANCES

          SECTION 7.1. ILLEGALITY. Notwithstanding any other provision herein,
if any Change in Law shall make it unlawful for any APA Bank to make or maintain
its portion of the VFC Certificateholders' Interest in any Eurodollar Tranche
and such APA Bank shall notify in writing the Funding Agent, the Trustee and the

                                       53


Company, then the portion of each Eurodollar Tranche applicable to such APA Bank
shall thereafter be calculated by reference to the Alternate Base Rate. If any
such change in the method of calculating interest occurs on a day which is not
the last day of the Eurodollar Period with respect to any Eurodollar Tranche,
the Company shall pay to the Funding Agent for the account of such APA Bank the
amounts, if any, as may be required pursuant to Section 7.4.

          SECTION 7.2. INCREASED COSTS. (a) If any Change in Law (except with
respect to Taxes which shall be governed by Section 7.3) shall:

               (i) impose, modify or deem applicable any reserve, special
     deposit or similar requirement against assets of, deposits with or for the
     account of, or credit extended by, any APA Bank (except any such reserve
     requirement reflected in the Adjusted LIBO Rate); or

               (ii) impose on any APA Bank or the London interbank market any
     other condition affecting the Transaction Documents or the funding of
     Eurodollar Tranches by such APA Bank;

and the result of any of the foregoing shall be to increase the cost to such APA
Bank of making, converting into, continuing or maintaining Eurodollar Tranches
(or maintaining its obligation to do so) or to reduce any amount received or
receivable by such APA Bank hereunder (whether principal, interest or
otherwise), then the Company will pay to such APA Bank such additional amount or
amounts as will compensate such APA Bank for such additional costs incurred or
reduction suffered.

          (b) If any APA Bank determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such APA Bank's capital or the capital of any corporation controlling such
APA Bank as a consequence of its obligations hereunder to a level below that
which such APA Bank or such corporation could have achieved but for such Change
in Law (taking into consideration such APA Bank's or such corporation's policies
with respect to capital adequacy), then from time to time, the Company shall pay
to such APA Bank such additional amount or amounts as will compensate such APA
Bank for any such reduction suffered.

          (c) A certificate of an APA Bank setting forth in reasonable detail
the amount or amounts necessary to compensate such APA Bank as specified in
Sections (a) and (b) of this Section 7.2 shall be delivered to the Company (with
a copy to the Funding Agent) and shall be conclusive absent manifest error
provided

                                       54


that such Certificate is delivered in good faith and in a manner generally
consistent with such APA Bank's standard practice. The agreements in this
Section shall survive the termination of this Supplement and the Agreement and
the payment of all amounts payable hereunder and thereunder for a period of nine
months.

          (d) Failure or delay on the part of any APA Bank to demand
compensation pursuant to this Section 7.2 shall not constitute a waiver of such
APA Bank's right to demand such compensation; PROVIDED that the Company shall
not be required to compensate an APA Bank pursuant to this Section 7.2 for any
increased costs or reductions incurred more than 270 days prior to the date that
such APA Bank notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such APA Bank's intention to claim
compensation therefor; PROVIDED FURTHER that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.

          SECTION 7.3. TAXES. (a) Any and all payments by or on account of any
obligation of the Company hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the Company
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 7.3) the Funding Agent or such APA Bank receives
an amount equal to the sum that it would have received had no such deductions
been made, (ii) the Company shall make such deductions and (iii) the Company
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

          (b) In addition, the Company shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

          (c) Subject to paragraph (e) of this Section 7.3, the Company shall
indemnify the Funding Agent and each APA Bank within the later of 10 days after
written demand therefor and the Distribution Date next following such demand for
the full amount of any Indemnified Taxes or Other Taxes paid by the Funding
Agent or such APA Bank on or with respect to any payment by or on account of any
obligation of the Company hereunder or under any other Transaction Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 7.3) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified

                                       55


Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Company by the Funding Agent or an APA Bank shall
be conclusive absent manifest error. Any payments made by the Company pursuant
to this Section shall be made solely from funds available to the Company which
are not otherwise needed to be applied to the payment of any amounts (other than
amounts payable to the Company) pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in excess
of the proceeds to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.
The agreements in this Section shall survive the termination of this Supplement
and the Agreement and the payment of all amounts payable hereunder and
thereunder for a period of nine months.

          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Company to a Governmental Authority, the Company shall
deliver to the Funding Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Funding Agent.

          (e) The Funding Agent and each APA Bank shall (but with respect to any
Indemnified Tax or Other Tax arising from a Change in Law, only to the extent
the Funding Agent or such APA Bank is legally able to do so) deliver to the
Company (with a copy to the Funding Agent) such properly completed and executed
documentation prescribed by applicable law and reasonably requested by the
Company on the later of (i) 30 Business Days after such request is made and the
applicable forms are provided to such APA Bank or (ii) 30 Business Days before
prescribed by applicable law as will permit such payments to be made without
withholding or with an exemption from or reduction of Indemnified Taxes or Other
Taxes. Failure to timely provide such documentation to the Company shall relieve
the Company of any indemnification responsibility under this Section 7.3.

          (f) If the Funding Agent or an APA Bank (or a Transferee) receives a
refund solely in respect of Taxes or Other Taxes, it shall pay over such refund
to the Company to the extent that such Funding Agent or APA Bank (or Transferee)
has already received indemnity payments or additional amounts pursuant to this
Section 7.3 with respect to such Taxes or Other Taxes giving rise to the refund,
net of all out-of-pocket expenses and without interest (other than interest paid
by the relevant Governmental Authority with respect to such refund); PROVIDED,
HOWEVER, that the Company shall, upon request of the Funding Agent or such APA

                                       56


Bank (or Transferee), repay such refund (plus interest or other charges imposed
by the relevant Governmental Authority) to the Funding Agent or such APA Bank
(or Transferee) if the Funding Agent or such APA Bank (or Transferee) is
required to repay such refund to such Governmental Authority. Nothing contained
herein shall require the Funding Agent or an APA Bank (or Transferee) to make
its tax returns (or any other information relating to its taxes which it deems
confidential) available to the Company or any other Person.

          SECTION 7.4. BREAK FUNDING PAYMENTS. The Company agrees to indemnify
each APA Bank and to hold each APA Bank harmless from any loss or expense which
such APA Bank may sustain or incur as a consequence of (a) default by the
Company in making a borrowing of, conversion into or continuation of a
Eurodollar Tranche after the Company has given irrevocable notice requesting the
same in accordance with the provisions of this Supplement, or (b) default by the
Company in making any prepayment in connection with a Decrease after the Company
has given irrevocable notice thereof in accordance with the provisions of
Section 2.7 or (c) the making of a prepayment of a Eurodollar Tranche prior to
the termination of the Eurodollar Period for such Eurodollar Tranche. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the Eurodollar Period (or in the case of a failure to borrow, convert or
continue, the Eurodollar Period that would have commenced on the date of such
prepayment or of such failure) in each case at the Adjusted LIBO Rate for such
Eurodollar Tranche provided for herein over (ii) the amount of interest (as
reasonably determined by such APA Bank) which would have accrued to such APA
Bank on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market; PROVIDED that any
payments made by the Company pursuant to this Section shall be made solely from
funds available to the Company which are not otherwise needed to be applied to
the payment of any amounts (other than amounts payable to the Company) pursuant
to any Pooling and Servicing Agreements, shall be non-recourse other than with
respect to proceeds in excess of the proceeds to make such payment, and shall
not constitute a claim against the Company to the extent that insufficient
proceeds exist to make such payment. This covenant shall survive the termination
of this Supplement and the Agreement and the payment of all amounts payable
hereunder and thereunder for a period of nine months. A certificate as to any
additional amounts payable pursuant to the foregoing sentence, showing in
reasonable detail the calculation thereof, submitted by any APA Bank to the
Company shall be conclusive absent manifest error.

                                       57


          Notwithstanding anything in this Agreement to the contrary, the
Company agrees to indemnify the Initial Purchaser and to hold the Initial
Purchaser harmless from any loss or expense which the Initial Purchaser may
sustain or incur as a consequence of (a) default by the Company in making a
borrowing of or conversion into a CP Tranche after the Company has given
irrevocable notice requesting the same in accordance with the provisions of this
Supplement or (b) the prepayment, whether in connection with a Decrease or
otherwise, of any portion of the Series 1998-1 Invested Amount held by the
Initial Purchaser.

          SECTION 7.5. ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Eurodollar Period:

          (a) the Funding Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Eurodollar Period, or

          (b) the Funding Agent is advised by the Majority Purchasers that the
Adjusted LIBO Rate for such Eurodollar Period will not adequately and fairly
reflect the cost to such Purchasers of making or maintaining the Eurodollar
Tranches during such Eurodollar Period,

then the Funding Agent shall forthwith give telecopy or telephonic notice
thereof to the Company, the Trustee and the Purchasers, whereupon until the
Funding Agent notifies the Company and the Trustee that the circumstances giving
rise to such notice no longer exist, the Available Pricing Amount shall not be
allocated to any Eurodollar Tranche.

          SECTION 7.6. MITIGATION OBLIGATIONS. (a) If any APA Bank requests
compensation under Section 7.2, or if the Company is required to pay any
additional amount to any APA Bank or any Governmental Authority for the account
of any APA Bank pursuant to Section 7.3, then such APA Bank shall use reasonable
efforts to designate a different lending office for funding or booking its
obligations under this Supplement and the Agreement or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such APA Bank, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 7.2 or 7.3, as the case
may be, in the future and (ii) would not subject such APA Bank to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
APA Bank. The Company hereby agrees

                                       58


to pay all reasonable costs and expenses incurred by any APA Bank in connection
with any such designation or assignment.

          (b) If any APA Bank requests compensation under Section 7.2, or if the
Company is required to pay any additional amount to any APA Bank or any
Governmental Authority for the account of any APA Bank pursuant to Section 7.3,
or if any APA Bank defaults in its obligations hereunder, then the Company may,
at its sole expense and effort, upon notice to such APA Bank and the Funding
Agent require such APA Bank to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 11.11), all
its interests, rights and obligations under this Supplement to an assignee that
shall assume such obligations (which assignee may be another APA Bank, if an APA
Bank accepts such assignment); PROVIDED that (i) the Company shall have received
the prior written consent of the Funding Agent, which consent shall not
unreasonably be withheld, (ii) such APA Bank shall have received payment of an
amount equal to its Series 1998-1 Purchaser Invested Amount, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such Series 1998-1 Purchaser Invested Amount and
accrued interest and fees) or the Company (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for compensation
under Section 7.2 or payments required to be made pursuant to Section 7.3, such
assignment will result in a reduction in such compensation or payments. An APA
Bank shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such APA Bank or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply.

                                  ARTICLE VIII

                    REPRESENTATIONS AND WARRANTIES, COVENANTS

          SECTION 8.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SERVICER. The Company and the Servicer each hereby represents and warrants to
the Trustee, the Funding Agent and each of the Purchasers that each and every of
their respective representations and warranties contained in the Agreement is
true and correct in all material respects as of the Effective Date and as of the
date of each Increase (except to the extent that any such representation or
warranty is expressly made as of another date).

                                       59


          SECTION 8.2. COVENANTS OF THE COMPANY AND THE SERVICER. The Company
and the Servicer hereby agree, in addition to their obligations under the
Agreement and the Servicing Agreement, that:

          (a) they shall observe in all material respects each and every of
their respective covenants (both affirmative and negative) contained in the
Agreement, the Servicing Agreement, this Supplement and all other Transaction
Documents to which each is a party;

          (b) they shall afford the Trustee, Funding Agent or any
representatives of the Trustee or the Funding Agent access to all records
relating to the Receivables at any reasonable time during regular business
hours, upon reasonable prior notice (and without prior notice if an Early
Amortization Event has occurred), for purposes of inspection and shall permit
the Trustee, Funding Agent or any representative of the Trustee or the Funding
Agent to visit any of the Company's or the Servicer's, as the case may be,
offices or properties during regular business hours and as often as may
reasonably be desired to discuss the business, operations, properties, financial
and other conditions of the Company or the Servicer with their respective
officers and employees and with their independent certified public accountants;
PROVIDED that the Funding Agent shall provide the Company or the Servicer, as
the case may be, with reasonable notice prior to any such contact and shall give
the Company or the Servicer the reasonable opportunity to participate in such
discussions; and

          (c) neither the Company nor the Servicer shall take any action, nor
permit the Seller to take any action, requiring the satisfaction of the Rating
Agency Condition pursuant to any Transaction Document without the prior written
consent of the Majority Purchasers.

          SECTION 8.3. COVENANTS OF THE SERVICER. The Servicer hereby agrees
that:

          (a) it shall observe each and all of its respective covenants (both
affirmative and negative) contained in the Pooling and Servicing Agreements in
all material respects;

          (b) it shall provide to the Funding Agent and the Rating Agencies,
simultaneously with delivery to the Trustee, all reports, notices, certificates,
statements and other documents required to be delivered to the Trustee pursuant
to the Agreement, the Servicing Agreement and the other Transaction Documents
and

                                       60


furnish to the Funding Agent promptly after receipt thereof a copy of each
material notice, material demand or other material communication (excluding
routine communications) received by or on behalf of the Company or the Servicer
with respect to the Transaction Documents;

          (c) it shall provide notice to the Funding Agent of the appointment of
a Successor Servicer pursuant to Section 6.2 of the Servicing Agreement; and

          (d) it shall operate in good faith to allow the Trustee to use the
Servicer's available facilities, equipment, leasehold agreements, data systems,
records, files and expertise upon the Servicer's termination or default.

          SECTION 8.4. OBLIGATIONS UNAFFECTED. The obligations of the Company
and the Servicer to the Funding Agent and the Purchasers under this Supplement
shall not be affected by reason of any invalidity, illegality or irregularity of
any of the Receivables or any sale of any of the Receivables.

                                   ARTICLE IX

                              CONDITIONS PRECEDENT

          SECTION 9.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SUPPLEMENT. This
Supplement shall become effective on the date (the "EFFECTIVE DATE") on which
the following conditions precedent have been satisfied:

          (a) DOCUMENTS. The Funding Agent shall have received, with a copy for
the Initial Purchaser, true and complete copies of this Supplement, executed by
a duly authorized officer of each of the Company, the Servicer, the Trustee, the
Funding Agent, the Initial Purchaser and the APA Banks, together with all
documents related hereto.

          (b) ORGANIZATIONAL DOCUMENTS, ORGANIZATIONAL PROCEEDINGS OF THE
COMPANY AND SERVICER. The Funding Agent shall have received from the Company,
the Seller and the Servicer, with a copy for the Initial Purchaser, true and
complete copies of:

               (i) the articles of association, articles of incorporation or
     other formation documents, including all amendments thereto, of such

                                       61


     Person, certified as of a recent date by the Secretary of State or other
     appropriate authority of the state of formation or incorporation, as the
     case may be, and a certificate of compliance, of status or of good
     standing, as and to the extent applicable, of each such Person as of a
     recent date, from the Secretary of State or other appropriate authority of
     such jurisdiction;

               (ii) a certificate of the Secretary or an Assistant Secretary of
     each such Person, dated the Effective Date and certifying (A) that attached
     thereto is a true and complete copy of the bylaws and articles of
     incorporation or articles of association of each such Person, as in effect
     on the Effective Date and at all times since a date prior to the date of
     the resolutions described in clause (B) below, (B) that attached thereto is
     a true and complete copy of the resolutions, in form and substance
     reasonably satisfactory to the Funding Agent, of the Board of Directors of
     each such Person or committees thereof authorizing the execution, delivery
     and performance of the Series 1998-1 Transaction Documents to which it is a
     party and the transactions contemplated thereby, and that such resolutions
     have not been amended, modified, revoked or rescinded and are in full force
     and effect, (C) that the articles of association, article of incorporation
     or other formation documents of each such Person has not been amended since
     the date of the last amendment thereto shown on the certificate of good
     standing (or its equivalent) furnished pursuant to clause (i) above and (D)
     as to the incumbency and specimen signature of each officer executing any
     Series 1998-1 Transaction Documents or any other document delivered in
     connection herewith or therewith on behalf of each such Person; and

               (iii) a certificate of another officer as to the incumbency and
     specimen signature of the Secretary or Assistant Secretary executing the
     certificate pursuant to clause (ii) above.

          (c) GOOD STANDING CERTIFICATES. The Funding Agent shall have received
copies of certificates of compliance, of status or of good standing, dated as of
a recent date, from the Secretary of State or other appropriate authority of
such jurisdiction, with respect to the Company, the Servicer and the Seller, in
each State where the ownership, lease or operation of property or the conduct of
business requires it to qualify as a foreign corporation or limited liability
company, except where the failure to so qualify would not reasonably be expected
to have a material adverse effect on the business, operations, properties or
condition (financial or otherwise) of the Company, the Servicer or the Seller,
as the case may be.

                                       62


          (d) CONSENTS, LICENSES, APPROVALS, ETC. The Funding Agent shall have
received, with a copy for the Initial Purchaser, certificates dated the date
hereof of a Responsible Officer of the Company, the Servicer and the Seller
either (i) attaching copies of all material consents, licenses and approvals
required in connection with the execution, delivery and performance by the
Company, the Servicer or the Seller, as the case may be, of this Supplement, and
the validity and enforceability of this Supplement and the Agreement against the
Company and the Servicer, and such consents, licenses and approvals shall be in
full force and effect or (ii) stating that no such consents, licenses or
approvals are so required.

          (e) NO LITIGATION. The Funding Agent shall have received confirmation
that there is no pending or, to their knowledge after due inquiry, threatened
action or proceeding affecting USSC, USFS or any of their respective
Subsidiaries before any Governmental Authority that could reasonably be expected
to have a Material Adverse Effect with respect to USSC and its Subsidiaries
taken as a whole.

          (f) LIEN SEARCHES. The Funding Agent shall have received a written
search report listing all effective financing statements that name the Seller,
USFS or the Company as debtor or assignor and that are filed in the
jurisdictions in which filings were made pursuant to paragraph (h) below and in
any other jurisdictions that the Funding Agent determines are reasonably
necessary or appropriate, together with copies of such financing statements
(none of which, except for those described in paragraph (h) below shall cover
any Receivables), and tax and judgment lien searches showing no such liens that
are not permitted by the Transaction Documents

          (g) UCC CERTIFICATE. The Funding Agent shall have received from each
of the Seller, USFS and the Company a UCC Certificate, completed in a manner
satisfactory to the Funding Agent, duly executed by a Responsible Officer of the
Seller or the Company, as the case may be, and dated the Effective Date.

          (h) FILINGS, REGISTRATIONS AND RECORDINGS. Any documents (including,
without limitation, financing statements) required to be filed in order (i) to
perfect the sale of the Receivables by the Seller to USFS and by USFS to the
Company pursuant to the applicable Receivables Sale Agreement, (ii) to perfect
the sale of Receivables by USSC to the Company under the Original Agreement (as
defined in the Amended and Restated Receivables Sale Agreement) and (iii) to
create, in favor of the Trustee, a perfected ownership/security interest in the
Trust Assets under the Agreement with respect to which an ownership/security
interest

                                       63


may be perfected by a filing under the UCC or other comparable statute, shall,
in each case, have been properly prepared and executed for immediate filing in
each office in each jurisdiction listed in the Agreement or the applicable
Receivables Sale Agreement, as the case may be, and such filings are the only
filings required in order to perfect the sale of the Receivables to USFS or the
Company, as the case may be, under the applicable Receivables Sale Agreement or
Original Agreement (as defined in the Amended and Restated Receivables Sale
Agreement), as appropriate, or to the Trust, under the Agreement, as the case
may be, in the jurisdictions listed therein. The Funding Agent shall have
received evidence reasonably satisfactory to it of each such filing,
registration or recordation and reasonably satisfactory evidence of the payment
of any necessary fee, tax or expense relating thereto.

          (i) LEGAL OPINIONS. The Funding Agent shall have received, with a
counterpart for the Initial Purchaser and the Trustee, opinions of counsel to
the Company and the Servicer, dated the Issuance Date, as to corporate, federal
tax (tax status of the VFC Certificates as debt), perfection and priority of
security and/or ownership interests and other matters in form and substance
reasonably acceptable to the Funding Agent and their counsel. On the Effective
Date, the Funding Agent shall have received copies of, and reliance letters
upon, all other opinions of counsel to the Company and the Servicer delivered to
the certificateholders of any other Series of the Trust issued on the Effective
Date.

          (j) FEES. The Funding Agent shall have received payment of all fees
and other amounts due and payable to it, the Initial Purchaser or the APA Banks
on or before the Effective Date.

          (k) MATERIAL ADVERSE CHANGE. No material adverse change shall have
occurred with respect to the business, operations, property or condition
(financial or otherwise) of USSC and its Subsidiaries taken as a whole since
December 31, 1998.

                                    ARTICLE X

                                THE FUNDING AGENT

          SECTION 10.1. APPOINTMENT. Each Purchaser and APA Bank hereby
irrevocably designates and appoints the Funding Agent as the agent of such
Purchaser and APA Bank, respectively, under this Supplement and each such
Purchaser and APA Bank irrevocably authorizes the Funding Agent, in such
capacity,

                                       64


to take such action on its behalf under the provisions of this Supplement and to
exercise such powers and perform such duties as are expressly delegated to the
Funding Agent by the terms of this Supplement, together with such other powers
as are reasonably incidental thereto. In its capacity as agent of each Purchaser
and APA Bank, the Funding Agent shall act with the same due care as it does with
respect to its own investments. Subject to the foregoing sentence or any
provision to the contrary elsewhere in this Supplement, the Funding Agent shall
not have any duties or responsibilities except those expressly set forth herein,
or any fiduciary relationship with any Purchaser or APA Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Supplement or otherwise exist against the Funding Agent.

          SECTION 10.2. DELEGATION OF DUTIES. The Funding Agent may execute any
of its duties under this Supplement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel (who may be counsel for the Company
or the Servicer), independent public accountants and other experts selected by
it concerning all matters pertaining to such duties. The Funding Agent shall not
be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

          SECTION 10.3. EXCULPATORY PROVISIONS. Neither the Funding Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with the Agreement or this
Supplement (x) with the consent or at the request of the Majority Purchasers or
(y) in the absence of its own gross negligence or willful misconduct or (ii)
responsible in any manner to any of the Purchasers for any recitals, statements,
representations or warranties made by the Company or any officer thereof
contained in this Supplement or any other Transaction Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Funding Agent under or in connection with, this Supplement or
any other Transaction Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Supplement or any other
Transaction Document or for any failure of the Company to perform its
obligations hereunder or thereunder. The Funding Agent shall not be under any
obligation to any Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Supplement or any other Transaction Document, or to inspect the properties,
books or records of the Company.

                                       65


          SECTION 10.4. RELIANCE BY FUNDING AGENT. The Funding Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Certificate,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Company or the Servicer),
independent accountants and other experts selected by the Funding Agent and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts. The
Funding Agent may deem and treat the payee of any Certificate as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Funding Agent. The Funding Agent
shall be fully justified in failing or refusing to take any action under this
Supplement or any other Transaction Document unless it shall first receive such
advice or concurrence of the Majority Purchasers as it deems appropriate or it
shall first be indemnified to its satisfaction by the Purchasers against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Funding Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Supplement
and the other Transaction Documents in accordance with a request of the Majority
Purchasers, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Purchasers.

          SECTION 10.5. NOTICE OF SERVICER DEFAULT OR EARLY AMORTIZATION EVENT
OR CLOSE UP POTENTIAL EARLY AMORTIZATION EVENT. The Funding Agent shall not be
deemed to have knowledge or notice of the occurrence of any Servicer Default
with respect to the Servicer or any Early Amortization Event or Potential Early
Amortization Event hereunder unless the Funding Agent has received notice from a
Purchaser, the Company or the Servicer referring to the Agreement or this
Supplement, describing such Servicer Default or Early Amortization Event or
Potential Early Amortization Event and stating that such notice is a "notice of
a Servicer Default with respect to the Servicer" or a "notice of an Early
Amortization Event or Potential Early Amortization Event", as the case may be.
In the event that the Funding Agent receives such a notice, the Funding Agent
shall give notice thereof to the Purchasers, the Trustee, the Company and the
Servicer. The Funding Agent shall take such action with respect to such Servicer
Default or Early Amortization Event or Potential Early Amortization Event as
shall be reasonably directed by the Majority Purchasers, PROVIDED that unless
and until the Funding Agent shall have received such directions, the Funding
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Servicer Default or

                                       66


Early Amortization Event or Potential Early Amortization Event as it shall deem
advisable in the best interests of the Purchasers.

          SECTION 10.6. NON-RELIANCE ON THE FUNDING AGENT AND OTHER PURCHASERS.
Each Purchaser expressly acknowledges that neither the Funding Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Funding
Agent hereinafter taken, including any review of the affairs of the Company,
shall be deemed to constitute any representation or warranty by the Funding
Agent to any Purchaser. Each Purchaser represents to the Funding Agent that it
has, independently and without reliance upon the Funding Agent or any other
Purchaser, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and made its own decision to enter into this Supplement. Each Purchaser
also represents that it will, independently and without reliance upon the
Funding Agent or any other Purchaser, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Supplement and the other Transaction Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Company. Except for notices, reports and other documents expressly required to
be furnished to the Purchasers by the Funding Agent hereunder, the Funding Agent
shall have no duty or responsibility to provide any Purchaser with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Company which may
come into the possession of the Funding Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.

          SECTION 10.7. INDEMNIFICATION. The Purchasers agree to indemnify the
Funding Agent in its capacity as such (to the extent not reimbursed by the
Company and the Servicer and without limiting the obligation of the Company and
the Servicer to do so), ratably according to their respective Series 1998-1
Purchaser Invested Amounts on the date on which indemnification is sought, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time be imposed on, incurred by or asserted against
the Funding Agent in any way relating to or arising out of the Commitments, this
Supplement, any of the other Transaction Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action

                                       67


taken or omitted by the Funding Agent under or in connection with any of the
foregoing; PROVIDED that no Purchaser shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Funding Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of all amounts payable hereunder.

          SECTION 10.8. THE FUNDING AGENT IN ITS INDIVIDUAL CAPACITY. The
Funding Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Company, the Servicer or any
of their Affiliates as though the Funding Agent were not the Funding Agent
hereunder. With respect to any VFC Certificate held by the Funding Agent, the
Funding Agent shall have the same rights and powers under this Supplement and
the other Transaction Documents as any Purchaser and may exercise the same as
though it were not the Funding Agent, and the terms "APA Bank" and "Purchaser"
shall include the Funding Agent in its individual capacity.

          SECTION 10.9. SUCCESSOR FUNDING AGENT. The Funding Agent may resign as
Funding Agent upon 10 days' written notice to the Purchasers (with a copy to the
Company). If the Funding Agent shall resign as Funding Agent under this
Supplement, then the Majority Purchasers shall appoint from among the Purchasers
a successor administrative agent for the Purchasers, which successor
administrative agent shall be approved by the Company and the Servicer (which
approval shall not be unreasonably withheld), whereupon such successor
administrative agent shall succeed to the rights, powers and duties of the
Funding Agent, and the term "Funding Agent" shall mean such successor
administrative agent effective upon such appointment and approval, and the
former Funding Agent's rights, powers and duties as Funding Agent shall be
terminated, without any other or further act or deed on the part of such former
Funding Agent or any of the parties to this Supplement. After any retiring
Funding Agent's resignation as Funding Agent, the provisions of this Article 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Funding Agent under this Supplement.

                                   ARTICLE XI

                                  MISCELLANEOUS

          SECTION 11.1. RATIFICATION OF AGREEMENT. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the

                                       68


Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.

          SECTION 11.2. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

          SECTION 11.3. FURTHER ASSURANCES. Each of the Company, the Servicer
and the Trustee agrees, from time to time, to do and perform any and all acts
and to execute any and all further instruments required or reasonably requested
by the Funding Agent or the Majority Purchasers more fully to effect the
purposes of this Supplement and the sale of the VFC Certificates hereunder,
including, without limitation, in the case of the Company and the Servicer, the
execution of any financing or registration statements or similar documents or
notices or continuation statements relating to the Receivables and the other
Trust Assets for filing or registration under the provisions of the UCC or
similar legislation of any applicable jurisdiction.

          SECTION 11.4. PAYMENTS. To the extent proper payment instructions are
provided, each payment to be made hereunder shall be made on the required
payment date in lawful money of the United States and in immediately available
funds, if to the Purchasers, at the office of the Funding Agent set forth in
Section 11.9. Except as provided in Section 2.6(e), on each Distribution Date,
the Funding Agent shall remit in like funds to each Purchaser its applicable PRO
RATA share (based on each such Purchaser's Series 1998-1 Purchaser Invested
Amount) of each such payment received by the Funding Agent for the account of
the Purchasers.

          SECTION 11.5. COSTS AND EXPENSES. The Company agrees to pay all
reasonable out-of-pocket costs and expenses of the Funding Agent (including,
without limitation, reasonable fees and disbursements of one counsel to the
Funding Agent) in connection with (i) the preparation, execution and delivery of
this Supplement, the Agreement and the other Transaction Documents and
amendments or waivers of any such documents and (ii) the enforcement by the
Funding Agent of the obligations and liabilities of the Company and the Servicer
under the Agreement, this Supplement, the other Transaction Documents or any
related document; PROVIDED that any payments made by the Company pursuant to
this Section shall be made solely from funds available to the Company which are
not otherwise needed to be applied to the payment of any amounts (other than
amounts payable to the

                                       69


Company) pursuant to any Pooling and Servicing Agreements, shall be non-recourse
other than with respect to proceeds in excess of the proceeds to make such
payment, and shall not constitute a claim against the Company to the extent that
insufficient proceeds exist to make such payment.

          SECTION 11.6. NO WAIVER, CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Trustee, the Funding Agent or any
Purchaser, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.

          SECTION 11.7. AMENDMENTS. (a) Subject to Section (c) of this Section
11.7, this Supplement may be amended in writing from time to time by the
Servicer, the Company and the Trustee, with the consent of the Funding Agent but
without the consent of any holder of any outstanding VFC Certificate, to cure
any ambiguity, to correct or supplement any provisions herein which may be
inconsistent with any other provisions herein or to add any other provisions to
or change in any manner or eliminate any of the provisions with respect to
matters or questions raised under this Supplement which shall not be
inconsistent with the provisions of any Pooling and Servicing Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Officer's
Certificate or, to the extent in the reasonable view of the Company, a question
of law exists, an Opinion of Counsel delivered to the Trustee, adversely affect
in any material respect the interests of the VFC Certificateholders, including
without limitation the tax status of the VFC Certificates or of the Trust, or
the APA Banks. The Trustee may, but shall not be obligated to, enter into any
such amendment pursuant to this paragraph or paragraph (b) below which affects
the Trustee's rights, duties or immunities under any Pooling and Servicing
Agreement or otherwise.

          (b) Subject to Section (c) of this Section 11.7, this Supplement may
also be amended in writing from time to time by the Servicer, the Company and
the Trustee with the consent of the Majority Purchasers for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Supplement or of modifying in any manner the rights of the
VFC Certificateholders (including, without limitation, the acceleration of the
payment of sums payable to or for the account of the Purchasers under any
provision of this Supplement); PROVIDED, HOWEVER, that no such amendment shall,
unless signed or

                                       70


consented to in writing by all Purchasers and each APA Bank, (i) extend the time
for payment, or reduce the amount, of any sum payable to or for the account of
any Purchaser under any provision of this Supplement or extend the Series 1998-1
Termination Date, (ii) subject any Purchaser to any additional obligation
(including, without limitation, any change in the determination of any amount
payable by any Purchaser), (iii) change the Aggregate Commitment Amount, the
amount of any interest or fees or the percentage of Purchasers which shall be
required for any action under this Section or any other provision of this
Supplement or (iv) change the tax characteristics of the VFC Certificates or of
the Trust.

          (c) Any amendment hereof can be effected without the Funding Agent's
being party thereto; PROVIDED, HOWEVER, that no such amendment, modification or
waiver of this Supplement that affects rights or duties of the Funding Agent
shall be effective unless the Funding Agent shall have given its prior written
consent thereto.

          (d) No amendment hereof shall be effective until the Rating Agency
Condition is satisfied with respect thereto.

          SECTION 11.8. SEVERABILITY. If any provision hereof is void or
unenforceable in any jurisdiction, such voidness or unenforceability shall not
affect the validity or enforceability of (i) such provision in any other
jurisdiction or (ii) any other provision hereof in such or any other
jurisdiction.

          SECTION 11.9. NOTICES. All notices, requests and demands to or upon
any party hereto to be effective shall be given (i) in the case of the Company,
the Servicer and the Trustee, in the manner set forth in Section 10.4 of the
Agreement and (ii) in the case of the Funding Agent, the Rating Agencies, the
Initial Purchaser and each APA Bank, in writing, and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand or three days after being deposited in the mail, postage prepaid, or, in
the case of facsimile notice, when received, (A) in the case of each APA Bank,
at its address set forth on Schedule 1 hereto and (B) addressed as follows in
the case of the Funding Agent, the Rating Agencies and the Initial Purchaser; or
to such other address as may be hereafter notified by the respective parties
hereto:

                                       71


         Funding Agent:             The Chase Manhattan Bank
                                    450 West 33rd Street, 15th Floor
                                    New York, New York 10001
                                    Attention:  Lara Graff
                                    Fax:  212-946-8098

         S&P:                       Standard & Poor's Ratings Service
                                    55 Water Street, 40th Floor
                                    New York, New York  10041
                                    Attention:  Philip Galgano
                                    Fax: 212-438-2647

         Moody's:                   Moody's Investors Service
                                    99 Church Street
                                    New York, New York 10007
                                    Attention:  Brigitte Posch
                                    Fax: 212-553-0881

         Initial Purchaser:         Park Avenue Receivables Corporation
                                    c/o Global Securitization Services, LLC
                                    114 West 47th Street, Suite 1715
                                    New York, New York  10036
                                    Attention:  Andy Stidd
                                    Fax: 212-302-8767

                                    WITH A COPY TO:

                                    Chase Securities Inc.
                                    270 Park Avenue, 7th Floor
                                    New York, New York  10017
                                    Attention:  Tino Luzano
                                    Fax:  212-834-6562

          SECTION 11.10. SUCCESSORS AND ASSIGNS. This Supplement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights under this Supplement without the prior written consent of all of
the Purchasers, the Initial Purchaser may not assign or transfer any of its
rights under this Supplement except as set forth in Section 2.6 and each APA
Bank may not assign or transfer any of its rights under this Supplement except
as set forth in Section 11.11.

                                       72


          SECTION 11.11. SECURITIES LAWS; PARTICIPATIONS; ASSIGNMENTS. (a) Each
Purchaser agrees that its VFC Certificate will be acquired for investment only
and not with a view to any public distribution thereof, and that such Purchaser
will not offer to sell or otherwise dispose of its VFC Certificate (or any
interest therein) in violation of any of the registration requirements of the
Securities Act or any applicable state or other securities laws. Each Purchaser
acknowledges that it has no right to require the Company to register its VFC
Certificate under the Securities Act or any other securities law. Each Purchaser
hereby confirms and agrees that in connection with any transfer by it of an
interest in the VFC Certificate, such Purchaser has not engaged and will not
engage in a general solicitation or general advertising including
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio or television, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.

          (b) Any APA Bank may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more financial
institutions or other entities ("PARTICIPANTS") participations in its VFC
Certificate and its rights hereunder pursuant to documentation in form and
substance satisfactory to such APA Bank and the Participant; PROVIDED, HOWEVER,
that (i) in the event of any such sale by an APA Bank to a Participant, (A) such
APA Bank's obligations under this Supplement shall remain unchanged, (B) such
APA Bank shall remain solely responsible for the performance thereof and (C) the
Company shall continue to deal solely and directly with such APA Bank in
connection with its rights and obligations under the Pooling and Servicing
Agreements, (ii) no APA Bank shall sell any participating interest under which
the Participant shall have rights to approve any amendment to, or any consent or
waiver with respect to, any Pooling and Servicing Agreement, except to the
extent that the approval of such amendment, consent or waiver otherwise would
require the unanimous consent of all APA Banks hereunder, (iii) no sale by an
APA Bank to a Participant shall be given effect if such sale would result in
there being more than 20 Targeted Holders with respect to the VFC Certificates
or is not otherwise permitted under Section 5.3(e) of the Agreement, and (iv)
each Participant shall, prior to becoming a Participant, execute and deliver to
the Funding Agent an Assignment/Participation Certification. The Company agrees
that each APA Bank is entitled, in its own name, to enforce for the benefit of,
or as agent for, any Participant any and all rights, claims and interest of such
Participant in respect of the Trust and the Company's obligations under this
Supplement. A Participant shall have the right to receive Article VII Costs but
only to the extent that

                                       73


the related selling APA Bank would have had such right absent the sale of the
related participation.

          (c) Any APA Bank may, upon the satisfaction of all applicable
requirements under Section 5.3 of the Agreement, in the ordinary course of its
business and in accordance with applicable law, at any time sell all or any part
of its rights and obligations under this Supplement and the VFC Certificate to
(i) its Affiliates and to any other APA Bank and (ii) upon prior written notice
to the Funding Agent, one or more banks or other entities (an "ACQUIRING APA
BANK"), in each case pursuant to a commitment transfer supplement, substantially
in the form of Exhibit G (the "COMMITMENT TRANSFER SUPPLEMENT"), executed by
such Acquiring APA Bank, such assigning APA Bank and the Funding Agent (and, in
the case of an Acquiring APA Bank that is not then an existing APA Bank or an
Affiliate thereof, by the Company and the Servicer), and delivered to the
Funding Agent for its acceptance and recording in the Register with notice
delivered to each Rating Agency. Notwithstanding the foregoing, no APA Bank
shall so sell its rights hereunder (other than to its Affiliate or any other APA
Bank) without the prior written consent of the Company, which consent shall not
be unreasonably withheld, and no APA Bank shall sell its rights hereunder (w) if
such sale would result in there being more than 20 Targeted Holders with respect
to the VFC Certificates or more than 20 beneficial owners of the VFC
Certificates for the purposes of the 1940 Act or is not otherwise permitted
under Section 5.3(e) of the Agreement, (x) if such Acquiring APA Bank is not an
Eligible Assignee, (y) unless such APA Bank reasonably believes that such
Acquiring APA Bank is a "qualified institutional buyer" within the meaning of
Rule 144A promulgated under the Securities Act and (z) unless, prior to such
sale, the purchaser of such rights shall have executed and delivered to the
Funding Agent and the Transfer Agent and Registrar an Assignment/Participation
Certification. Upon such execution, delivery, acceptance and recording, (A) the
Company shall sign, on behalf of the Trust, and shall direct the Trustee in
writing to duly authenticate, and the Trustee, upon receiving such direction,
shall so authenticate, a new VFC Certificate in the name and the denomination
determined pursuant to the related Commitment Transfer Supplement and set forth
in such written direction and shall deliver such VFC Certificate to the
Acquiring APA Bank in accordance with such written direction, and (B) from and
after the Transfer Issuance Date determined pursuant to such Commitment Transfer
Supplement, (1) the Acquiring APA Bank thereunder shall be a party hereto and,
to the extent provided in such Commitment Transfer Supplement, have the rights
and obligations of an APA Bank hereunder with a Commitment as set forth therein
and (2) the transferor APA Bank thereunder shall, to the extent provided in such
Commitment Transfer Supplement, be released from its obligations under this
Supplement. Such

                                       74


Commitment Transfer Supplement shall be deemed to amend this Supplement
(including the Schedules attached hereto) to the extent, and only to the extent,
necessary to reflect the addition of such Acquiring APA Bank as an "APA Bank"
and the resulting adjustment of Pro Rata Shares arising from the purchase by
such Acquiring APA Bank of all or a portion of the rights and obligations of
such transferor APA Bank under this Supplement and the VFC Certificates.

          (d) The Funding Agent shall maintain at its address referred to in
Section 11.9 a copy of each Commitment Transfer Supplement delivered to it.

          (e) Upon its receipt of a Commitment Transfer Supplement executed by a
transferor APA Bank and an Acquiring APA Bank (and, in the case of a Transferee
that is not then an existing APA Bank or an Affiliate thereof, by the Company
and the Servicer) and a processing fee of $3,500, the Funding Agent shall (i)
promptly accept such Commitment Transfer Supplement and (ii) on the Transfer
Issuance Date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Initial Purchaser, the APA Banks, the Servicer and the Company.

          (f) The Company and the Servicer each authorizes each APA Bank to
disclose to any Participant or Acquiring APA Bank (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such APA Bank's
possession concerning the Company, the Servicer or the Receivables which has
been delivered to such APA Bank by the Company or the Servicer pursuant to this
Supplement or which has been delivered to such APA Bank by or on behalf of the
Company in connection with such APA Bank's credit evaluation of the Company, the
Servicer, the Trust and the Trust Assets prior to becoming a party to this
Supplement; PROVIDED, HOWEVER, the Transferee or prospective Transferee shall
have agreed to be bound by the terms and conditions of Section 11.15.

          (g) Notwithstanding any other provisions herein, no transfer or
assignment of any interests or obligations of any APA Bank hereunder or any
grant of participations therein shall be permitted if such transfer, assignment
or grant would result in a prohibited transaction under Section 4975 of the
Internal Revenue Code or Section 406 of ERISA or cause the Trust Assets to be
regarded as plan assets pursuant to 29 C.F.R. ss. 2510.3-101.

          SECTION 11.12. ADJUSTMENTS; SET-OFF. (a) If any Purchaser (a
"BENEFITTED PURCHASER") shall at any time receive in respect of its Series
1998-1 Invested Amount any distribution of principal, interest, Commitment Fees
or other

                                       75


fees, or any interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off or otherwise) in a greater
proportion than any such distribution received by any other Purchaser, if any,
in respect of such other Purchaser's Series 1998-1 Invested Amount, or interest
thereon, such Benefitted Purchaser shall purchase for cash from the other
Purchasers such portion of each such other Purchaser's interest in the VFC
Certificates, or shall provide such other Purchasers with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Purchaser to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Purchasers; PROVIDED, HOWEVER, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Purchaser, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. The Company agrees that each Purchaser so purchasing a portion of the
VFC Certificateholders' Interest may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Purchaser were the direct holder of such portion.

          (b) In addition to any rights and remedies of the Purchasers provided
by law, each Purchaser shall have the right, without prior notice to the
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Company hereunder or under the VFC Certificates to set-off and appropriate and
apply against any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Purchaser to
or for the credit or the account of the Company. Each Purchaser agrees promptly
to notify the Company and the Funding Agent after any such set-off and
application made by such Purchaser, PROVIDED that the failure to give such
notice shall not affect the validity of such set-off and application.

          SECTION 11.13. COUNTERPARTS. This Supplement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.

          SECTION 11.14. NO BANKRUPTCY PETITION. (a) The Funding Agent and each
Purchaser hereby covenants and agrees that, prior to the date which is one year
and one day after the later of (i) the last day of the Series 1998-1
Amortization Period and (ii) the last day of the amortization period of any
other Outstanding

                                       76


Series, it will not institute against, or join any other Person in instituting
against, the Company any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other similar proceedings under any federal or state
bankruptcy or similar law.

          (b) The Company, the Servicer, the Trustee, the Funding Agent and each
APA Bank hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all outstanding Commercial Paper, it
will not institute against, or join any other Person in instituting against, the
Initial Purchaser any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other similar proceedings under any federal or state
bankruptcy or similar law. The provisions of this Section 11.14(b) shall survive
termination of this Agreement.

          SECTION 11.15. CONFIDENTIALITY. Each APA Bank agrees to keep
information obtained by it pursuant hereto and the other Transaction Documents
identified as confidential in writing at the time of delivery confidential in
accordance with such APA Bank's customary practices and agrees that it will only
use such information in connection with the transactions contemplated by the
Pooling and Servicing Agreements and not disclose any of such information other
than (a) to such APA Bank's employees, representatives, directors, attorneys,
auditors, agents, professional advisors, trustees or affiliates who are advised
of the confidential nature of such information, (b) to the extent such
information that is in the public domain at the time of disclosure, (c) to the
extent disclosure is required by law (including applicable securities laws),
regulation, subpoena or judicial order or process (PROVIDED that notice of such
requirement or order shall be promptly furnished to the Company or the Servicer
unless such notice is legally prohibited) or requested or required by bank,
securities, insurance or investment company regulations or auditors or any
administrative body or commission to whose jurisdiction such APA Bank may be
subject, (d) to any rating agency to the extent required in connection with any
rating to be assigned to such APA Bank, (e) to Transferees or prospective
Transferees who agree to be bound by the provisions of this Section 11.15, or
(f) with the Company's or the Servicer's prior written consent. The agreements
in this Section 11.15 shall survive the termination of this Supplement and the
Agreement and the payment of all amounts payable hereunder and thereunder.

          SECTION 11.16. LIMITED RECOURSE. Notwithstanding anything to the
contrary contained herein, the obligations of the Initial Purchaser under this
Agreement are solely the corporate obligations of the Initial Purchaser and, in
the case of obligations of the Initial Purchaser other than Commercial Paper,
shall be

                                       77


payable at such time as funds are received by or are available to the Initial
Purchaser in excess of funds necessary to pay in full all outstanding Commercial
Paper and, to the extent funds are not available to pay such obligations, the
claims relating thereto shall not constitute a claim against the Initial
Purchaser but shall continue to accrue. Each party hereto agrees that the
payment of any claim (as defined in Section 101 of Title 11, United States Code
(Bankruptcy)) of any such party shall be subordinated to the payment in full of
all Commercial Paper.

          No recourse under any obligation, covenant or agreement of the Initial
Purchaser contained in this Agreement shall be had against any incorporator,
stockholder, officer, director, employee or agent of the Initial Purchaser, the
Initial Purchaser's administrative agent, the Funding Agent, Global
Securitization Services, LLC or any of their Affiliates (solely by virtue of
such capacity) by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the Initial
Purchaser individually, and that no personal liability whatever shall attach to
or be incurred by any incorporator, stockholder, officer, director, member,
employee or agent of the Initial Purchaser, the Initial Purchaser's
administrative agent, the Funding Agent, Global Securitization Services, LLC or
any of their Affiliates (solely by virtue of such capacity) or any of them under
or by reason of any of the obligations, covenants or agreements of the Initial
Purchaser contained in this Agreement, or implied therefrom, and that any and
all personal liability for breaches by the Initial Purchaser of any of such
obligations, covenants or agreements, either at common law or at equity, or by
statute, rule or regulation, of every such incorporator, stockholder, officer,
director, employee or agent is hereby expressly waived as a condition of and in
consideration for the execution of this Agreement; PROVIDED that the foregoing
shall not relieve any such Person from any liability it might otherwise have as
a result of fraudulent actions taken or omissions made by them. The provisions
of this Section 11.16 shall survive termination of this Agreement.

          SECTION 11.17. CONSENTS OF INVESTOR CERTIFICATEHOLDERS. Each of the
Investor Certificateholders party hereto consents to the execution and delivery
of the Agreement and the Servicing Agreement.

                                       78


                                   ARTICLE XII

                               FINAL DISTRIBUTIONS

          SECTION 12.1. CERTAIN DISTRIBUTIONS. (a) Not later than 2:00 p.m., New
York City time, on the Distribution Date following the date on which the
proceeds from the disposition of the Receivables pursuant to Section 7.2(b) of
the Agreement are deposited into the Series 1998-1 Non-Principal Collection
Sub-subaccount and the Series 1998-1 Principal Collection Sub-subaccount, the
Trustee shall distribute such amounts pursuant to Article III of this
Supplement.

          (b) Notwithstanding anything to the contrary in this Supplement or the
Agreement, any distribution made pursuant to this Section shall be deemed to be
a final distribution pursuant to Section 9.3 of the Agreement with respect to
the VFC Certificates.

                                       79


          IN WITNESS WHEREOF, the Company, the Servicer, the Trustee, the
Funding Agent, the Initial Purchaser and the APA Banks have caused this Second
Amended and Restated Series 1998-1 Supplement to be duly executed by their
respective officers as of the day and year first above written.

                                                 USS RECEIVABLES COMPANY, LTD.

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                 UNITED STATIONERS  FINANCIAL
                                                 SERVICES LLC, as Servicer

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                 THE CHASE MANHATTAN BANK, not
                                                 in its individual capacity but
                                                 solely as Trustee and as
                                                 Securities Intermediary

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                       80


                                                 THE CHASE MANHATTAN BANK,
                                                  as Funding Agent

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                 PARK AVENUE RECEIVABLES
                                                  CORPORATION, as Initial
                                                  Purchaser

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                 THE CHASE MANHATTAN BANK,
                                                  as an APA Bank

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                                 THE NORTHERN TRUST COMPANY,
                                                  as an APA Bank

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                       81


                                                 THE BANK OF NEW YORK, as
                                                  an APA Bank

                                                 By
                                                   -----------------------------
                                                   Name:
                                                   Title:

                                       82


Consented to by:

UNITED STATIONERS SUPPLY CO.

By
  --------------------------
  Name:
  Title:

                                       83


                                                                      SCHEDULE 1

                               LIST OF COMMITMENTS



NAME OF APA BANK                            COMMITMENT

                                         
The Chase Manhattan Bank                    $51,600,000

The Northern Trust Company                  $15,000,000

The Bank of New York                        $15,000,000
                                            -----------

Total Commitment                            $81,600,000


                                       84

EX-10.6

                                                                  EXHIBIT 10.6


                          USS RECEIVABLES COMPANY, LTD.

                    UNITED STATIONERS FINANCIAL SERVICES LLC,
                                  as Servicer,

                         PNC BANK, NATIONAL ASSOCIATION,
                                as Administrator,

                       MARKET STREET FUNDING CORPORATION,
                             as Committed Purchaser,

                                       and

                            THE CHASE MANHATTAN BANK,
                    as Trustee and as Securities Intermediary

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

                              AMENDED AND RESTATED
                            SERIES 2000-2 SUPPLEMENT

                             Dated as of May 1, 2001

                                       to

                              AMENDED AND RESTATED
                                POOLING AGREEMENT

                             Dated as of May 1, 2001

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

                   UNITED STATIONERS RECEIVABLES MASTER TRUST

================================================================================



                                         TABLE OF CONTENTS


                                                                                                          PAGE
                                                                                                        
ARTICLE I      DEFINITIONS................................................................................. -1-

ARTICLE II     DESIGNATION OF CERTIFICATES; PURCHASE AND SALE OF
               THE VFC CERTIFICATES........................................................................-20-
       SECTION 2.1.             Designation................................................................-20-
       SECTION 2.2              The Series 2000-2 Interests................................................-20-
       SECTION 2.3.             Purchases of Interests in the VFC Certificates.............................-21-
       SECTION 2.4.             Delivery...................................................................-21-
       SECTION 2.5.             Procedure for Initial Issuance and for Increasing the Series
                                2000-2 Invested Amount.....................................................-21-
       SECTION 2.6.             [Reserved].................................................................-23-
       SECTION 2.7.             Procedure for Decreasing the Series 2000-2 Invested Amount;
                                Optional Termination.......................................................-23-
       SECTION 2.9.             Interest, Fees.............................................................-24-
       SECTION 2.10.            Indemnification by the Company and the Servicer............................-25-

ARTICLE III         ARTICLE III OF THE AGREEMENT...........................................................-26-
       SECTION 3A.2             ...........................................................................-27-
       SECTION 3A.3.            Allocations................................................................-28-
       SECTION 3A.4.            Determination of Series 2000-2 Monthly Interest............................-29-
       SECTION 3A.5.            Determination of Series 2000-2 Monthly Principal...........................-30-
       SECTION 3A.6.            Applications...............................................................-31-

ARTICLE IV DISTRIBUTIONS AND REPORTS.......................................................................-33-
       SECTION 4A.1.            Distributions..............................................................-33-
       SECTION 4A.2.            Reserved...................................................................-33-
       SECTION 4A.3.            Statements and Notices.....................................................-33-

ARTICLE V           ADDITIONAL EARLY AMORTIZATION EVENTS...................................................-34-
       SECTION 5.1.             Additional Early Amortization Events.......................................-34-

ARTICLE VI          SERVICING FEE .........................................................................-37-
       SECTION 6.1.             Servicing Compensation.....................................................-37-

ARTICLE VII CHANGE IN CIRCUMSTANCES........................................................................-38-
       SECTION 7.1.             Illegality ................................................................-38-
       SECTION 7.2.             Increased Costs ...........................................................-38-
       SECTION 7.3.             Taxes . ...................................................................-39-
       SECTION 7.4.             Break Funding Payments . ..................................................-41-


                                       -i-


                                                                                                        
       SECTION 7.5.             Mitigation Obligations.....................................................-41-

ARTICLE VIII REPRESENTATIONS AND WARRANTIES, COVENANTS.....................................................-42-
       SECTION 8.1.             Representations and Warranties of the Company and the Service..............-42-
       SECTION 8.2.             Covenants of the Company and the Servicer..................................-42-
       SECTION 8.3.             Covenants of the Servicer..................................................-43-
       SECTION 8.4.             Obligations Unaffected.....................................................-43-

ARTICLE IX          CONDITIONS PRECEDENT ..................................................................-44-
       SECTION 9.1.             Conditions Precedent to Effectiveness of Supplement .......................-44-

ARTICLE X           [Reserved] ............................................................................-46-

ARTICLE XI          MISCELLANEOUS . .......................................................................-47-
       SECTION 11.1.            Ratification of Agreement .................................................-47-
       SECTION 11.2.            Governing Law .............................................................-47-
       SECTION 11.3.            Further Assurances ........................................................-48-
       SECTION 11.4.            Payments ..................................................................-48-
       SECTION 11.5.            Costs and Expenses . ......................................................-48-
       SECTION 11.6.            No Waiver, Cumulative Remedies . ..........................................-48-
       SECTION 11.7.            Amendments ................................................................-48-
       SECTION 11.8.            Severability ..............................................................-49-
       SECTION 11.9.            Notices . .................................................................-49-
       SECTION 11.10.           Successors and Assigns ....................................................-50-
       SECTION 11.11.           Securities Laws; Assignments . ............................................-51-
       SECTION 11.12.           [Reserved] ................................................................-52-
       SECTION 11.13.           Counterparts . ............................................................-52-
       SECTION 11.14.           No Bankruptcy Petition ....................................................-52-

ARTICLE XII         FINAL DISTRIBUTIONS . .................................................................-53-
       SECTION 12.1.            Certain Distributions .....................................................-53-



                                       -ii-


EXHIBITS

Exhibit A            VFC Certificate, Series 2000-2
Exhibit B            Form of [Assignment] [Participation] Certification
Exhibit C            Reserved.
Exhibit D            Form of UCC Certificate of United Stationers Supply Co.
Exhibit E            Form of Notice of Increase
Exhibit F            Form of Monthly Settlement Statement
Exhibit G            Form of Commitment Transfer Supplement

SCHEDULES

Schedule 1           Commitments

                                       -iii-


          AMENDED AND RESTATED SERIES 2002 SUPPLEMENT, dated as of May 1, 2001
(as amended, supplemented or otherwise modified from time to time, this
("SUPPLEMENT"), among USS Receivables Company, Ltd., a Cayman Islands limited
liability company (the "COMPANY"), United Stationers Financial Services LLC
("USFS"), as servicer (except where otherwise noted) (in such capacity, the
"SERVICER"), Market Street Funding Corporation, a Delaware corporation
(including its successors and assigns, the "COMMITTED PURCHASER"), PNC Bank,
National Association, a national banking association ("PNC"), in its capacity as
administrator (the "ADMINISTRATOR"), and The Chase Manhattan Bank, in its
capacity as Trustee (the "TRUSTEE") and as Securities Intermediary (the
"SECURITIES INTERMEDIARY") under the Agreement (as defined below).

                              W I T N E S S E T H:

          WHEREAS, the Company, the Servicer and the Trustee have entered into
an Amended and Restated Pooling Agreement, dated as of May 1, 2001 (as amended,
supplemented or otherwise modified from time to time, the "AGREEMENT";
capitalized terms used herein and not otherwise defined are used as defined in
the Agreement);

          WHEREAS, the Company, USSC, as the initial Servicer, the Committed
Purchaser, the Administrator and the Trustee and Securities Intermediary are
parties to that certain Series 2000-2 Supplement, dated as of March 31, 2000 (as
amended or otherwise modified prior to the date hereof, the "ORIGINAL
SUPPLEMENT");

          WHEREAS, the parties hereto desire to amend and restate the Original
Supplement in its entirety; and

          WHEREAS, the Committed Purchaser and the Administrator desire to
evidence their consent to the execution and delivery of the Agreement, the
Servicing Agreement, the USFS Receivables Sale Agreement and the Amended and
Restated Receivables Sale Agreement and the other Transaction Documents being
executed concurrently herewith, which consent shall be evidenced by their
execution of this Supplement.

          NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.1. DEFINITIONS. The following words and phrases shall have
the following meanings with respect to Series 2000-2 and the definitions of such
terms are applicable



to the singular as well as the plural form of such terms and to the masculine as
well as the feminine and neuter genders of such terms:

               "ACCRUAL PERIOD" shall mean the period from and including a
          Distribution Date, or, in the case of the initial Accrual Period, the
          Issuance Date, to but excluding the succeeding Distribution Date.

               "ACCRUED EXPENSE AMOUNT" shall mean, for each Business Day during
          an Accrual Period, the sum of (i) the Daily Interest Deposit for such
          Business Day, (ii) the Daily Commitment Fee Deposit for such Business
          Day, (iii) the Daily Utilization Fee Deposit for such Business Day,
          (iv) the Daily Servicing Fee Deposit for such Business Day and (v) all
          Program Costs which have accrued since the preceding Business Day.

               "ADDITIONAL INTEREST" shall have the meaning assigned in
          subsection 3A.4(c).

               "ADMINISTRATOR" shall have the meaning specified in the
          introductory paragraph hereto.

               "AFFECTED PART" means any of the Committed Purchaser, any
          Liquidity Purchaser, the Administrator, any other Program Support
          Provider and their respective Affiliates.

               "AGED RECEIVABLES RATIO" shall mean, as of the last day of each
          Settlement Period, the percentage equivalent of a fraction, the
          numerator of which shall be the sum of (a) the aggregate unpaid
          balance of Receivables originated by the Sellers that were 60 to 89
          days past due and (b) the aggregate amount of Receivables of such
          Sellers that were charged off as uncollectible prior to the day that
          is 60 days after its original due date during such Settlement Period,
          and the denominator of which shall be the aggregate Principal Amount
          of Receivables originated by the Sellers during the third prior
          Settlement Period (including the Settlement Period ended on such day).

               "AGENT" shall mean, for purposes of this Supplement and the
          Agreement, the Administrator.

               "AGGREGATE COMMITMENT AMOUNT" for purposes of any calculation
          under any Transaction Document referring to the "Commitment" amount
          under this Supplement, shall mean the Purchase Limit.

               "ALLOCATED RECEIVABLES AMOUNT" shall mean the Series 2000-2
          Allocated Receivables Amount.

               "ALTERNATE RATE" shall mean, for any Rate Period for any Funding
          Tranche, an interest rate PER ANNUM equal to: (a) the Applicable
          Margin PER ANNUM plus the Euro-Rate for such Rate Period, or, in the
          sole discretion of the Administrator (b) the Base Rate for

                                      -2-


          as determined each day in such Rate Period; PROVIDED, HOWEVER, that
          the "Alternate Rate" for any day while an Early Amortization Event
          exists shall be an interest rate equal to 2.00% per annum above the
          Base Rate in effect on such day.

               "APPLICABLE MARGIN " shall mean on any date of determination (i)
          for each Eurodollar Tranche, 1.50% per annum and (ii) for each
          Floating Tranche, 0.25% per annum; PROVIDED, HOWEVER that, after the
          occurrence of (i) the date which is five Business Days prior to the
          Commitment Termination Date or (ii) an Early Amortization Event, the
          Applicable Margin shall mean on any date of determination for each
          Eurodollar Tranche or the Floating Tranche, the applicable rate per
          annum set forth below under the caption "Eurodollar Spread" or
          "Floating Rate Spread," as the case may be, based upon the Pricing
          Leverage Ratio (as defined in, and determined in accordance with, the
          Credit Agreement under the definition of Letter of Credit Fee Rate, as
          in effect on the date hereof) as of the most recent determination
          date:



                            LEVERAGE                                   EURODOLLAR           FLOATING RATE
          CATEGORY          RATIO                                      SPREAD               SPREAD
          --------          --------                                   ----------           -------------
                                                                                   
          Category 1        greater than 4.50 to 1.00                  2.00%                0.75%

          Category 2        greater than 4.00 to 1.00 and less         1.75%                0.50%
                            than or equal to 4.50 to 1.00

          Category 3        greater than 3.50 to 1.00 and less         1.50%                0.25%
                            than or equal to 4.00 to 1.00

          Category 4        greater than 3.00 to 1.00 and less         1.25%                0.00%
                            than or equal to 3.50 to 1.00

          Category 5        less than or equal to 3.00 to 1.00         1.00%                0.00%


               "ASSIGNMENT/PARTICIPATION CERTIFICATION" shall mean an assignment
          or participation certification, as the case may be, in substantially
          the form of Exhibit B hereto.

                                      -3-


               "BASE RATE" shall mean, for any day, the sum of (i) the
          Applicable Margin for a Floating Tranche and (ii) a fluctuating
          interest rate per annum as shall be in effect from time to time, which
          rate shall be at all times equal to the higher of:

                    (a) the rate of interest in effect for such day as publicly
               announced from time to time by PNC in Pittsburgh, Pennsylvania as
               its "prime rate." Such "prime rate" is set by PNC based upon
               various factors, including PNC's costs and desired return,
               general economic conditions and other factors, and is used as a
               reference point for pricing some loans, which may be priced at,
               above or below such announced rate, and

                    (b) 0.50% per annum above the latest Federal Funds Rate.

               "BOARD" shall mean the Board of Governors of the Federal Reserve
          System of the United States.

               "CARRYING COST RESERVE RATIO" shall mean, as of any Settlement
          Report Date and continuing until (but not including) the next
          Settlement Report Date, an amount (expressed as a percentage) equal to
          the quotient of (a) the product of (i) 2.0 times Days Sales
          Outstanding as of such day times (ii) 1.30 times the rate set forth in
          clause (ii) of the definition of Base Rate in effect as of such day
          divided by (b) 365.

               "CHANGE IN LAW" shall mean (a) the adoption of any law, rule or
          regulation after the Issuance Date, (b) any change in law, rule or
          regulation or in the interpretation or application thereof by any
          Governmental Authority after the Issuance Date or (c) compliance by
          any Person with any request, guideline or directive (whether or not
          having the force of law) of any Governmental Authority made or issued
          after the Issuance Date.

               "CLAIM" shall have the meaning assigned in subsection 2.10(a).

               "COMMERCIAL PAPER" shall mean the promissory notes issued or to
          be issued by the Committed Purchaser in the commercial paper market.

               "COMMITMENT EXPIRY DATE" shall mean March 28, 2002 (as may be
          extended for an additional 364 days from time to time in writing by
          the Committed Purchaser and the Administrator (in their sole
          discretion).

               "COMMITMENT FEE" shall have the meaning assigned in subsection
          2.9(b).

               "COMMITMENT FEE RATE" shall have the meaning assigned in the Fee
          Letter.

               "COMMITMENT PERIOD" shall mean the period commencing on the
          Issuance Date and terminating on the Commitment Termination Date.

                                       -4-


               "COMMITMENT TERMINATION DATE" shall mean the earlier to occur of
          (i) the date on which the Purchase Limit has bean reduced to zero
          pursuant to Section 2.8 of this Agreement and (ii) the Commitment
          Expiry Date.

               "COMMITMENT TRANSFER SUPPLEMENT" shall have the meaning assigned
          in subsection 11.11(b).

               "COMPANY" shall have the meaning specified in the introductory
          paragraph hereto.

               "COMPANY INDEMNIFIED PERSON" shall have the meaning assigned in
          subsection 2.10(a).

               "COMMITTED PURCHASER" shall have the meaning specified in the
          introductory paragraph hereto.

               "CP RATE" for any Rate Period for any Funding Tranche means a
          rate calculated in good faith by the Administrator equal to: (a) the
          rate (or if more than one rate, the weighted average of the rates) at
          which Commercial Paper of the Committed Purchaser on each day during
          the related Accrual Period have been outstanding; PROVIDED, that if
          such rate(s) is (are) a discount rate(s), then the CP Rate shall be
          the rate (or if more than one rate, the weighted average of the rates)
          resulting from converting such discount rate(s) to an
          interest-bearing equivalent rate plus (b) the commissions and charges
          charged by such placement agent or commercial paper dealer with
          respect to such Commercial Paper, expressed as a percentage of the
          face amount of such Commercial Paper and converted to an
          interest-bearing equivalent rate per annum. Notwithstanding the
          foregoing, the "CP Rate" for any day while an Early Amortization Event
          exists shall be an interest rate equal to 2% above the Base
          Rate in effect on such day.

               "CP TRANCHE" shall mean a Funding Tranche that accrues interest
          at the CP Rate.

               "CREDIT AGREEMENT" shall mean that certain Third Amended and
          Restated Credit Agreement, dated as of June 29, 2000, among USSC, as
          borrower, United Stationers Inc., as guarantor, The Chase Manhattan
          Bank, as administrative agent, and Chase Securities Inc., as arranger,
          as the same maybe amended, supplemented or otherwise modified from
          time to time.

               "DAILY COMMITMENT FEE DEPOSIT" shall mean, for any Business Day,
          an amount equal to (i) the amount of Daily Commitment Fee Expense for
          each day since the preceding Business Day plus (ii) the aggregate
          amount of all previously accrued Daily Commitment Fee Expense that has
          not yet been deposited in the Series 2000-2 Non-Principal Collection
          Sub-subaccount.

                                       -5-


               "DAILY COMMITMENT FEE EXPENSE" shall mean, (i) during the Series
          2000-2 Revolving Period, for any day in any Accrual Period, the
          product of (A) the excess of 102% of the Purchase Limit over the
          Series 2000-2 Purchaser Invested Amount of the Committed Purchaser on
          such day multiplied by (B) the Commitment Fee Rate divided by 360.

               "DAILY INTEREST DEPOSIT" shall mean, for any Business Day, an
          amount equal to (i) the amount of Daily Interest Expense for each day
          since the preceding Business Day PLUS (ii) the aggregate amount of a
          previously accrued Daily Interest Expense that has not yet been
          deposited in the Series 2000-2 Non-Principal Collection Sub-subaccount
          PLUS (iii) the aggregate amount of all Additional Interest for each
          day since the preceding Business Day.

               "DAILY INTEREST EXPENSE" shall mean for each day in an Accrual
          Period, the sum of: (i) for each CP Tranche outstanding on such day,
          the product of (A) the portion of the Series 2000-2 Funded Amount
          allocated to such Funding Tranche on such day and (B) the "estimated
          CP Rate" (which shall be the CP Rate in effect for the preceding
          Accrual Period (or, in the case of the initial Accrual Period, the CP
          Rate specified by the Administrator by notice to the Servicer on or
          prior to the Closing Date) TIMES 1.5)/360 PLUS (ii) for each Floating
          Tranche outstanding on such day, the product of (A) the portion of the
          Series 2000-2 Funded Amount allocated to such Floating Tranche on such
          day and (B) the Base Rate in effect on such day (or, if such day is
          after the delivery of the calculation of Series 2000-2 Monthly
          Interest to the Servicer for any Accrual Period, the Base Rate in
          effect on the date of such delivery 365 or 366, as applicable, PLUS
          (iii) for each Eurodollar Tranche outstanding on such day, the product
          of (A) the portion of the Series 2000-2 Funded Amount allocable to
          such Eurodollar Tranche on such day and (y) the Euro-Rate in effect
          for such Accrual Period/360.

               "DAILY SERVICING FEE DEPOSIT" shall mean, for any Business Day,
          an amount equal to (i) the amount of Daily Servicing Fee Expense for
          each day since the preceding Business Day PLUS (ii) the aggregate
          amount of all previously accrued Daily Servicing Fee Expense that has
          not yet been deposited in the Series 2000-2 Non-Principal Collection
          Sub-subaccount.

               "DAILY SERVICING FEE EXPENSE" shall mean, for any day in any
          Accrual Period the Series 2000-2 Interests' PRO RATA portion
          (determined in accordance with Section 6.1) of the Servicing Fee
          accruing for such day.

               "DAILY UTILIZATION FEE DEPOSIT" shall mean, for any day in an
          Accrual Period, an amount equal to (i) the amount of Daily Utilization
          Fee Expense for each day since the preceding Business Day PLUS (ii)
          the aggregate amount of all previously accrued Daily Utilization Fee
          Expense that has not yet been deposited in the Series 2000-2
          Non-Principal Collection Sub-subaccount.

                                       -6-


               "DAILY UTILIZATION FEE EXPENSE" shall mean for any day in any
          Accrual Period, the product of (A) the Series 2000-2 Funded Amount on
          such day multiplied by (B) the Utilization Fee Rate divided by 360 and
          (ii) for any day thereafter, zero.

               "DAYS SALES OUTSTANDING" shall mean, as of any Settlement Report
          Date and continuing until (but not including) the next Settlement
          Report Date, the number of days equal to the product of (a) 91 and (b)
          the amount obtained by dividing (i) the aggregate Principal Amount of
          Eligible Receivables by (ii) the aggregate Principal Amount of
          Receivables generated by the Seller for the three Settlement Periods
          immediately preceding such earlier Settlement Report Date.

               "DECREASE" shall have the meaning assigned in subsection 2.7(a).

               "DEFAULT RATIO" shall mean, for any Settlement Period, a ratio
          (expressed as a percentage) equal to the quotient of (a) the sum of
          (i) the aggregate outstanding Principal Amount of all Receivables
          which are unpaid in whole or in part for more than 91 days after their
          respective due dates on the last day of such Settlement Period and
          (ii) the aggregate amount of Disputed Receivables; and (b) the
          aggregate outstanding Principal Amount of all Receivables on such last
          day.

               "DILUTION PERIOD" shall mean, as of any Settlement Report Date
          and continuing until (but not including) the next Settlement Report
          Date, the quotient of (i) the product of (A) the aggregate Principal
          Amount of Receivables that were originated by the Sellers during the
          Settlement Period preceding such earlier Settlement Report Date and
          (B) the quotient of (1) Days Sales Outstanding as of such Settlement
          Report Date and (2) 30 and (ii) the Aggregate Receivables Amount as of
          the last day of the Settlement Period preceding such earlier
          Settlement Report Date.

               "DILUTION RATIO" shall mean, as of the last day of each
          Settlement Period, an amount (expressed as a percentage) equal to (i)
          the difference between (A) the aggregate amount of Dilution
          Adjustments made during such Settlement Period and (B) the Dilution
          Reduction Amount divided by (ii) the average aggregate Principal
          Amount of Receivables that were originated by the Sellers during the
          last two Settlement Periods (including the Settlement Period ending on
          such day).

               "DILUTION RESERVE RATIO" shall mean, as of any Settlement Report
          Date and continuing until (but not including) the next Settlement
          Report Date, an amount (expressed as a percentage) that is calculated
          as follows:

                         DRR = [ (c * d) + ((e-d) * (e/d)) ] * f

               Where:

                                  -7-


                         DRR = Dilution Reserve Ratio;

                         c = 2.00;

                         d = the average of the Dilution Ratios that occurred
          during the period of twelve consecutive Settlement Periods ending
          immediately prior to such earlier Settlement Report Date;

                         e = the highest of the Dilution Ratios that occurred
          during the period of twelve consecutive Settlement Periods ending
          prior to such earlier Settlement Report Date; and

                         f = the Dilution Period.

               "DISCOUNT" shall mean for each Rate Period and each Funding
          Tranche:

                         (a) for any Funding Tranche for any Rate Period to the
          extent the Committed Purchaser will be funding such Funding Tranche
          during such Rate Period through the issuance of Commercial Paper:

                                     CPR x C x ED/360

                         (b) for any Funding Tranche for any Rate Period to the
          extent the Committed Purchaser will not be funding such Funding
          Tranche during such Rate Period through the issuance of Commercial
          Paper:

                                     AR x C x ED/Year

               where:

                         AR    =    the Alternate Rate for the Funding Tranche
                                    for such Rate Period,

                         C     =    the Series 2000-2 Funded Amount allocated to
                                    the Funding Tranche during such Rate Period,

                         CPR   =    the weighted average CP Rate for the Funding
                                    Tranche for such Rate Period,

                         ED    =    the actual number of days on which such
                                    Funding Tranche remained outstanding during
                                    such Rate Period, and

                                       -8-


                         Year  =    if such Funding Tranche is funded based
                                    upon: (i) the Euro-Rate, 360 days, and (ii)
                                    the Base Rate, 365 or 366 days, as
                                    applicable;

          PROVIDED, that no provision of this Supplement shall require the
          payment or permit the collection of Discount in excess of the maximum
          permitted by applicable law; and PROVIDED FURTHER, that Discount for
          the Funding Tranche shall not be considered paid by any distribution
          to the extent that at any time all or a portion of such distribution
          is rescinded or must otherwise be returned for any reason.

               "EARLY AMORTIZATION EVENT" shall have the meanings assigned in
          Section 5.1 of this Supplement and Section 7.1 of the Agreement.

               "EARLY AMORTIZATION PERIOD" shall have the meaning assigned in
          Section 5.1 of this Supplement and Section 7.1 of the Agreement.

               "EFFECTIVE DATE" shall have the meaning assigned in Section 9.1.

               "EURO-RATE" shall mean with respect to any Rate Period, the
          interest rate per annum determined by the Administrator by dividing
          (the resulting quotient rounded upwards, if necessary, to the nearest
          1/100th of 1% per annum) (i) the rate of interest determined by the
          Administrator in accordance with its usual procedures (which
          determination shall be conclusive absent manifest error) to be the
          average of the London interbank market offered rates for U.S. dollars
          quoted by the British Bankers' Association ("BBA") as set forth on Dow
          Jones Markets Service (formerly known as Telerate) (or appropriate
          successor or, if BBA or its successor ceases to provide display page
          3750 (or such other display page on the Dow Jones Markets Service
          system as may replace display page 3750) at or about 11:00 a.m.
          (London time) on the Business Day which is two (2) Business Days prior
          to the first day of such Rate Period for an amount comparable to the
          Funding Tranche to be funded at the Alternate Rate and based upon the
          Euro-Rate during such Rate Period by (ii) a number equal to 1.00 minus
          the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed
          by the following formula:

                              Average of London interbank offered rates quoted
                              by BBA as shown on Dow Jones Markets Service
                              display page 3750 or appropriate successor
            Euro-Rate =
                        -------------------------------------------------------

                                   1.00 - Euro-Rate Reserve Percentage

          where "Euro-Rate Reserve Percentage" means, the maximum effective
          percentage in effect on such day as prescribed by the Board (or any
          successor) for determining the

                                       -9-


          reserve requirements (including without limitation, supplemental,
          marginal, and emergency reserve requirements) with respect to
          eurocurrency funding (currently referred to as "Eurocurrency
          Liabilities"). The Euro-Rate shall be adjusted with respect to any
          Funding Tranche funded at the Alternate Rate and based upon the
          Euro-Rate that is outstanding on the effective date of any change in
          the Euro-Rate Reserve Percentage as of such effective date. The
          Administrator shall give prompt notice to the Servicer of the
          Euro-Rate as determined or adjusted in accordance herewith (which
          determination shall be conclusive absent manifest error).

               "EURODOLLAR TRANCHE" shall mean each Funding Tranche that accrues
          interest at the Euro-Rate.

               "EXCLUDED TAXES" shall mean, with respect to the Administrator,
          any Purchaser or any other recipient of any payment to be made by or
          on account of any increased obligation of the Company hereunder, (a)
          income or franchise taxes imposed on (or measured by) its net income
          (i) by the United States of America, or (ii) by the jurisdiction under
          the laws of which such recipient is organized or in which its
          principal office is located, managed or controlled, or, in the case of
          any Alternate Investor, in which its applicable lending office is
          located, or (iii) by reason of any connection between the jurisdiction
          imposing such tax and the Administrator, such recipient or such office
          other than a connection arising solely from this Agreement or any
          other Transaction Document or any transaction hereunder or thereunder,
          and (b) any branch profits imposed by the United States of America or
          any similar tax imposed by any other jurisdiction in which the Company
          is located.

               "FACILITY TERMINATION DATE" shall mean the earliest to occur of:
          (a) the Commitment Termination Date, (b) the date on which the Early
          Amortization Period is declared to commence or automatically
          commences, (c) the Optional Termination Date, (d) the date on which
          the commitment of the Liquidity Purchasers terminates under the
          Liquidity Agreement and (e) the Company's failure to cause the
          amendment or modification of any Transaction Document or related
          opinion as required by Moody's or Standard & Poor's, which failure
          shall continue for 30 days after such amendment is initially proposed.

               "FEDERAL FUNDS RATE" shall mean, for any day, the per annum rate
          set forth in the weekly statistical release designated as H.15(519),
          or any successor publication, published by the Board (including any
          such successor, "H.15(519)") for such day opposite the caption
          "Federal Funds (Effective)." If on any relevant day such rate is not
          yet published in H.15(519), the rate for such day will be the rate set
          forth in the daily statistical release designated as the Composite
          3:30 p.m. Quotations for U.S. Government Securities, or any successor
          publication, published by the Federal Reserve Bank of New York
          (including any such successor, the "Composite 3:30 p.m. Quotations")
          for such day under the caption "Federal Funds Effective Rate." If on
          any relevant day the appropriate

                                      -10-


          rate is not yet published in either H.15(519) or the Composite 3:30
          p.m. Quotations, the rate for such day will be the arithmetic mean as
          determined by the Administrator of the rates for the last transaction
          in overnight Federal funds arranged before 9:00 a.m. (New York time)
          on that day by each of three leading brokers of Federal funds
          transactions in New York City selected by the Administrator.

               "FEE LETTER" shall mean, collectively, those certain Fee Letters,
          dated as of the date hereof, among the Company, the Administrator and
          the Committed Purchaser.

               "FLOATING TRANCHE" shall mean, a Funding Tranche that accrues
          interest at the Base Rate.

               "FUNDING TRANCHE" shall have the meaning assigned in subsection
          3A.4(a).

               "INCREASE" shall have the meaning assigned in subsection 2.5(a).

               "INCREASE AMOUNT" shall have the meaning assigned in subsection
          2.5(a).

               "INCREASE DATE" shall have the meaning assigned in subsection
          2.5(a).

               "INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.

               "INITIAL SERIES 2000-2 INVESTED AMOUNT" shall have the meaning
          assigned in subsection 2.5(a).

               "INTEREST SHORTFALL" shall have the meaning assigned in
          subsection 3A.4(c).

               "INVESTED PERCENTAGE" shall mean, with respect to any Business
          Day (i) during the Series 2000-2 Revolving Period, the percentage
          equivalent of a fraction, the numerator of which is the Series 2000-2
          Allocated Receivables Amount as of the end of the immediately
          preceding Business Day and the denominator of which is the Aggregate
          Receivables Amount with respect to such Business Day and (ii) during
          the Series 2000-2 Amortization Period, the percentage equivalent of a
          fraction, the numerator of which is the Series 2000-2 Allocated
          Receivables Amount as of the end of the last Business Day of the
          Series 2000-2 Revolving Period (PROVIDED THAT if during the Series
          2000-2 Amortization Period, the amortization periods of all other
          Outstanding Series which were outstanding prior to the commencement of
          the Series 2000-2 Amortization Period commence, then, from and after
          the date the last of such Series commences its Amortization Period,
          the numerator shall be the Series 2000-2 Allocated Receivables Amount
          as of the end of the Business Day preceding such date) and the
          denominator of which is the greater of (A) the Aggregate Receivables
          Amount with respect to such Business Day and (B) the sum of the
          numerators used to calculate the Invested Percentage for all
          Outstanding Series on the Business Day for which such percentage is
          determined.

                                      -11-


               "ISSUANCE DATE" shall have the meaning assigned in subsection
          2.5(a).

               "LIQUIDITY AGREEMENT" shall mean the Liquidity Asset Purchase
          Agreement, dated as of March 31, 2000, between the Liquidity
          Purchasers from time to time party thereto, the Committed Purchaser
          and PNC, as Administrator and liquidity agent for the Liquidity
          Purchasers, as the same may be amended, supplemented or otherwise
          modified from time to time.

               "LIQUIDITY PURCHASER" shall mean each bank or other institutions
          party to the Liquidity Agreement

               "LOSS RESERVE RATIO" shall mean, as of any Settlement Report Date
          and continuing until (but not including) the next Settlement Report
          Date, an amount (expressed as a percentage) that is calculated as
          follows:

                         LRR = (a * b)/c * d * e

               Where:

                         LRR = Loss Reserve Ratio;

                         a = the aggregate Principal Amount of Receivables
          originated by the Sellers during the three Settlement Periods
          immediately preceding such earlier Settlement Report Date;

                         b = the highest three-month rolling average of the Aged
          Receivables Ratio that occurred during the period of twelve
          consecutive Settlement Periods ending prior to such earlier Settlement
          Report Date;

                         c = the Aggregate Receivables Amount as of the last day
          of the Settlement Period immediately preceding such earlier Settlement
          Report Date; and

                         d = 2.00.

                         e = Payment Terms Factor

               "LOSS-TO-LIQUIDATION RATIO" shall mean, for any Settlement
          Period, a ratio (expressed as a percentage) equal to the quotient of
          (a) the difference, if any, between (i) the aggregate Principal Amount
          of Charged-Off Receivables with respect to such Settlement Period and
          the immediately preceding two Settlement Periods and (ii) the
          aggregate amount of Recoveries during such two Settlement Periods, and
          (b) the aggregate amount of Collections during such two Settlement
          Periods.

                                      -12-


               "MINIMUM RATIO" shall mean, as of any Settlement Report Date and
          continuing until (but not including) the next Settlement Report Date,
          the sum of (i) 10% and (ii) 2.5% for each customer designated as a
          Special Obligor.

               "MONTHLY INTEREST PAYMENT" shall have the meaning assigned in
          subsection 3A.6(a).

               "OPTIONAL TERMINATION DATE" shall have the meaning assigned in
          subsection 2.7(d).

               "OPTIONAL TERMINATION NOTICE" shall have the meaning assigned in
          subsection 2.7(d).

               "ORIGINAL SUPPLEMENT" shall have the meaning assigned in the
          preamble hereto.

               "OTHER TAXES" shall mean any and all current or future stamp or
          documentary taxes or other excise or property taxes, charges or
          similar levies arising from any payment made under the Transaction
          Documents or from the execution, delivery or enforcement of, or
          otherwise with respect to, any Transaction Document.

               "PAYMENT TERMS FACTOR" shall mean 1.017.

               "PBGC" shall mean the Pension Benefit Guaranty Corporation
          established pursuant to Subtitle A of Title IV of ERISA.

               "PNC" shall have the meaning specified in the introductory
          paragraph hereto.

               "PROGRAM COSTS" shall mean, for any Business Day, the sum of (i)
          all expenses, indemnities and other amounts due and payable to any
          Affected Party under the Agreement or this Supplement (including,
          without limitation, any Article VII Costs) and (ii) the product of (A)
          all unpaid fees and expenses due and payable to counsel to, and
          independent auditors of, the Company (other than fees and expenses
          payable on or in connection with the closing of the issuance of the
          Series 2000-2 Interests) and (B) a fraction, the numerator of which is
          the Purchase Limit on such Business Day and the denominator of which
          is the sum of (x) the Aggregate Invested Amounts on such Business Day
          (other than the Series 2000-2 Invested Amount and the Invested Amount
          in respect of any variable funding certificate of any other
          Outstanding Series) and (y) the Aggregate Commitment Amount on such
          Business Day plus the Aggregate Commitment Amount for any variable
          funding certificate of any other Outstanding Series; PROVIDED,
          HOWEVER, that the amount of Program Costs payable pursuant to
          subsection 3A.6(b)(iv) shall not exceed $75,000 in the aggregate in
          any fiscal year of the Servicer.

                                      -13-


               "PROGRAM SUPPORT AGREEMENT" shall mean and include the Liquidity
          Agreement and any other agreement entered into by any Program Support
          Provider providing for: (a) the issuance of one or more letters of
          credit for the account of the Committed Purchaser, (b) the issuance of
          one or more surety bonds for which the Committed Purchaser is
          obligated to reimburse the applicable Program Support Provider for any
          drawings thereunder, (c) the sale by the Committed Purchaser to any
          Program Support Provider of its Series 2000-2 Purchaser Invested
          Amount (or portions thereof or participations therein) and/or (d) the
          making of loans and/or other extensions of credit to the Committed
          Purchaser in connection with the Committed Purchaser's commercial
          paper program, together with any letter of credit, surety bond or
          other instrument issued thereunder but excluding any discretionary
          advance facility provided by the Administrator.

               "PROGRAM SUPPORT PROVIDER" shall mean and include any Liquidity
          Purchaser and any other Person (other than any customer of the
          Committed Purchaser) now or hereafter extending credit or having a
          commitment to extend credit to or for the account of, or to make
          purchases from, the Committed Purchaser or issuing a letter of credit,
          surety bond or other instrument to support any obligations arising
          under or in connection with the Committed Purchaser's commercial paper
          program

               "PURCHASE LIMIT" shall mean $80,000,000, as such amount may be
          reduced in accordance with Section 2.8.

               "PURCHASE LIMIT REDUCTION" shall have the meaning assigned in
          subsection 2.7(a).

               "RATE PERIOD" shall mean, unless otherwise mutually agreed by the
          Administrator and the Company, with respect to any Funding Tranche,
          (i) initially the period commencing on (and including) the date of the
          initial purchase or funding of such Funding Tranche and ending on (but
          excluding) the next following Distribution Date, and (ii) thereafter,
          each period commencing on (and including) a Distribution Date and
          ending on (but excluding) the next following Distribution Date;
          PROVIDED, that:

                    (A) any Rate Period with respect to any Funding Tranche not
               funded at the CP Rate which would otherwise end on a day which is
               not a Business Day shall be extended to the next succeeding
               Business Day; PROVIDED, HOWEVER, if Yield in respect of such Rate
               Period is computed by reference to the Euro-Rate, and such Rate
               Period would otherwise end on a day which is not a Business Day,
               and there is no subsequent Business Day in the same calendar
               month as such day, such Rate Period shall end on the next
               preceding Business Day;

                    (B) in the case of any Rate Period for any Funding Tranche
               which commences before the occurrence of an Early Amortization
               Event and would otherwise end on a date occurring after the
               occurrence of an Early

                                      -14-


               Amortization Event, such Rate Period shall end on the date of the
               occurrence of an Early Amortization Event and the duration of
               each Rate Period which commences on or after the occurrence of an
               Early Amortization Event shall be of such duration as shall be
               selected by the Administrator; and

                    (C) any Rate Period in respect of which Yield is computed by
               reference to the CP Rate may be terminated at the election of,
               and upon notice thereof to the Company and the Servicer by, the
               Administrator any time, in which case the Funding Tranche
               allocated to such terminated Rate Period shall be allocated to a
               new Rate Period commencing on (and including) the date of such
               termination and ending on (but excluding) the next following
               Distribution Date, and shall accrue Yield at the Alternate Rate.

               "RATE TYPE" shall mean the Euro-Rate, the Base Rate or the CP
          Rate.

               "RATING AGENCY" and "RATING AGENCIES" shall mean Moody's, S&P
          and/or any other nationally recognized statistical rating organization
          from which a rating for the Commercial Paper was requested by the
          Committed Purchaser and is currently in effect.

               "RATING AGENCY CONDITION" shall mean, with respect to any action,
          that the Administrator and the Committed Purchaser shall have given
          their prior written consent to such action.

               "RECORD DATE" shall mean the first Business Day prior to each
          Distribution Date.

               "REPORTED PERIOD" shall mean, with respect to Series 2000-2, each
          Business Day.

               "REQUIRED DOWNGRADE ASSIGNMENT PERIOD" is defined in Section
          2.12(a).

               "SCHEDULED REVOLVING TERMINATION DATE" shall mean the last day of
          the Settlement Period ending on or immediately before March 29, 2003.

               "SECURITIES INTERMEDIARY" shall have the meaning specified in the
          introductory paragraph hereto.

               "SERIES 2000-2" shall mean Series 2000-2, the Principal Terms of
          which are set forth in this Supplement.

               "SERIES 2000-2 ACCRUED INTEREST SUB-SUBACCOUNT" shall have the
          meaning assigned in subsection 3A.2(a).

                                      -15-


               "SERIES 2000-2 ADJUSTED INVESTED AMOUNT" shall mean, as of any
          date of determination, (i) the Series 2000-2 Invested Amount on such
          date, MINUS (ii) the amount on deposit in the Series 2000-2 Principal
          Collection Sub-subaccount on such date.

               "SERIES 2000-2 ALLOCABLE CHARGED-OFF AMOUNT" shall mean, with
          respect to any Special Allocation Settlement Report Date, the
          "Allocable Charged-Off Amount", if any, which has been allocated to
          Series 2000-2.

               "SERIES 2000-2 ALLOCABLE RECOVERIES AMOUNT" shall mean, with
          respect to any Special Allocation Settlement Report Date, the
          "Allocable Recoveries Amount", if any, which has been allocated to
          Series 2000-2.

               "SERIES 2000-2 ALLOCATED RECEIVABLES AMOUNT" shall mean, on any
          date of determination, the lower of (i) the Series 2000-2 Target
          Receivables Amount on such day and (ii) the product of (x) the
          Aggregate Receivables Amount on such day and (y) the percentage
          equivalent of a fraction the numerator of which is the Series 2000-2
          Target Receivables Amount on such day and the denominator of which is
          the Aggregate Target Receivables Amount on such day.

               "SERIES 2000-2 AMORTIZATION PERIOD" shall mean the period
          commencing on the Business Day following the earliest to occur of (i)
          the date on which an Early Amortization Period is declared to commence
          or automatically commences, (ii) the Optional Termination Date and
          (iii) the Scheduled Revolving Termination Date and ending on the
          earlier of (i) the date when the Series 2000-2 Invested Amount shall
          have been reduced to zero and all accrued interest and other amounts
          owing on the VFC Certificates and to the Administrator and the
          Committed Purchaser hereunder shall have been paid in full and (ii)
          the Series 2000-2 Termination Date.

               "SERIES 2000-2 COLLECTION SUBACCOUNT" shall have the meaning
          assigned in subsection 3A.2(a).

               "SERIES 2000-2 FUNDED AMOUNT" shall mean, as of any date of
          determination, the Series 2000-2 Purchaser Funded Amount of the
          Committed Purchaser on such date.

               "SERIES 2000-2 INTERESTS" shall mean, collectively, the VFC
          Certificates and the Series 2000-2 Subordinated Interest.

               "SERIES 2000-2 INVESTED AMOUNT" shall mean, as of any date of
          determination, the Series 2000-2 Purchaser Invested Amount of the
          Committed Purchaser on such date.

               "SERIES 2000-2 MONTHLY INTEREST" shall mean, for each
          Distribution Date, the summation of the Discount that accrued during
          the related Rate Period on each Funding Tranche outstanding during all
          or a portion of such Accrual Period.

                                      -16-


               "SERIES 2000-2 MONTHLY PRINCIPAL PAYMENT" shall have the meaning
          assigned in Section 3A.5.

               "SERIES 2000-2 NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall
          have the meaning assigned in subsection 3A.2(a).

               "SERIES 2000-2 PERIODIC SERVICING FEE" shall have the meaning
          assigned in Section 6.1.

               "SERIES 2000-2 PRINCIPAL COLLECTION SUB-SUBACCOUNT" shall have
          the meaning assigned in subsection 3A.2(a).

               "SERIES 2000-2 PURCHASER FUNDED AMOUNT" shall mean the Series
          2000-2 Purchaser Invested Amount of the Committed Purchaser
          (calculated without regard to clauses (d) and (e) of the definition
          thereof).

               "SERIES 2000-2 PURCHASER INVESTED AMOUNT" shall mean, with
          respect to the Committed Purchaser on the Issuance Date, an amount
          equal to the Initial Series 2000-2 Invested Amount, and thereafter, an
          amount equal to (a) the Committed Purchaser's Series 2000-2 Purchaser
          Invested Amount on the immediately preceding Business Day, plus (b)
          the amount of any increases in the Committed Purchaser's Series
          2000-2 Purchaser Invested Amount pursuant to Section 2.5 made on such
          day, MINUS (c) the amount of any distributions to the Committed
          Purchaser in respect of principal received and applied on such day
          minus (d) the aggregate Series 2000-2 Allocable Charged-Off Amount
          applied to the Committed Purchaser on or prior to such date pursuant
          to subsection 3A.5(b)(ii) and PLUS (e) (but only to the extent of any
          unreimbursed reductions made pursuant to clause (d) above) the
          aggregate Series 2000-2 Allocable Recoveries Amount applied to the
          Committed Purchaser on or prior to such date pursuant to subsection
          3A.5(c)(i).

               "SERIES 2000-2 RATIO" shall mean, as of any Settlement Report
          Date and continuing until (but not including) the next Settlement
          Report Date, the greater of (i) the sum of the Loss Reserve Ratio and
          the Dilution Reserve Ratio and (ii) the Minimum Ratio, in each case,
          then in effect.

               "SERIES 2000-2 REQUIRED RESERVES" shall mean, (x) as of any date
          of determination during the Series 2000-2 Revolving Period, an amount
          equal to the sum of:

                    (a) the product of (i) the Series 2000-2 Adjusted Invested
               Amount on such day (after giving effect to any increase or
               decrease thereof on such day) and (ii) the percentage equivalent
               of a fraction, the numerator of which is the Series 2000-2 Ratio
               and the denominator of which is one MINUS the Series 2000-2
               Ratio;

                                      -17-


                    (b) the product of (i) the Series 2000-2 Invested Amount on
               such day (after giving effect to any increase or decrease thereof
               on such day), (ii) the Carrying Cost Reserve Ratio in effect on
               such day and (iii) the percentage equivalent of a fraction, the
               numerator of which is one and the denominator of which is one
               MINUS the Series 2000-2 Ratio; and

                    (c) the product of (i) the aggregate Principal Amount of
               Receivables in the Trust on such day, (ii) the Series 2000-2
               Invested Amount on such day (after giving effect to any increase
               or decrease thereof on such day) DIVIDED BY the Aggregate
               Invested Amount on such day, (iii) the Servicing Reserve Ratio in
               effect on such day and (iv) the percentage equivalent of a
               fraction, the numerator of which is one and the denominator of
               which is one MINUS the Series 2000-2 Ratio;

          and (y) on any date of determination during the Series 2000-2
          Amortization Period, an amount equal to the Series 2000-2 Required
          Reserves on the last Business Day of the Series 2000-2 Revolving
          Period; PROVIDED, in each case, that such amount shall be adjusted on
          each Special Allocation Settlement Report Date, if any, to the extent
          required as set forth in subsection 3A.5(b)(i) and subsection
          3A.5(c)(ii).

               "SERIES 2000-2 REVOLVING PERIOD" shall mean the period commencing
          on the Issuance Date and terminating on the Facility Termination Date.

               "SERIES 2000-2 SUBORDINATED INTEREST" shall have the meaning
          assigned in subsection 2.2(b).

               "SERIES 2000-2 SUBORDINATED INTEREST AMOUNT" shall mean, for any
          date of determination, an amount equal to (i) the Series 2000-2
          Allocated Receivables Amount MINUS (ii) the Series 2000-2 Adjusted
          Invested Amount.

               "SERIES 2000-2 SUBORDINATED INTEREST REDUCTION AMOUNT" shall have
          the meaning assigned in subsection 2.7(b).

               "SERIES 2000-2 TARGET RECEIVABLES AMOUNT" shall mean, on any
          date of determination, the greater of (A) sum of (i) the Series 2000-2
          Adjusted Invested Amount on such day and (ii) the Series 2000-2
          Required Reserves for such day and (B) $350,000.

               "SERIES 2000-2 TERMINATION DATE" shall mean the Distribution Date
          that occurs in September, 2003.

               "SERIES 2000-2 TRANSACTION DOCUMENTS" shall mean this Supplement,
          the Receivables Sale Agreements, the Pooling Agreement and the
          Servicing Agreement.

                                      -18-


               "SERVICER" shall have the meaning specified in the introductory
          paragraph hereto.

               "SERVICER INDEMNIFIED PERSON" shall have the meaning assigned in
          subsection 2.10(b).

               "SERVICING RESERVE RATIO" shall mean, as of any Settlement Report
          Date and continuing until (but not including) the next Settlement
          Report Date, an amount (expressed as a percentage) equal to (i) the
          product of (A) the Servicing Fee Percentage and (B) 2.0 TIMES Days
          Sales Outstanding as of such earlier Settlement Report Date, DIVIDED
          BY (ii) 360.

               "SUPPLEMENT" shall have the meaning specified in the introductory
          paragraph hereto

               "TAXES" shall mean any and all present or future taxes, levies,
          imposts, duties, deductions, charges or withholdings imposed by any
          Governmental Authority.

               "TRANSACTION PARTIES" shall have the meaning assigned in
          subsection 2.6(d).

               "TRANSFER ISSUANCE DATE" shall mean the date on which a
          Commitment Transfer Supplement becomes effective pursuant to the terms
          of such Commitment Transfer Supplement.

               "TRUST ACCOUNTS" shall have the meaning assigned in subsection
          3A.2(a).

               "TRUSTEE" shall have the meaning specified in the introductory
          paragraph hereto.

               "UCC CERTIFICATE" shall mean a certificate substantially in the
          form of Exhibit D to this Supplement.

               "UNALLOCATED BALANCE" shall mean, as of any Business Day, (i) the
          portion of the Series 2000-2 Funded Amount allocated to any CP
          Tranche and (ii) the sum of (A) the portion of the Series 2000-2
          Funded Amount for which interest is then being calculated by reference
          to the Base Rate and (B) the portion of the Series 2000-2 Funded
          Amount allocated to any Eurodollar Tranche the Rate Period in respect
          of which expires on such Business Day.

               "USI CHANGE IN CONTROL" shall have the meaning assigned to the
          term "Change of Control" in Section 1.01 of the Credit Agreement.

               "USFS" shall have the meaning specified in the introductory
          paragraph hereto.

               "USSC" shall mean United Stationers Supply Co., an Illinois
          corporation.

                                      -19-


               "UTILIZATION FEE" shall have the meaning assigned in subsection
          2.9(c).

               "UTILIZATION FEE RATE" shall have the meaning assigned in the Fee
          Letter.

               "VFC CERTIFICATE" shall mean a VFC Certificate, Series 2000-2,
          executed by the Company and authenticated by or on behalf of the
          Trustee, substantially in the form of Exhibit A.

               "VFC CERTIFICATEHOLDER" shall mean the Committed Purchaser.

               "VFC CERTIFICATEHOLDERS' INTEREST" shall have the meaning
          assigned in subsection 2.2(a).

                    (b) If any term or provision contained herein conflicts with
          or is inconsistent with any term, definition or provision contained in
          the Agreement, the terms and provisions of this Supplement shall
          govern. All Article, Section or subsection references herein shall
          mean Article, Section or subsections of this Supplement, except as
          otherwise provided herein. Unless otherwise stated herein, the context
          otherwise requires or such term is otherwise defined in the Agreement,
          each capitalized term used or defined herein shall relate only to the
          Series 2000-2 Interests and no other Series of Investor Certificates
          issued by the Trust.

                                   ARTICLE II

                DESIGNATION OF CERTIFICATES; PURCHASE AND SALE OF
                              THE VFC CERTIFICATES

                    SECTION 2.1. DESIGNATION. The Certificates and interests
created and authorized pursuant to the Agreement and this Supplement shall be
divided into two Classes, which shall be designated respectively as (i) the "VFC
Certificates, Series 2000-2" and (ii) an interest designated as the "Series
2000-2 Subordinated Interest."

                    SECTION 2.2. THE SERIES 2000-2 INTERESTS. (a) The VFC
Certificates shall represent fractional undivided interests in the Trust,
including the right to receive (i) the Invested Percentage (expressed as a
decimal) of Collections received with respect to the Receivables and all other
funds on deposit in the Collection Account and (ii) all other funds on deposit
in the Series Collection Subaccounts and any subaccounts thereof (collectively,
the "VFC CERTIFICATEHOLDERS' INTEREST").

                    (b) The "SERIES 2000-2 SUBORDINATED INTEREST" shall be a
fractional undivided interest in the Trust retained by the Company, consisting
of the right to receive Collections with respect to the Receivables allocated to
the VFC Certificateholders' Interest and not required to be

                                      -20-


distributed to or for the benefit of the Committed Purchaser. The Exchangeable
Company Interest and any other Series of Investor Certificates outstanding shall
represent the ownership interest in the remainder of the Trust not allocated
pursuant hereto to the VFC Certificateholders' Interest or the Series 2000-2
Subordinated Interest.

                    (c) The VFC Certificates shall be substantially in the form
of Exhibit A and shall, upon issue, be executed and delivered by the Company to
the Trustee for authentication and redelivery as provided in Section 2.4 hereof
and Section 5.2 of the Agreement.

                    SECTION 2.3. PURCHASES OF INTERESTS IN THE VFC CERTIFICATES,
INITIAL PURCHASE. (a) Subject to the terms and conditions of this Supplement,
including delivery of notice in accordance with Section 2.4 and 2.5, (i) on the
Issuance Date, the Committed Purchaser hereby agrees to purchase on the Issuance
Date a VFC Certificate in an amount equal to the Initial Series 2000-2 Invested
Amount and (ii) thereafter, the Committed Purchaser hereby agrees to maintain
its VFC Certificate, subject to increase or decrease during the Series 2000-2
Revolving Period, in accordance with the provisions of this Supplement. The
Company hereby agrees to maintain ownership of the Series 2000-2 Subordinated
Interest, subject to increase or decrease during the Series 2000-2 Revolving
Period, in accordance with the provisions of this Supplement. Payments by the
Committed Purchaser in respect of the VFC Certificates shall be made in
immediately available funds on the Issuance Date to the Administrator for
payment to the Company.

                    (b) MAXIMUM SERIES 2000-2 PURCHASER FUNDED AMOUNT.
Notwithstanding anything to the contrary contained in this Supplement, at no
time shall the Series 2000-2 Funded Amount exceed the Purchase Limit at such
time.

                    SECTION 2.4. DELIVERY. On the Issuance Date, the Company
shall sign, on behalf of the Trust, and shall direct the Trustee in writing
pursuant to Section 5.2 of the Agreement to duly authenticate, and the Trustee,
upon receiving such direction, shall so authenticate a VFC Certificate in such
name and such denomination and deliver such VFC Certificate to the
Administrator, on behalf of the Committed Purchaser, in accordance with such
written directions. The VFC Certificate shall be issued in a minimum
denominations of $1,000,000 and in integral multiples of $100,000 in excess
thereof. The Trustee shall mark on its books the actual Series 2000-2 Invested
Amount and Series 2000-2 Subordinated Interest Amount outstanding on any date of
determination, which, absent manifest error, shall constitute prima facie
evidence of the outstanding Series 2000-2 Invested Amount and Series 2000-2
Subordinated Interest Amount from time to time.

                    SECTION 2.5. PROCEDURE FOR INITIAL ISSUANCE AND FOR
INCREASING THE SERIES 2000-2 INVESTED AMOUNT. (a) Subject to subsection 2.5(c)
of this Supplement, (i) on the date designated in writing as provided herein
(the "ISSUANCE DATE"), the Committed Purchaser hereby agrees to purchase a VFC
Certificate in accordance with Section 2.3 and (ii) on any Business Day during
the Commitment Period, the Committed Purchaser hereby agrees that the Series
2000-2

                                      -21-


Invested Amount may be increased by increasing its Series 2000-2 Purchaser
Invested Amount (an "INCREASE"), upon the request of the Servicer or the Company
on behalf of the Trust (each date on which an increase in the Series 2000-2
Invested Amount occurs hereunder being herein referred to as the "INCREASE DATE"
applicable to such Increase); PROVIDED, HOWEVER, that the Servicer or the
Company, as the case may be, shall have given the Administrator (with a copy to
the Trustee) irrevocable written notice (effective upon receipt), substantially
in the form of Exhibit E hereto, of such request no later than (i) 11:00 a.m.,
New York City time, two Business Days prior to the Issuance Date or such
Increase Date, as the case maybe, in the case of any Increase Date if the
Initial Series 2000-2 Invested Amount or Increase Amount is to be priced solely
with reference to the CP Rate or (ii) (x) if the Initial Series 2000-2 Invested
Amount or Increase Amount is to be priced solely with reference to the Base
Rate, on or prior to 12:00 noon, New York City time, on the Issuance Date or
such Increase Date, as the case may be and (y) if all or a portion of the
Initial Series 2000-2 Invested Amount or Increase Amount is to be allocated to a
Eurodollar Tranche, 1:00 p.m., New York City time, three Business Days prior to
the Issuance Date or such Increase Date, as the case may be; PROVIDED, FURTHER,
that the provisions of this subsection shall not restrict the allocations of
Collections pursuant to Article III. Such notice shall state (x) the Issuance
Date or the Increase Date, as the case may be, and (y) the initial invested
amount (the "INITIAL SERIES 2000-2 INVESTED AMOUNT") or, the proposed amount of
such Increase (the "INCREASE AMOUNT"), as the case may be.

                    (b) [Reserved].

                    (c) The Committed Purchaser shall not be required to make
the initial purchase of VFC Certificates on the Issuance Date or to increase its
Series 2000-2 Purchaser Invested Amount on any Increase Date hereunder unless:

                        (i)   the related aggregate initial purchase amount or
          Increase Amount is equal to $1,000,000 or an integral multiple of
          $100,000 in excess thereof;

                        (ii)  after giving effect to the initial purchase amount
          or Increase Amount, (A) the Series 2000-2 Funded Amount would not
          exceed the Purchase Limit on the Issuance Date or such Increase Date,
          as the case may be, and (B) the Series 2000-2 Allocated Receivables
          Amount would not be less than the Series 2000-2 Target Receivables
          Amount on the Issuance Date or such Increase Date, as the case may be;

                        (iii) at the time of and after giving effect to the
          initial purchase amount or the Increase Amount, no Early Amortization
          Event or Potential Early Amortization Event shall have occurred and be
          continuing; and

                        (iv)  all of the representations and warranties made by
          each of the Company, the Servicer, USFC, the Support Provider and the
          Seller in each Transaction Document to which it is a party are true
          and correct in all material respects on and as of the Issuance Date or
          such Increase Date, as the case may be, as if made on and as of such

                                      -22-


          date (except to the extent such representations and warranties are
          expressly made as of another date).

The Company's acceptance of funds in connection with (x) the initial purchase of
VFC Certificates on the Issuance Date and (y) each Increase occurring on any
Increase Date shall constitute a representation and warranty by the Company to
the Committed Purchaser as of the Issuance Date or such Increase Date (except to
the extent such representations and warranties are expressly made as of another
date), as the case may be, that all of the conditions contained in this
subsection 2.5(c) have been satisfied.

                    (d) After receipt by the Administrator of the notice
required by subsection 2.5(a) from the Servicer or the Company on behalf of the
Trust, the Administrator shall, so long as the conditions set forth in
subsections 2.5(a) and (c) are satisfied, promptly provide telephonic notice to
the Committed Purchaser of the Increase Date and of the Increase Amount. The
Committed Purchaser agrees to pay in immediately available funds the amount of
such Increase on the related Increase Date to the Administrator for payment to
the Trust for deposit in the Series 2000-2 Principal Collection Sub-subaccount.

                    SECTION 2.6. [Reserved]

                    SECTION 2.7. PROCEDURE FOR DECREASING THE SERIES 2000-2
INVESTED AMOUNT; OPTIONAL TERMINATION. (a) On any Business Day during the Series
2000-2 Revolving Period or the Series 2000-2 Amortization Period (except for
Distribution Dates during the Series 2000-2 Amortization Period (which shall be
governed by subsection 3A.6(c)), upon the written request of the Servicer or the
Company on behalf of the Trust to the Trustee, the Series 2000-2 Invested Amount
may be reduced (a "DECREASE") by the distribution by the Trustee to the
Administrator for the benefit of the Committed Purchaser in accordance with its
Series 2000-2 Purchaser Invested Amount of funds on deposit in the Series 2000-2
Principal Collection Sub-subaccount on such day in an amount not to exceed the
amount of such funds on deposit on such day; PROVIDED that the Servicer shall
have given the Administrator (with a copy to the Trustee) irrevocable written
notice (effective upon receipt), prior to 1:00 p.m., New York City time, (i) on
the second Business Day prior to such Decrease or, in the ease of any Decrease
which is greater than $10,000,000, on the tenth Business Day prior to such
Decrease, in the case of any Decrease that relates to a CP Tranche and (ii) (A)
if the Decrease relates solely to a Floating Tranche, on the Business Day of
such Decrease or (B) if all or any portion of the Decrease relates to an
Eurodollar Tranche, on the Business Day that is three Business Days prior to
such Decrease and which notice shall state the amount of such Decrease;
PROVIDED, FURTHER, that such Decrease shall be in an amount equal to $1,000,000
and integral multiples of $100,000 in excess thereof and such Decrease shall be
in an amount no greater than the Unallocated Balance on such day.

                    (b) Simultaneously with any such Decrease during the Series
2000-2 Revolving Period, the Series 2000-2 Subordinated Interest Amount shall be
reduced by an amount (the "SERIES 2000-2 SUBORDINATED INTEREST REDUCTION
AMOUNT") such that the Series

                                      -23-


2000-2 Subordinated Interest Amount shall equal the Series 2000-2 Required
Reserves after giving effect to such Decrease. During the Series 2000-2
Revolving Period, after the distribution described in subsection (a) above has
been made, and the Series 2000-2 Subordinated Interest Amount shall have been
reduced by the Series 2000-2 Subordinated Interest Reduction Amount, a
distribution shall be made to the owner of the Series 2000-2 Subordinated
Interest out of remaining funds on deposit in the Series 2000-2 Principal
Collection Sub-subaccount in an amount equal to the lesser of (x) the Series
2000-2 Subordinated Interest Reduction Amount and (y) the amount of such
remaining funds on deposit in the Series 2000-2 Principal Collection
Sub-subaccount.

                    (c) Any reduction in the Series 2000-2 Invested Amount on
any Business Day shall be allocated first to reduce the Unallocated Balance and
then to reduce the portion of the Series 2000-2 Invested Amount allocated to
Eurodollar Tranches in such order as the Company may select in order to minimize
costs payable pursuant to Section 7.4.

                    (d) (i) On any Business Day unless the Scheduled Revolving
Termination Date, an Early Amortization Event or a Potential Early Amortization
Event shall have occurred and be continuing, the Company shall have the right to
deliver an irrevocable written notice (an "OPTIONAL TERMINATION NOTICE") to the
Trustee, the Servicer and the Administrator in which the Company declares that
the Series 2000-2 Revolving Period shall terminate on the date (the "OPTIONAL
TERMINATION DATE") set forth in such notice (which date, in any event, shall be
the last day of a Settlement Period which is not less than 10 days from the date
on which such notice is delivered).

                        (ii) From and after the Optional Termination Date, the
Series 2000-2 Amortization Period shall commence for all purposes under this
Agreement and the other Transaction Documents. The Trustee shall give prompt
written notice of its receipt of an Optional Termination Notice to the Committed
Purchaser.

                    SECTION 2.8. REDUCTION OF THE PURCHASE LIMIT (a) On any
Business Day during the Series 2000-2 Revolving Period, the Company, on behalf
of the Trust, may, upon three Business Days' prior written notice to the
Administrator (effective upon receipt) (with copies to the Servicer and the
Trustee) reduce or terminate the Purchase Limit (a "PURCHASE LIMIT REDUCTION")
in a minimum aggregate amount equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof; PROVIDED that no such termination or reduction
shall be permitted if, after giving effect thereto and to any reduction in the
Series 2000-2 Invested Amount on such date, the Series 2000-2 Invested Amount
would exceed the Purchase Limit then in effect.

                    (b) [Reserved]

                    (c) Once reduced, the Purchase Limit may not be subsequently
reinstated. The Administrator shall provide written notice of the reduced
Purchaser Limit to the Company, the Servicer and the Trustee.

                                      -24-


                    SECTION 2.9. INTEREST, FEES. (a) Interest shall be payable
on the VFC Certificates on each Distribution Date pursuant to subsection
3A.6(a).

                    (b) The Trustee (acting at the written direction of the
Servicer upon which the Trustee may conclusively rely) shall distribute pursuant
to subsection 3A.6(b), from amounts on deposit in the Series 2000-2
Non-Principal Collection Sub-subaccount, to the Administrator, for the account
of the Committed Purchaser, on each Distribution Date, a commitment fee with
respect to each Accrual Period ending on such date (the "COMMITMENT FEE") at the
Commitment Fee Rate of the average daily excess of 102% of the Purchase Limit
OVER the average Series 2000-2 Purchaser Invested Amount during such Accrual
Period for the actual number of days in such Accrual Period. The Commitment Fee
shall be payable (i) monthly in arrears on each Distribution Date and (ii) on
the Facility Termination Date. To the extent that funds on deposit in the Series
2000-2 Non-Principal Collection Sub-subaccount at any such date are insufficient
to pay the Commitment Fee due on such date, the Servicer shall so notify the
Company and the Company shall immediately pay the Administrator the amount of
any such deficiency.

                    (c) The Trustee (acting at the written direction of the
Servicer upon which the Trustee may conclusively rely) shall distribute pursuant
to subsection 3A.6(b), from amounts on deposit in the Series 2000-2
Non-Principal Collection Sub-subaccount, to the Administrator, for the account
of the Committed Purchaser, on each Distribution Date, a utilization fee (the
"UTILIZATION FEE") with respect to each Accrual Period ending on such date at
the Utilization Fee Rate of the average daily Series 2000-2 Purchaser Invested
Amount during such period for the actual number of days in such Accrual Period.
The Utilization Fee shall be payable (i) monthly in arrears on each Distribution
Date and (ii) on the Facility Termination Date. To the extent that funds on
deposit in the Series 2000-2 Non-Principal Collection Sub-subaccount at any such
date are insufficient to pay the Utilization Fee due on such date, the Servicer
shall so notify the Company and the Company shall immediately pay the
Administrator the amount of any such deficiency.

                    (d) Calculations of per annum rates and fees under this
Supplement shall be made on the basis of a 360- (or 365-/366-, in the case of
interest on the Floating Tranche based on the Base Rate) day year with respect
to Commitment Fees, Utilization Fees and interest rates. Each determination of
the Euro-Rate by the Administrator shall be conclusive and binding upon each of
the parties hereto in the absence of manifest error.

                    SECTION 2.10. INDEMNIFICATION BY THE COMPANY AND THE
SERVICER. (a) The Company agrees to indemnify and hold harmless the Trustee, its
officers, directors, agents and employees and each Affected Party (each, a
"COMPANY INDEMNIFIED PERSON") from and against any loss, liability, expense,
damage or injury suffered or sustained by (a "CLAIM") such Company Indemnified
Person by reason of (i) any acts, omissions or alleged acts or omissions arising
out of, or relating to, activities of the Company pursuant to any Pooling and
Servicing Agreement or the other Transaction Documents to which it is a party,
(ii) a breach of any representation or warranty made or deemed made by the
Company (or any of its officers) in any Pooling and

                                      -25-


Servicing Agreement or other Transaction Document or (iii) a failure by the
Company to comply with any applicable law or regulation or to perform its
covenants, agreements, duties obligations required to be performed or observed
by it in accordance with the provisions of any Pooling and Servicing Agreement
or the other Transaction Documents, including, but not limited to, any judgment,
award, settlement, reasonable attorneys' fees and other reasonable costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim, except to the extent such loss, liability, expense,
damage or injury (A) resulted from the gross negligence, bad faith or wilful
misconduct of such Company Indemnified Person or its officers, directors,
agents, principals, employees or employers, (B) resulted solely from a default
by an Obligor with respect to any Receivable or (C) includes any income or
franchise taxes imposed on (or measured by) any Company Indemnified Person's net
income; PROVIDED that any payments made by the Company pursuant to this
subsection shall be made solely from funds available to the Company which are
not otherwise needed to be applied to the payment of any amounts (other than
amounts payable to the Company pursuant to any Pooling and Servicing Agreements,
shall be non-recourse other than with respect to proceeds in excess of the
proceeds needed to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.

                    (b) The Servicer agrees to indemnify and hold harmless the
Trustee, its officers, directors, agents and employees and each Affected Party
(each, a "SERVICER INDEMNIFIED PERSON") from and against any Claim by reason of
(i) any acts, omissions or alleged acts or omissions arising out of, or relating
to, activities of the Servicer pursuant to any Pooling and Servicing Agreement
or the other Transaction Documents to which it is a party, (ii) a material
breach of any representation or warranty made or deemed made by the Servicer (or
any of its officers) in any Pooling and Servicing Agreement or other Transaction
Document or (iii) a failure by the Servicer to comply in any material respect
with any applicable law or regulation or to perform its covenants, agreements,
duties or obligations required to be performed or observed by it in accordance
with the provisions of any Pooling and Servicing Agreement or the other
Transaction Documents, including, but not limited to, any judgment, award,
settlement, reasonable attorneys' fees and other reasonable costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim, except to the extent such loss, liability, expense, damage
or injury (A) resulted from the gross negligence, bad faith or wilful misconduct
of such Servicer indemnified person or its officers, directors, agents,
principals, employees or employers, (B) resulted solely from a default by an
Obligor with respect to any Receivable or (C) include any income or franchise
taxes imposed on (or measured by) any Servicer Indemnified Person's net income.

                                      -26-


                                   ARTICLE III

                          ARTICLE III OF THE AGREEMENT

                    Section 3.1 of the Agreement and each other section of
Article III of the Agreement relating to another Series shall read in their
entirety herein as provided in the Agreement. Article III of the Agreement
(except for Section 3.1 thereof and any portion thereof relating to another
Series) shall read in its entirety herein as follows and shall be exclusively
applicable to the Series 2000-2 Interests:

                    SECTION 3A.2. ESTABLISHMENT OF TRUST ACCOUNTS. (a) The
Trustee shall cause to be established and maintained in the name of the Trustee,
on behalf of the Trust, (i) for the benefit of the Committed Purchaser and (ii)
in the case of clauses (A) and (B) below, for the benefit, subject to the prior
and senior interest of the Committed Purchaser, of the owner of the Series
2000-2 Subordinated Interest, (A) a subaccount of the Collection Account (the
"SERIES 2000-2 COLLECTION SUBACCOUNT"), which subaccount is the Series
Collection Subaccount with respect to Series 2000-2; (B) two subaccounts of the
Series 2000-2 Collection Subaccount: (1) the Series 2000-2 Principal Collection
Sub-subaccount and (2) the Series 2000-2 Non-Principal Collection Sub-subaccount
(respectively, the "SERIES 2000-2 PRINCIPAL COLLECTION SUB-SUBACCOUNT" and the
"SERIES 2000-2 NON-PRINCIPAL COLLECTION SUB-SUBACCOUNT") and (C) a subaccount of
the Series 2000-2 Non-Principal Collection Sub-subaccount (the "SERIES 2000-2
ACCRUED INTEREST SUB-SUBACCOUNT"; all accounts established pursuant to this
subsection 3A.2(a), collectively, the "TRUST ACCOUNTS"), each Trust Account to
bear a designation indicating that the funds deposited therein are held for the
benefit of the Persons (and, for each such Person, to the extent) set forth in
clauses (i) and (ii) above. The Trustee shall possess all right, title and
interest in all funds from time to time on deposit in, and all Eligible
Investments credited to, the Trust Accounts and in all proceeds thereof. The
Trust Accounts shall be under the sole dominion and control of the Trustee for
the exclusive benefit of the Persons (and, for each such Person, to the extent)
set forth in clauses (i) and (ii) above.

                    (b) All Eligible Investments in the Trust Accounts shall be
delivered to the Trustee in accordance with the definition of "Delivery" and
shall be held by the Trustee or its nominee (including the Securities
Intermediary) for the exclusive benefit of the Committed Purchaser and, subject
to the prior interest of the Committed Purchaser, the owner of the Series 2000-2
Subordinated Interest; PROVIDED, HOWEVER, that funds on deposit in a Trust
Account which is a sub-subaccount of a Collection Account may, at the direction
of the Servicer, be invested together with funds held in other sub-subaccounts
of the Collection Account. After giving effect to any distribution to the
Company pursuant to subsection 3A.3(b), amounts on deposit and available for
investment in the Series 2000-2 Principal Collection Sub-subaccount shall be
invested by the Trustee at the written direction of the Servicer in Eligible
Investments that mature, or that are payable or redeemable upon demand of the
holder thereof, (i) in the case of any such investment made during the Series
2000-2 Revolving Period, on or prior to the next Business Day and (ii) in the
case of any such investment made during the Series 2000-2

                                      -27-


Amortization Period, on or prior to the Business Day immediately preceding the
next Distribution Date. Amounts on deposit and available for investment in the
Series 2000-2 Non Principal Collection Sub-subaccount and the Series 2000-2
Accrued Interest Sub-subaccount shall be invested by the Trustee at the written
direction of the Servicer in Eligible Investments that mature, or that are
payable or redeemable upon demand of the holder thereof, on or prior to the
Business Day immediately preceding the next Distribution Date. As of the
Business Day immediately preceding such next Distribution Date, (x) all interest
and other investment earnings (net of losses and investment expenses) on funds
deposited in the Series 2000-2 Accrued Interest Sub-subaccount shall be
deposited in the Series 2000-2 Non-Principal Collection Sub-subaccount and (y)
all interest and investment earnings (net of losses and investment expenses) on
funds deposited in the Series 2000-2 Principal Collection Sub-subaccount shall
be deposited in the Series 2000-2 Non-Principal Collection Sub-subaccount. If
the Servicer fails to give the Trustee investment instructions with respect to
amounts on deposit in any Series 2000-2 Collection Subaccount or any subaccount
thereof, such amounts shall remain uninvited.

                    (c) Any securities intermediary maintaining a securities
account for the Trustee for the benefit of the Committed Purchaser, and The
Chase Manhattan Bank as initial Securities Intermediary, hereby represents that
it is as of the date hereof and shall be for so long as it is the Securities
Intermediary hereunder a bank or broker-dealer that (i) in the ordinary course
of its business maintains securities accounts for others and is acting in that
capacity hereunder and (ii) maintains a Participant's Securities Account (as
defined in the United States Regulations) with a Federal Reserve Bank. The
Securities Intermediary shall agree (and The Chase Manhattan Bank as initial
Securities Intermediary hereby agrees) with the parties hereto that (x) the
Collection Account (including any sub-accounts thereof) is a securities account
to which financial assets may be credited, (y) the Trustee shall be entitled to
exercise rights that comprise such financial assets and to exercise the ordinary
rights of an entitlement holder, (z) the "securities intermediary's
jurisdiction" as defined in the UCC of the Securities Intermediary with respect
to the Eligible Investments credited to the Collection Account (including any
subaccounts thereof) shall be the State of New York. The Securities Intermediary
shall represent and covenant (and The Chase Manhattan Bank hereby represents and
covenants) that it is not and will not be (as long as it is the Securities
Intermediary hereunder) a party to any agreement that is inconsistent with the
provisions of this Agreement. The Securities Intermediary shall covenant (and
The Chase Manhattan Bank hereby covenants) that it will not take any action
inconsistent with the provisions of this Agreement applicable to it. It is the
intent of the Trustee, the Servicer and the Company that the Collection Account
(including any sub-accounts thereof) shall be a securities account of the
Trustee and not an account of the Company or the Servicer. If despite such
intent, the Collection Account (including any sub-accounts thereof) is
determined to be an account of the Company or the Servicer, then the Securities
Intermediary agrees to comply with entitlement orders originated by the Trustee
without further consent by the Company or the Servicer.

                    SECTION 3A.3. ALLOCATIONS. In accordance with the written
direction of the Servicer, upon which the Trustee may conclusively rely:

                                      -28-


                    (a) The portion of the Aggregate Daily Collections allocated
to the Series 2000-2 Interests pursuant to Article III of the Agreement shall be
allocated and distributed as set forth in this Article III by the Trustee as
follows:

                        (i)   on each Business Day, an amount equal to the
          Accrued Expense Amount for such day (or, during the Series 2000-2
          Revolving Period, such greater amount as the Company may request in
          writing) shall be transferred from the Series 2000-2 Collection
          Subaccount to the Series 2000-2 Non-Principal Collection
          Sub-subaccount; and

                        (ii)  following the transfers pursuant to clause (i)
          above, any remaining funds on deposit in the Series 2000-2 Collection
          Subaccount shall be transferred by the Trustee to the Series 2000-2
          Principal Collection Sub-subaccount.

                    (b) On each Business Day that is not a Distribution Date
during the Series 2000-2 Revolving Period, after giving effect to (x) all
allocations of Aggregate Daily Collections and (y) any deposit resulting from an
Increase, if any, pursuant to subsection 2.5(c) on such Business Day, amounts on
deposit in the Series 2000-2 Principal Collection Sub-subaccount shall be
distributed by the Trustee to the Company to such accounts or such persons as
the Company may direct in writing (which directions may consist of standing
instructions provided by the Company that shall remain in effect until changed
by the Company in writing); PROVIDED that such distribution shall be made only
if no Early Amortization Event or Potential Early Amortization Event has
occurred and is continuing and only to the extent that, if after giving effect
to such distribution, the Series 2000-2 Target Receivables Amount would not
exceed the Series 2000-2 Allocated Receivables Amount; PROVIDED FURTHER that if
the Company or the Servicer, on behalf of the Company, shall have given the
Administrator irrevocable prior written notice (effective upon receipt) when
required under Section 2.7(a), the Company or the Servicer may instruct the
Trustee in writing (specifying the related amount) to withdraw all or a portion
of such amounts on deposit in the Series 2000-2 Principal Collection
Sub-subaccount and apply such withdrawn amounts toward the reduction of the
Series 2000-2 Invested Amount and the Series 2000-2 Subordinated Interest Amount
in accordance with Section 2.7.

                        (i) On each Business Day during the Series 2000-2
          Amortization Period (including Distribution Dates), funds deposited in
          the Series 2000-2 Principal Collection Sub-subaccount shall be
          invested in Eligible Investments, at the written direction of the
          Servicer pursuant to subsection 3A.2(b), that mature on or prior to
          the Business Day immediately preceding the next Distribution Date and
          shall be distributed on such Distribution Date in accordance with
          subsection 3A.6(c). Except as set forth in subsection 3A.6(c), no
          amounts on deposit in the Series 2000-2 Principal Collection
          Sub-subaccount shall be distributed by the Trustee to the Company or
          the owner of the Series 2000-2 Subordinated Interest during the Series
          2000-2 Amortization Period.

                                      -29-


                    (c) On each Business Day, an amount equal to the Daily
Interest Deposit for such day shall be transferred by the Trustee from the
Series 2000-2 Non-Principal Collection Sub-subaccount to the Series 2000-2
Accrued Interest Sub-subaccount.

                    (d) The allocations to be made pursuant to this Section 3A.3
are subject to the provisions of Sections 2.5, 2.7, 7.2, 9.1 and 9.4 of the
Agreement.

                    SECTION 3A.4. DETERMINATION OF SERIES 2000-2 MONTHLY
INTEREST. (a) On or before the Business Day preceding each Distribution Date,
the Administrator shall notify the Servicer and the Trustee of the Series 2000-2
Monthly Interest for the Accrual Period ending on the related Distribution Date.
From time to time, for purposes of determining the Rate Periods applicable to
the different portions of the Series 2000-2 Funded Amount and of calculating
Discount with respect thereto, the Administrator shall allocate the Series
2000-2 Funded Amount to one or more tranches (each a "FUNDING TRANCHE"). At any
time, each Funding Tranche shall have only one Rate Period and one Rate Type. In
addition, at any time when the Series 2000-2 Funded Amount is not divided into
more than one portion, "Funding Tranche" means 100% of the Series 2000-2
Invested Amount.

                    (b) From time to time the Administrator shall notify the
Servicer and the Trustee of the number of Funding Tranches and the Rate Type of
each Funding Tranche.

                    (c) On each Distribution Date, the Servicer shall determine
the excess, if any (the "INTEREST SHORTFALL"), of (i) the Series 2000-2 Monthly
Interest for the Accrual Period ending on such Distribution Date OVER (ii) the
amount which will be available to be distributed to the Purchasers on such
Distribution Date in respect thereof pursuant to this Supplement. If the
Interest Shortfall with respect to any Distribution Date is greater than zero,
an additional amount ("ADDITIONAL INTEREST") equal to the product of (A) the
number of days until such Interest Shortfall shall be repaid DIVIDED BY 365 (or
366, as the case may be), (B) the Base Rate PLUS 2.0% and (C) such Interest
Shortfall (or the portion thereof which has not been paid to the Committed
Purchaser) shall be payable as provided herein with respect to the VFC
Certificates on each Distribution Date following such Distribution Date to but
excluding the Distribution Date on which such Interest Shortfall is paid to the
VFC Certificateholders.

                    (d) Any reduction in the Series 2000-2 Invested Amount on
any Business Day shall be allocated in the following order of priority:

                    FIRST, to reduce the Unallocated Balance, as appropriate;
and

                    SECOND, to reduce the portion of the Series 2000-2 Invested
Amount allocated to Eurodollar Tranches in such order as the Company may select
in order to minimize costs payable pursuant to Section 7.4.

                                      -30-


                    SECTION 3A.5. DETERMINATION OF SERIES 2000-2 MONTHLY
PRINCIPAL. (a) PAYMENTS OF SERIES 2000-2 PRINCIPAL. The amount (the "SERIES
2000-2 MONTHLY PRINCIPAL PAYMENT") distributable from the Series 2000-2
Principal Collection Sub-subaccount on each Distribution Date during the Series
2000-2 Amortization Period, as determined by the Servicer, shall be equal to the
amount on deposit in such account on the immediately preceding Settlement Report
Date; PROVIDED, HOWEVER, that the Series 2000-2 Monthly Principal Payment on any
Distribution Date shall not exceed the Series 2000-2 Invested Amount on such
Distribution Date after giving effect to the reductions and increases pursuant
to paragraphs (b) and (c) below. Further, on any other Business Day during the
Series 2000-2 Amortization Period, funds may be distributed from the Series
2000-2 Principal Collection Sub-subaccount to the Committed Purchaser in
accordance with Section 2.7 of this Supplement.

                    (b) REDUCTIONS TO SERIES 2000-2 PRINCIPAL. If, on any
Special Allocation Settlement Report Date, the Series 2000-2 Allocable
Charged-Off Amount is greater than zero for the related Settlement Period, the
Trustee shall (in accordance with written directions from the Servicer, upon
which the Trustee may conclusively rely) make the following allocations of such
amounts in the following order of priority:

                        (i)  the Series 2000-2 Required Reserves shall be
          reduced (but not below zero) by an amount equal to the Series 2000-2
          Allocable Charged-Off Amount (which shall also be reduced by the
          amount so applied);

                        (ii) then, to the extent that the Series 2000-2
          Allocable Charged-Off Amount is greater than zero following the
          application in clause (i) above, the Series 2000-2 Invested Amount
          shall be reduced (but not below zero) by such remaining Series 2000-2
          Allocable Charged-Off Amount (which shall also be reduced by the
          amount so applied).

                    (c) INCREASES TO SERIES 2000-2 PRINCIPAL. If, on any Special
Allocation Settlement Report Date, the Series 2000-2 Allocable Recoveries Amount
is greater than zero for the related Settlement Period, the Trustee shall (in
accordance with written directions from the Servicer upon which the Trustee may
conclusively rely) make the following allocations (after giving effect to the
applications in paragraph (b) of such amount in the following order of
priority):

                        (i)  the Series 2000-2 Invested Amount shall be
          increased (but only to the extent of any previous reductions of the
          Series 2000-2 Invested Amount pursuant to subsection 3A.5(b)(ii)) by
          the amount of the Series 2000-2 Allocable Recoveries Amount (which
          shall also be reduced by the amount so applied);

                        (ii) then, to the extent that the Series 2000-2
          Allocable Recoveries Amount is greater than zero following the
          applications in clause (i) above, the Series 2000-2 Required Reserves
          shall be increased (but only to the extent of any previous

                                      -31-


          reductions of the Series 2000-2 Required Reserves pursuant to
          subsection 3A.5(b)(i)) by such remaining Series 2000-2 Allocable
          Recoveries Amount (which shall also be reduced by the amount so
          applied).

                    SECTION 3A.6. APPLICATIONS. (a) The Trustee (acting at the
written direction of the Servicer upon which the Trustee may conclusively rely)
shall on each Distribution Date distribute to the Administrator, for further
distribution to the Committed Purchaser, from amounts on deposit in the Series
2000-2 Accrued Interest Sub-subaccount, an amount equal to the Series 2000-2
Monthly Interest payable on such Distribution Date (such amount, the "MONTHLY
INTEREST PAYMENT"), PLUS the amount of any Monthly Interest Payment previously
due but not distributed to the Administrator, for further distribution to the
Committed Purchaser on a prior Distribution Date, PLUS the amount of any
Additional Interest for such Distribution Date and any Additional Interest
previously due but not distributed to the Administrator, for further
distribution to the Committed Purchaser on a prior Distribution Date.

                    (b) On each Distribution Date, the Trustee shall apply funds
on deposit in the Series 2000-2 Non-Principal Collection Sub-subaccount in the
following order of priority to the extent funds are available:

                        (i)   an amount equal to the Commitment Fee for the
          Accrual Period ending on such Distribution Date shall be withdrawn
          from the Series 2000-2 Non-Principal Collection Sub-subaccount by the
          Trustee and paid to the Administrator, for the account of the
          Committed Purchaser;

                        (ii)  an aggregate amount equal to the Utilization Fee
          for the Accrual Period ending on such Distribution Date shall be
          withdrawn from the Series 2000-2 Non-Principal Collection
          Sub-subaccount by the Trustee and paid to the Administrator, for the
          account of the Committed Purchaser;

                        (iii) an amount equal to any amounts owing to the
          Trustee pursuant to Section 8.5 of the Agreement, shall be withdrawn
          from the Series 2000-2 Non-Principal Collection Sub-subaccount by the
          Trustee and paid to itself;

                        (iv)  an amount equal to the Series 2000-2 Periodic
          Servicing Fee for the Accrual Period ending on such Distribution Date
          shall be withdrawn from the Series 2000-2 Non-Principal Collection
          Sub-subaccount by the Trustee and paid to the Servicer or, if USSC or
          any Affiliate thereof is not the Servicer, an amount equal to the
          Series 2000-2 Periodic Servicing Fee shall be paid to the Person
          acting as Successor Servicer (less, in each case, any amounts payable
          to the Trustee pursuant to Section 8.5 of the Agreement, which shall
          be paid to the Trustee); and

                                      -32-


                        (v)   an amount equal to any unpaid Program Costs due
          and payable shall be withdrawn from the Series 2000-2 Non-Principal
          Collection Sub-subaccount by the Trustee and paid to the Persons owed
          such amounts.

Any remaining amounts on deposit in the Series 2000-2 Non-Principal Collection
Sub-subaccount (in excess of the Accrued Expense Amount as of such day) not
allocated pursuant to clauses (i) through (v) above shall be paid to the owner
of the Series 2000-2 Subordinated Interest; PROVIDED, HOWEVER, that during the
Series 2000-2 Amortization Period, such remaining amounts shall be deposited in
the Series 2000-2 Principal Collection Sub-subaccount for distribution in
accordance with subsection 3A.6(c).

                    (c) During the Series 2000-2 Amortization Period, the
Trustee shall apply, on each Distribution Date, amounts on deposit in the Series
2000-2 Principal Collection Sub-subaccount in the following order of priority:

                        (i)   an amount equal to the Series 2000-2 Monthly
          Principal Payment for such Distribution Date shall be distributed from
          the Series 2000-2 Principal Collection Sub-subaccount to the
          Administrator, for the account of the Committed Purchaser;

                        (ii)  if, following the repayment in full of the Series
          2000-2 Invested Amount, any amounts are owed to the Trustee, the
          Committed Purchaser or any other Person hereunder, such amounts shall
          be transferred from the Series 2000-2 Principal Collection
          Sub-subaccount and paid to the Trustee, the Committed Purchaser or
          such other Person; and

                        (iii) following the repayment in full of the Series
          2000-2 Invested Amount and of all of the amounts set forth in clause
          (ii), the remaining amount on deposit in the Series 2000-2 Principal
          Collection Sub-subaccount on such Distribution Date, if any, shall be
          distributed to the owner of the Series 2000-2 Subordinated Interest.

                                   ARTICLE IV

                            DISTRIBUTIONS AND REPORTS

                    Article IV of the Agreement (except for any portion thereof
relating to another Series) shall read in its entirety herein as follows and the
following shall be exclusively applicable to the VFC Certificates:

                    SECTION 4A.1. DISTRIBUTIONS. (a) On each Distribution Date,
the Trustee shall distribute to the Administrator and the Administrator shall
further distribute to the

                                      -33-


Committed Purchaser the amount to be distributed to the Committed Purchaser
pursuant to Article III.

                    (b) All allocations and distributions hereunder shall be in
accordance with the Monthly Settlement Statement, upon which the Trustee may
conclusively rely, and shall be made in accordance with the provisions of
Section 11.4 hereof and subject to Section 3.1 (h) of the Agreement.

                    SECTION 4A.2. Reserved.

                    SECTION 4A.3. STATEMENTS AND NOTICES. (a) MONTHLY SETTLEMENT
STATEMENTS. On each Settlement Report Date, the Servicer shall deliver to the
Trustee and the Administrator (commencing with the Settlement Report Date
occurring on April 17, 2000) a Monthly Settlement Statement in the form of
Exhibit F setting forth, among other things, the Loss Reserve Ratio, the
Dilution Reserve Ratio, the Minimum Ratio, the Carrying Cost Reserve Ratio, the
Servicing Reserve Ratio and the components of the calculation thereof, the
Series 2000-2 Monthly Interest, the Additional Interest, the Series 2000-2
Periodic Servicing Fee, the Commitment Fee and the Series 2000-2 Monthly
Principal Payment, each as recalculated for the period until the next succeeding
Settlement Report Date. The Trustee shall have no obligation whatsoever to
verify the accuracy of any information contained within the Monthly Settlement
Statement, including any calculations contained therein. A copy of any such
items may be obtained by any holder of a Certificate upon a written request
delivered to the Trustee at the Corporate Trust Office. Where the Servicer is
required to provide written instructions to the Trustee in respect of the
distributions and allocations to be made on a Distribution Date, the delivery by
the Servicer to the Trustee of the Monthly Settlement Statement with all such
instructions contained therein on the Settlement Report Date shall satisfy the
Servicers obligation to provide written instructions.

                    (b) ANNUAL CERTIFICATEHOLDERS' TAX STATEMENT. On or before
January 31 of each calendar year (or such earlier date as required by applicable
law), beginning with calendar year 2001, the Company on behalf of the Trustee
shall furnish, or cause to be furnished, to the Committed Purchaser, a statement
prepared by the Company containing the aggregate amount distributed to the
Committed Purchaser for such calendar year or the applicable portion thereof,
together with such other information as is required to be provided by an issuer
of indebtedness under the Internal Revenue Code and such other customary
information as the Company deems necessary or desirable to enable the Purchasers
to prepare their tax returns. Such obligation of the Company shall be deemed to
have been satisfied to the extent that substantially comparable information
shall have been prepared by the Servicer and provided to the Trustee or the
Administrator and to the Committed Purchaser, in each case pursuant to any
requirements of the Internal Revenue Code as from time to time in effect.

                    (c) EARLY AMORTIZATION EVENT/DISTRIBUTION OF PRINCIPAL
NOTICES. Upon the occurrence of an Early Amortization Event with respect to
Series 2000-2, the Company or the

                                      -34-


Servicer, as the case may be, shall give prompt written notice thereof to the
Trustee and the Administrator. As promptly as reasonably practicable after its
receipt of notice of the occurrence of an Early Amortization Event with respect
to Series 2000-2, the Trustee shall give notice to the Administrator.

                                    ARTICLE V

                      ADDITIONAL EARLY AMORTIZATION EVENTS

                    SECTION 5.1. ADDITIONAL EARLY AMORTIZATION EVENTS. If any
one of the events specified in Section 7.1 of the Agreement (after the
expiration of any grace periods or consents applicable thereto) or any one of
the following events (each, an "EARLY AMORTIZATION EVENT") shall occur during
the Series 2000-2 Revolving Period with respect to the Series 2000-2 Interests:

                    (a) (i) failure on the part of the Servicer to direct any
payment or deposit to be made or failure of any payment or deposit to be made in
respect of interest owing on any VFC Certificates or the Commitment Fee within
two Business Days of the date such interest or Commitment Fee is due or (ii)
failure on the part of the Servicer to direct any payment or deposit to be made
or of the Company to make any payment or deposit in respect of any other amounts
owing by the Company under any Pooling and Servicing Agreement within five
Business Days of the date such other amount is due or such deposit is required
to be made;

                    (b) failure on the part of the Company to duly observe or
perform in any material respect any of the covenants or agreements of the
Company set forth in Section 2.7 and 2.8 of the Agreement or (ii) failure on the
part of the Company duly to observe or perform in any material respect any other
covenants or agreements of the Company set forth in any Pooling and Servicing
Agreement, which failure continues unremedied until 30 days after the earlier of
the date on which a Responsible Officer of the Company or the Servicer has
knowledge thereof and the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by the
Trustee, or to the Company and the Trustee by the Administrator;

                    (c) any representation or warranty made or deemed made by
the Company in any Pooling and Servicing Agreement to or for the benefit of the
Committed Purchaser (i) proves to have been incorrect in any material respect
when made or when deemed made and (ii) continues to be materially incorrect
until 30 days after the earlier of the date on which a Responsible Officer of
the Company or the Servicer has knowledge thereof and the date on which notice
of such failure, requiring the same to be remedied, has been given by the
Trustee to the Company or by the Administrator to the Company and the Trustee;
PROVIDED, HOWEVER, that an Early Amortization Event with respect to the Series
2000-2 Interests shall not be deemed to have occurred under this paragraph if
the incorrectness of such representation or warranty gives

                                      -35-


rise to an obligation to repurchase the related Receivables and the Company has
repurchased the related Receivable or all such Receivables, if applicable, in
accordance with the provisions of the Pooling and Servicing Agreements within
ten Business Days of the day on which the Company was obligated to do so;

                    (d) a Servicer Default with respect to the Servicer shall
have occurred and be continuing or the Servicer shall have resigned;

                    (e) a Purchase Termination Event (as defined in either
Receivables Sale Agreement) shall have occurred and be continuing either
Receivables Sale Agreement;

                    (f) a USI Change in Control shall have occurred, or any
Seller, the Servicer, the Support Provider or the Company shall cease to be a
directly or indirectly wholly-owned, Subsidiary of United Stationers Inc.;

                    (g) any of the Agreement, the Servicing Agreement, this
Supplement or the Receivables Sale Agreements shall cease, for any reason, to be
in full force and effect, or the Company, the Seller or the Servicer or any
Affiliate of any thereof shall so assert in writing;

                    (h) the Trust shall for any reason cease to have a valid and
perfected first priority undivided ownership or security interest in the Trust
Assets, as a whole (subject to no other Liens other than Permitted Liens), or
any of USSC, USFS, the Company or any Affiliate of either thereof shall so
assert in writing;

                    (i) there shall have been filed against USSC, USFS, the
Company or the Trust (i) a notice of federal tax Lien from the Internal Revenue
Service, (ii) a notice of Lien from the PBGC under Section 412(n) of the
Internal Revenue Code or Section 302(f) of ERISA for a failure to make a
required installment or other payment to a plan to which either of such sections
applies or (iii) a notice of any other Lien the existence of which could
reasonably be expected to have a Material Adverse Effect on the business,
operations or financial condition of such Person, and, in each case, 40 days
shall have elapsed without such notice having been effectively withdrawn or such
Lien having been released or discharged;

                    (j) an Event of Default under the Credit Agreement shall
have occurred and the lender parties thereto shall have caused the indebtedness
thereunder to come due prior to its stated maturity;

                    (k) any action, suit, investigation or proceeding at law or
in equity (including, without limitation, injunctions, writs or restraining
orders) shall be brought or commenced or filed by or before any arbitrator,
court or Governmental Authority against the Company or the Servicer or any
properties, revenues or rights of either thereof which could reasonably be
expected to have a Material Adverse Effect with respect to such Person;

                                      -36-


                    (1) (i) one or more judgments for the payment of money (to
the extent not bonded or covered by insurance to the reasonable satisfaction of
the Administrator) shall be rendered against the Company (A) in an aggregate
amount greater than $50,000 or (B) that, individually or in the aggregate, have
resulted or could reasonably be expected to result in a Material Adverse Effect
or (ii) one or more judgments for the payment of money (to the extent not bonded
or covered by insurance to the reasonable satisfaction of the Administrator)
shall be rendered against the Servicer, the Support Provider, any Seller or any
combination thereof (A) in an aggregate amount greater than $7,500,000 or (B)
that, individually or in the aggregate, have resulted or could reasonably be
expected to result in a Material Adverse Effect and, in either case, the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to levy upon assets or properties of the Company, the
Servicer, the Support Provider or any Seller to enforce any such judgment;

                    (m) as at the end of any Settlement Period, the average
Loss-to-Liquidation Ratio for the two preceding Settlement Periods (including
such Settlement Period then ended) shall exceed 1.0%;

                    (n) as at the end of any Settlement Period, the average
Default Ratio for the two preceding Settlement Periods (including such
Settlement Period then ended) shall exceed 2.75%;

                    (o) as at the end of any Settlement Period, the average
Dilution Ratio for the two preceding Settlement Periods (including such
Settlement Period then ended) shall exceed 4.25%;

                    (p) for any Settlement Period, Days Sales Outstanding shall
be more than 40 days; or

                    (q) the Series 2000-2 Allocated Receivables Amount shall be
less than the Series 2000-2 Target Receivables Amount for a period of two
consecutive Business Days.

then, in the case of (x) any event described in Section 7.1 of the Agreement,
after the applicable grace period (if any) set forth in such Section, and
paragraphs (h) and (i) above automatically without any notice or action on the
part of the Trustee or Administrator, an early amortization period shall
immediately commence or (y) any other event described above, after the
expiration of the applicable grace period (if any) set forth in such
subsections, the Administrator may, by written notice then given to the Company
and the Servicer, declare that an early amortization period has commenced as of
the date of such notice with respect to Series 2000-2 (any such period under
clause (x) or (y) above, an "EARLY AMORTIZATION PERIOD").

                    Notwithstanding the foregoing, a delay or failure in
performance referred to in clause (a) above for a period of five Business Days
after the expiration of the applicable grace

                                      -37-


period, or in clause (b) above for a period of 30 Business Days after the
expiration of the applicable grace period, will not constitute an Early
Amortization Event if such delay or failure could not have been prevented by the
exercise of reasonable diligence by the Company and such delay or failure was
caused by a Force Majeure Delay. The Company will nevertheless be required to
use its best efforts to perform its obligations in a timely manner in accordance
with the terms of the Transaction Documents, and the Company shall promptly give
the Trustee an Officer's Certificate notifying it of any such delay or failure.

                                   ARTICLE VI

                                  SERVICING FEE

                    SECTION 6.1. SERVICING COMPENSATION. A periodic servicing
fee (the "SERIES 2000-2 PERIODIC SERVICING FEE") shall be payable to the
Servicer on each Distribution Date for the preceding Settlement Period in an
amount equal to the product of (a) the Servicing Fee and (b) a fraction the
numerator of which is the daily average Purchase Limit for such Settlement
Period and the denominator of which is the sum of (i) the Aggregate Invested
Amounts (other than the Series 2000-2 Invested Amount and the Invested Amount in
respect of any variable funding certificate of any other Outstanding Series) on
the first day of such Settlement Period and (ii) the Purchase Limit on the first
day of such Settlement Period plus the aggregate Commitment amount for any
variable funding certificate of any other Outstanding Series; PROVIDED, HOWEVER,
that if an Early Amortization Event has occurred and is continuing and USFS or
any Affiliate thereof is Servicer, payment of the Series 2000-2 Periodic
Servicing Fee shall be deferred until the Series 2000-2 Invested Amount has been
paid in full.

                                   ARTICLE VII

                             CHANGE IN CIRCUMSTANCES

                    SECTION 7.1. ILLEGALITY. Notwithstanding any other provision
herein, if any Change in Law shall make it unlawful for any Affected Party to
make or maintain its portion of the VFC Certificateholder's Interest (or funding
thereof through a Program Support Agreement) in any Eurodollar Tranche and such
Affected Party shall notify in writing the Administrator, the Trustee and the
Company, then the portion of each Eurodollar Tranche applicable to such Affected
Party shall thereafter be calculated by reference to the Base Rate. If any such
change in the method of calculating interest occurs on a day which is not the
last day of the Rate Period with respect to any Eurodollar Tranche, the Company
shall pay to the Administrator for the account of such Affected Party the
amounts, if any, as may be required pursuant to Section 7.4.

                    SECTION 7.2. INCREASED COSTS. If any Change in Law (except
with respect to Taxes which shall be governed by Section 7.3) shall:

                                      -38-


               (i)  impose, modify or deem applicable any reserve, special
          deposit or similar requirement against assets of, deposits with or for
          the account of, or credit extended by, any Affected Party (except any
          such reserve requirement reflected in the Euro-Rate); or

               (ii) impose on any Affected Party or the London interbank market
          any other condition affecting the Transaction Documents or the funding
          of Eurodollar Tranches by such Affected Party;

and the result of any of the foregoing shall be to increase the cost to such
Affected Party of making, converting into, continuing or maintaining Eurodollar
Tranches (or maintaining its obligation to do so) or to reduce any amount
received or receivable by such Affected Party hereunder or under any Program
Support Agreement (whether principal, interest or otherwise), then the Company
will pay to such Affected Party such additional amount or amounts as will
compensate such Affected Party for such additional costs incurred or reduction
suffered.

                    (b) If any Affected Party determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Affected Party's capital or the capital of any corporation
controlling such Affected Party as a consequence of its obligations hereunder or
under any Program Support Agreement to a level below that which such Affected
Party or such corporation could have achieved but for such Change in Law (taking
into consideration such Affected Party's or such corporation's policies with
respect to capital adequacy), then from time to time, the Company shall pay to
such Affected Party such additional amount or amounts as will compensate such
Affected Party for any such reduction suffered.

                    (c) A certificate of an Affected Party setting forth in
reasonable detail the amount or amounts necessary to compensate such Affected
Party as specified in subsections (a) and (b) of this Section 7.2 shall be
delivered to the Company (with a copy to the Administrator) and shall be
conclusive absent manifest error provided that such Certificate is delivered in
good faith and in a manner generally consistent with such Affected Party's
standard practice. The agreements in this Section shall survive the termination
of this Supplement and the Agreement and the payment of all amounts payable
hereunder and thereunder for a period of nine months.

                    (d) Failure or delay on the part of any Affected Party to
demand compensation pursuant to this Section 7.2 shall not constitute a waiver
of such Affected Party's right to demand such compensation; PROVIDED that the
Company shall not be required to compensate an Affected Party pursuant to this
Section 7.2 for any increased costs or reductions incurred more than 270 days
prior to the date that such Affected Party notifies the Company of the Change in
Law giving rise to such increased costs or reductions and of such Affected
Party's intention to claim compensation therefor; PROVIDED FURTHER that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 270-day period referred to above shall be extended to include the
period of retroactive effect thereof.

                                      -39-


                    SECTION 7.3. TAXES. Any and all payments by or on account of
any obligation of the Company hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the
Company shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 7.3) the Administrator or the
Committed Purchaser receives an amount equal to the sum that it would have
received had no such deductions been made, (ii) the Company shall make such
deductions and (iii) the Company shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

                    (a) In addition, the Company shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.

                    (b) Subject to paragraph (e) of this Section 7.3, the
Company shall indemnify the Administrator and the Committed Purchaser within the
later of 10 days after written demand therefor and the Distribution Date next
following such demand for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrator or the Committed Purchaser on or with respect to
any payment by or on account of any obligation of the Company hereunder or under
any other Transaction Document (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section
7.3) and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Company by the Administrator or the Committed Purchaser shall be conclusive
absent manifest error. Any payments made by the Company pursuant to this
subsection shall be made solely from funds available to the Company which are
not otherwise needed to be applied to the payment of any amounts (other than
amounts payable to the Company) pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in excess
of the proceeds to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.
The agreements in this subsection shall survive the termination of this
Supplement and the Agreement and the payment of all amounts payable hereunder
and thereunder for a period of nine months.

                    (c) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Company to a Governmental Authority, the Company
shall deliver to the Administrator the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrator.

                    (d) The Administrator and the Committed Purchaser shall (but
with respect to any Indemnified Tax or Other Tax arising from a Change in Law,
only to the extent the

                                      -40-


Administrator or such Purchaser is legally able to do so) deliver to the Company
(with a copy to the Administrator) such properly completed and executed
documentation prescribed by applicable law and reasonably requested by the
Company on the later of (i) 30 Business Days after such request is made and the
applicable forms are provided to the Committed Purchaser or (ii) 30 Business
Days before prescribed by applicable law as will permit such payments to be made
without withholding or with an exemption from or reduction of Indemnified Taxes
or Other Taxes. Failure to timely provide such documentation to the Company
shall relieve the Company of any indemnification responsibility under this
Section 7.3.

                    (e) If the Administrator or the Committed Purchaser receives
a refund solely in respect of Taxes or Other Taxes, it shall pay over such
refund to the Company to the extent that such Administrator or Purchaser has
already received indemnity payments or additional amounts pursuant to this
Section 7.3 with respect to such Taxes or Other Taxes giving rise to the refund,
net of all out-of-pocket expenses and without interest (other than interest paid
by the relevant Governmental Authority with respect to such refund); PROVIDED,
HOWEVER, that the Company shall, upon request of the Administrator or the
Committed Purchaser, repay such refund (plus interest or other charges imposed
by the relevant Governmental Authority) to the Administrator or the Committed
Purchaser if the Administrator or the Committed Purchaser is required to repay
such refund to such Governmental Authority. Nothing contained herein shall
require the Administrator or the Committed Purchaser to make its tax returns (or
any other information relating to its taxes which it deems confidential)
available to the Company or any other Person.

                    SECTION 7.4. BREAK FUNDING PAYMENTS. The Company agrees to
indemnify the Committed Purchaser and to hold the Committed Purchaser harmless
from any loss or expense which the Committed Purchaser may sustain or incur as a
consequence of (a) default by the Company in making a borrowing of a Eurodollar
Tranche after the Company has given irrevocable notice requesting the same in
accordance with the provisions of this Supplement, or (b) default by the Company
in making any prepayment in connection with a Decrease after the Company has
given irrevocable notice thereof in accordance with the provisions of Section
2.7 or (c) the making of a prepayment of a Eurodollar Tranche or CP Tranche
prior to the termination of the Rate Period for such Eurodollar Tranche or CP
Tranche, as applicable. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid or not so borrowed, for the period from the date of such
prepayment or of such failure to borrow to the last day of the Rate Period (or
in the case of a failure to borrow the Rate Period that would have commenced on
the date of such prepayment or of such failure) in each case at the Euro-Rate or
CP Rate, as applicable, for such Eurodollar Tranche or CP Tranche, as
applicable, provided for herein over (ii) the amount of interest (as reasonably
determined by the Committed Purchaser) which would have accrued to the Committed
Purchaser on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank eurodollar market; PROVIDED that any
payments made by the Company pursuant to this subsection shall be made solely
from funds available to the Company which are not otherwise needed to be applied
to the payment of any amounts (other

                                      -41-


than amounts payable to the Company) pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in excess
of the proceeds to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.
This covenant shall survive the termination of this Supplement and the Agreement
and the payment of all amounts payable hereunder and thereunder for a period of
nine months. A certificate as to any additional amounts payable pursuant to the
foregoing sentence, showing in reasonable detail the calculation thereof,
submitted by the Committed Purchaser to the Company shall be conclusive absent
manifest error.

                    SECTION 7.5. MITIGATION OBLIGATIONS. (a) If any Liquidity
Purchaser requests compensation under Section 7.2, or if the Company is required
to pay any additional amount to any such Liquidity Purchaser or any Governmental
Authority for the account of any Alternate Investor pursuant ho Section 7.3,
then such Liquidity Purchaser shall use reasonable efforts to designate a
different lending office for funding or booking its obligations under this
Supplement and the Agreement or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Liquidity Purchaser, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 7.2 or 7.3, as the case may be, in
the future and (ii) would not subject such liquidity Purchaser to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Liquidity Purchaser. The Company hereby agrees to pay all reasonable costs and
expenses incurred by any Liquidity Purchaser in connection with any such
designation or assignment.

                    (b) If any Liquidity Purchaser requests compensation under
Section 7.2, or if the Company is required to pay any additional amount to such
Liquidity Purchaser or any Governmental Authority for the account of such
Liquidity Purchaser pursuant to Section 7.3, or if such Liquidity Purchaser
defaults in its obligations under the Liquidity Agreement, Then the Company may,
at its sole expense and effort, upon notice to such Liquidity Purchaser and the
Administrator require such Liquidity Purchaser to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.11), all its interests, rights and obligations under the Liquidity
Agreement to an assignee that shall assume such obligations (which assignee may
be another Liquidity Purchaser, if a Liquidity Purchaser accepts such
assignment); PROVIDED that (i) the Company shall have received the prior written
consent of the Administrator, (ii) such Liquidity Purchaser shall have received
payment of all amounts payable to it hereunder and under the Liquidity
Agreement, from the assignee or the Company (in the case of all amounts payable
hereunder) and (iii) in the case of any such assignment resulting from a claim
for compensation under Section 7.2 or payments required to be made pursuant to
Section 7.3, such assignment will result in a reduction in such compensation or
payments. A Liquidity Purchaser shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Liquidity Purchaser or otherwise, the circumstances entitling the Company to
require such assignment and delegation cease to apply.

                                      -42-


                                  ARTICLE VIII

                    REPRESENTATIONS AND WARRANTIES, COVENANTS

                    SECTION 8.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE SERVICER. The Company and the Servicer each hereby represents and
warrants to the Trustee, the Administrator and each of the Purchasers that each
and every of their respective representations and warranties contained in the
Agreement is true and correct in all material respects as of the Issuance Date
and as of the date of each Increase (except to the extent that any such
representation or warranty is expressly made as of another date).

                    SECTION 8.2. COVENANTS OF THE COMPANY AND THE SERVICER. The
Company and the Servicer hereby agree, in addition to their obligations under
the Agreement and the Servicing Agreement, that:

                    (a) they shall observe in all material respects each and
every of their respective covenants (both affirmative and negative) contained in
the Agreement, the Servicing Agreement, this Supplement and all other
Transaction Documents to which each is a party;

                    (b) they shall afford the Trustee, Administrator or any
representatives of the Trustee or the Administrator access to all records
relating to the Receivables at any reasonable time during regular business
hours, upon reasonable prior notice (and without prior notice if an Early
Amortization Event has occurred), for purposes of inspection and shall permit
the Trustee, Administrator or any representative of the Trustee or the
Administrator to visit any of the Company's or the Servicer's, as the case may
be, offices or properties during regular business hours and as often as may
reasonably be desired to discuss the business, operations, properties, financial
and other conditions of the Company or the Servicer with their respective
officers and employees and with their independent certified public accountants;
PROVIDED that the Administrator shall provide the Company or the Servicer, as
the case may be, with reasonable notice prior to any such contact and shall give
the Company or the Servicer the reasonable opportunity to participate in such
discussions; and

                    (c) neither the Company nor the Servicer shall take any
action, nor permit the Seller to take any action, requiring the satisfaction of
the Rating Agency Condition pursuant to any Transaction Document without the
prior written consent of the Majority Purchasers.

                    SECTION 8.3. COVENANTS OF THE SERVICER. The Servicer hereby
agrees that:

                    (a) it shall observe each and all of its respective
covenants (both affirmative and negative) contained in the Pooling and Servicing
Agreements in all material respects;

                    (b) it shall provide to the Administrator, simultaneously
with delivery to the Trustee, all reports, notices, certificates, statements and
other documents required to be delivered

                                      -43-


to the Trustee pursuant to the Agreement, the Servicing Agreement and the other
Transaction Documents and furnish to the Administrator promptly after receipt
thereof a copy of each material notice, material demand or other material
communication (excluding routine communications) received by or on behalf of the
Company or the Servicer with respect to the Transaction Documents;

                    (c) it shall provide notice to the Administrator of the
appointment of a Successor Servicer pursuant to Section 6.2 of the Servicing
Agreement; and

                    (d) it shall operate in good faith to allow the Trustee to
use the Servicer's available facilities, equipment, leasehold agreements, data
systems, records, files and expertise upon the Servicer's termination or
default.

                    SECTION 8.4. OBLIGATIONS UNAFFECTED. The obligations of the
Company and the Servicer to the Administrator and the Committed Purchaser under
this Supplement shall not be affected by reason of any invalidity, illegality or
irregularity of any of the Receivables or any sale of any of the Receivables.

                                   ARTICLE IX

                              CONDITIONS PRECEDENT

                    SECTION 9.1. CONDITIONS PRECEDENT TO EFFECTIVENESS OF
SUPPLEMENT. This Supplement shall become effective on the date (the "EFFECTIVE
DATE") on which the following conditions precedent have been satisfied:

                    (a) DOCUMENTS. The Administrator shall have received, with a
copy for the Committed Purchaser, true and complete copies of (i) this
Supplement, executed by a duly authorized officer of each of the Company, the
Servicer, the Trustee, the Administrator and the Committed Purchaser and (ii)
the other Transaction Documents, each duly executed by the parties thereto.

                    (b) ORGANIZATIONAL DOCUMENTS, ORGANIZATIONAL PROCEEDINGS OF
THE COMPANY AND SERVICER. The Administrator shall have received from the
Company, the Seller, the Support Provider and the Servicer, with a copy for the
Committed Purchaser, true and complete copies of:

                        (i)   the articles of association, articles of
          incorporation or other formation documents, including all amendments
          thereto, of such Person, certified as of a recent date by the
          Secretary of State or other appropriate authority of the state of
          formation or incorporation, as the case may be, and a certificate of
          compliance, of status or of good standing, as and to the extent
          applicable, of each such Person as of a recent date, from the
          Secretary of State or other appropriate authority of such
          jurisdiction;

                                      -44-


                        (ii)  a certificate of the Secretary or an Assistant
          Secretary of each such Person, dated the Effective Date and certifying
          (A) that attached thereto is a true and complete copy of the bylaws
          and articles of incorporation or articles of association of each such
          Person, as in effect on the Effective Date and at all times since a
          date prior to the date of the resolutions described in clause (B)
          below, (B) that attached thereto is a true and complete copy of the
          resolutions, in form and substance reasonably satisfactory to the
          Administrator, of the Board of Directors of each such Person or
          committees thereof authorizing the execution, delivery and performance
          of the Series 2000-2 Transaction Documents to which it is a party and
          the transactions contemplated thereby, and that such resolutions have
          not been amended, modified, revoked or rescinded and are in full force
          and effect, (C) that the articles of association, article of
          incorporation or other formation documents of each such Person has not
          been amended since the date of the last amendment thereto shown on the
          certificate of good standing (or its equivalent) furnished pursuant to
          clause (i) above and (D) as to the incumbency and specimen signature
          of each officer executing any Series 2000-2 Transaction Documents or
          any other document delivered in connection herewith or therewith on
          behalf of each such Person; and

                        (iii) a certificate of another officer as to the
          incumbency and specimen signature of the Secretary or Assistant
          Secretary executing the certificate pursuant to clause (ii) above.

                    (c) GOOD STANDING CERTIFICATES. The Administrator shall have
received, with a copy for the Committed Purchaser, copies of certificates of
compliance, of status or of good standing, dated as of a recent date, from the
Secretary of State or other appropriate authority of such jurisdiction, with
respect to the Company, the Servicer, the Support Provider and the Seller, in
each State where the ownership, lease or operation of property or the conduct of
business requires it to qualify as a foreign corporation or limited liability
company, except where the failure to so qualify would not reasonably be expected
to have a material adverse effect on the business, operations, properties or
condition (financial or otherwise) of the Company, the Servicer, the Support
Provider or the Seller, as the case may be.

                    (d) CONSENTS, LICENSES, APPROVALS, ETC. The Administrator
shall have received, with a copy for the Committed Purchaser, certificates dated
the date hereof of a Responsible Officer of the Company, the Servicer and the
Seller either (i) attaching copies of all material consents, licenses and
approvals required in connection with the execution, delivery and performance by
the Company or the Servicer, as the case may be, of this Supplement and the
validity and enforceability of this Supplement against the Company and the
Servicer, and such consents, licenses and approvals shall be in full force and
effect or (ii) stating that no such consents, licenses or approvals are so
required.

                    (e) NO LITIGATION. The Administrator shall have received
confirmation that there is no pending or, to their knowledge after due inquiry,
threatened action or proceeding

                                      -45-


affecting USSC, USFS or any of their respective Subsidiaries before any
Governmental Authority that could reasonably be expected to have a Material
Adverse Effect with respect to USSC and its Subsidiaries taken as a whole.

                    (f) LIEN SEARCHES. The Administrator shall have received,
with a copy for the Committed Purchaser, a written search report listing all
effective financing statements that name the Seller, USFS or the Company as
debtor or assignor and that are filed in the jurisdictions in which filings were
made pursuant to paragraph (h) below and in any other jurisdictions that the
Administrator determines are reasonably necessary or appropriate, together with
copies of such financing statements (none of which, except for those described
in paragraph (h) below shall cover any Receivables), and tax and judgment lien
searches showing no such liens that are not permitted by the Transaction
Documents.

                    (g) UCC CERTIFICATE. The Administrator shall have received,
with a copy for the Committed Purchaser, from the Seller, USFS and the Company a
UCC Certificate, completed in a manner satisfactory to the Administrator, duly
executed by a Responsible Officer of the Seller or the Company, as the case
maybe, and dated on or prior to the Issuance Date.

                    (h) FILINGS, REGISTRATIONS AND RECORDINGS. Any documents
(including, without limitation, financing statements) required to be filed in
order (i) to perfect the sale of the Receivables by the Seller to USFS and by
USFS to the Company pursuant to the Receivables Sale Agreements and (ii) to
create, in favor of the Trustee, a perfected ownership/security interest in the
Trust Assets under the Agreement with respect to which an ownership/security
interest may be perfected by a filing under the UCC or other comparable statute,
shall, in each case, have been properly prepared, executed and filed in each
office in each jurisdiction listed in the Agreement or the Receivables Sale
Agreement, as the case may be, and such filings are the only filings required in
order to perfect the sale of the Receivables by a Seller to USFS and by USFS to
the Company under the Receivables Sale Agreements or to the Trust, under the
Agreement, as the case may be, in the jurisdictions listed therein. The
Administrator shall have received evidence reasonably satisfactory to it of each
such filing, registration or recordation and reasonably satisfactory evidence of
the payment of any necessary fee, tax or expense relating thereto.

                    (i) LEGAL OPINIONS. The Administrator shall have received,
with a copy for the Committed Purchaser, opinions of counsel to the Company and
the Servicer, dated the Issuance Date (or, dated as of an earlier date, with a
reliance letter dated as of the Issuance Date as agreed by the Administrator and
the Servicer), as to corporate, federal tax (tax status of the VFC Certificates
as debt), bankruptcy ("true sale" and "non-substantive consolidation"),
perfection and priority of security and/or ownership interests and other matters
in form and substance reasonably acceptable to the Administrator and their
counsel.

                    (j) FEES. The Administrator shall have received payment of
all fees and other amounts due and payable to it or the Committed Purchaser on
or before the Effective Date.

                                      -46-


                    (k) MATERIAL ADVERSE CHANGE. No material adverse change
shall have occurred with respect to the business, operations, property or
condition (financial or otherwise) of USSC and its Subsidiaries taken as a whole
since December 31, 1999.

                                    ARTICLE X

                                   [Reserved]

                                   ARTICLE XI

                                  MISCELLANEOUS

                    SECTION 11.1. RATIFICATION OF AGREEMENT. As supplemented by
this Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.

                    SECTION 11.2. GOVERNING LAW. (a) THIS SUPPLEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW) AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                    EACH OF THE COMPANY, THE TRUSTEE AND THE SERVICER HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE
CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS SUPPLEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH OF THE COMPANY, THE SERVICER AND THE
TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING IN THIS SECTION 11.2 SHALL AFFECT THE RIGHT OF THE PURCHASERS TO BRING
ANY ACTION OR PROCEEDING AGAINST ANY OF THE COMPANY, THE TRUSTEE OR THE

                                      -47-


SERVICER OR ANY OF THEIR RESPECTIVE PROPERTY IN THE COURTS OF OTHER
JURISDICTIONS.

                    (b) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE, AMONG ANY OF THEM ARISING OUT OF, CONNECTED WITH, RELATING TO
OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS
SUPPLEMENT OR THE OTHER TRANSACTION DOCUMENTS.

                    SECTION 11.3. FURTHER ASSURANCES. Each of the Company, the
Servicer and the Trustee agrees, from time to time, to do and perform any and
all acts and to execute any and all further instruments required or reasonably
requested by the Administrator more fully to effect the purposes of this
Supplement and the sale of the VFC Certificates hereunder, including, without
limitation, in the case of the Company and the Servicer, the execution of any
financing or registration statements or similar documents or notices or
continuation statements relating to the Receivables and the other Trust Assets
for filing or registration under the provisions of the UCC or similar
legislation of any applicable jurisdiction.

                    SECTION 11.4. PAYMENTS. To the extent proper payment
instructions are provided, each payment to be made hereunder shall be made on
the required payment date in lawful money of the United States and in
immediately available funds, if to the Committed Purchaser, at the office of the
Administrator set forth in Section 11.9.

                    SECTION 11.5. COSTS AND EXPENSES. The Company agrees to pay
all reasonable out-of-pocket costs and expenses of the Administrator (including,
without limitation, reasonable fees and disbursements of one counsel to the
Administrator) in connection with (i) the preparation, execution and delivery of
this Supplement, the Agreement and the other Transaction Documents and
amendments or waivers of any such documents and (ii) the enforcement by the
Administrator of the obligations and liabilities of the Company and the Servicer
under the Agreement, this Supplement, the other Transaction Documents or any
related document; PROVIDED that any payments made by the Company pursuant to
this subsection shall be made solely from funds available to the Company which
are not otherwise needed to be applied to the payment of any amounts (other than
amounts payable to the Company) pursuant to any Pooling and Servicing
Agreements, shall be non-recourse other than with respect to proceeds in excess
of the proceeds to make such payment, and shall not constitute a claim against
the Company to the extent that insufficient proceeds exist to make such payment.

                    SECTION 11.6. NO WAIVER, CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee, the
Administrator or the Committed Purchaser, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or

                                      -48-


privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.

                    SECTION 11.7. AMENDMENTS. (a) Subject to subsection (c) of
this Section 11.7, this Supplement may be amended in writing from time to time
by the Servicer, the Company and the Trustee, with the consent of the
Administrator but without the consent of any holder of any outstanding VFC
Certificate, to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein or to add any
other provisions to or change in any manner or eliminate any of the provisions
with respect to matters or questions raised under this Supplement which shall
not be inconsistent with the provisions of any Pooling and Servicing Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Officer's
Certificate or, to the extent in the reasonable view of the Company, a question
of law exists, an Opinion of Counsel delivered to the Trustee, adversely affect
in any material respect the interests of the VFC Certificateholder, including
without limitation the tax status of the VFC Certificates or of the Trust. The
Trustee may, but shall not be obligated to, enter into any such amendment
pursuant to this paragraph or paragraph (b) below which affects the Trustee's
rights, duties or immunities under any Pooling and Servicing Agreement or
otherwise.

                    (b) Subject to subsection (c) of this Section 11.7, this
Supplement may also be amended in writing from time to time by the Servicer, the
Company and the Trustee with the consent of the Administrator for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Supplement or of modifying in any manner the rights of the
VFC Certificateholder (including, without limitation, the acceleration of the
payment of sums payable to or for the account of the Committed Purchaser under
any provision of this Supplement); PROVIDED, HOWEVER, that no such amendment
shall, unless signed or consented to in writing by the Committed Purchaser, (i)
extend the time for payment, or reduce the amount, of any sum payable to or for
the account of the Committed Purchaser under any provision of this Supplement or
extend the Series 2000-2 Termination Date, (ii) subject the Committed Purchaser
to any additional obligation (including, without limitation, any change in the
determination of any amount payable by any Purchaser), (iii) increase the
Purchase Limit or change the amount of any interest or fees or the voting
requirements required for any action under this subsection or any other
provision of this Supplement or (iv) change the tax characteristics of the VFC
Certificates or of the Trust.

                    (c) Any amendment hereof can be effected without the
Administrator's being party thereto; PROVIDED, HOWEVER, that no such amendment,
modification or waiver of this Supplement that affects rights or duties of the
Administrator shall be effective unless the Administrator shall have given its
prior written consent thereto.

                    (d) No amendment hereof shall be effective until the Rating
Agency Condition is satisfied with respect thereto.

                                      -49-


                    SECTION 11.8. SEVERABILITY. If any provision hereof is void
or unenforceable in any jurisdiction, such voidness or unenforceability shall
not affect the validity or enforceability of (i) such provision in any other
jurisdiction or (ii) any other provision hereof in such or any other
jurisdiction.

                    SECTION 11.9. NOTICES. All notices, requests and demands to
or upon any party hereto to be effective shall be given (i) in the case of the
Company, the Servicer and the Trustee, in the manner set forth in Section 10.4
of the Agreement and (ii) in the case of the Administrator and the Committed
Purchaser in writing, and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand or three days
after being deposited in the mail, postage prepaid, or, in the case of facsimile
notice, when received, addressed as follows in the case of the Administrator,
and the Committed Purchaser; or to such other address as may be hereafter
notified by the respective parties hereto:

         If to the Administrator:

                          PNC Bank, National Association,
                          as Administrator
                          One PNC Plaza
                          259 Fifth Avenue
                          Pittsburgh, Pennsylvania 15222-2707
                          Attention:    John Smathers
                          Telephone:    412/762-6440
                          Facsimile:    412/762-9184

         If to the Committed Purchaser:

                          Market Street Funding Corporation
                          AMACAR Group, LLC
                          6525 Morrison Boulevard, Suite 318
                          Charlotte, North Carolina 28211
                          Attention:    Douglas K. Johnson
                          Telephone:    704/365-0569
                          Facsimile:    704/363-1362

                          (with a copy to the Administrator)

                    SECTION 11.10. SUCCESSORS AND ASSIGNS. This Supplement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights under this Supplement without the prior written
consent of the Administrator and the Committed Purchaser may not

                                      -50-


assign or transfer any of its rights under this Supplement except as described
below. The Committed Purchaser may assign its rights under this Supplement
without the prior written consent of the Company to PNC, any Affiliate of PNC
(other than a director or officer of PNC), any Liquidity Purchaser or other
Program Support Provider or any Person that is: (i) in the business of issuing
Commercial Paper and (ii) associated with or administered by PNC or any
Affiliate of PNC. The Administrator shall give prior written notice of any
assignment of the Committed Purchaser's rights and obligations (including
ownership of the VFC Certificate to any Person other than a Program Support
Provider). The Committed Purchaser may at any time grant to one or more
Liquidity Providers party to the Liquidity Agreement, or to any other Program
Support Provider, participating interests in its Series 2000-1 Purchaser
Invested Amount. In the event of any such grant by the Committed Purchaser of a
participating interest to a Liquidity Purchaser or other Program Support
Provider, the Committed Purchaser shall remain responsible for the performance
of its obligations hereunder. The Company agrees that each Liquidity Purchaser
or other Program Support Provider shall be entitled to the benefits of ARTICLE
VII. Only assignments to Persons other than a Program Support Provider shall be
subject to SECTION 11.11.

                    SECTION 11.11. SECURITIES LAWS, ASSIGNMENTS. (a) The
Committed Purchaser agrees that its VFC Certificate will be acquired for
investment only and not with a view to any public distribution thereof, and that
the Committed Purchaser will not offer to sell or otherwise dispose of its VFC
Certificate (or any interest therein) in violation of any of the registration
requirements of the Securities Act or any applicable state or other securities
laws. The Committed Purchaser acknowledges that it has no right to require the
Company to register its VFC Certificate under the Securities Act or any other
securities law. The Committed Purchaser hereby confirms and agrees that in
connection with any transfer by it of an interest in the VFC Certificate, the
Committed Purchaser has not engaged and will not engage in a general
solicitation or general advertising including advertisements, articles, notices
or other communications published in any newspaper, magazine or similar media or
broadcast over radio or television, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.

                    (b) Any sale subject to the terms of this Section 11. 11(a)
shall be made only upon the satisfaction of all applicable requirements under
Section 5.3 of the Agreement, in the ordinary course of its business and in
accordance with applicable law, in each case pursuant to a commitment transfer
supplement, substantially in the form of Exhibit G (the "COMMITMENT TRANSFER
SUPPLEMENT"), executed by such purchaser, the Committed Purchaser and delivered
to the Administrator for its acceptance and recording in the Register.
Notwithstanding the foregoing, the Committed Purchaser shall not so sell its
rights hereunder, (x) if such sale would result in there being more than 20
beneficial owners of the VFC Certificates for the purposes of the 1940 Act or is
not otherwise permitted under subsection 5.3(e) of the Agreement, (y) unless the
Committed Purchaser reasonably believes that such purchaser is a "qualified
institutional buyer" within the meaning of Rule 144A promulgated under the
Securities Act and (z) unless, prior to such sale, the purchaser of such rights
shall have executed and delivered to the

                                      -51-


Administrator and the Transfer Agent and Registrar an Assignment/Participation
Certification. Upon such execution, delivery, acceptance and recording, (A) the
Company shall sign, on behalf of the Trust, and shall direct the Trustee in
writing to duly authenticate, and the Trustee, upon receiving such direction,
shall so authenticate, a new VFC Certificate in the name and the denomination
determined pursuant to the related Commitment Transfer Supplement and set forth
in such written direction and shall deliver such VFC Certificate to such
purchaser (or its designated agent or nominee) in accordance with such written
direction, and (B) from and after the Transfer Issuance Date determined pursuant
to such Commitment Transfer Supplement, (1) the purchaser thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer Supplement,
have the rights and obligations of the Committed Purchaser hereunder with a
"Commitment" as set forth therein and (2) the Committed Purchaser shall, to the
extent provided in such Commitment Transfer Supplement, be released from its
obligations under this Supplement.

                    (c) The Administrator shall maintain at its address referred
to in Section 11.9 a copy of each Commitment Transfer Supplement delivered to
it.

                    (d) Upon its receipt of an executed Commitment Transfer
Supplement, the Administrator shall (i) promptly accept such Commitment Transfer
Supplement and (ii) on the Transfer Issuance Date determined pursuant thereto
record the information contained therein in the Register and give notice of such
acceptance and recordation to the Servicer and the Company.

                    SECTION 11.12. [Reserved]

                    SECTION 11.13. COUNTERPARTS. This Supplement may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.

                    SECTION 11.14. NO BANKRUPTCY PETITION. The Administrator and
the Committed Purchaser hereby covenants and agrees that, prior to the date
which is one year and one day after the later of (i) the last day of the Series
2000-2 Amortization Period and (ii) the last day of the amortization period of
any other Outstanding Series, it will not institute against, or join any other
Person in instituting against, the Company any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other similar proceedings
under any federal or state bankruptcy or similar law.

                    (a) The Company, the Servicer, the Trustee, the
Administrator and each Alternate Investor hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of all
outstanding Commercial Paper, it will not institute against, or join any other
Person in instituting against, the Committed Purchaser any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
similar proceedings under any federal or state bankruptcy or similar law.

                                      -52-


                    SECTION 11.15. COMMITTED PURCHASER'S LIABILITIES.
Notwithstanding anything to the contrary contained in this Supplement, the
obligations of the Committed Purchaser under this Supplement and all other
Transaction Documents are solely the corporate obligations of the Committed
Purchaser. No recourse shall be had against any stockholder, employee, officer,
director or incorporator of the Committed Purchaser; PROVIDED, that this Section
11.15 shall not relieve any such Person of any liability it might otherwise have
for its own gross negligence or willful misconduct.

                                   ARTICLE XII

                               FINAL DISTRIBUTIONS

                    SECTION 12.1. CERTAIN DISTRIBUTIONS. Not later than 2:00
p.m., New York City time, on the Distribution Date following the date on which
the proceeds from the disposition of the Receivables pursuant to subsection
7.2(b) of the Agreement are deposited into the Series 2000-2 Non-Principal
Collection Sub-subaccount and the Series 2000-2 Principal Collection
Sub-subaccount, the Trustee shall distribute such amounts pursuant to Article
III of this Supplement.

                    (a) Notwithstanding anything to the contrary in this
Supplement or the Agreement, any distribution made pursuant to this Section
shall be deemed to be a final distribution pursuant to Section 9.3 of the
Agreement with respect to the VFC Certificates.

                                      -53-


                    IN WITNESS WHEREOF, the Company, the Servicer, the Trustee,
the Administrator, the Committed Purchaser and the Alternate Investors have
caused this Series 2000-2 Supplement to be duly executed by their respective
officers as of the day and year first above written.

                          USS RECEIVABLES COMPANY, LTD.


                           by
                              --------------------------------------------------
                              Name:
                              Title:

                          UNITED STATIONERS FINANCIAL SERVICES LLC, as Servicer,

                           by
                              --------------------------------------------------
                              Name:
                              Title:

                          THE CHASE MANHATTAN BANK, not in its individual
                          capacity but solely as Trustee and as Securities
                          Intermediary,

                           by
                              --------------------------------------------------
                              Name:
                              Title:

                          PNC BANK, NATIONAL ASSOCIATION, as Administrator,

                           by
                              --------------------------------------------------
                              Name:
                              Title:

                                       S-1


                          MARKET STREET FUNDING CORPORATION, as
                          Committed Purchaser,

                           by
                              --------------------------------------------------
                              Name:
                              Title:

                                      S-2

EX-10.8

EXHIBIT 10.8

                                 LEASE AGREEMENT
                            (SINGLE TENANT FACILITY)

ARTICLE ONE: BASIC TERMS.

     This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and are
to be read in conjunction with the Basic Terms.

     Section 1.01. DATE OF LEASE: DECEMBER 1, 2001

     Section 1.02. LANDLORD (INCLUDE LEGAL ENTITY): PANATTONI INVESTMENTS, LLC,
a California limited liability company.

             Address of Landlord:   c/o PDC Properties
                                    8395 Jackson Road, suite F
                                    Sacramento, CA 95826

     Section 1.03. TENANT (INCLUDE LEGAL ENTITY): UNITED STATIONERS SUPPLY CO.,
an Illinois corporation

             Address of Tenant:     2200 East Golf Road
                                    Des Plaines, IL  60016
                                    Attention : Law Department

     Section 1.04. PROPERTY (include street address, approximate square footage
and description): The Property is part of the Antelope Business Park and will be
a new building with approximately 250,000 square feet located on the land
described in Exhibit A attached hereto and incorporated herein by reference,
which is located on Roseville Road, in Sacramento County, California.

     Section 1.05. LEASE TERM: 10 years 0 months BEGINNING ON or about August 1,
2002 or such other date as is specified in this Lease, and ENDING ON the last
day of the 120th month after the Commencement Date.

     Section 1.06. PERMITTED USES (See Article Five): Office and distribution
warehouse use (which shall include assembly and processing incidental to
distribution).

     Section 1.07. TENANT'S GUARANTOR (if none, so state): None

     Section 1.08. BROKERS (See Article fourteen) (if none, so state):

             Landlord's Broker: C.B. Richard Ellis, Sacramento, CA
             Tenant's Broker: Grubb & Ellis, 1610 Arden Way, Sacramento, CA,
                                Attn: Herb Grabell

     Section 1.09. COMMISSION PAYABLE TO BROKERS (See Article Fourteen): Per
Separate written agreement between Landlord and Brokers.

     Section 1.10. INITIAL SECURITY DEPOSIT (See Section 3.03): $ None

     Section 1.11. VEHICLE PARKING SPACES ALLOCATED TO TENANT: approximately 80
spaces

     Section 1.12. RENT AND OTHER CHARGES PAYABLE BY TENANT:

     (a) BASE RENT: See Paragraph 1 of the Rider attached hereto and
incorporated herein by reference.

     (b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See Section 4.02);
(ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See Section 4.04);
(iv) Impounds for Insurance Premiums and Property Taxes (See Section 4.07); (v)
Maintenance, Repairs and Alterations (See Article Six).

     Section 1.13. LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE Fifty
per cent (50%).

     Section 1.14. RIDERS: The following Riders are attached to and made a part
of this Lease: (If none, so state) Rider of even date herewith, Exhibits A & B,
and the Hazardous Materials Rider.

ARTICLE TWO. LEASE TERM.

     Section 2.01. LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in

                                        1


Section 1.05 above and shall begin and, unless earlier terminated in accordance
with the terms hereof, end on the dates specified in Section 1.05 above, unless
the beginning or end of the Lease Term is changed under any provision of this
Lease. The "Commencement Date" shall be the date specified in Section 1.05 above
for the beginning of the Lease Term, unless advanced or delayed under any
provision of this Lease.

     Section 2.02. DELAY IN COMMENCEMENT. Landlord shall not be liable to Tenant
if Landlord does not deliver possession of the Property to Tenant on the
Commencement Date. Landlord's non-delivery of the Property to Tenant on that
date shall not affect this Lease or the obligations of Tenant under this Lease
except that the Commencement Date shall be delayed until Landlord delivers
possession of the Property to Tenant and the Lease Term shall be extended for a
period equal to the delay in delivery of possession of the Property to Tenant,
plus the number of days necessary to end the Lease Term on the last day of a
month. In the event the Commencement Date is delayed, the Rental Commencement
Date shall be delayed for a like number of days. If the Landlord does not
deliver possession of the Property to Tenant within Ninety (90) days after
August 1, 2002, subject to delays resulting from force majeure as provided in
Section 13.12, Tenant may elect to cancel this Lease by giving written notice to
Landlord within ten (10) days after the ninety (90) day period ends. If Tenant
does not give such notice, Tenant's right to cancel the Lease shall expire and
the Lease Term shall commence upon delivery of possession of the Property to
Tenant. If delivery of possession of the Property to Tenant is delayed, Landlord
and Tenant shall, upon such delivery, execute an amendment to this Lease setting
forth the actual Commencement Date and expiration date of the Lease. Failure to
execute such amendment shall not affect the actual Commencement Date and
expiration date of the Lease.

     Section 2.03. EARLY OCCUPANCY. Tenant shall be entitled to occupy the space
for a period of sixty (60) days before Landlord has substantially completed the
Building prior to the Rental Commencement Date, which shall be the date the
Landlord has substantially completed the Building. If Tenant occupies the
Property prior to the Commencement Date, Tenant's occupancy of the Property
shall be subject to all of the provisions of this Lease. Early occupancy of the
Property shall not advance the expiration date of this Lease. Tenant shall not
pay Base Rent and all other charges specified in this Lease for the sixty day
early occupancy period.

     Section 2.04. HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages which Landlord incurs from
Tenant's delay in vacating the Property. If Tenant does not vacate the Property
upon the expiration or earlier termination of the Lease and Landlord thereafter
accepts rent from Tenant, Tenant's occupancy of the Property shall be a "month
to month" tenancy, subject to all of the terms of this Lease applicable to a
month-to-month tenancy terminable by either party upon thirty (30) days written
notice, except that the Base Rent then in effect shall be increased by fifty
percent (50%).

ARTICLE THREE: BASE RENT.

     Section 3.01. TIME AND MANNER OF PAYMENT. Upon execution of this Lease,
Tenant shall pay Landlord the Base Rent in the amount stated in paragraph 1 of
the Rider for the first month of the Lease Term. On the first day of the second
month of the Lease Term and each month thereafter, Tenant shall pay Landlord the
Base Rent, in advance, without offset, deduction or prior demand. The Base Rent
shall be payable at Landlord's address set forth in Paragraph 1.02, or at such
other place as Landlord may designate in writing.

     Section 3.02. COST OF LIVING INCREASES. Intentionally Omitted.

     Section 3.03. SECURITY DEPOSIT; INCREASES. Intentionally Omitted.

     Section 3.04. TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease
under Article Seven (Damage or Destruction), Article Eight (Condemnation) or any
other termination not resulting from Tenant's default, and after Tenant has
vacated the Property in the manner required by this Lease, Landlord shall refund
or credit to Tenant (or Tenant's successor) the unused portion of the Security
Deposit, any advance rent or other advance payments made by Tenant to Landlord,
and any amounts paid for real property taxes and other reserves which apply to
any time periods after termination of the Lease.

ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT.

     Section 4.01. ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent." Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then due with the next monthly installment
of Base Rent. The term "rent" shall mean Base Rent and Additional Rent.

     Section 4.02. PROPERTY TAXES.

                                        2


     (a) REAL PROPERTY TAXES. Landlord shall pay all real property taxes on the
Property (including any fees, taxes or assessments against, or as a result of,
any tenant improvements installed on the Property by or for the benefit of
Tenant) during the Lease Term. Such payment shall be made prior to the
delinquency date of the taxes. Tenant shall pay the amount of such tax payment
to Landlord prior to the delinquency date of such taxes, but in no event later
than thirty (30) days after receipt of Landlord's written statement. If the
Property is not separately assessed (i.e., is assessed as part of the Project),
Landlord shall reasonably determine Tenant's share of the Real Property Tax from
the assessor's worksheets or other reasonably available information. Tenant
shall not be responsible for any Real Property Taxes paid by Landlord covering
any period of time prior to or after the Lease Term.

     (b) DEFINITION OF "REAL PROPERTY TAX." "Real Property Tax" means: All
taxes, assessments and similar charges, including, without limitation (i) any
fee, license fee, license tax, business license fee, commercial rental tax, levy
charge, assessment (such assessments shall only become Real Property Taxes as
such installments become due and payable), penalty or tax imposed by any taxing
authority against the Property and based upon the value of the Property or this
Lease; (ii) any tax on the Landlord's right to receive, or the receipt of, rent
or income from the Property or against Landlord's business of leasing the
Property; (iii) water and sewer charges, any tax or charge for fire protection,
streets, sidewalks, road maintenance, refuse or other services provided to the
Property by any governmental agency; (iv) any tax imposed upon this transaction
or based upon a re-assessment of the Property due to a change of ownership, as
defined by applicable law, or other transfer of all or part of Landlord's
interest in the Property; and (v) any charge or fee replacing any tax previously
included within the definition of real property tax. "Real property tax" does
not, however, include Landlord's federal or state income, franchise, inheritance
or estate taxes.

     (c) PERSONAL PROPERTY TAXES.

          (i) Tenant shall pay all taxes charged against trade fixtures,
furnishings, equipment or any other personal property belonging to Tenant.
Tenant shall try to have personal property taxed separately from the Property.

          (ii) If any of Tenant's personal property is taxed with the Property,
Tenant shall pay Landlord the taxes for the personal property within thirty (30)
days after Tenant receives a written statement from Landlord for such personal
property taxes.

     Section 4.03. UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property. However, if any services or utilities are jointly metered with
other property, Landlord shall make a reasonable determination of Tenant's
proportionate share of the cost of such utilities and services and Tenant shall
pay such share to Landlord within fifteen (15) days after receipt of Landlord's
written statement.

     Section 4.04. INSURANCE POLICIES.

     (a) LIABILITY INSURANCE. During the Lease Term, Tenant shall maintain a
policy of commercial general liability insurance (sometimes known as broad form
comprehensive general liability insurance) insuring Tenant against liability for
bodily injury, property damage (including loss of use of property) and personal
injury arising out of the operation, use or occupancy of the Property. Tenant
shall name Landlord as an additional insured under such policy. The initial
amount of such insurance shall be ONE MILLION DOLLARS ($1,000,000.00) per
occurrence and shall be subject to periodic increase based upon inflation,
increased liability awards, recommendation of Landlord's professional insurance
advisers and other relevant factors. The liability insurance obtained by Tenant
under this Paragraph 4.04(a) shall (i) be primary and non-contributing; (ii)
contain cross-liability endorsements; and (iii) insure Landlord against Tenant's
performance under Section 5.05, if the matters giving rise to the indemnity
under Section 5.05 result from the negligence of Tenant. Tenant shall be liable
for the payment of any deductible amount. The amount and coverage of such
insurance shall not limit Tenant's liability nor relieve Tenant of any other
obligations under this Lease. Landlord may also obtain comprehensive public
liability insurance in an amount and with coverage determined by Landlord
insuring Landlord against liability arising out of ownership, operation, use or
occupancy of the Property. The policy obtained by Landlord shall not be
contributory and shall not provide primary insurance.

     (b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term, Landlord
shall maintain policies of insurance covering loss of or damage to the Property
in the full amount of its replacement value. Such policy shall contain an
inflation Guard Endorsement and shall provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk), sprinkler leakage and
any other perils which Landlord deems reasonably necessary. Landlord shall have
the right to obtain flood and earthquake insurance if required by any lender
holding a security interest in the Property. Landlord shall not obtain insurance
for Tenant's fixtures or equipment or building improvements installed by Tenant
on the Property. During the Lease Term, Landlord shall also maintain a rental
income insurance policy, with loss payable to Landlord, in an amount equal to
one (1) year's Base Rent, plus estimated real property taxes and insurance
premiums. Tenant shall be liable for the payment of any deductible amount under
Landlord's or Tenant's insurance policies maintained pursuant to this Section
4.04, in an amount not to exceed TWENTY THOUSAND DOLLARS

                                        3


($20,000.00). Tenant shall not do or permit anything to be done which
invalidates any such insurance policies. Tenant shall also maintain policies of
insurance covering loss of or damage to Tenant's contents, including inventory,
in the full amount of its value. Such policies shall provide protection against
all perils included within the classification of fire, extended coverage,
sprinkler leakage and special extended perils (all risk).

     (c) PAYMENT OF PREMIUMS. Subject to Section 4.07, Tenant shall pay all
premiums for the insurance policies described in Paragraphs 4.04(a) and (b)
(whether obtained by Landlord or Tenant) within fifteen (15) days after Tenant's
receipt of a copy of the premium statement or other evidence of the amount due,
except Landlord shall pay all premiums for non-primary comprehensive public
liability insurance which Landlord elects to obtain as provided in Paragraph
4.04(a). If insurance policies maintained by Landlord cover improvements on real
property other than the Property, Landlord shall deliver to Tenant a statement
of the premium applicable to the Property showing in reasonable detail how
Tenant's share of the premium was computed. If the Lease Term expires before the
expiration of an insurance policy maintained by Landlord, Tenant shall be liable
for Tenant's prorated share of the insurance premiums. Before the Commencement
Date, Tenant shall deliver to Landlord a copy of any policy of insurance which
Tenant is required to maintain under this Section 4.04. At least thirty (30)
days prior to the expiration of any such policy, Tenant shall deliver to
Landlord a renewal of such policy as an alternative to providing a policy of
insurance. Tenant shall have the right to provide Landlord a certificate of
insurance, executed by an authorized officer of the insurance company, showing
that the insurance which Tenant is required to maintain under this Section 4.04
is in full force and effect and containing such other information which Landlord
reasonably requires.

     (d) GENERAL INSURANCE PROVISIONS.

          (i) Any insurance which Tenant is required to maintain under this
Lease shall include a provision which requires the insurance carrier to give
Landlord not less than thirty (30) days' written notice prior to any
cancellation or modification of such coverage.

          (ii) If Tenant fails to deliver a policy, certificate or renewal to
Landlord required under this Lease within the prescribed time period or if any
such policy is canceled or modified during the Lease Term without Landlord's
consent, Landlord may obtain such insurance, in which case Tenant shall
reimburse Landlord for the cost of such insurance within fifteen (15) days after
receipt of a statement that indicates the cost of such insurance.

          (iii) Tenant shall maintain all insurance required under this Lease
with companies holding a "General Policy Rating" of A-12 or better, as set forth
in the most current issue of "Best Key Rating Guide". Landlord and Tenant
acknowledge the insurance markets are rapidly changing and that insurance in the
form and amounts described in this Section 4.04 may not be available in the
future. Tenant acknowledges that the insurance described in this Section 4.04 is
for the primary benefit of Landlord. If at any time during the Lease Term,
Tenant is unable to maintain the insurance required under the Lease, Tenant
shall nevertheless maintain insurance coverage which is customary and
commercially reasonable in the insurance industry for Tenant's type of business,
as that coverage may change from time to time. Landlord makes no representation
as to the adequacy of such insurance to protect Landlord's or Tenant's
interests. Therefore, Tenant shall obtain any such additional property or
liability insurance which Tenant deems necessary to protect Landlord and Tenant.

          (iv) Unless prohibited under any applicable insurance policies
maintained, Landlord and Tenant each hereby waive any and all rights of recovery
against the other, or against the officers, employees, agents or representatives
of the other, for loss of or damage to its property or the property of others
under its control, if such loss or damage is covered by any insurance policy in
force (whether or not described in this Lease) at the time of such loss or
damage. Upon obtaining the required policies of insurance, Landlord and Tenant
shall give notice to the insurance carriers of this mutual waiver of
subrogation.

     Section 4.05. LATE CHARGES. Tenant's failure to pay rent promptly may cause
Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed encumbering the
Property. Therefore, if Landlord does not receive any rent payment within ten
(10) days after Tenant's receipt of written notice of Tenant's failure to make
such payment, Tenant shall pay to Landlord a late charge equal to five percent
(5%) of the overdue amount, provided, however, Landlord hereby waives payment of
such late charge for the first such delinquency by Tenant in any period of
twelve (12) consecutive months. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment.

     Section 4.06. INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest at the rate of
fifteen percent (15%) per annum from the due date of such amount. However,
interest shall not be payable on late charges to be paid by Tenant under this
Lease. The payment of interest on such amounts shall not excuse or cure any
default by Tenant under this Lease. If the interest rate specified in this Lease
is higher than the rate permitted by law, the interest rate is hereby decreased
to the maximum legal interest rate permitted by law.

                                        4


     Section 4.07. IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES. If
Tenant is more than ten (10) days late in the payment of rent more than twice in
any consecutive twelve (12) month period, Tenant shall pay Landlord a sum equal
to one-twelfth (1/12) of the annual real property taxes and insurance premiums
payable by Tenant under this Lease, together with each payment of Base Rent.
Landlord shall hold such payments in a non-interest bearing impound account. If
unknown, Landlord shall reasonably estimate the amount of real property taxes
and insurance premiums when due. Tenant shall pay any deficiency of funds in the
impound account to Landlord upon written request. If Tenant defaults under this
Lease, Landlord may apply any funds in the impound account to any obligation
then due under this Lease.

     Section 4.08. MANAGEMENT FEES. Tenant shall reimburse Landlord monthly for
management fees and expenses incurred by Landlord in connection with the
Property.

ARTICLE FIVE: USE OF PROPERTY.

     Section 5.01. PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.

     Section 5.02. MANNER OF USE. Tenant shall not cause or permit the Property
to be used in any way which constitutes a violation of any law, ordinance, or
governmental regulation or order, which annoys or interferes with the rights of
other tenants of Landlord, or which constitutes a nuisance or waste. Tenant
shall obtain and pay for all permits, except a Certificate of Occupancy, and any
other construction-related permits, required for Tenant's occupancy of the
Property and shall promptly take all actions necessary to comply with all
applicable statutes, ordinances, rules, regulations, orders and requirements
regulating the use by Tenant of the Property, including the Occupational Safety
and Health Act. Landlord shall obtain and pay for all construction-related
permits including a certificate of shell completion for the Building and assist
Tenant in obtaining a Certification of Occupancy for the Property subject to
installation by Tenant of its fixtures and equipment.

     Section 5.03. HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal, state or
local laws or regulations, including, without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated, released or disposed
of in or about the Property by Tenant, its agents, employees, contractors,
sublessees without the prior written consent of Landlord, which can be withheld
in Landlord's sole and absolute discretion. Landlord shall be entitled to take
into account such other factors or facts as Landlord may reasonably determine to
be relevant in determining whether to grant or withhold consent to Tenant's
proposed activity with respect to Hazardous Material. In no event, however,
shall Landlord be required to consent to the installation or use of any storage
tanks on the Property. Tenant shall immediately notify Landlord upon release of
any Hazardous Material on, in or under the property and shall commence a
diligent clean-up of any release to Landlord's satisfaction and in accordance
with any local, state or Federal regulations. Tenant shall indemnify Landlord
against the effect and any release of any Hazardous Material.

     Landlord hereby warrants and represents that, as of the date of this Lease
and the Commencement Date, to the best of Landlord's knowledge, (a) the Property
does not violate any environmental or other laws, statutes, ordinances, or
regulations, (b) the Property is free from Hazardous Materials, and (c) Landlord
has not committed any act or omission which will resulting any claim to be
asserted against Tenant or the Demised Premises. Landlord shall indemnify Tenant
and hold Tenant harmless from and against any and all claims, expenses, losses
and liabilities suffered by Tenant based on Landlord's breach of any of the
foregoing warranties. The indemnity contained herein shall survive the
termination or expiration of this Lease.

     Section 5.04. SIGNS AND AUCTIONS. Tenant shall not place any signs on the
Property without Landlord's prior written consent. Tenant shall not conduct or
permit any auctions or sheriff's sales at the Property. Landlord shall furnish a
free-standing, monument style sign support for Tenant's identity sign, which
sign shall comply with all local applicable codes and permits adjacent to
Roseville Road. Landlord shall also allow Tenant to place directional signs on
the exterior of the Property subject to Landlords approval, which shall not be
unreasonably withheld. All signs are subject to Tenant's signage allowance set
forth in Rider1.

     Section 5.05. INDEMNITY. Except for insured losses and subject always to
Section 4.04(d)(iv) herein, Tenant shall indemnify Landlord against and hold
Landlord harmless from any and all costs, claims or liability arising from: (a)
Tenant's use of the Property; (b) the conduct of Tenant's business or anything
else done or permitted by Tenant to be done in or about the Property, including
any

                                        5


contamination of the Property or any other property resulting from the presence
or use of Hazardous Material caused or permitted by Tenant; (c) any breach or
default in the performance of Tenant's obligations under this Lease; (d) any
misrepresentation or breach of warranty by Tenant under this Lease; or (e) other
acts or omissions of Tenant. Tenant shall defend Landlord against any such cost,
claim or liability at Tenant's expense with counsel reasonably acceptable to
Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any
legal fees or costs incurred by Landlord in connection with any such claim. In
no event shall Tenant be liable hereunder for any consequential damages. As a
material part of the consideration to Landlord, Tenant assumes all risk of
damage to property or injury to persons in or about the Property arising from
any cause, and Tenant hereby waives all claims in respect thereof against
Landlord, except for any claim arising out of Landlord's gross negligence or
willful misconduct. As used in this Section, the term "Tenant" shall include
Tenant's employees, agents, contractors and invitees, if applicable.

     Section 5.06. LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazardous
Material; or for any other purpose Landlord deems necessary. Landlord shall give
Tenant prior notice of such entry, except in the case of an emergency. Landlord
may place customary "For Sale" or "For Lease" signs on the Property.

     Section 5.07. QUIET POSSESSION. If Tenant pays the rent and complies with
all other terms of this Lease, Tenant may occupy and enjoy the Property for the
full Lease Term, subject to the provisions of this Lease.

ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS

     Section 6.01. EXISTING CONDITIONS. Tenant accepts the Property, subject to
all recorded matters, laws, ordinances, and governmental regulations and orders.
Except as provided herein, or in the attached Rider and Exhibit B, Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation as to the condition of the Property or the suitability of the
Property for Tenant's intended use. Notwithstanding any provision in this Lease
to the contrary, Landlord represents, warrants and covenants that upon the
Rental Commencement Date, the Property will comply with (at Landlord's expense)
all applicable laws, regulations, and building codes, including, without
limitation, the requirements of the American with Disabilities Act and all
regulations there under.

     Section 6.02. EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be
liable for any damage or injury to the person, business (or any loss of income
there from), goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers or any other person in or about the Property,
whether such damage or injury is caused by or results from: (a) fire, steam,
electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause; (c) conditions arising in or about the
Property or upon other portions of the Project, or from other sources or places;
or (d) any act or omission of any other tenant of the Project. Landlord shall
not be liable for any such damage or injury even though the cause of or the
means of repairing such damage or injury are not accessible to Tenant. The
provisions of this Section 6.02 shall not, however, exempt Landlord from
liability for Landlord's gross negligence or willful misconduct or omission of
Landlord or Landlord's failure to make repairs within a reasonable time after
notice of the need for repairs, or to correct defects in the Property in
accordance with Landlord's obligations set out in paragraph 6.03(b).

     Section 6.03. LANDLORD'S OBLIGATIONS.

     (a) Subject to the provisions of Article Seven (Damage or Destruction) and
Article Eight (Condemnation), Landlord shall keep the following in good order,
condition and repair: the foundations, exterior walls and roof of the Property
(including painting the exterior surface of the exterior walls of the Property
not more than once every five (5) years, if necessary to maintain the Property
in the standard set out in the last sentence of this paragraph), and all
components of electrical, mechanical, plumbing, heating and air conditioning
systems and facilities located in the Property which are concealed. Landlord
shall also be responsible for repairing any part of the Property which is
damaged as a result of any defect in the foundations, floor or structural frame
of the Building. However, Landlord shall not be obligated to maintain or repair
windows, doors, plate glass or the interior surfaces of exterior walls. Landlord
shall make repairs under this Section 6.03 within a reasonable time after
receipt of written notice from Tenant of the need for such repairs. It is the
intention of Landlord and Tenant that at all times Landlord shall maintain the
portions of the Building which Landlord is obligated to maintain in an
attractive, first-class and fully operational condition.

     (b) In addition to the repair obligations set forth in Paragraph 6.03(a),
Landlord shall correct any defects in the construction of the Building or the
Property which are brought to Landlord's attention within the first twelve
months following delivery of the Property to Tenant.

     Section 6.04. TENANT'S OBLIGATIONS.

                                        6


     (a) Except as provided in Article Seven (Damage Destruction) and Article
Eight (Condemnation), Tenant shall keep all portions of the Property (including,
nonstructural, interior, systems and equipment) in good order, condition and
repair (including interior repainting and refinishing, as needed). If any
portion of the Property or any system or equipment in the Property which Tenant
is obligated to repair cannot be fully repaired or restored, Tenant shall
promptly replace such portion of the Property or system or equipment or
equipment in the Property, regardless of whether the benefit of such replacement
extends beyond the Lease Term; but if the benefit or useful life of such
replacement extends beyond the Lease Term (as such term may be extended by
exercise of any options), the useful life of such replacement shall be prorated
over the remaining portion of the Lease Term (as extended), and Tenant shall be
liable only for that portion of the cost which is applicable to the Lease Term
(as extended). Tenant shall maintain a preventive maintenance contract providing
for the regular inspection and maintenance of the heating and air conditioning
system by a licensed heating and air conditioning contractor. If any part of the
Property is damaged by any act or omission of Tenant, Tenant shall pay Landlord
the cost of repairing or replacing such damaged property, whether or not
Landlord would otherwise be obligated to pay the cost of maintaining or
repairing such property. It is the intention of Landlord and Tenant that at all
times Tenant shall maintain the portions of the Property which Tenant is
obligated to maintain in an attractive, first-class and fully operative
condition.

     (b) Tenant shall fulfill all of Tenant's obligations under this Section
6.04, at Tenant's sole expense. If Tenant fails to maintain, repair or replace
the Property as required by this Section 6.04, Landlord may, upon ten (10) days'
prior notice to Tenant (except that no notice shall be required in the case of
an emergency), enter the Property and perform such maintenance or repair
(including replacement, as needed) on behalf of Tenant. In such case, Tenant
shall reimburse Landlord for all costs incurred in performing such maintenance
or repair immediately upon demand.

     Section 6.05. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.

     (a) Tenant shall not make any alterations, additions, or improvements to
the Property without Landlord's prior written consent, except for non-structural
alterations which do not exceed Fifty Thousand Dollars ($50,000.00) in cost
cumulatively over the Lease Term and which are not visible from the outside of
any building of which the Property is part. Notwithstanding the foregoing,
Tenant shall have the right and privilege to install, at its sole cost and
without Landlord's further consent, a "wire guidance system" within the
warehouse floors of the Property with such wire guidance system requiring that
the floor of the warehouse be saw cut in order to accept a low voltage wire down
each of the pallet rack rows and extending approximately fifteen feet (15')
beyond the end of each row. Tenant shall submit plans for installation of such
"wire guidance system" for review and approval by Landlord's structural engineer
which approval shall not be unreasonably withheld or delayed. Tenant shall
follow the requirements of Landlord's structural engineer for maintaining the
structural integrity of the warehouse floor. Landlord may require Tenant to
provide demolition and/or lien and completion bonds in form and amount
satisfactory to Landlord. Tenant shall promptly remove any alterations,
additions, or improvements constructed in violation of this Paragraph 6.05(a)
upon Landlord's written request and repair any damage caused by such removal.
All alterations, additions, and improvements shall be done in a good and
workmanlike manner, in conformity with all applicable laws and regulations, and
by a contractor approved by Landlord. Upon completion of any such work, Tenant
shall provide Landlord with "as built" plans, copies of all construction
contracts, and proof of payment for all labor and materials.

     (b) Tenant shall pay when due all claims for labor and material furnished
to the Property. Tenant shall give Landlord at least twenty (20) days' prior
written notice of the commencement of any work on the Property, regardless of
whether Landlord's consent to such work is required. Landlord may elect to
record and post notices of non-responsibility on the Property.

     Section 6.06. CONDITION UPON TERMINATION. Upon the termination of the
Lease, Tenant shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required to
repair under this lease. In addition, Landlord may require Tenant to remove any
alterations, additions or improvements which Tenant was required to obtain
Landlord's consent as required by Paragraph 6.05(a), provided that such consent
when given was conditioned (as stated in writing evidencing such consent) upon
Tenant's removal of such alterations, additions or improvements upon termination
of this Lease; provided that Tenant shall not be required to remove the wire
guidance system installed as specified in Section 6.05 herein All alterations,
additions and improvements which Landlord has not required Tenant to remove
shall become Landlord's property and shall be surrendered to Landlord upon the
expiration or earlier termination of the Lease, except that Tenant may remove
any of Tenant's machinery, racking or equipment which can be removed without
material damage to the Property. Tenant shall repair, at Tenant's expense, any
damage to the Property caused by the removal of any such machinery, racking or
equipment. Except for any materials or equipment provided or installed by Tenant
(which shall not include the Additional Improvements as defined in the Rider),
in no event shall Tenant remove any of the following materials or equipment
(which shall be deemed Landlord's property) without Landlord's prior written
consent; any power wiring or power panels; lighting or lighting fixtures; wall
coverings; drapes, blinds or other window coverings; carpets or other floor
coverings; heaters, air conditioners or any other heating or air conditioning
equipment; fencing or security gates; or other similar building operating
equipment and decorations.

                                        7


ARTICLE SEVEN: DAMAGE OR DESTRUCTION

     Section 7.01. PARTIAL DAMAGE TO PROPERTY.

     (a) Tenant shall notify Landlord in writing immediately upon the occurrence
of any damage to the Property. If the Property can be restored within ninety
(90) days in the good faith estimation of Landlord's contractor, this Lease
shall remain in effect and Landlord shall repair the damage as soon as
reasonably possible. Landlord may elect (but is not required) to repair any
damage to Tenant's fixtures, equipment, or improvements.

     (b) If the insurance proceeds received by Landlord are not sufficient to
pay the entire cost of repair, or if the cause of the damage is not covered by
the insurance policies which Landlord maintains under Paragraph 4.04(b),
Landlord may elect either to (i) repair the damage as soon as reasonably
possible, in which case this Lease shall remain in full force and effect, or
(ii) terminate this Lease as of the date the damage occurred. Landlord shall
notify Tenant within thirty (30) days after receipt of notice of the occurrence
of the damage whether Landlord elects to repair the damage or terminate the
Lease. If Landlord elects to repair the damage, Tenant shall pay Landlord the
"deductible amount" (if any) under Landlord's insurance policies and, if the
damage was due to an act or omission of Tenant, or Tenant's employees, agents,
contractors or invitees, the difference between the actual cost of repair and
any insurance proceeds received by Landlord. If Landlord elects to terminate the
Lease, Tenant may elect to continue this Lease in full force and effect, in
which case Tenant shall repair any damage to the Property and any building in
which the Property is located. Tenant shall pay the cost of such repairs, except
that upon satisfactory completion of such repairs, Landlord shall deliver to
Tenant any insurance proceeds received by Landlord for the damage repaired by
Tenant. Tenant shall give Landlord written notice of such election within ten
(10) days after receiving Landlord's termination notice.

     (c) If the damage to the Property occurs during the last six (6) months of
the Lease Term and such damage will require more than thirty (30) days to
repair, either Landlord or Tenant may elect to terminate this Lease as of the
date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Tenant's notice to Landlord of the occurrence of the damage.

     Section 7.02. SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally destroyed by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage as described in Section 7.01), and
regardless of whether Landlord receives any insurance proceeds, this Lease shall
terminate as of the date the destruction occurred. Notwithstanding the preceding
sentence, if the Property can be rebuilt within six (6) months after the date of
destruction, Landlord may elect to rebuild the Property at Landlord's own
expense, in which case this Lease shall remain in full force and effect.
Landlord shall notify Tenant of such election within thirty (30) days after
Tenant's notice of the occurrence of total or substantial destruction. If
Landlord so elects, Landlord shall rebuild the Property at Landlord's sole
expense, except that if the destruction was caused by an act or omission of
Tenant, Tenant shall pay Landlord the difference between the actual cost of
rebuilding and any insurance proceeds received by Landlord.

     Section 7.03. TEMPORARY REDUCTION OF RENT. Tenant shall not be entitled to
any compensation, reduction in base rent, insurance premiums and real property
taxes, provided that the Property is restored within the 90-day period set out
in Section 7.02 above, or reimbursement from Landlord as a result of any
damage, destruction, repair, or restoration of or to the Property.

     Section 7.04. WAIVER. Tenant waives the protection of any statute, code or
judicial decision which grants a tenant the right to terminate a lease in the
event of the substantial or total destruction of the leased property. Tenant
agrees that the provisions of Section 7.02 above shall govern the rights and
obligations of Landlord and Tenant in the event of any substantial or total
destruction to the Property.

ARTICLE EIGHT: CONDEMNATION

     If all or any portion of the Property is taken under the power of eminent
domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the building in which the
Property is located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or in the
absence of such notice, within ten (10) days after the condemning authority
takes title or possession). If neither Landlord nor Tenant terminates this
Lease, this Lease shall remain in effect as to the portion of the Property not
taken, except that the Base Rent and Additional Rent shall be reduced in
proportion to the reduction in the floor area of the Property. Any Condemnation
award or payment shall be distributed in the following order: (a) first, to any
ground lessor, mortgagee or beneficiary under a deed of trust encumbering the
Property, the amount of its interest in the Property; (b) second, to Tenant,
only the amount of any award specifically designated for loss of or damage to
Tenant's trade fixtures or removable personal property; and (c) third, to
Landlord, the remainder of such award, whether as compensation for reduction in
the value of the leasehold, the taking

                                        8


of the fee, or otherwise. If this Lease is not terminated, Landlord shall repair
any damage to the Property caused by the Condemnation, except that Landlord
shall not be obligated to repair any damage for which Tenant has been reimbursed
by the condemning authority. If the severance damages received by Landlord are
not sufficient to pay for such repair, Landlord shall have the right to either
terminate this Lease or make such repair at Landlord's expense.

ARTICLE NINE: ASSIGNMENT AND SUBLETTING

     Section 9.01. LANDLORD'S CONSENT REQUIRED. No portion of the Property or of
Tenant's interest in this Lease may be acquired by any other person or entity,
whether by sale, assignment, mortgage, sublease, transfer, operation of law, or
act of Tenant, without Landlord's prior written consent, except as provided in
Section 9.02 below. Landlord has the right to grant or withhold its consent as
provided in Section 9.05 below. Any attempted transfer without consent shall be
void and shall constitute a non-curable breach of this Lease If Tenant is a
corporation, any change in the ownership of a controlling interest of the voting
stock of the corporation shall require Landlord's consent, except a sale, gift
or other conveyance of stock or other interest in Tenant from any owner thereof
to a member of that owner's family or a trust or other entity for the benefit of
such family member.

     Section 9.02. TENANT AFFILIATE. Tenant may assign this Lease or sublease
the Property, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume writing all of
Tenant's obligations under this Lease.

     Section 9.03. NO RELEASE OF TENANT. No transfer permitted by this Article
Nine, whether with or without Landlord's consent, shall release Tenant or change
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. Landlord's acceptance of rent from any other person
is not a waiver of any provision of this Article Nine. Consent to one transfer
is not a consent to any subsequent transfer. If Tenant's transferee defaults
under this Lease, Landlord may proceed directly against Tenant without pursuing
remedies against the transferee. Landlord may consent to subsequent assignments
or modifications of this Lease by Tenant's transferee, without notifying Tenant
or obtaining its consent. Such action shall not relieve Tenant's liability under
this Lease.

     Section 9.05. LANDLORD'S CONSENT.

     (a) Tenant's request for consent to any transfer described in Section 9.01
shall set forth in writing the details of the proposed transfer, including the
name, business and financial condition of the prospective transferee, financial
details of the proposed transfer (e.g., the term of and the rent and security
deposit payable under any proposed assignment or sublease), and any other
information Landlord deems relevant. Landlord shall have the right to withhold
consent, if reasonable, or to grant consent, based on the following factors: (i)
the business of the proposed assignee or subtenant and the proposed use of the
Property: (ii) the net worth and financial reputation of the proposed assignee
or subtenant: (iii) Tenant's compliance with all of its obligations under the
Lease: and (iv) such other factors as Landlord may reasonably deem relevant. If
Landlord objects to a proposed assignment solely because of the net worth and/or
financial reputation of the proposed assignee, Tenant may nonetheless sublease
(but not assign), all or a portion of the Property to the proposed transferee,
but only on the other terms of the proposed transfer.

     Section 9.06. NO MERGER. No merger shall result from Tenant's sublease of
the Property under this Article Nine, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord under any or all subtenancies.

ARTICLE TEN: DEFAULTS; REMEDIES

     Section 10.01. COVENANTS AND CONDITIONS. Tenant's performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
Tenant's right to continue in possession of the Property is conditioned upon
such performance. Time is of the essence in the performance of all covenants and
conditions.

     Section 10.02. DEFAULTS. Tenant shall be in material default under this
Lease:

     (a) If Tenant abandons the Property or if Tenant's vacation of the Property
results in the cancellation of any insurance described in Section 4.04;

     (b) If Tenant fails to pay rent or any other charge within ten (10) days
after receipt of written notice of Tenant's failure to pay such rent or charge
when due;

     (c) If Tenant fails to perform any of Tenant's non-monetary obligations
under this Lease for a period of thirty (30) days after written notice from
Landlord; provided that if more than thirty (30) days are

                                        9


required to complete such performance, Tenant shall not be in default if Tenant
commences such performance within the thirty (30)day period and thereafter
diligently pursues its completion. However, Landlord shall not be required to
give such notice if Tenant's failure to perform constitutes a non-curable breach
of this Lease. The notice required by this Paragraph is intended to satisfy any
and all notice requirements imposed by law on Landlord and is not in addition to
any such requirement.

     (d) (i) If Tenant makes a general assignment or general arrangement for the
benefit of creditors; (ii) if a petition for adjudication of bankruptcy or for
reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed
to take possession of substantially all of Tenant's assets located at the
Property or of Tenant's interest in this Lease and possession is not restored to
Tenant within thirty (30) days; or (iv) if substantially all of Tenant's assets
located at the Property or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not discharged within
thirty (30) days. If a court of competent jurisdiction determines that any of
the acts described in this subparagraph (d) is not a default under this Lease,
and a trustee is appointed to take possession (or if Tenant remains a debtor in
possession) and such trustee or Tenant transfers Tenant's interest hereunder,
then Landlord shall receive, as Additional Rent, the excess, if any, of the rent
(or any other consideration) paid in connection with such assignment or sublease
over the rent payable by Tenant under this Lease.

     (e) If any guarantor of the Lease revokes or otherwise terminates, or
purports to revoke or otherwise terminate, any guaranty of all or any portion of
Tenant's obligations under the Lease. Unless otherwise expressly provided, no
guaranty of the Lease is revocable.

     Section 10.03. REMEDIES. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:

     (a) Terminate Tenant's right to possession of the Property by any lawful
means, and terminate this Lease in which event Tenant shall immediately
surrender possession of the Property to Landlord. In such event, Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default, including (i) the worth at the time of the award of the unpaid
Base Rent, Additional Rent and other charges which Landlord had earned at the
time of the termination; (ii) the worth at the time of the award of the amount
by which the unpaid Base Rent, Additional Rent and other charges which Landlord
would have earned after termination until the time of the award exceeds the
amount of such rental loss that Tenant proves Landlord could have reasonably
avoided; (iii) the worth at the time of the award of the amount by which the
unpaid Base Rent, and other charges which Tenant would have paid for the balance
of the Lease Term after the time of award exceeds the amount of such rental loss
that Tenant proves Landlord could have reasonably avoided; and (iv) any other
amount necessary to compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under the Lease or which in the
ordinary course of things would be likely to result therefrom, including, but
not limited to, any costs or expenses Landlord incurs in maintaining or
preserving the Property after such default, the cost of recovering possession of
the Property, expenses of reletting, including necessary renovation or
alteration of the Property, Landlord's reasonable attorneys' fee incurred in
connection therewith, and any real estate commission paid or payable. As used in
subparts (i) and (ii) above, the "worth at the time of the award" is computed by
allowing interest on unpaid amounts at the rate of fifteen percent (15%) per
annum, or such lesser amount as may then be the maximum lawful rate. As used in
subpart (iii) above, the "worth at the time of the award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%). If Tenant has
abandoned the Property, Landlord shall have the option of (i) retaking
possession of the Property and recovering from Tenant the amount specified in
this Paragraph 10.03(a), or (ii) proceeding under Paragraph 10.03(b);

     (b) Maintain Tenant's right to possession and not terminate this lease, in
which case this Lease shall continue in effect whether or not Tenant has
abandoned the Property. In such event, Landlord shall be entitled to enforce all
of Landlord's rights and remedies under this Lease, including the right to
recover the rent as it becomes due;

     (c) Pursue any other remedy now or hereafter available to Landlord in
equity or under the laws or judicial decisions of the state in which the
Property is located.

     Section 10.04. REPAYMENT OF "FREE" RENT. If this Lease provides for a
postponement of any monthly rental payments, a period of "free" rent or other
rent concession, such postponed rent or "free" rent is called the "Abated Rent".
Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Tenant has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Property in the physical condition required
by this Lease. Tenant acknowledges that its right to receive credit for the
Abated Rent is absolutely conditioned upon Tenant's full, faithful and punctual
performance of its obligations under this Lease. If Tenant defaults and does not
cure within any applicable grace period, the Abated Rent shall immediately
become due and payable in full and this Lease shall be enforced as if there were
no such rent abatement or other rent concession. In such case, Abated Rent shall
be calculated based on the full initial rent payable under this Lease.

                                       10


     Section 10.05. Automatic Termination. Notwithstanding any other term or
provision hereof to the contrary, the Lease shall terminate on the occurrence of
any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 10.03 hereof, including the filing of any unlawful detainer
action against Tenant. On such termination, Landlord's damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
incurs in connection with the filing, commencement, pursuing and/or defending of
any action in any bankruptcy court or other court with respect to the Lease; the
obtaining of relief from any stay in bankruptcy restraining any action to evict
Tenant; or the pursuing of any action with respect to Landlord's right to
possession of the Property. All such damages suffered (apart from Base Rent and
other rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Tenant in any bankruptcy or other proceeding.

     Section 10.06. CUMULATIVE REMEDIES. Landlord's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.

ARTICLE ELEVEN. PROTECTION OF LENDERS.

     Section 11.01. SUBORDINATION. Landlord shall have the right to subordinate
this Lease to any ground lease, deed of trust or mortgage encumbering the
Property, any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made
or recorded. Tenant shall cooperate with Landlord and any lender which is
acquiring a security interest in the Property or the Lease. Tenant shall execute
such further documents and assurances as such lender may require, provided that
Tenant's obligations under this Lease shall not be increased in any material way
(the performance of ministerial acts shall not be deemed material), and Tenant
shall not be deprived of its rights under this Lease. Tenant's right to quiet
possession of the Property during the Lease Term shall not be disturbed if
Tenant pays the rent and performs all of Tenant's obligations under this Lease
and is not otherwise in default. If any ground lessor, beneficiary or mortgagee
elects to have this Lease prior to the lien of its ground lease, deed of trust
or mortgage and gives written notice thereof to Tenant, this Lease shall be
deemed prior to such ground lease, deed of trust or mortgage whether this Lease
is dated prior or subsequent to the date of said ground lease, deed of trust or
mortgage or the date of recording thereof.

     Section 11.02. ATTORNMENT. If Landlord's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale, Tenant shall attorn to the transferee or
successor to Landlord's interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.

     Section 11.03. SIGNING OF DOCUMENTS. Tenant shall sign and deliver, within
ten (10) business days of any request to do so, any instrument or documents
necessary or appropriate to evidence any such attornment or subordination or
agreement to do so.

     Section 11.04. ESTOPPEL CERTIFICATES.

     (a) Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been cancelled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why); and (v) such other representations or information with respect to Tenant
or the Lease as Landlord may reasonably request or which any prospective
purchaser or encumbrancer of the Property may require. Tenant shall deliver such
statement to Landlord within ten (10) days after Landlord's request. Landlord
may give any such statement by Tenant to any prospective purchaser or
encumbrancer of the Property. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct.

     (b) If Tenant does not deliver such statement to Landlord within such ten
(10) day period, Landlord may give Tenant Notice of Tenant's failure to allow
Tenant an additional period of five (5) business days to respond. Failure of
Tenant to deliver such statement to Landlord within such five (5) day period
shall entitle Landlord, and any prospective purchaser or encumbrancer, to
conclusively presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been cancelled or terminated except as
otherwise represented by Landlord; (iii) that not more than one month's Base
Rent or other charges have been paid in advance; and (iv) that Landlord is not
in default under the Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.

     Section 11.05. TENANT'S FINANCIAL CONDITION. Within fifteen (15) days after
written request from Landlord, Tenant shall deliver to Landlord such financial
statements as Landlord reasonably requires to verify the net worth of Tenant or
any assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall
deliver to any lender designated by Landlord any financial statements required
by such lender to

                                       11


facilitate the financing or refinancing of the Property. Tenant represents and
warrants to Landlord that each such financial statement is a true and accurate
statement as of the date of such statement. All financial statements shall be
confidential and shall be used only for the purposes set forth in this Lease.

ARTICLE TWELVE: LEGAL COSTS

     Section 12.01. LEGAL PROCEEDINGS. If Tenant or Landlord shall be in breach
or default under this Lease, such party (the "Defaulting Party") shall reimburse
the other party (the "Nondefaulting Party") upon demand for any costs or
expenses that the Nondefaulting Party incurs in connection with any breach or
default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the provisions
of this Lease is commenced, the court in such action shall award to the party in
whose favor a judgment is entered, a reasonable sum as attorneys' fees and
costs. The losing party in such action shall pay such attorneys' fees and costs.
Tenant shall also indemnify Landlord against and hold Landlord harmless from all
costs, expenses, demands and liability Landlord may incur if Landlord becomes or
is made a party to any claim or action (a) instituted by Tenant against any
third party, or by any third party against Tenant, or by or against any person
holding any interest under or using the Property by license of or agreement with
Tenant; (b) for foreclosure of any lien for labor or material furnished to or
for Tenant or such other person; (c) otherwise arising out of or resulting from
any act or transaction of Tenant or such other person; or (d) necessary to
protect Landlord's interest under this Lease in a bankruptcy proceeding, or
other proceeding under Title 11 of the United States Code, as amended. Tenant
shall defend Landlord against any such claim or action at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant
shall reimburse landlord for any legal fees or costs Landlord incurs in any such
claim or action. Landlord shall also indemnify Tenant against and hold Tenant
harmless from all costs, expenses, demands and liability tenant may incur if
Tenant becomes or is made a party to any claim or action (a) instituted by
Landlord against any third party, or by any third party against Landlord, or by
or against any person holding any interest under or using the Property by
license of or agreement with Landlord; (b) for foreclosure of any lien for labor
or material furnished to or for Landlord or such other person; (c) otherwise
arising out of or resulting from any act or transaction of Landlord or such
other person; or (d) necessary to protect Tenant's interest under this Lease in
a bankruptcy proceeding, or other proceeding under Title II of the United States
Code, as amended. Landlord shall defend Tenant against any such claim or action
at Landlord's expense with counsel reasonably acceptable to Tenant or, at
Tenant's option, Landlord shall reimburse Tenant for any legal fees or costs
Tenant incurs in any such claim or action.

     Section 12.02. LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with Tenant's request for Landlord's
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which Tenant proposes to do and which requires Landlord's consent.

ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS

     Section 13.02. LANDLORD'S LIABILITY; CERTAIN DUTIES.

     (a) As used in this Lease, the term "Landlord" means only the current owner
or owners of the fee title to the Property or the leasehold estate under a
ground lease of the Property at the time in question. Each Landlord is obligated
to perform the obligations of Landlord under this Lease only during the time
such Landlord owns such interest or title. Any Landlord who transfers its title
or interest is relieved of all liability with respect to the obligations of
Landlord under this Lease to be performed on or after the date of transfer.
However, each Landlord shall deliver to its transferee all funds that Tenant
previously paid if such funds have not yet been applied under the terms of this
Lease.

     (b) Tenant shall give written notice of any failure by Landlord to perform
any of its obligations under this Lease to Landlord and to any ground lessor,
mortgagee or beneficiary under any deed of trust encumbering the Property whose
name and address have been furnished to Tenant in writing. Landlord shall not be
in default under this Lease unless Landlord (or such ground lessor, mortgagee or
beneficiary) fails to cure such non-performance within thirty (30) days after
receipt of Tenant's notice. However, if such non-performance reasonably requires
more than thirty (30) days to cure, Landlord shall not be in default if such
cure is commenced within such thirty (30) day period and thereafter diligently
pursued to completion.

     (c) Notwithstanding any term or provision herein to the contrary, the
liability of Landlord for the performance of its duties and obligations under
this Lease is limited to Landlord's interest in the Property, and neither the
Landlord nor its partners, shareholders, officers or other principals shall have
any personal liability under this Lease.

     Section 13.03. SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.

                                       12


     Section 13.04. INTERPRETATION. The captions of the Articles or Sections of
this Lease are to assist the parties in reading this Lease and are not a part of
the terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Property with Tenant's expressed or
implied permission.

     Section 13.05. INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This Lease
is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.

     Section 13.06. NOTICES. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified mail,
return receipt requested, postage prepaid. Notices to Tenant shall be delivered
to the address specified in Section 1.03 above, except that upon Tenant's taking
possession of the Property, the Property shall be Tenant's address for notice
purposes. Notices to Landlord shall be delivered to the address specified in
Section 1.02 above. All notices shall be effective upon delivery. Either party
may change its notice address upon written notice to the other party.

     Section 13.07. WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or its
acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.

     Section 13.08. NO RECORDATION. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties be
recorded. The party requiring such recording shall pay all transfer taxes and
recording fees.

     Section 13.09. BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant's successor unless
the rights or interests of Tenant's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.

     Section 13.10. CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY; LIMITED
LIABILITY COMPANY AUTHORITY. If Tenant is a corporation, each person signing
this Lease on behalf of Tenant represents and warrants that he has full
authority to do so and that this Lease binds the corporation. Within thirty (30)
days after this Lease is signed, Tenant shall deliver to Landlord a certified
copy of a resolution of Tenant's Board of Directors authorizing the execution of
this Lease or other evidence of such authority reasonably acceptable to
Landlord. If Tenant is a partnership, each person or entity signing this Lease
for Tenant represents and warrants that he or it is a general partner of the
partnership, that he or it has full authority to sign for the partnership and
that this Lease binds the partnership and all general partners of the
partnership. Tenant shall give written notice to Landlord of any general
partner's withdrawal or addition. Within thirty (30) days after this Lease is
signed, Tenant shall deliver to Landlord a copy of Tenant's recorded statement
of partnership or certificate of limited partnership. If Tenant is a limited
liability company, each person or entity signing this Lease for Tenant
represents and warrants that he or it is the manager or managing member of the
limited liability company, that he or it has full authority to sign for the
limited liability company, and that this Lease binds the limited liability
company. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord evidence satisfactory to Landlord of the authority of the
individual(s) signing this Lease.

     Section 13.11. JOINT AND SEVERAL LIABILITY. All parties signing this Lease
as Tenant shall be jointly and severally liable for all obligations of Tenant.

     Section 13.12. FORCE MAJEURE. If either Landlord or tenant cannot perform
any of its obligations due to events beyond such party's control, the time
provided for performing such obligations shall be extended by a period of time
equal to the duration of such events. Events beyond Landlord's control include,
but are not limited to, acts of God, war, terrorism, civil commotion, labor
disputes, strikes, fire, flood or other casualty, shortages of labor or
material, government regulation or restriction and weather conditions. Except as
otherwise provided in Section 2.02, the foregoing provision shall not apply to
extend the obligation of either party to this Lease to pay money required to be
paid hereunder when due, specifically including without limitation, the
obligation to Tenant to pay rent hereunder.

     Section 13.13. EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Landlord's delivery of this Lease
to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.

                                       13


     Section 13.14. SURVIVAL. All representations and warranties of Landlord and
Tenant shall survive the termination of this Lease.


















                                       14


ARTICLE FOURTEEN: BROKERS

     Section 14.01. BROKER'S FEE. When this Lease is signed by and delivered to
both Landlord and Tenant, Landlord shall pay a real estate commission to
Landlord's Broker named in Section 1.08 above, if any, as provided in the
written agreement between Landlord and Landlord's Broker, or the sum stated in
Section 1.09 above for services rendered to Landlord by Landlord's Broker. If a
Tenant's Broker is named in Section 1.08 above, Landlord shall pay a commission
to Tenant's Broker as set forth in Section 1.09, above. Nothing contained in
this Lease shall impose any obligation on Landlord to pay a commission or fee to
any party or other Broker.

     Section 14.02. AGENCY DISCLOSURE; NO OTHER BROKERS. Landlord and Tenant
each warrant that they have dealt with no other real estate broker(s) in
connection with this transaction except: C.B. Richard Ellis, who represents
Landlord, and Grubb & Ellis, who represents Tenant.

ARTICLE FIFTEEN: COMPLIANCE

     The parties hereto agree to comply with all applicable federal, state and
local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this Agreement,
including, but not limited to, the 1964 Civil Rights Act and all amendments
thereto, the Foreign Investment in Real Property Tax Act, the Comprehensive
Environmental Response Compensation and Liability Act, and The Americans With
Disabilities Act.

     ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED HERETO
OR IN THE BLANK SPACE BELOW. IF NO ADDITIONAL PROVISIONS ARE INSERTED, PLEASE
DRAW A LINE THROUGH THE SPACE BELOW.
SEE THE RIDER AND EXHIBITS A & B ATTACHED HERETO, AND THE HAZARDOUS MATERIALS
RIDER.

     Landlord and Tenant have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialed all Riders which
are attached to or incorporated by reference in this Lease.


                                        "LANDLORD"

Signed on ___________________, 2001     PANATTONI INVESTMENTS, LLC
at Sacramento, California               a California limited liability company

                                        By:     PANATTONI LIVING TRUST,
                                                dated April 8, 1998, Sole Member


                                                By:
                                                    ---------------------------
                                                      Carl D. Panattoni, Trustee


                                        "TENANT"

Signed on ___________________, 2001     UNITED STATIONERS SUPPLY CO.,
at ________________________________     an Illinois corporation


                                        By:
                                           -----------------------

                                        Its:
                                            ----------------------

                                        By:
                                           -----------------------

                                        Its:
                                            ----------------------

                                       15

EX-10.16

EXHIBIT 10.16

                                   INDUSTRIAL
                                 LEASE AGREEMENT

     THIS LEASE is executed this _____ day of October, 2001, by and between DUKE
CONSTRUCTION LIMITED PARTNERSHIP, an Indiana limited partnership ("Landlord"),
and UNITED STATIONERS SUPPLY CO., an Illinois corporation ("Tenant").

                                   WITNESSETH:

                          ARTICLE 1 - LEASE OF PREMISES

     SECTION 1.01. BASIC LEASE PROVISIONS AND DEFINITIONS.

A.   Leased Premises (shown outlined on EXHIBIT A attached hereto): 125 Horizon
     Drive; Suwanee, Georgia 30024; located in Horizon Park (the "Park");

B.   Rentable Area: approximately 600,674 square feet (the "Building")

     Landlord shall use commercially reasonable standards, consistently applied,
     in determining the Rentable Area and the rentable area of the Building.
     Landlord's determination of Rentable Area shall conclusively be deemed
     correct for all purposes hereunder.

C.   Tenant's Proportionate Share: 100%;

D.   Minimum Annual Rent:

                        
           Year 1                     $1,729,941.10
           Year 2                     $1,729,941.10
           Year 3                     $1,729,941.10
           Year 4                     $1,729,941.10
           Year 5                     $1,729,941.10
           Year 6                     $1,940,177.00
           Year 7                     $1,940,177.00
           Year 8                     $1,940,177.00
           Year 9                     $1,940,177.00
           Year 10                    $1,940,177.00

           

E.   Monthly Rental Installments:

                        
           Months   1 - 12              $144,161.75
           Months  13 - 24              $144,161.75
           Months  25 - 36              $144,161.75
           Months  37 - 48              $144,161.75
           Months  49 - 60              $144,161.75
           Months  61 - 72              $161,681.41
           Months  73 - 84              $161,681.41
           Months  85 - 96              $161,681.41
           Months  97 -108              $161,681.41
           Months 109 -120              $161,681.41

           

F.   Lease Term: Ten (10) years;

G.   Commencement Date: In accordance with the provisions of Section 2.02
     herein;

H.   Security Deposit: Zero and no/100 Dollars ($0.00);

I.   Guarantor(s): None;

J.   Broker(s): John Crawford of Grubb & Ellis Company representing Tenant;

K.   Permitted Use: Storage and distribution of office and business products,
     including janitorial and sanitation supplies, office and administrative
     uses and call center services;



L.   Address for notices:

     Landlord:                  Duke Construction Limited Partnership
                                3950 Shackleford Rd., Suite 300
                                Duluth, Georgia 30096
                                Attn: Asset/Property Management

     Tenant:                    United Stationers Supply Co.
                                125 Horizon Drive
                                Suwanee, Georgia 30024

     With a copy to:            United Stationers Supply Co.
                                2200 East Golf Road
                                Des Plaines, Illinois  60016-1267
                                Attn: Legal Department

     Address for rental and other payments:

                                Duke Construction Limited Partnership
                                P.O. Box 945703
                                Atlanta, Georgia 30394-5703

     Exhibits attached hereto:
                             EXHIBIT A:   Site Plan
                             EXHIBIT B-1: Project Specifications
                             EXHIBIT B-2: Project Design Schedule
                             EXHIBIT C:   Tenant's Acceptance of Premises
                             EXHIBIT D:   Subordination, Non-disturbance and
                                          Attornment Agreement
                             EXHIBIT E:   Special Stipulations

     SECTION 1.02. LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
leases from Landlord, under the terms and conditions herein, the Leased
Premises, Building and Common Areas as defined herein.

                         ARTICLE 2 - TERM AND POSSESSION

     SECTION 2.01. TERM. The term of this Lease ("Lease Term") shall be for the
period of time and shall commence on the Commencement Date described in the
Basic Lease Provisions. Upon delivery of possession of the Leased Premises to
Tenant, Tenant shall execute Landlord's Tenant's Acceptance of Premises form,
attached hereto as EXHIBIT C, acknowledging (i) the Commencement Date of this
Lease, and (ii) that Tenant has accepted the Leased Premises.

     SECTION 2.02. CONSTRUCTION.

     A. SCOPE. The scope of the work for the shell and tenant finish
improvements ("Work") to be performed by Landlord is set forth in the project
specifications and written descriptions thereto all of which are listed on the
attached PRELIMINARY EXHIBIT B-1. Landlord will prepare final plans and
specifications and actual working drawings which will be mutually agreed to by
both Tenant and Landlord and upon completion, substituted and attached hereto as
EXHIBIT B-1 ("Plans and Specifications"). Subject to force majeure events (as
defined herein) and other events beyond Landlord's control, Landlord shall
construct in a good workmanlike manner all of the Work and supply all work,
labor, materials and equipment necessary to complete the Work in accordance with
the Plans and Specifications, which shall include, without limitation, the
installation of landscaping, parking lots, driveways and all improvements as
shown on the Plans and Specifications. Landlord shall receive a construction
management fee of ten percent (10%) of the cost incurred by Landlord to complete
the tenant finish improvements, together with general conditions.

     B. CHANGE ORDERS. Tenant shall have the right to request in writing that
Landlord make changes from time to time in the Work of a non-structural nature,
and Landlord shall not unreasonably refuse to do so. Notwithstanding the
foregoing, Landlord shall have the right to refuse to perform Tenant requested
changes to the Work which delay the construction of the Work. Any additional
increase in cost associated with said changes shall be paid to Landlord within
ten (10) days of receipt of an invoice for same but not before the Commencement
Date. Change orders that result in a credit may, at the written election of
Tenant, be either applied toward the cost of additional current or future work.
A construction management fee equal to ten percent (10%), together with general
conditions, shall be

                                       -2-


charged to all change order work. Any change order work that shall decrease the
cost associated with the construction of the Leased Premises shall not be
subject to any additional charges or credits.

     C. PROJECT DESIGN SCHEDULE AND PERMITS. The Work shall be constructed by
Landlord in a good and workmanlike manner and in accordance with the Project
Design Schedule attached hereto as EXHIBIT B-2. Landlord shall apply for and
obtain as expeditiously as possible all permits, licenses and certificates
necessary for the construction of the Work and for the occupancy thereof by
Tenant. Landlord does not guarantee or warrant that all necessary permits,
licenses or certificates shall be granted by or available from the applicable
governing body.

     D. OFFICE SPACE ALLOWANCE. As further consideration for Tenant's
performance of all obligations to be performed by Tenant under this Lease,
Landlord shall contribute the amount of Thirty-Five and 00/100 Dollars ($35.00)
per square feet towards finish improvements in the office portion of the Leased
Premises ("Landlord's Contribution"), which area is estimated to be
approximately 32,000 square feet (the "Office Space"). Landlord's Contribution
shall be used for alterations, improvements, fixtures and equipment which become
part of or are attached or affixed to the Office Space, including walls, wall
coverings and floor coverings, but excluding trade fixtures, furniture and
furnishings or other personal property. In the event the cost of improving the
Office Space exceeds of Landlord's Contribution, the excess shall be paid by
Tenant to Landlord within ten (10) days of receipt of an invoice for same but
not before the Commencement Date.

     E. SUBSTANTIAL COMPLETION, POSSESSION AND COMMENCEMENT DATE. The Leased
Premises, shall be deemed to be substantially completed at such time as (i)
Landlord shall certify in writing to Tenant that the Work has been completed in
substantial accordance with the Plans and Specifications described above subject
only to minor punch list items (i.e., such unfinished items as shall not impair
Tenant's ability to use the Leased Premises in the manner intended by the Lease)
to be mutually agreed to and identified by Tenant and Landlord during a joint
inspection of the Leased Premises prior to substantial completion, (ii) Landlord
shall have obtained all necessary governmental approvals and inspections, all
systems are fully operational, and sufficient utilities are available to service
the Leased Premises and are connected to mains and all meters are set and
activated, (iii) the project architect shall certify in writing to Tenant
pursuant to and in accordance with form AIA-G704 as to those same matters in (i)
and (ii) immediately preceding, and (iv) the issuance of a temporary certificate
of occupancy which shall allow Tenant to commence its business operations. At
such time as the last of the foregoing requirements shall have been satisfied,
Landlord shall deliver possession of the Leased Premises to Tenant. Subject to
force majeure events or delays caused by the Tenant, in no event shall
substantial completion occur later than October 15, 2002. The date upon which
Landlord shall deliver possession of the Leased Premises to Tenant in
substantially completed condition is herein called the "Commencement Date". Upon
delivery of possession of the Leased Premises to Tenant, Tenant shall execute
Landlord's Tenant's Acceptance of Premises form, attached hereto as EXHIBIT "C",
acknowledging (i) the Commencement Date of this Lease, and (ii) that Tenant has
accepted the Leased Premises.

     Notwithstanding the foregoing, if substantial completion of the Work is
delayed beyond October 15, 2002 as a result of any act or omission of Tenant
(including, without limitation, any delay in approving the Plans and
Specifications, change orders requested by Tenant or the installation of racking
within the warehouse portion of the Leased Premises by Tenant), then, for
purposes of determining the Commencement Date, substantial completion shall be
deemed to occur on the date that substantial completion would have occurred but
for such act or omission of Tenant.

     F. FIXTURING AND PUNCHLIST ITEMS. Landlord shall give Tenant written notice
on or before June 12, 2002 permitting access to the Building. From and after
receipt of said notice, or earlier with consent of Landlord, Tenant shall have
the right of going into the Leased Premises to complete interior decoration
work, installation of warehouse equipment, install fixtures, telephone and
communication wiring. Upon Tenant's entry of Leased Premises as set forth above,
Tenant shall arrange his schedule so as not to unreasonably interfere with or
delay the other work of Landlord in unoccupied portion of the Leased Premises or
any permitting or inspecting process being carried on at the same time and
Tenant and its contractor shall comply with Landlord's or its agent's directions
and safety procedures while working in the Leased Premises. Landlord shall have
no liability for loss or damage to Tenant's fixtures, equipment or any other
items or property brought into the Leased Premises by the Tenant or its
contractors, subcontractors, agents or representatives prior to Commencement
Date which Tenant agrees to insure against loss, damage or theft. Tenant and
Landlord shall prepare a punchlist of uncompleted items to the Leased Premises
upon the date the same shall be substantially completed. Landlord agrees that
all punchlist items shall be completed within thirty (30) days of the
preparation of such list unless such list contains long lead-time items or as
otherwise agreed to by both Tenant and Landlord.

     G. WARRANTY. Landlord hereby warrants for a period of one (1) year from the
Commencement Date, the Work against defects in materials and workmanship,
routine maintenance

                                       -3-


(except as to Landlord's obligations herein) and ordinary wear and tear
excepted. The foregoing warranties cover all materials, labor and equipment for
repairs but do not cover consequential damages, such as lost profits or
opportunity, incurred by the Tenant. In addition to the foregoing, upon the
Commencement Date, Landlord shall enforce for the benefit of Tenant all
warranties and guarantees relating to the Work and any and all systems contained
therein. Landlord shall provide Tenant with copies of all warranties and
guarantees applicable to the Work and Landlord shall consult with Tenant as to
the application and restrictions applicable to all such warranties and
guarantees. Tenant shall not take any action that shall invalidate any of the
foregoing warranties or guarantees and shall provide Landlord with written
notice of all warranty claims. Tenant will notify Landlord promptly upon
discovery of any potential problems that may be covered under the foregoing
warranties. Without limiting Landlord's duty to perform repairs under any
warranties contained herein, the extent and performance of any repairs required
under the foregoing warranties will be mutually agreed to between Landlord and
Tenant so as to minimize the disruption to Tenant's business operations.

     H. CALL CENTER. Landlord agrees to construct the Call Center at Tenant's
sole cost and expense. It is estimated that the cost to construct the Call
Center and additional parking (total parking spaces on the site will be 400
spaces) will be One Million Two Hundred Seventy-Three Thousand Six Hundred
Thirteen and no/100 Dollars ($1,273,613.00) ("Additional Cost"). Tenant shall
pay the Additional Cost to Landlord within ten (10) days of receipt of an
invoice for same but not before substantial completion of said improvements.
Tenant and Landlord shall execute a Memorandum of Agreement which shall specify
the actual cost to design and construct the Call Center before the commencement
of such work. Landlord shall receive a construction management fee of ten
percent (10%), together with general conditions which is included in the
Additional Cost.

     I. EASEMENTS. Landlord hereby reserves the right to grant or establish
reasonable easements along the property lines of the land upon which the
Building is constructed and/or under the parking areas and/or other areas of the
Leased Premises which are exterior to the Building provided the installation,
operation, use, maintenance and repair thereof will not materially or adversely
interfere with the Tenant's use and enjoyment of the Leased Premises.

     SECTION 2.03. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of this Lease, Tenant shall immediately surrender the Leased
Premises to Landlord in broom-clean condition and in good condition and repair.
Tenant shall also remove its personal property, trade fixtures and any of
Tenant's alterations designated by Landlord, promptly repair any damage caused
by such removal, and restore the Leased Premises to the condition existing prior
to the installation of such items. If Tenant fails to do so, Landlord may
restore the Leased Premises to such condition at Tenant's expense, Landlord may
cause all of said property to be removed at Tenant's expense, and Tenant hereby
agrees to pay all the costs and expenses thereby reasonably incurred. All Tenant
property which is not removed within ten (10) days following Landlord's written
demand therefor shall be conclusively deemed to have been abandoned by Tenant,
and Landlord shall be entitled to dispose of such property at Tenant's cost
without thereby incurring any liability to Tenant. The provisions of this
section shall survive the expiration or other termination of this Lease.

     SECTION 2.04. HOLDING OVER. If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant shall
become a tenant from month to month at one hundred fifty percent (150%) the
Monthly Rental Installment in effect at the end of the Lease Term, and otherwise
upon the terms, covenants and conditions herein specified, so far as applicable.
Acceptance by Landlord of rent in such event shall not result in a renewal of
this Lease, and Tenant shall vacate and surrender the Leased Premises to
Landlord upon Tenant being given thirty (30) days' prior written notice from
Landlord to vacate whether or not said notice is given on the rent paying date.
This SECTION 2.04 shall in no way constitute a consent by Landlord to any
holding over by Tenant upon the expiration or earlier termination of this Lease,
nor limit Landlord's remedies in such event.

                                ARTICLE 3 - RENT

     SECTION 3.01. BASE RENT. Tenant shall pay to Landlord the Minimum Annual
Rent in the Monthly Rental Installments, in advance, without deduction or
offset, beginning on the Commencement Date and on or before the first day of
each and every calendar month thereafter during the Lease Term. The Monthly
Rental Installment for partial calendar months shall be prorated.

     SECTION 3.02. ADDITIONAL RENT. In addition to the Minimum Annual Rent
Tenant shall pay directly to the applicable party when due as "Additional
Rent,": (a) all Operating Expenses for the Leased Premises, Building and Common
Areas; (b) all Insurance Premiums (as herein defined); and (c) all Real Estate
Taxes (as herein defined).

                                       -4-


     "Operating Expenses" shall mean all necessary expenses for operation,
repair, replacement and maintenance to keep the Building and Common Areas in
good order, condition and repair (including all additional direct costs and
expenses of operation and maintenance of the Building) including, but not
limited to, utilities; stormwater discharge fees; license, permit, inspection
and other fees; fees and assessments imposed by any covenants or owners'
association; security services; and maintenance, repair and replacement of the
Building systems, driveways, parking areas (including snow removal), exterior
lighting, landscaped areas, walkways, curbs, drainage strips, sewer and plumbing
lines, exterior walls, foundation, structural frame, roof and gutters.

     To the extent that the Landlord shall reasonably determine that any of the
roof, walls, foundation or structural frame of the Building shall require
replacement during the Lease Term, such replacement shall be made by Landlord.
The cost associated with such replacement shall be amortized over the useful
life of the improvement, in accordance with generally accepted accounting
principles, together with interest at twelve percent (12%), and only the
amortized portion thereof (during any given Lease year) shall be paid by Tenant
to Landlord within ten (10) days of receipt of an invoice for same.

     "Insurance Premiums" shall include premiums and deductible amounts for
insurance coverage on the Building or Common Areas and shall include all fire
and extended coverage insurance on the Building and all liability insurance
coverage on the Common Areas of the Building, and the grounds, sidewalks,
driveways and parking areas on the Land, together with such other insurance
coverages, including, but not limited to, rent interruption insurance.

     "Real Estate Taxes" shall include any form of real estate tax or assessment
or service payments in lieu thereof, and any license fee, commercial rental tax,
improvement bond or other similar charge or tax (other than inheritance,
personal income or estate taxes) imposed upon the Building or common areas by
any authority having the power to so charge or tax, together with costs and
expenses Tenant may incur of contesting the validity or amount of Real Estate
Taxes. Additionally, Tenant shall pay, prior to delinquency, all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all personal
property of Tenant contained in the Leased Premises. Nothing herein shall limit
Tenant's ability to contest Real Estate Taxes.

     Tenant agrees to pay as Additional Rent to Landlord, upon demand, its pro
rata share of any utility surcharges, or any other costs levied, assessed or
imposed by, or at the direction of, or resulting from statutes or regulations,
or interpretations thereof, promulgated by any Federal, State, Municipal or
local governmental authorities in connection with the use or occupancy of the
Leased Premises.

     SECTION 3.03. LATE CHARGES. Tenant acknowledges that Landlord shall incur
certain additional unanticipated administrative and legal costs and expenses if
Tenant fails to timely pay any payment required hereunder. Therefore, in
addition to the other remedies available to Landlord hereunder, Tenant shall pay
to Landlord an administrative fee equal to five percent (5%) of the past due
amount, together with such past due amounts, upon demand. Notwithstanding the
foregoing sentence, Landlord shall provide Tenant with a written courtesy notice
of such default and Tenant shall have an additional five (5) days to cure such
default before Landlord imposes such late charge; provided, however, that
Landlord shall not be required to give such courtesy notice more than one (1)
time with respect to any particular default, nor more than two (2) times in any
consecutive twelve (12) month period with respect to any payment defaults in the
aggregate.

     SECTION 3.04. NET LEASE. It is the purpose and intent of Landlord and
Tenant that (except as otherwise expressly provided in this Lease) the base
rental payable under this Lease be net to Landlord so that this Lease shall
yield, net to Landlord, the Minimum Annual Rent specified in Section 1.01.D. for
each lease year of this Lease. Tenant therefore covenants and agrees with
Landlord to pay and discharge on a timely basis, as Additional Rent hereunder,
in addition to those items set forth above and in Articles 6 and 8 hereof, all
reasonable and customary costs, expenses, and obligations of every kind and
nature whatsoever relating to the Leased Premises which benefit Tenant or are at
Tenant's request, excepting only any costs, expenses and/or obligations which
arise as a result of the negligence, intentional misconduct or unauthorized acts
of Landlord or Landlord's agents or employees, or the Landlord's breach or
default in the performance of any obligation of Landlord under the terms of this
Lease. Notwithstanding the foregoing, nothing contained herein shall be
construed to require Tenant to make any debt service payments under any secured
or unsecured indebtedness of Landlord or to pay any costs and expenses which
this Lease expressly provided for Landlord to pay, if any, or to pay any income
taxes, franchise taxes, estate or gift taxes, inheritance taxes, transfer taxes,
recording taxes or intangible taxes of Landlord.

                          ARTICLE 4 - SECURITY DEPOSIT

                              INTENTIONALLY OMITTED

                                       -5-


                                 ARTICLE 5 - USE

     SECTION 5.01. USE OF LEASED PREMISES. The Leased Premises are to be used by
Tenant solely for the Permitted Use and for no other purposes without the prior
written consent of Landlord.

     SECTION 5.02. COVENANTS OF TENANT REGARDING USE. Tenant shall (i) use and
maintain the Leased Premises and conduct its business thereon in a safe,
careful, reputable and lawful manner, (ii) comply with all laws, rules,
regulations, orders, ordinances, directions and requirements of any governmental
authority or agency, now in force or which may hereafter be in force, including
without limitation those which shall impose upon Landlord or Tenant any duty
with respect to or triggered by a change in the use or occupation of, or any
improvement or alteration to, the Leased Premises, (iii) comply with any
protective covenants applicable to the Park which are in effect and as may
hereafter be adopted and promulgated and (iv) comply with and obey all
reasonable directions of the Landlord, including any rules and regulations that
may be adopted by Landlord from time to time. All damage to the floor structure
or foundation of the Building due to improper positioning or storage of items or
materials shall be repaired by Tenant at the sole expense of Tenant.

     SECTION 5.03. LANDLORD'S RIGHTS REGARDING USE. Landlord or Landlord's agent
shall be permitted to inspect or examine the Leased Premises at any reasonable
time upon reasonable notice (except in an emergency when no notice shall be
required), and Landlord shall have the right to make any repairs to the Leased
Premises which are necessary for its preservation; provided, however, that any
repairs made by Landlord shall be at Tenant's expense. Landlord shall incur no
liability to Tenant for such entry, nor shall such entry constitute an eviction
of Tenant or a termination of this Lease, or entitle Tenant to any abatement of
rent therefor.

                       ARTICLE 6 - UTILITIES AND SERVICES

     Tenant shall obtain in its own name and pay directly to the appropriate
supplier the cost of all utilities and services for the Leased Premises,
Building and Common Areas. Landlord shall not be liable in damages or otherwise
for any failure or interruption of any utility or other Building service and no
such failure or interruption shall entitle Tenant to terminate this Lease or
withhold sums due hereunder.

                       ARTICLE 7 - MAINTENANCE AND REPAIRS

     SECTION 7.01. TENANT'S RESPONSIBILITY. During Lease Term and subject to the
provisions of Section 3.02 herein, Tenant shall, at its own cost and expense,
maintain the Leased Premises, Building and Common Areas in good condition,
regularly servicing and promptly making all repairs and replacements thereto,
including but not limited to the electrical systems, heating and air
conditioning systems, plate glass, floors, windows and doors, sprinkler and
plumbing systems, the roof, exterior walls, foundation and structural frame of
the Building and the parking and landscaped areas, and shall obtain a preventive
maintenance contract on the heating, ventilating and air-conditioning systems,
and provide Landlord with a copy thereof. The preventive maintenance contract
shall meet or exceed Landlord's standard maintenance criteria, and shall provide
for the inspection and maintenance of the heating, ventilating and air
conditioning system on not less than a semi-annual basis. In the event Tenant
fails to maintain the Leased Premises as required herein or fails to commence
repairs (requested by Landlord in writing) within thirty (30) days after such
request, or fails diligently to proceed thereafter to complete such repairs,
Landlord shall have the right in order to preserve the Leased Premises or
portion thereof, and/or the appearance thereof, to make such repairs or have a
contractor make such repairs and charge Tenant for the cost thereof as
additional rent, together with interest at the rate of twelve percent (12%) per
annum from the date of making such payments.

     SECTION 7.02. ALTERATIONS. Tenant shall not permit alterations in or to the
Leased Premises unless and until the plans and the contractor have been approved
by Landlord in writing. As a condition of such approval, Landlord may require
Tenant to remove the alterations and restore the Leased Premises upon
termination of this Lease; otherwise, all such alterations shall at Landlord's
option become a part of the realty and the property of Landlord, and shall not
be removed by Tenant. Tenant shall ensure that all alterations shall be made in
accordance with all applicable laws, regulations and building codes, in a good
and workmanlike manner and of quality equal to or better than the original
construction of the Building. Upon completion of the work, Tenant shall provide
lien waivers from the subcontractors or a final affidavit of lien waiver from
the general contractor, and such lien waiver shall be in a form acceptable to
Landlord. No person shall be entitled to any lien derived through or under
Tenant for any labor or material furnished to the Leased Premises, and nothing
in this Lease shall be construed to constitute a consent by Landlord to the
creation of any lien. If any lien is filed against the Leased Premises for work
claimed to have been done for or material claimed to have been furnished to
Tenant, Tenant shall cause such lien to be discharged of record or bonded or
otherwise insured over within thirty (30) days after

                                       -6-


filing. Tenant shall indemnify Landlord from all costs, losses, expenses and
attorneys' fees in connection with any construction or alteration and any
related lien.

                              ARTICLE 8 - CASUALTY

     SECTION 8.01. CASUALTY. In the event of total or partial destruction of the
Building or the Leased Premises by fire or other casualty and upon receipt of
the insurance proceeds with respect to the casualty, Landlord agrees to promptly
restore and repair the Leased Premises; provided, however, Landlord's obligation
hereunder shall be limited to the reconstruction of such of the tenant finish
improvements as were originally required to be made by Landlord, if any. Tenant
agrees to also pay Landlord any deductible amount elected to be maintained by
Tenant. Rent shall proportionately abate during the time that the Leased
Premises or part thereof are unusable because of any such damage.
Notwithstanding the foregoing, if the Leased Premises are (i) so destroyed that
they cannot be repaired or rebuilt within one hundred eighty (180) days from the
casualty date; or (ii) destroyed by a casualty which is not covered by the
insurance required hereunder or, if covered, such insurance proceeds are not
released by any mortgagee entitled thereto or are insufficient to rebuild the
Building and the Leased Premises; then, in case of a clause (i) casualty, either
Landlord or Tenant may, or, in the case of a clause (ii) casualty, then Landlord
may, upon thirty (30) days' written notice to the other party, terminate this
Lease with respect to matters thereafter accruing. Tenant waives any right under
applicable laws inconsistent with the terms of this paragraph and in the event
of a destruction agrees to accept any offer by Landlord to provide Tenant with
comparable space within the project in which the Leased Premises are located on
the same terms as this Lease. Notwithstanding the provisions of this paragraph,
if any such damage or destruction occurs within the final two (2) years of the
term hereof, then Landlord, in its sole discretion, may, without regard to the
aforesaid one hundred eighty (180) day period, terminate this Lease by written
notice to Tenant. In the event of such termination, Tenant's obligation to pay
Minimum Annual Rent and Additional Rent shall cease as of the date of the
casualty.

     SECTION 8.02. ALL RISK COVERAGE INSURANCE. During the Lease Term, Tenant
shall maintain all risk coverage insurance for the full replacement cost of the
Building by an Insurance Carrier acceptable to Landlord, and shall also protect
Tenant's property on the Leased Premises. Landlord shall not be liable for any
damage to Tenant's property, regardless of cause, including the negligence of
Landlord and its employees, agents and invitees. Tenant hereby expressly waives
any right of recovery against Landlord for damage to any property of Tenant
located in or about the Leased Premises, Building or Common Areas, however
caused, including the negligence of Landlord and its employees, agents and
invitees. All insurance policies maintained by Tenant as provided in this Lease
shall contain an agreement by the insurer waiving the insurer's right of
subrogation against the other party to this Lease.

     SECTION 8.03. WAIVER OF SUBROGATION. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant each hereby waive any and all right to
recovery, claim, action or cause of action, against the other, its agents,
directors, officers or employees, for any loss or damage that may occur to the
Leased Premises, or any improvements thereto, or the Building, or any
improvements thereto, or any personal property of such party therein, by reason
of fire, the elements, or any other cause which could be insured against under
the terms of insurance policies referred to in Sections 8.02 and 9.02 hereof,
regardless of cause or origin, including negligence of the other party hereto,
its agents, directors, officers or employees, and covenants that no insurer
shall hold any right of subrogation against such other party.

                         ARTICLE 9 - LIABILITY INSURANCE

     SECTION 9.01. TENANT'S RESPONSIBILITY. Landlord shall not be liable to
Tenant or to any other person for (i) damage to property or injury or death to
persons due to the condition of the Leased Premises, the Building or the Common
Areas, or (ii) the occurrence of any accident in or about the Leased Premises or
the Common Areas, or (iii) any act or neglect of Tenant or any other tenant or
occupant of the Building or of any other person, unless such damage, injury or
death is directly and solely the result of Landlord's negligence; and Tenant
hereby releases Landlord from any and all liability for the same. Tenant will
indemnify Landlord and save it harmless from and against any and all claims,
actions, damages, liability and expense in connection with the loss of life,
personal injury, and/or damage to property arising from or out of (i) any
occurrence in, upon or at the Leased Premises, however caused, including
occurrences caused by the sole or contributory negligence of Tenant or its
respective agents, customers, invitees, concessionaires, contractors, servants,
vendors, materialmen or suppliers, or (ii) any occurrence elsewhere on the
Leased Premises occasioned wholly or in part by any act or omission caused by
the Tenant or its agents, customers, invitees, concessionaire, contractors,
servants, vendors, materialmen or suppliers. In case Landlord shall be made a
party to any litigation commenced by or against the Tenant for any of the above
reasons, then Tenant shall protect and hold Landlord harmless and pay all
reasonably required costs, penalties, charges, damages, expenses and reasonable
attorneys' fees paid by Landlord. It is understood that the provisions of this
Section 9.01 shall apply except to the

                                       -7-


extent any such liability is caused directly by Landlord's negligence or that of
its agents, materialmen, vendors or suppliers. This provision shall survive the
expiration or earlier termination of this Lease.

     SECTION 9.02. TENANT'S INSURANCE. Tenant shall carry general public
liability and property damage insurance, issued by one or more insurance
companies acceptable to Landlord, with the following minimum coverages:

A.   All Risk Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage
     insurance, if applicable, for the full cost of replacement of the Leased
     Premises, Building, Common Areas and Tenant's property.

B.   Commercial General Liability Insurance, including blanket, contractual
     liability, broad form property damage, personal injury, completed
     operations, products liability, and fire damage: Not less than $3,000,000
     Combined Single Limit for both bodily injury and property damage.

C.   Worker's Compensation: minimum statutory amount.

D.   Business interruption insurance.

The insurance policies under Article 8 and Article 9 shall protect Tenant and
Landlord as their interests may appear, naming Landlord and Landlord's managing
agent and mortgagee as additional insureds, and shall provide that they may not
be canceled on less than thirty (30) days' prior written notice to Landlord.
Tenant shall furnish Landlord with Certificates of Insurance evidencing all
required coverages on or before the Commencement Date. If Tenant fails to carry
such insurance and furnish Landlord with such Certificates of Insurance after a
request to do so, Landlord may obtain such insurance and collect the cost
thereof from Tenant.

                           ARTICLE 10 - EMINENT DOMAIN

     If all or any substantial part of the Building or Common Areas shall be
acquired by the exercise of eminent domain, Landlord may terminate this Lease by
giving thirty (30) days' written notice to Tenant on or before the date that
actual possession thereof is so taken. If all or any part of the Leased Premises
shall be acquired by the exercise of eminent domain so that the Leased Premises
shall become impractical for Tenant to use for the Permitted Use, Tenant may
terminate this Lease as of the date that actual possession thereof is so taken
by giving written notice to Landlord. All damages awarded shall belong to
Landlord; provided, however, that Tenant may claim dislocation damages if such
amount is not subtracted from Landlord's award, unless any amount paid to
Landlord expressly includes an amount given to compensate Tenant for any loss or
damage it sustains.

                      ARTICLE 11 - ASSIGNMENT AND SUBLEASE

     Tenant shall not assign this Lease or sublet the Leased Premises in whole
or in part without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied. In the event of any assignment or
subletting, Tenant shall remain primarily liable hereunder, and any extension,
expansion, rights of first offer, rights of first refusal or other options
granted to Tenant under this Lease shall be rendered void and of no further
force or effect. The acceptance of rent from any other person shall not be
deemed to be a waiver of any of the provisions of this Lease or to be a consent
to the assignment of this Lease or the subletting of the Leased Premises.
Without in any way limiting Landlord's right to refuse to consent to any
assignment or subletting of this Lease, Landlord reserves the right to refuse to
give such consent if in Landlord's opinion (i) the Leased Premises are or may be
in any way adversely affected; (ii) the business reputation of the proposed
assignee or subtenant is unacceptable; or (iii) the financial worth of the
proposed assignee or subtenant is insufficient to meet the obligations
hereunder. Tenant agrees to reimburse Landlord for reasonable accounting and
attorneys' fees incurred in conjunction with the processing and documentation of
any such requested assignment, subletting or any other hypothecation of this
Lease or Tenant's interest in and to the Leased Premises.

     Notwithstanding the foregoing, Tenant may freely transfer and assign this
Lease or sublet all or any portion of the Leased Premises (i) to any affiliate
or subsidiary of Tenant or (ii) in connection with any merger, consolidation or
sale of assets of Tenant, without having to obtain any consent or approval of
Landlord; provided, however, that any such assignment or subletting shall not
result in Tenant being released or discharged from any liability under this
Lease except to the extent Tenant ceases to exist following any such merger or
consolidation. Tenant shall provide Landlord with written notice of such
assignment or subletting prior to or promptly following the effective date of
such assignment or subletting. Tenant agrees to reimburse Landlord in an amount
equal to the lesser of Five Hundred Dollars ($500.00) in conjunction with the
processing and documentation of any requested assignment, subletting or any
other hypothecation of this Lease or Tenant's interest in and to the Leased
Premises.

                                       -8-


                       ARTICLE 12 - TRANSFERS BY LANDLORD

     SECTION 12.01. TRANSFERS. Landlord shall have the right to subordinate this
Lease to any mortgage presently existing or hereafter placed upon the Building
by so declaring in such mortgage. In the event of a sale or transfer of such
interest (except a mortgage or other transfer as security for a debt), the
"Landlord" named herein, or in the case of a subsequent transfer, the transferor
shall, after the date of such transfer, be automatically released from all
personal liability for the performance or observance of any term, condition,
covenant or obligation required to be performed or observed by Landlord
hereunder, and the transferee shall be deemed to have assumed all of such terms,
conditions, covenants and obligations. Within ten (10) days following receipt of
a written request from Landlord, Tenant shall execute and deliver to Landlord,
without cost, any instrument which Landlord deems necessary or desirable to
confirm the subordination of this Lease and an estoppel certificate in such form
as Landlord may reasonably request certifying (i) that this Lease is in full
force and effect and unmodified or stating the nature of any modification, (ii)
the date to which rent has been paid, (iii) that there are not, to Tenant's
knowledge, any uncured defaults or specifying such defaults if any are claimed,
and (iv) any other matters or state of facts reasonably required respecting the
Lease. Such estoppel may be relied upon by Landlord and by any purchaser or
mortgagee of the Building. Notwithstanding the foregoing, if the mortgagee shall
take title to the Leased Premises through foreclosure or deed in lieu of
foreclosure, Tenant shall be allowed to continue in possession of the Leased
Premises as provided for in this Lease so long as Tenant shall not be in
default.

     SECTION 12.02. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT.
Landlord shall use commercially reasonable efforts, upon written request by
Tenant and at Tenant's sole expense, to obtain a Subordination, Non-Disturbance
and Attornment Agreement executed by holders of any mortgages on the Leased
Premises providing that (i) in the event the mortgagee files suit to foreclose
the mortgage, the mortgagee will not join Tenant in the foreclosure proceedings
so long as Tenant is not in default under any of the terms, covenants and
conditions of the Lease, (ii) in the event mortgagee succeeds to the interest of
mortgagor, as Landlord, and Tenant is not in default under the terms, covenants
or conditions of the Lease, the mortgagee shall be bound to Tenant under all of
the terms, covenants and conditions of the Lease, (iii) Tenant agrees to attorn
to mortgagee, and (iv) Tenant agrees to give mortgagee notice of Landlord's
default and opportunity to cure.

                         ARTICLE 13 - DEFAULT AND REMEDY

     SECTION 13.01. DEFAULT. The occurrence of any of the following shall be a
"Default":

     (a) Tenant fails to pay any Monthly Rental Installment or Additional Rent
within five (5) days after the same is due, or Tenant fails to pay any other
amounts due Landlord from Tenant within thirty (30) days after the same is due.
Notwithstanding the foregoing sentence, Landlord shall provide Tenant with a
written courtesy notice of such default and Tenant shall have an additional five
(5) days after receipt of notice to cure such default before Landlord exercises
any of its remedies hereunder provided, however, that Landlord shall not be
required to give such courtesy notice more than one (1) time with respect to any
particular default, nor more than two (2) times in any consecutive twelve (12)
month period with respect to any payment defaults in the aggregate.

     (b) Tenant fails to perform or observe any other term, condition, covenant
or obligation required under this Lease for a period of thirty (30) days after
notice thereof from Landlord; provided, however, that if the nature of Tenant's
default is such that more than thirty days are reasonably required to cure, then
such default shall be deemed to have been cured if Tenant commences such
performance within said thirty-day period and thereafter diligently completes
the required action within a reasonable time.

     (c) Tenant shall assign or sublet all or a portion of the Leased Premises
in contravention of the provisions of Article 11 of this Lease.

     (d) All or substantially all of Tenant's assets in the Leased Premises or
Tenant's interest in this Lease are attached or levied under execution (and
Tenant does not discharge the same within sixty (60) days thereafter); a
petition in bankruptcy, insolvency or for reorganization or arrangement is filed
by or against Tenant (and Tenant fails to secure a stay or discharge thereof
within sixty (60) days thereafter); Tenant is insolvent and unable to pay its
debts as they become due; Tenant makes a general assignment for the benefit of
creditors; Tenant takes the benefit of any insolvency action or law; the
appointment of a receiver or trustee in bankruptcy for Tenant or its assets if
such receivership has not been vacated or set aside within thirty (30) days
thereafter; or, dissolution or other termination of Tenant's corporate charter
if Tenant is a corporation.

                                       -9-


     SECTION 13.02. REMEDIES. Upon the occurrence of any Default, Landlord shall
have the following rights and remedies, in addition to those allowed by law or
in equity, any one or more of which may be exercised without further notice to
Tenant:

     (a) Landlord may apply the Security Deposit or re-enter the Leased Premises
and cure any default of Tenant, and Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord thereby incurs; and
Landlord shall not be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action.

     (b) Landlord may terminate this Lease or, without terminating this Lease,
terminate Tenant's right to possession of the Leased Premises as of the date of
such Default, and thereafter (i) neither Tenant nor any person claiming under or
through Tenant shall be entitled to possession of the Leased Premises, and
Tenant shall immediately surrender the Leased Premises to Landlord; and (ii)
Landlord may re-enter the Leased Premises and dispossess Tenant and any other
occupants of the Leased Premises by any lawful means and may remove their
effects, without prejudice to any other remedy which Landlord may have. Upon the
termination of this Lease, Landlord may declare the present value (discounted at
the Prime Rate of interest) of all rent which would have been due under this
Lease for the balance of the Lease Term to be immediately due and payable,
whereupon Tenant shall be obligated to pay the same to Landlord, together with
all loss or damage which Landlord may sustain by reason of Tenant's default
("Default Damages"), which shall include without limitation expenses of
preparing the Leased Premises for re-letting, demolition, repairs, tenant finish
improvements, brokers' commissions and attorneys' fees, such payment shall not
constitute a penalty or forfeiture, but shall constitute full liquidated damages
due to Landlord as a result of Tenant's default. Landlord and Tenant acknowledge
that Landlord's actual damages in the event of a default by Tenant under this
Lease will be difficult to ascertain, and that the liquidated damages provided
above represent the parties' best estimate of such damages. The parties
expressly acknowledge that the foregoing liquidated damages are intended not as
a penalty, but as full liquidated damages, as permitted by Section 13-6-7 of the
Official Code of Ga. Annotated it being expressly understood and agreed that the
liabilities and remedies specified in this subsection (b) shall survive the
termination of this Lease.

     (c) Landlord may, without terminating this Lease, re-enter the Leased
Premises and re-let all or any part thereof for a term different from that which
would otherwise have constituted the balance of the Lease Term and for rent and
on terms and conditions different from those contained herein, whereupon Tenant
shall be immediately obligated to pay to Landlord as liquidated damages the
difference between the rent provided for herein and that provided for in any
lease covering a subsequent re-letting of the Leased Premises, for the period
which would otherwise have constituted the balance of the Lease Term, together
with all of Landlord's Default Damages.

     (d) Landlord may sue for injunctive relief or to recover damages for any
loss resulting from the Default.

     SECTION 13.03. LANDLORD'S DEFAULT AND TENANT'S REMEDIES. Landlord shall be
in default if it fails to perform any term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days after written notice
thereof from Tenant to Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Landlord is such that it cannot
reasonably be performed within thirty (30) days, such default shall be deemed to
have been cured if Landlord commences such performance within said thirty-day
period and thereafter diligently undertakes to complete the same. Upon the
occurrence of any such default, Tenant may sue for injunctive relief or to
recover damages for any loss directly resulting from the breach, but Tenant
shall not be entitled to terminate this Lease or withhold, offset or abate any
sums due hereunder.

     SECTION 13.04. LIMITATION OF LANDLORD'S LIABILITY. If Landlord shall fail
to perform any term, condition, covenant or obligation required to be performed
by it under this Lease and if Tenant shall, as a consequence thereof, recover a
money judgment against Landlord, Tenant agrees that it shall look solely to
Landlord's right, title and interest in and to the Building for the collection
of such judgment; and Tenant further agrees that no other assets of Landlord
shall be subject to levy, execution or other process for the satisfaction of
Tenant's judgment.

     SECTION 13.05. NONWAIVER OF DEFAULTS. Neither party's failure or delay in
exercising any of its rights or remedies or other provisions of this Lease shall
constitute a waiver thereof or affect its right thereafter to exercise or
enforce such right or remedy or other provision. No waiver of any default shall
be deemed to be a waiver of any other default. Landlord's receipt of less than
the full rent due shall not be construed to be other than a payment on account
of rent then due, nor shall any statement on Tenant's check or any letter
accompanying Tenant's check be deemed an accord and satisfaction. No act or
omission by Landlord or its employees or agents during the Lease Term shall be
deemed an acceptance

                                      -10-


of a surrender of the Leased Premises, and no agreement to accept such a
surrender shall be valid unless in writing and signed by Landlord.

     SECTION 13.06. ATTORNEYS' FEES. If either party defaults in the performance
or observance of any of the terms, conditions, covenants or obligations
contained in this Lease and the non-defaulting party obtains a judgment against
the defaulting party, then the defaulting party agrees to reimburse the
non-defaulting party for reasonable attorneys' fees incurred in connection
therewith.

                ARTICLE 14 - LANDLORD'S RIGHT TO RELOCATE TENANT

                              INTENTIONALLY DELETED

                 ARTICLE 15 - TENANT'S RESPONSIBILITY REGARDING
                  ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES.

     SECTION 15.01. DEFINITIONS.

     (a) "Environmental Laws" - All present or future federal, state and
municipal laws, ordinances, rules and regulations applicable to the
environmental and ecological condition of the Leased Premises, the rules and
regulations of the Federal Environmental Protection Agency or any other federal,
state or municipal agency or governmental board or entity having jurisdiction
over the Leased Premises.

     (b) "Hazardous Substances" - Those substances included within the
definitions of "hazardous substances," "hazardous materials," "toxic substances"
"solid waste" or "infectious waste" under Environmental Laws and petroleum
products.

     SECTION 15.02. COMPLIANCE. Tenant, at its sole cost and expense, shall
promptly comply with the Environmental Laws including any notice from any source
issued pursuant to the Environmental Laws or issued by any insurance company
which shall impose any duty upon Tenant with respect to the use, occupancy,
maintenance or alteration of the Leased Premises whether such notice shall be
served upon Landlord or Tenant.

     SECTION 15.03. RESTRICTIONS ON TENANT. Tenant shall operate its business
and maintain the Leased Premises in compliance with all Environmental Laws.
Tenant shall not cause or permit the use, generation, release, manufacture,
refining, production, processing, storage or disposal of any Hazardous
Substances on, under or about the Leased Premises, Building or Common Areas, or
the transportation to or from the Leased Premises, Building or Common Areas of
any Hazardous Substances, except as necessary and appropriate for its Permitted
Use in which case the use, storage or disposal of such Hazardous Substances
shall be performed in compliance with the Environmental Laws and the highest
standards prevailing in the industry.

     SECTION 15.04. NOTICES, AFFIDAVITS, ETC. Tenant shall immediately notify
Landlord of (i) any violation by Tenant, its employees, agents, representatives,
customers, invitees or contractors of the Environmental Laws on, under or about
the Leased Premises, Building or Common Areas, or (ii) the presence or suspected
presence of any Hazardous Substances on, under or about the Leased Premises,
Building or Common Areas and shall immediately deliver to Landlord any notice
received by Tenant relating to (i) and (ii) above from any source. Tenant shall
execute affidavits, representations and the like within five (5) days of
Landlord's request therefor concerning Tenant's best knowledge and belief
regarding the presence of any Hazardous Substances on, under or about the Leased
Premises, Building or Common Areas.

     SECTION 15.05. LANDLORD'S RIGHTS. Landlord and its agents shall have the
right, but not the duty, upon advance notice (except in the case of emergency
when no notice shall be required) to inspect the Leased Premises, Building or
Common Areas and conduct tests thereon to determine whether or the extent to
which there has been a violation of Environmental Laws by Tenant or whether
there are Hazardous Substances on, under or about the Leased Premises, Building
or Common Areas. In exercising its rights herein, Landlord shall use reasonable
efforts to minimize interference with Tenant's business but such entry shall not
constitute an eviction of Tenant, in whole or in part, and Landlord shall not be
liable for any interference, loss, or damage to Tenant's property or business
caused thereby.

     SECTION 15.06. TENANT'S INDEMNIFICATION. Tenant shall indemnify Landlord
and Landlord's managing agent from any and all claims, losses, liabilities,
costs, expenses and damages, including attorneys' fees, costs of testing and
remediation costs, incurred by Landlord in connection with any breach by Tenant
of its obligations under this Article 15. The covenants and obligations under
this Article 15 shall survive the expiration or earlier termination of this
Lease.

                                      -11-


                           ARTICLE 16 - MISCELLANEOUS

     SECTION 16.01. BENEFIT OF LANDLORD AND TENANT. This Lease shall inure to
the benefit of and be binding upon Landlord and Tenant and their respective
successors and assigns.

     SECTION 16.02. GOVERNING LAW. This Lease shall be governed in accordance
with the laws of the State where the Building is located.

     SECTION 16.03. GUARANTY. Not applicable.

     SECTION 16.04. FORCE MAJEURE. Landlord and Tenant (except with respect to
the payment of any monetary obligation) shall be excused for the period of any
delay in the performance of any obligation hereunder when such delay is
occasioned by a force majeure event, including but not limited to work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment,
labor or energy; unusual weather conditions; or acts or omissions of
governmental or political bodies including but not limited to the issuance of
all necessary permits for the construction and occupancy of the Building.

     SECTION 16.05. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature to Tenant does not constitute a reservation of or
option for Lease, and it is not effective as a Lease or otherwise until
execution by and delivery to both Landlord and Tenant.

     SECTION 16.06. INDEMNIFICATION FOR LEASING COMMISSIONS. Tenant's Broker and
Landlord's Broker (collectively, "Broker") shall each be entitled to receive a
commission in the amounts, and upon the terms and conditions, contained in a
separate commission agreement between Landlord and such parties. Tenant warrants
and represents to Landlord that, other than Broker, no other party is entitled,
as a result of the actions of Tenant, to a commission or other fee resulting
from the execution of this Lease; and in the event Tenant extends or renews this
Lease, or expands the Leased Premises, and Tenant's Broker is entitled to a
commission under the above-referenced commission agreement, Tenant shall pay all
commissions and fees payable to any party (other than Tenant's Broker) engaged
by Tenant to represent Tenant in connection therewith. Landlord warrants and
represents to Tenant that, except as set forth above, no other party is
entitled, as a result of the actions of Landlord, to a commission or other fee
resulting from the execution of this Lease. Landlord and Tenant agree to
indemnify and hold each other harmless from any loss, cost, damage or expense
(including reasonable attorneys' fees) incurred by the nonindemnifying party as
a result of the untruth or incorrectness of the foregoing warranty and
representation, or failure to comply with the provisions of this subparagraph.
Tenant's Broker is representing Tenant in connection with this Lease, and is not
representing Landlord. Landlord's Broker, or employees of Landlord or its
affiliates, are representing Landlord and are not representing Tenant. The
parties acknowledge that certain officers, directors, shareholders, or partners
of Landlord or its general partner(s), are licensed real estate brokers and/or
salesmen under the laws of the State of Georgia. Tenant consents to such parties
acting in such dual capacities.

     SECTION 16.07. NOTICES. Any notice required or permitted to be given under
this Lease or by law shall be deemed to have been given if it is written and
delivered in person or by overnight courier or mailed by certified mail, postage
prepaid, to the party who is to receive such notice at the address specified in
Article 1. If delivered in person, notice shall be deemed given as of the
delivery date. If sent by overnight courier, notice shall be deemed given as of
the first business day after sending. If mailed, the notice shall be deemed to
have been given on the date which is three business days after mailing. Either
party may change its address by giving written notice thereof to the other
party.

     SECTION 16.08. PARTIAL INVALIDITY; COMPLETE AGREEMENT. If any provision of
this Lease shall be held to be invalid, void or unenforceable, the remaining
provisions shall remain in full force and effect. This Lease represents the
entire agreement between Landlord and Tenant covering everything agreed upon or
understood in this transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect between the
parties. No change or addition shall be made to this Lease except by a written
agreement executed by Landlord and Tenant.

     SECTION 16.09. FINANCIAL STATEMENTS. In the event that Tenant is no longer
a publicly traded company, during the Lease Term and any extensions thereof, but
not more than annually, Tenant shall provide to Landlord within thirty (30) days
of Landlord's written request therefor, a copy of Tenant's most recent audited
and certified financial statements prepared as of the end of Tenant's fiscal
year. Such financial statements shall be signed by Tenant who shall attest to
the truth and accuracy of the information set forth in such statements. All
financial statements provided by Tenant to Landlord hereunder shall be prepared
in conformity with generally accepted accounting principles, consistently
applied. Landlord shall keep all such statements confidential.

                                      -12-


     SECTION 16.10. CONSENT. Where the consent of a party is required, such
consent will not be unreasonably withheld.

     SECTION 16.11. TIME. Time is of the essence of each term and provision of
this Lease.

     SECTION 16.12. REPRESENTATIONS AND WARRANTIES. The undersigned represent
and warrant that (i) such party is duly organized, validly existing and in good
standing (if applicable) in accordance with the laws of the state under which it
was organized; (ii) the Tenant is authorized to do business in the State where
the Building is located; and (iii) the individual executing and delivering this
Lease has been properly authorized to do so, and such execution and delivery
shall bind such party.


     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.

Signed, sealed and delivered         LANDLORD:
as to Landlord, in the
presence of:
                                     DUKE CONSTRUCTION LIMITED
                                     PARTNERSHIP, a Delaware limited partnership
- ---------------------------
Unofficial Witness                       By:  Duke Business Centers Corporation,
                                              its sole general partner

                                              By:
- ---------------------------                      -------------------------------
Notary Public                                          W. Gregory Thurman
                                                       Senior Vice President

Signed, sealed and delivered         TENANT:
as to Tenant, in the
presence of:                         UNITED STATIONERS SUPPLY CO., an
                                     Illinois corporation

- ---------------------------
Unofficial Witness                            By:
                                                 -------------------------
                                              Name:
                                                   -----------------------
                                              Title:
                                                    ----------------------

- ---------------------------
Notary Public                                 Attest:
                                                      --------------------
                                              Name:
                                                   -----------------------
                                              Title:
                                                    ----------------------
                                      -13-


                                   PRELIMINARY
                                   EXHIBIT B-1

                             PROJECT SPECIFICATIONS
















                                      -14-


                                   EXHIBIT B-2

                             PROJECT DESIGN SCHEDULE















                                      -15-


                                    EXHIBIT C

                             ACCEPTANCE OF PREMISES

Tenant:
                  --------------------------------------------------

Landlord:
                  --------------------------------------------------

Date Lease Signed:
                           -----------------------------------------

Term of Lease:
                           -----------------------------------------

Address of Leased Premises: Suite ______ containing approximately _____________
square feet,

located at______________________________________________________________________

________________________________________________________________________________

Commencement Date:
                   ---------------------------------------

Expiration Date:
                   ---------------------------------------


The above described premises are accepted by Tenant as suitable for the purpose
for which they were let. The above described lease term commences and expires on
the dates set forth above. Tenant acknowledges that it has received from
Landlord ________ number of keys to the Leased Premises. It is understood that
there is a punch list which will be completed after move-in and will be an
exhibit to the Tenant Estoppel.

TENANT                                      LANDLORD

- -------------------------------             -------------------------------
    (Type Name of Tenant)                       (Type Name of Landlord)

By:                                         By:
   ----------------------------                ----------------------------
         (Signature)                                   (Signature)

- -------------------------------             -------------------------------
     (Type Name and Title)                       (Type Name and Title)

                                      -16-


                                    EXHIBIT D

             SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

     THIS AGREEMENT, made as of the ___ day of _____________ , 2001, between
_____________ with offices at ("Tenant") and (herein, together with its
successors, transferees and assigns, the "Mortgagee");

     W I T N E S S E T H:

     WHEREAS, Mortgagee is about to or has heretofore granted to_______________,

a Georgia limited partnership (the "owner") a first mortgage loan, which loan is
secured by a security deed (herein "Mortgage") dated as of ____________ , 2001
and duly recorded on _________ , 2001 in the land records of Gwinnett County,
Georgia; and

     WHEREAS, the Mortgage is to be a first and prior lien upon the Owner's fee
estate in the real property described in Exhibit "A" annexed hereto ("Mortgaged
Premises"); and

     WHEREAS, Tenant is occupying a portion of the Mortgaged Premises under a
lease dated as of _____ , 2001 in which Owner is Landlord (the "Lease") covering
that portion of the Mortgaged Premises therein more particularly described (the
"Leased Premises"); and

     WHEREAS, Tenant desires to be assured of its continued and undisturbed
occupancy of the Leased Premises should the Mortgage be foreclosed or the
Mortgaged Premises sold pursuant to any power of sale contained therein and
Mortgagee is agreeable thereto.

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement and in further consideration of the sum of ONE DOLLAR ($1.00) each to
the other in hand paid, the receipt whereof is hereby acknowledged, Tenant and
Mortgagee mutually covenant and agree as follows:

     FIRST: The Lease and all of Tenant's rights, interest and estate therein
and thereunder are hereby made subject and subordinate to the lien of the
Mortgage and to any extensions, renewals, replacements, modifications, additions
or consolidations thereof and to all rights, title and interest of Mortgagee and
its successors and assigns therein and thereunder.

     SECOND: In the event, however, proceedings shall ever be instituted by
Mortgagee to foreclose or liquidate the Mortgage, the Tenant's possession of its
leased portion of the Mortgaged Premises shall not be disturbed by the
foreclosure proceedings and the Mortgaged Premises shall be sold at any
foreclosure sale subject to Tenant's possession on condition that:

     (a) there shall be, at the time of commencement of foreclosure proceedings,
as well as all subsequent times, no default by Tenant in the due and timely
observance and performance of any covenant and agreement in the Lease to be
observed and performed by Tenant which has not been cured after delivery of
notice and expiration of any applicable cure period; and

     (b) the Tenant shall not have entered into any agreement modifying any
term, condition or agreement of the Mortgagee-approved Lease without the prior
written consent of Mortgagee.

     THIRD: Tenant shall attorn to Mortgagee while Mortgagee is in possession of
the Mortgaged Premises, or to a Receiver appointed in any action or proceeding
to foreclose the Mortgage. In the event of the completion of foreclosure
proceedings and sale of the Mortgaged Premises or in the event the Mortgagee
should otherwise acquire possession of the Mortgaged Premises, the Tenant will
promptly upon demand attorn to the purchaser at the foreclosure sale or to the
Mortgagee, as the case may be, and will recognize such purchaser or the
Mortgagee as the Tenant's landlord. The Tenant agrees to execute and deliver, at
any time and from time to time, upon the request of the Mortgagee or the
purchaser at the foreclosure sale, as the case may be, any instrument which may
be necessary or appropriate to such successor landlord to evidence such
attornment. The Tenant shall, upon demand of the Mortgagee or any Receiver or
purchaser at the foreclosure sale, pay to the Mortgagee or to such Receiver or
purchaser, as the case may be, all rental monies then due or as they thereafter
become due.

     FOURTH: Upon the attornment provided for in preceding Paragraph THIRD the
Tenant's occupancy shall thereafter be in full force and effect as under a
direct Lease between Mortgagee, the Receiver or the purchaser at the foreclosure
sale, as the case may be, and Tenant. It is specifically understood and agreed
that Mortgagee or any such Receiver or purchaser shall not be:

                                      -17-


     (a) subject to any offsets, claims or defenses which Tenant might have
against any prior landlord except as expressly allowed for in the Lease; or

     (b) bound by any rent or additional rent which Tenant might have paid for
more than one month in advance to any prior landlord; or

     (c) bound by any amendment or modification of the Lease made without the
prior written consent of the Mortgagee.

     FIFTH: On and after the date Tenant in good standing attorns to Mortgagee
or any Receiver or subsequent owner in pursuance of its agreement herein set
forth, Mortgagee, the Receiver or such subsequent owner will undertake and
perform all subsequent obligations of the Landlord as set forth in the Lease for
the benefit of and undisturbed occupancy of Tenant under the Lease.

     SIXTH: Tenant agrees it will not amend, modify nor abridge the Lease in any
way, nor cancel or surrender the same without prior written approval of the
Mortgagee other than by reason of an uncured default of the Landlord under the
Lease, nor will the Lease ever merge into the fee in the event that Mortgagee
acquires fee title to the Mortgaged Premises.

     SEVENTH: Any notices or other communication to be given hereunder by either
party shall be in writing and shall be deemed to have been sufficiently given or
served for all purposes if sent as provided in the Lease.

     EIGHTH: Mortgagee has and shall have the continuing right to execute and
record in the Land Records of Gwinnett County, Georgia at any time, in its
unilateral discretion, a Declaration of Subordination for the purpose of thereby
subordinating its rights, title and interest in and under the Mortgage to the
rights, title and interest of Tenant under the Lease. Such Declaration of
Subordination shall, at Mortgagee's election, operate, function and be in full
force and effect for whatever period of time Mortgagee declares therein that it
shall be in force not exceeding the term of the Lease and any extensions thereof
and the said Declaration may be voided unilaterally by Mortgagee when it so
elects.

     NINTH: Tenant waives any and all rights it may have to execute and record
after the date hereof any document purporting to again or further subordinate
its right, title or interest under the Lease to the lien of either the Mortgage
or any other mortgage or deed of trust or any ground lease or any agreement
modifying or amending the Mortgage except with the written consent of Mortgagee.

     TENTH: This Agreement cannot be changed orally but only in writing signed
by both parties hereto.

     ELEVENTH: This Agreement may be recorded by either party at its own expense
in the Land Records of Gwinnett County, Georgia whenever, in its sole
discretion, either party elects so to do.

     TWELFTH: All of the terms, covenants and conditions hereof shall run with
the Mortgaged Premises and shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.

                    (SIGNATURES CONTAINED ON FOLLOWING PAGE)

                                      -18-


     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, acknowledged and delivered the day and year first above written.

SIGNED, SEALED AND DELIVERED                TENANT:
in the presence of:

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

                                            BY:
- ---------------------------                    -----------------------------

                                            MORTGAGEE:

                                            BY:
- ---------------------------                    -----------------------------

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

     The undersigned Owner of the leased and mortgaged premises hereby consents
to the foregoing Agreement and agrees to be bound by and subject to the terms
thereof.

                                            BY:
                                               -----------------------------

                                      -19-


                                    EXHIBIT E

                              SPECIAL STIPULATIONS

     The Special Stipulations set forth herein are hereby incorporated into the
body of the Lease and to the extent of any conflict between these Special
Stipulations and the Lease, these Special Stipulations shall govern and control.

1.   OPTION TO EXTEND.

     A. GRANT AND EXERCISE OF OPTION. Provided (i) Tenant has not been in
default hereunder at any time during the Lease Term (the "Original Term"), (ii)
the creditworthiness of Tenant is then acceptable to Landlord, (iii) Tenant
originally named herein remains in possession of and has been continuously
operating in the entire Leased Premises for the term immediately preceding the
Extension Term (defined below), and (iv) the current use of the Leased Premises
is acceptable to Landlord, Tenant shall have the option to extend the Original
Term for two (2) successive periods of five (5) years each (the "Extension
Term(s)"). The Extension Term shall be upon the same terms and conditions
contained in the Lease for the Original Term except (i) this provision giving
two (2) extension options shall be amended to reflect the remaining options to
extend, if any and (ii) the Minimum Annual Rent shall be adjusted as set forth
below (the "Rent Adjustment"). Tenant shall exercise such option by (i)
delivering to Landlord, no later than six (6) months prior to the expiration of
the Original Term or, if applicable, the Extension Term, written notice of
Tenant's desire to extend the Original Term or, if applicable, the Extension
Term, and (ii) delivering to Landlord within ten (10) business days of receipt
of the Rent Adjustment, written notice of its acceptance thereof. Unless
Landlord otherwise agrees in writing, Tenant's failure to timely exercise such
option shall waive it and any succeeding option. Landlord shall notify Tenant of
the amount of the Rent Adjustment no later than ninety (90) days prior to the
commencement of the applicable Extension Term. If Tenant properly exercises its
option to extend, Landlord and Tenant shall execute an amendment to the Lease
(or, at Landlord's option, a new lease on the form then in use by Landlord)
reflecting the terms and conditions of the Extension Term.

     B. MARKET RENT ADJUSTMENT. The Minimum Annual Rent for the applicable
Extension Term shall be an amount equal to the Minimum Annual Rent then being
quoted by Landlord to prospective tenants of Landlord for space of comparable
size and quality and with similar or equivalent improvements in similar
buildings in the vicinity, excluding free rent and other concessions; provided,
however, that in no event shall the Minimum Annual Rent per square foot during
any Extension Term be less than the highest Minimum Annual Rent per square foot
payable during the immediately preceding term. The Minimum Monthly Rent shall be
an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the
Extension Term and shall be paid at the same time and in the same manner as
provided in the Lease.

2. COMPLIANCE WITH ADA. Landlord, at Landlord's sole cost and expense, shall
ensure that upon the Commencement Date, the Building, Common Areas and the
Leased Premises are in compliance with the requirements of the Americans With
Disabilities Act and/or laws governing the Leased Premises, excepting only that
Tenant shall be responsible during the Lease Term for such costs and expenses as
may be required as a direct result of Tenant's use of the Leased Premises or
Tenant's alterations to the Leased Premises.

3. SIGNAGE Provided that Tenant complies with all zoning and other municipal and
county regulations, Tenant may, at its own expense, erect an exterior building
sign on the upper level of the Building, and a monument sign at the entrance to
the Building and interior signage within the Leased Premises (collectively,
"Signs") concerning its business. Tenant agrees to maintain such signs in a
first-class manner and in compliance with all zoning and building codes
throughout the Lease Term. Upon the expiration or early termination of this
Lease, Tenant shall remove the signs and repair any damage to the Building or
Leased Premises caused thereby. Landlord does not warrant the availability of
such Signs to Tenant. Except for the gross negligence or willful misconduct of
Landlord, Tenant shall indemnify and hold harmless Landlord from any and all
liability concerning loss or damage or injury to any person (including death
resulting therefrom) or property connected with or arising from the Signs or the
rights granted to the Tenant herein. Landlord shall contribute an allowance up
to the amount of Ten Thousand and no/100 Dollars ($10,000) (the "Signage
Allowance"), which will be used solely for the design and installation of the
Signs. Any Signs not in conformity with this provision may be removed by the
Landlord. Any costs in excess of the Signage Allowance shall be borne solely by
Tenant.

                                      -20-


4. ADDITIONAL ALLOWANCES

     A. LANDSCAPING ALLOWANCE. Landlord shall contribute an allowance up to the
amount of One Hundred Seventy-Five Thousand Two Hundred Fifty and No/100 Dollars
($175,000.00) (the "Landscaping Allowance"), which Tenant may use solely for the
design and installation of landscaping around the Leased Premises. In the event
Tenant's landscaping costs exceed the Landscaping Allowance, the excess shall be
paid by Tenant to Landlord fifty percent (50%) before the commencement of the
change order work and fifty percent (50%) within ten (10) days of receipt of an
invoice for same.

     B. ELECTRICAL ALLOWANCE. Landlord shall contribute an allowance up to the
amount of One Hundred Twenty-Five Thousand and No/100 Dollars ($125,000.00) (the
"Electrical Allowance"), to be used solely for Tenant specified electrical
distribution, excluding overhead lighting panels, main transformer, switch gear
and building feed. In the event Tenant's electrical costs exceed the Electrical
Allowance, the excess shall be paid by Tenant to Landlord fifty percent (50%)
before the commencement of the change order work and fifty percent (50%) within
ten (10) days of receipt of an invoice for same.

5. PARKING Tenant shall be entitled to four hundred (400) unreserved parking
spaces. No vehicle may be repaired or serviced in the parking area and any
vehicle deemed abandoned by Landlord will be towed from the project and all
costs therein shall be borne by the Tenant. There shall be no parking permitted
on any of the streets or roadways located within the Park.

                                      -21-

EX-10.20

Exhibit 10.20

                             UNITED STATIONERS INC.

                              Retention Grant Plan

1.   PURPOSE

United Stationers Inc., a Delaware corporation (the "Company") by means of this
Retention Grant Plan (the "Plan") desires to retain outstanding individuals as
key executives of United Stationers Inc. (the "Company") and its affiliates (the
Company and its affiliates, collectively or individually, "Employer"), and to
provide additional incentives for such key executives to achieve the objectives
and promote the business success of Employer by providing to such individuals
additional opportunities to acquire common shares of the Company ("Shares")
through the settlement of deferred stock units ("Deferred Stock Units") and
thereby provide such individuals with a greater proprietary interest in and
closer identity with Employer and its financial success.

2.   ADMINISTRATION

The Plan shall be administered by the Human Resources Committee, or any
successor thereto, of the Board of Directors of the Company or by the Board of
Directors or by such other committee, as determined by the Board of Directors of
the Company (the "Committee"). The Committee shall interpret the Plan and shall
prescribe, amend and rescind rules and regulations relating thereto and make all
other determinations necessary, advisable or desirable for the administration of
the Plan. Any such action by the Committee shall be final and conclusive on all
persons having any interest in the Deferred Stock Units or Shares to which such
action relates. A majority of the Committee shall constitute a quorum and the
acts of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee, shall be
the acts of the Committee.

Without limitation on the foregoing, the Committee shall determine, within the
limits of the express provisions of this Plan, those key executives to whom, and
the time or times at which, Deferred Stock Units shall be granted to such key
executives. The Committee shall determine the number of Deferred Stock Units to
be granted, the time or times Deferred Stock Units shall vest, whether the
vesting schedule will be accelerated, the time or times Deferred Stock Units may
be settled, whether the settlement date of the Deferred Stock Units will be
accelerated and the restrictions applicable to each Deferred Stock Unit. In
making such determinations, the Committee may take into account the nature of
the services rendered by the Participants (as herein defined), their present and
potential contributions to the Employer's success and such other factors as the
Committee in its discretion shall deem relevant.

The Committee may delegate to one or more of its members, or to one or more
agents, such administrative duties as it may deem advisable, and the Committee
or any person to whom it has delegated duties as aforesaid may employ one or
more persons to render advice with respect to any responsibility the Committee
or such person may have under the Plan.

3.   SHARES AVAILABLE

Subject to the adjustments provided in Section 6, the maximum aggregate number
of Deferred Stock Units which may be granted for all purposes under the Plan
shall be two hundred seventy



thousand (270,000). If, for any reason, any Deferred Stock Units cease to be
subject to settlement hereunder, including, without limitation, the forfeiture
of such Deferred Stock Units, such Deferred Stock Units shall thereafter be
available for grants to such individual or other individuals under the Plan.
Deferred Stock Units granted under the Plan may be settled in accordance with
the terms of the Plan with either authorized and unissued shares of the common
stock of the Company or issued shares of such common stock held in the Company's
treasury.

4.   PARTICIPATION

The "Participants" in the Plan will consist of such key executives of Employer
as the Committee in its sole discretion from time to time designates within the
limits of the express provisions of this Plan. The Committee's designation of a
Participant at any time shall not require the Committee to designate such person
at any other time.

5.   DEFERRED STOCK UNITS

The Deferred Stock Units granted under this Plan shall be in such number and
form and upon such terms and conditions as the Committee shall from time to time
determine. Unless the Committee determines otherwise, the following terms and
conditions shall apply to Deferred Stock Units:

     a.   VESTING OF DEFERRED STOCK UNITS. If the vesting of Deferred Stock
     Units had not been accelerated and the Deferred Stock Units had not been
     terminated, each outstanding Deferred Stock Unit shall vest upon April 11,
     2009 if the Participant has been continuously employed by the Employer
     since the grant of the Deferred Stock Unit. Accelerated vesting of Deferred
     Stock Units shall occur under the following circumstances:

          (i)  25% of the Deferred Stock Units in a Participant's Stock Unit
          Account shall become vested on the day that the daily closing price
          for a Share has been equal to or greater than $35 (as adjusted
          pursuant to Section 6) for at least 30 trading days within 35
          consecutive trading days.

          (ii)   An additional 35% of the Deferred Stock Units in a
          Participant's Stock Unit Account (for aggregate vesting of 60% of the
          Deferred Stock Units in the Participant's Stock Unit Account) shall
          become vested on the day that the daily closing price for a Share has
          been equal to or greater than $40 (as adjusted pursuant to Section 6)
          for at least 30 trading days within 35 consecutive trading days.

          (iii)  An additional 40% of the Deferred Stock Units in a
          Participant's Stock Unit Account (for aggregate vesting of 100% of the
          Deferred Stock Units in the Participant's Stock Unit Account) shall
          become vested on the day that the daily closing price for a Share has
          been equal to or greater than $45 (as adjusted pursuant to Section 6)
          for at least 30 trading days within 35 consecutive trading days.

                                        2


          (iv)   Immediately prior to the termination prior to a Change of
          Control of the Participant's employment with the Employer due to the
          Participant's death or total disability either as determined under the
          Employer's long-term disability policy or as determined by the
          Committee (either determination, "Disability"), a number or an
          additional number of Deferred Stock Units in the Participant's Stock
          Unit Account shall become vested equal to the product of (A) the
          number of Deferred Stock Units in the Participant's Stock Unit Account
          that are not vested immediately prior to the termination of
          Participant's employment due to death or Disability, as the case may
          be, and (B) a fraction the numerator of which is the number of full
          months that have elapsed from the effective date of grant of the
          Deferred Stock Units to the date of such death or Disability and the
          denominator of which is 96.

          (v)    100% of the Deferred Stock Units in a Participant's Stock Unit
          Account shall become vested upon the Participant's retirement on or
          after age sixty-two (62).

          (vi)   In accordance with any accelerated vesting provisions relating
          to a Change of Control, Transaction or Management Buyout set forth in
          the agreement setting forth the grant of the Deferred Stock Units
          ("Award Agreement").

     b    FORFEITURE OF DEFERRED STOCK UNITS.

          (i)    Certain Terminations of Employment. Upon a Participant's
          termination of employment with the Employer unless as a result of (A)
          retirement on or after age 62 or (B) a Termination of Employment of
          the Participant Related to a Change of Control, the Participant's
          unvested Deferred Stock Units shall immediately be forfeited and
          terminated.

          (ii)   Competition. If at any time prior to the settlement date when
          Shares are distributed in accordance with Section 8.a.(i) or 8.a.(ii)
          (without regard to any deferral election in 8.a.(iii)), a Participant
          in any way, directly or indirectly, manages, operates, controls (or
          participates in any of the foregoing), accepts employment or a
          consulting position with or otherwise advises or assists or is
          connected with or directly or indirectly owns or has any other
          interest in or right with respect to (other than through ownership of
          not more than 1% of the outstanding shares of a corporation's stock
          which is listed on a national securities exchange) any enterprise
          (other than for the Company or for the benefit of the Company) which
          is a wholesaler or retailer of office products having annual sales in
          excess of $1,000,000 or which sells or markets logistics or
          distribution or any other business in which the Employer or any
          affiliate may be actively involved or plan to become actively
          involved, the Deferred Stock Units in the Participant's Stock Unit
          Account, whether or not vested, shall immediately be forfeited and
          terminated effective on the date on which the Participant entered into
          such activity, unless terminated sooner by operation of another term
          or condition of the Deferred Stock Unit or the Plan.

                                        3


Without limitation on the foregoing, the award of any Deferred Stock Units may
be subject to other provisions (whether or not applicable to the Deferred Stock
Unit awarded to any other Participant) as the Committee, in its sole discretion
determines appropriate, including, without limitation, restrictions on resale or
other disposition, installment exercise limitations, noncompete restrictions,
such provisions as may be appropriate to comply with federal or state securities
laws and stock exchange requirements, and undertakings or conditions as to the
Participant's employment in addition to those specifically provided for under
this Plan.

6.   STOCK UNIT ACCOUNT AND ADJUSTMENT OF DEFERRED STOCK UNITS

     a.   STOCK UNIT ACCOUNTS. A Stock Unit Account will be established for each
     Participant. All Deferred Stock Units shall be credited to the
     Participant's Stock Unit Account. Any settlements or distributions pursuant
     to Section 8(b) shall be deducted from Participant's Stock Unit Account.

     b.   CREDITING OF DIVIDEND EQUIVALENTS. As of each dividend or other
     distribution payment date with respect to Shares, each Participant shall
     have credited to the Participant's Stock Unit Account a dollar amount equal
     to the amount of cash dividends or the fair market value (as determined in
     good faith by the Committee) of the property other than Shares that would
     have been paid or distributed on the number of Shares equal to the number
     of Deferred Stock Units credited to the Participant's Stock Unit Account as
     of the close of business on the record date for such dividend or
     distribution. Such dollar amount shall then be converted into a number of
     Deferred Stock Units equal to the number of whole and fractional Shares
     that could have been purchased at Fair Market Value on the dividend payment
     or distribution date with such dollar amount. In the case of any dividend
     declared on Shares which is payable in Shares, each Participant's Stock
     Unit Account shall be increased by the number of Deferred Stock Units equal
     to the product of (i) the number of Deferred Stock Units credited to the
     Participant's Stock Unit Account on the related dividend record date and
     (ii) the number of Shares (including any fraction thereof) distributable as
     a dividend on a Share. Deferred Stock Units which are credited to a
     Participant's Stock Unit Account pursuant to this Section 6.b. shall be
     subject to the same terms and conditions of the Plan and deferral elections
     of Deferred Stock Units applicable to the Participant's other Deferred
     Stock Units.

     c.   CAPITAL ADJUSTMENTS. If the Shares should, as a result of any stock
     split, other subdivision or combination of Shares, or any reclassification,
     recapitalization or otherwise, be increased or decreased, the number of
     outstanding Deferred Stock Units, the Share closing price to determine
     acceleration of vesting, and the total number of Shares reserved for
     issuance under this Plan shall be adjusted as determined by the Committee
     to reflect such action. Any new Shares or other securities issued with
     respect to Shares shall be deemed Shares. In the event of any stock split,
     recapitalization, reorganization or other transaction affecting the capital
     structure of the Company, the Committee shall make such adjustments to the
     number of Deferred Stock Units credited to each Participant's Stock Unit
     Account as the Committee shall deem necessary or appropriate to prevent the
     dilution or enlargement of such Participant's rights.

                                        4


     d.   SALE OR REORGANIZATION. Subject to Section 7, in the event the Company
     is merged or consolidated with another entity, or in the event the property
     or Shares of the Company are acquired by another entity, or in the event of
     a reorganization of Employer, or in the event of any extraordinary
     transaction ("Transaction"), the board of directors of any corporation or
     comparable governing body of any other type of entity, assuming the
     obligations of the Company hereunder or the Committee, as applicable, shall
     have the right to provide for the continuation of Deferred Stock Units
     granted under the Plan with respect to the Shares provided they remain
     publicly-traded or with respect to any publicly-traded equity securities
     into which the Shares are converted. If provision for such continuation of
     Deferred Stock Units after a Change of Control or other Transaction other
     than a Management Buyout is not made, all Deferred Stock Units shall become
     vested and Participants shall receive either prior to such Change of
     Control or other Transaction the number of Shares equal to the Deferred
     Stock Units credited to their Stock Unit Account so they may participate in
     such Change of Control transaction or other Transaction in the same manner
     and to the same extent as stockholders with a number of Shares equal to the
     Participants' number of Deferred Stock Units or shall receive at the same
     time and in the same manner the same securities, cash, notes or other
     property or assets as if they were stockholders with a number of Shares
     equal to the number of Deferred Stock Units credited to their Stock Unit
     Account.

     e.   FAIR MARKET VALUE. Except as otherwise provided herein, "Fair Market
     Value" for a Share for a day shall be the closing price per Share on such
     day on the principal exchange on which Shares are listed or admitted to
     trading; if Shares are listed or admitted to trading on an exchange but
     such day is not a trading day, Fair Market Value shall be determined as of
     the last preceding trading day. If the preceding sentence is not
     applicable, Fair Market Value shall be determined in good faith by the
     Committee.

7.   CHANGE OF CONTROL, MANAGEMENT BUYOUT AND RELATED DEFINITIONS

     a.   For the purposes of this Plan, a Change of Control means:

          (i)    Any "Person" (having the meaning ascribed to such term in
          Section 3(a)(9) of the Securities Exchange Act of 1934, as amended
          ("1934 Act") and used in Sections 13(d) and 14(d) thereof, including a
          "group" within the meaning of Section 13(d)(3)) has or acquires
          "Beneficial Ownership" (within the meaning of Rule 13d-3 under the
          1934 Act) of 30% or more of the combined voting power of the Company's
          then outstanding voting securities entitled to vote generally in the
          election of directors ("Voting Securities"); provided, however, that
          in determining whether a Change of Control has occurred, Voting
          Securities which are held or acquired by (i) the Company or any of its
          subsidiaries or (ii) an employee benefit plan (or a trust forming a
          part thereof) maintained by the Company or any of its subsidiaries
          shall not constitute a Change of Control. Notwithstanding the
          foregoing, a Change of Control shall not be deemed to occur solely
          because any Person acquired Beneficial Ownership of more than the
          permitted amount of Voting Securities as a result of the issuance of
          Voting Securities by the Company in exchange for assets (including
          equity interests) or

                                        5


          funds with a fair value equal to the fair value of the Voting
          Securities so issued; provided that if a Change of Control would occur
          (but for the operation of this sentence) as a result of the issuance
          of Voting Securities by the Company, and after such issuance of Voting
          Securities by the Company, such Person becomes the Beneficial Owner of
          any additional Voting Securities which increases the percentage of the
          Voting Securities Beneficially Owned by such Person to more than 50%
          of the Voting Securities of the Company, then a Change of Control
          shall occur.

          (ii)   At any time during a period of two consecutive years, the
          individuals who at the beginning of such period constituted the Board
          (the "Incumbent Board") cease for any reason to constitute more than
          50% of the Board; provided, however, that if the election, or
          nomination for election by the Company's stockholders, of any new
          director was approved by a vote of more than 50% of the directors then
          comprising the Incumbent Board, such new director shall, for purposes
          of this subsection b., be considered as though such person were a
          member of the Incumbent Board; provided, further, however, that no
          individual shall be considered a member of the Incumbent Board if such
          individual initially assumed office as a result of (i) either an
          actual "Election Contest" (as described in Rule 14a-11 promulgated
          under the 1934 Act) or other actual solicitation of proxies or
          consents by or on behalf of a Person other than the Incumbent Board (a
          "Proxy Contest"), or (ii) by reason of any agreement intended to avoid
          or settle any actual or threatened Election Contest or Proxy Contest.

          (iii)  Consummation of a merger, consolidation or reorganization or
          approval by the Company's stockholders of a liquidation or dissolution
          of the Company or the occurrence of a liquidation or dissolution of
          the Company ("Business Combination"), unless, following such Business
          Combination:

                 [A]   the Persons with Beneficial Ownership of the Company,
                 immediately before such Business Combination, have Beneficial
                 Ownership of more than 50% of the combined voting power of the
                 then outstanding voting securities entitled to vote generally
                 in the election of directors of the corporation (or in the
                 election of a comparable governing body of any other type of
                 entity) resulting from such Business Combination (including,
                 without limitation, an entity which as a result of such
                 transaction owns the Company or all or substantially all of the
                 Company's assets either directly or through one or more
                 subsidiaries) (the "Surviving Company") in substantially the
                 same proportions as their Beneficial Ownership of the Voting
                 Securities immediately before such Business Combination;

                 [B]   the individuals who were members of the Incumbent Board
                 immediately prior to the execution of the initial agreement
                 providing for such Business Combination constitute more than
                 50% of the members of the board of directors (or comparable
                 governing body of a noncorporate entity) of the Surviving
                 Company; and

                                        6


                 [C]   no Person (other than the Company, any of its
                 subsidiaries or any employee benefit plan (or any trust forming
                 a part thereof) maintained by the Company, the Surviving
                 Company or any Person who immediately prior to such Business
                 Combination had Beneficial Ownership of 30% or more of the then
                 Voting Securities) has Beneficial Ownership of 30% or more of
                 the then combined voting power of the Surviving Company's then
                 outstanding voting securities. Notwithstanding this subsection
                 [C], a Change of Control shall not be deemed to occur solely
                 because any Person acquired Beneficial Ownership of more than
                 30% of Voting Securities as a result of the issuance of Voting
                 Securities by the Company in exchange for assets (including
                 equity interests) or funds with a fair value equal to the fair
                 value of the Voting Securities so issued.

          (iv)   Approval by the Company's stockholders of an agreement for the
          assignment, sale, conveyance, transfer, lease or other disposition of
          all or substantially all of the assets of the Company to any Person
          (other than a subsidiary of the Company or other entity, the Persons
          with Beneficial Ownership of which are the same Persons with
          Beneficial Ownership of the Company and such Beneficial Ownership is
          in substantially the same proportions), or the occurrence of the same.

     Notwithstanding the foregoing, a Change of Control shall not be deemed to
     occur solely because any Person acquired Beneficial Ownership of more than
     the permitted amount of Voting Securities as a result of the acquisition of
     Voting Securities by the Company which, by reducing the number of Voting
     Securities outstanding, increases the proportional number of shares
     Beneficially Owned by such Person; provided that if a Change of Control
     would occur (but for the operation of this sentence) as a result of the
     acquisition of Voting Securities by the Company, and after such acquisition
     of Voting Securities by the Company, such Person becomes the Beneficial
     Owner of any additional Voting Securities which increases the percentage of
     the Voting Securities Beneficially Owned by such Person, then a Change of
     Control shall occur.

     b. For purposes of this Plan, a "Management Buyout" shall have occurred in
     the event that, immediately after the closing of a transaction resulting in
     a Change of Control, Senior Management Beneficially Owns in the aggregate
     more than 4% of the Adjusted Fully-Diluted Equity of the surviving entity
     and either (i) the surviving entity does not have a class of equity
     securities listed for trading on a national securities exchange or
     authorized for quotation on the National Association of Securities Dealers
     Automated Quotation system or (ii) both of the following conditions exist:
     (A) the acquiring Person, together with its affiliates and associates (in
     each case, within the meaning of Rule 12b-2 under the 1934 Act), has
     Beneficial Ownership of a majority of the issued and outstanding common
     stock of the surviving entity or, in the event that the surviving entity is
     a partnership or limited liability company, any issued and outstanding
     security or interest that participates generally without limitation in the
     value of the equity of such surviving entity (as used herein "Common
     Equity") and (B) no more than 20% of the Common Equity can be sold freely
     without restriction on resale under the Securities Act of 1933, as amended
     (either (i) or (ii), a "Private Transaction"). As used herein:

                                        7


          (i)    "Adjusted Fully-Diluted Equity" shall be calculated in good
          faith by the Board of Directors of the Company seated immediately
          prior to the Change of Control and shall mean [A] all issued and
          outstanding common stock of whatever class, and any other issued and
          outstanding security that participates generally without limitation in
          the value of the equity of the surviving entity, or [B] in the event
          that the surviving entity is a partnership or limited liability
          company, any issued and outstanding security or interest that
          participates generally without limitation in the value of the equity
          of such entity, plus, in the case of either clause [A] or [B], any
          options, warrants, right to purchase or stock appreciation rights
          (however denominated) that are intended, directly or upon exchange for
          another security, to participate in any increase in the value of the
          equity of such surviving entity and are received in connection with
          the consummation of a Change of Control transaction by one or more
          members of Senior Management. For greater certainty, the parties
          recognize that a Management Buyout could take numerous forms and that
          the intention of the parties is to equitably calculate Senior
          Management's direct and indirect equity interests in the entity
          surviving any Change of Control.

          (ii)   "Beneficially Owns" shall mean the applicable member of Senior
          Management has a direct or indirect interest in the subject
          securities, including by means of voting, investment and/or
          dispositive control over the subject securities, and shall include
          securities held by family members or trusts benefiting the member of
          Senior Management or any family member thereof, or any charity to
          which the Senior Management member has contributed such securities.
          For purposes of this sentence, the term "securities" shall include
          options and warrants for, rights to acquire, and securities
          convertible into, securities that are authorized for issuance or which
          the surviving entity or a parent thereof has contractually committed
          to authorize for issuance.

          (iii)  "Senior Management" means the 15 most-highly-compensated
          executive employees (taking into account annual base salary and bonus
          for the last completed fiscal year, but including the dollar value of
          salary or bonus amounts deferred at the election of the employee or
          foregone at the election of the employee pursuant to a program under
          which stock, stock-based, or other forms of non-cash compensation may
          be received by the employee in lieu of such salary or bonus amounts).

     c.   For purposes of this Plan, Termination of Employment of the
     Participant Related to a Change of Control means a termination of
     employment on or after either an Anticipated Change of Control or a Change
     of Control by the Employer without Cause or by the Participant with Good
     Reason. "Cause" shall mean: (a) the Participant's continued failure to
     perform substantially the duties of the Participant with the Employer
     (other than any such failure resulting from incapacity due to physical or
     mental illness or death), after a written demand for improvement and
     substantial performance is delivered to the Participant (by the Board for
     the chief executive officer of the Company, by the chief executive officer
     of the Company for officers other than the chief executive officer, and by
     an officer of the Company for Participants other than officers) which
     specifically

                                        8


     identifies the failure which when judged by objective standards is clearly
     and significantly detrimental to the Employer; (b) the Participant's
     engaging in an intentional, fraudulent act in the conduct of the business
     of the Employer which is demonstrably injurious to the Employer; or (c) the
     Participant's conviction of, or plea of guilty or nolo contendere to, any
     criminal violation (other than a traffic-related violation) involving
     dishonesty, fraud, breach of trust or sexual offense or any criminal felony
     violation (other than a traffic-related violation). "Good Reason" shall
     exist upon the occurrence of any of the following events: (a) a diminution
     in Participant's position (including status, offices, titles and reporting
     requirements), authority, duties or responsibilities (including the
     assignment to Participant of any duties inconsistent with Participant's
     position, authority, duties or responsibilities), excluding for this
     purpose an isolated, insubstantial and inadvertent action not taken in bad
     faith and which is remedied by the Employer promptly after receipt of
     notice thereof given by the Participant; (b) the Employer shall (i) reduce
     the base salary or bonus or incentive opportunity of the Participant or
     (ii) substantially reduce in the aggregate the Participant's benefits; or
     (c) the Employer shall require Participant to relocate Participant's
     principal business office to any location more than 50 miles from its
     location prior to the Change of Control or Anticipated Change of Control.
     "Anticipated Change of Control" shall mean (i) entering into an agreement,
     the consummation of which would result in the occurrence of a Change of
     Control or (ii) the public announcement of an intention to take actions
     which, if consummated, would constitute a Change of Control; provided,
     however no event shall be treated as an Anticipated Change of Control
     unless a Change of Control occurs within one year after such event.

8.   SETTLEMENT OF DEFERRED STOCK UNITS

     a.   TIMING OF PAYMENT.

          (i)    Normal Distribution. Except as otherwise provided by a deferral
          election in accordance with Section 8.a.(iii) or earlier settlement in
          connection with a Change of Control as set forth in Section 8.a.(ii),
          a Participant (or the Participant's beneficiary or guardian, as
          applicable) shall receive or begin receiving a distribution of the
          Participant's vested Deferred Stock Units in the Participant's Stock
          Unit Account in the manner described in Section 8(b) either on or as
          soon as administratively feasible after the earliest of (i) April 11,
          2009, (ii) the Participant's death, (iii) the Participant's
          Disability, or (iv) the Participant's retirement on or after age
          sixty-two (62).

          (ii)   Change of Control. A Participant (or the Participant's
          beneficiary or guardian, as applicable) shall receive a distribution
          of the Participant's vested Deferred Stock Units in the Participant's
          Stock Unit Account (including Deferred Stock Units which became vested
          pursuant to the accelerated vesting provisions relating to a Change of
          Control, Transaction or Management Buyout set forth in the Award
          Agreement) in the manner described in Section 8(b) immediately prior
          to a Change of Control. Without limitation on the foregoing, a
          Participant (or the Participant's beneficiary or guardian, as
          applicable) shall receive a distribution of the vested Participant's
          Stock Unit Account (including Deferred Stock Units

                                        9


          which became vested pursuant to the accelerated vesting provisions
          relating to a Change of Control, Transaction or Management Buyout set
          forth in the Award Agreement) upon the earlier of a Termination of
          Employment of the Participant related to a Change of Control or the
          second anniversary of the Change of Control.

          (iii)  Deferral. Notwithstanding Section 8.a.(i) or 8.a.(ii), a
          Participant may deliver an election to defer the distribution or
          commencement of distribution to the Treasurer of the Company or his or
          her designee at least one year before the earlier of (i) April 11,
          2009, or (ii) the Participant's retirement on or after age sixty-two
          (62). If the Participant has made such an election to defer payment in
          accordance with this Section 8.a.(iii), the Participant shall receive
          or begin receiving a distribution of the Participant's vested Deferred
          Stock Units in the Participant's Stock Unit Account on or as soon as
          administratively feasible following the date or dates to which the
          Participant elected to defer payment. Notwithstanding the foregoing,
          all deferral elections made by a Participant shall be revoked
          immediately prior to a Transaction described in the second sentence of
          Section 6.d., a Change of Control or the Participant's Disability or
          death unless the Participant's deferral election specifically states
          otherwise.

          (iv)   Committee Authority. Notwithstanding anything herein to the
          contrary, the Committee may in its sole discretion at any time
          accelerate settlement and payment of Deferred Stock Units.

     b.   PAYMENT. The Participant's Stock Unit Account will be settled by
     delivering to the Participant the number of Shares equal to the number of
     whole vested Deferred Stock Units then credited to the Participant's Stock
     Unit Account, in either a lump sum or any installment or other method
     elected in accordance with Section 8.a.(iii). Any fractional vested
     Deferred Stock Unit credited to a Participant's Stock Unit Account at the
     time of a distribution shall be paid in cash at the time of such
     distribution. Notwithstanding the foregoing, if the Fair Market Value of
     Shares that would be distributed to a Participant at the time of settlement
     (other than pursuant to any deferral election pursuant to Section
     8.a.(iii)) is less than the Fair Market Value of Shares which would have
     been distributed to the Participant if the Participant was considered
     vested and a settlement occurred on a Change of Control after the effective
     date of this Plan ("Change of Control Price"), the Participant shall
     receive a number of Shares which when multiplied by the Fair Market Value
     of a Share on the date of settlement equals the Change of Control Price.

     c.   PAYMENT UPON DEATH OF A PARTICIPANT. If a Participant dies before the
     entire balance of the Participant's Deferred Stock Unit Account has been
     distributed, the balance of the Participant's Deferred Stock Unit Account
     shall be paid to the beneficiary designated by the Participant or if no
     beneficiary has been designated, to the Participant's estate or beneficiary
     deemed appropriate by the Committee.

     d.   CONTINUATION OF DIVIDEND EQUIVALENTS AND OTHER ADJUSTMENTS. If payment
     of Deferred Stock Units is deferred pursuant to Section 8.a.(iii),

                                       10


     the Participant's Stock Unit Account shall continue to be credited with
     dividend equivalents and be subject to other adjustment as provided in
     Section 6 until the entire balance of the Participant's Stock Unit Account
     has been distributed.

9.   LIMITATIONS ON TRANSFERABILITY

No Deferred Stock Unit granted to a Participant shall be transferable by the
Participant except by will or by the laws of descent and distribution.

10.  LEGAL AND OTHER REQUIREMENTS

Each Deferred Stock Unit granted under this Plan shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the Shares
issuable or transferable upon the settlement of the Deferred Stock Unit upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with the granting of such Deferred Stock Unit, or
the issuance or transfer of Shares thereunder, such Deferred Stock Unit may not
be settled in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee. The Company shall not be obligated to sell or
issue any Shares in any manner in contravention of the Securities Act of 1933,
as amended ("Securities Act"), or any state securities law. No adjustment with
respect to any Shares with respect to which Deferred Stock Units have been
granted other than pursuant to Section 6 hereof shall be made for dividends or
other rights for which the record date is prior to the date such stock
certificate is delivered.

If a registration statement under the Securities Act with respect to Shares
issuable upon settlement of Deferred Stock Units, is not in effect at the time
such Deferred Stock Units are settled, the Company may require, for the sole
purpose of complying with the Securities Act, that prior to delivering such
common stock to the Participant whose Deferred Stock Units are being settled,
such Participant must deliver to the Secretary of the Company a written
statement (i) representing and warranting that such Shares are being acquired
for investment only and not with a view to the resale or distribution thereof,
(ii) acknowledging and confirming that such Shares may not be sold unless
registered for sale under the Securities Act or pursuant to an exemption from
such registration and (iii) agreeing that the certificates representing such
Shares shall bear a legend to the effect of the foregoing.

11. WITHHOLDING TAXES

Employer shall comply with the obligations imposed on Employer under applicable
tax withholding laws, if any, with respect to Deferred Stock Units granted
hereunder, Shares transferred upon settlement thereof, and the disposition of
such Shares thereafter, and shall be entitled to do any act or thing to
effectuate any such required compliance, including, without limitation,
withholding from amounts payable by Employer to a Participant and making demand
on a Participant for the amounts required to be withheld. By acceptance of the
Deferred Stock Units, the Participant will be deemed to (i) agree to reimburse
the Employer for any taxes required to be withheld or otherwise deducted with
respect to the Participant's settlement of all

                                       11


or any portion of the Deferred Stock Units; (ii) authorize the Employer to
withhold from any cash compensation paid to the Participant or on the
Participant's behalf, an amount sufficient to discharge any taxes imposed on the
Employer and which otherwise has not been reimbursed by the Participant with
respect to the Participant's settlement of all or any portion of the Deferred
Stock Units; and (iii) agree that the Employer, may in its discretion, hold the
stock certificate to which the Participant otherwise would be entitled upon
settlement of the Deferred Stock Units as security for the payment of the
aforementioned tax liability, until cash sufficient to pay that liability has
been accumulated, and may, in its discretion, effect such withholding by
retaining Shares issuable upon the settlement of the Deferred Stock Units having
a fair market value on the date of settlement equal to the amount to be
withheld.

If the Committee so permits, a Participant, or upon the Participant's death, the
Participant's beneficiary, may satisfy, in whole or in part, the obligation to
pay Employer any amount required to be withheld under the applicable federal,
state and local or foreign tax laws in connection with settlement of Deferred
Stock Units under this Plan by: (i) having Employer withhold from the Shares to
be acquired upon the settlement of the Deferred Stock Unit, (ii) delivering to
Employer either previously acquired Shares or Shares acquired upon the
settlement of the Deferred Stock Units which the Participant or beneficiary was
unconditionally obligated to deliver to Employer or (iii) any other means which
the Committee determines. The fair market value of Shares shall be determined in
accordance with procedures established by the Committee. Any amounts required to
be withheld in excess of the value of Shares withheld or delivered shall be paid
in cash or withheld from other compensation paid by Employer.

12.  EFFECT ON EMPLOYMENT, COMPENSATION AND STOCKHOLDER STATUS

Neither the adoption of this Plan nor the grant of any Deferred Stock Units, nor
ownership Deferred Stock Units or Shares shall be deemed or construed to
obligate Employer to continue the employment, appointment or engagement of any
Participant for any particular period. The Deferred Stock Units and the Shares
acquired pursuant to the settlement of such Deferred Stock Units are a matter of
separate inducement and are not in lieu of any salary or other compensation for
services. No Deferred Stock Unit confers upon any Participant any rights as a
stockholder of the Company prior to the date on which the Participant fulfills
all conditions for receipt of such rights.

13.  INDEMNIFICATION OF COMMITTEE

No member or agent of the Committee shall be personally liable for any action,
determination or interpretation made with respect to the Plan and each member of
the Committee shall be indemnified by the Company to the fullest extent
permitted by Delaware law and the governing instruments of the Company.

14.  AMENDMENT OR TERMINATION OF PLAN

The Committee may amend or terminate this Plan at any time, but no such action
shall reduce the number of Shares subject to the then outstanding Deferred Stock
Units granted to any Participant or adversely to the Participant change the
terms and conditions of outstanding Deferred Stock Units without the
Participant's consent (or if the Participant is not alive, the consent of the

                                       12


affected beneficiary of the Participant); provided that adjustments pursuant to
Section 6 shall not be subject to the foregoing limitations of this Section 14.

15.  EFFECTIVE DATE

The Plan became effective as of April 11, 2001.

                                       13

EX-10.22

Exhibit 10.22

                             UNITED STATIONERS INC.

                              Directors Grant Plan

1.   PURPOSE

United Stationers Inc., a Delaware corporation (the "Company") by means of this
Directors Grant Plan (the "Plan") desires to retain outstanding individuals who
are not employees of the Company or its affiliates as directors of the Company
and to provide additional incentives for such directors to achieve the
objectives and promote the business success of the Company by providing to such
individuals additional opportunities to acquire common shares of the Company
("Shares") through the settlement of deferred stock units ("Deferred Stock
Units") and thereby provide such individuals with a greater proprietary interest
in and closer identity with the Company and its financial success.

2.   ADMINISTRATION

The Plan shall be administered by the Board of Directors or by such committee of
the Board of Directors, as determined by the Board of Directors of the Company
(the "Committee"). The Committee shall interpret the Plan and shall prescribe,
amend and rescind rules and regulations relating thereto and make all other
determinations necessary, advisable or desirable for the administration of the
Plan. Any such action by the Committee shall be final and conclusive on all
persons having any interest in the Deferred Stock Units or Shares to which such
action relates. A majority of the Committee shall constitute a quorum and the
acts of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee, shall be
the acts of the Committee.

The Committee may delegate to one or more of its members, or to one or more
agents, such administrative duties as it may deem advisable, and the Committee
or any person to whom it has delegated duties as aforesaid may employ one or
more persons to render advice with respect to any responsibility the Committee
or such person may have under the Plan.

3.   SHARES

Deferred Stock Units granted under the Plan may be settled in accordance with
the terms of the Plan with either authorized and unissued shares of the common
stock of the Company or issued shares of such common stock held in the Company's
treasury.

4.   PARTICIPATION

The "Participants" in the Plan will consist of directors of the Company who are
not employees of the Company or any affiliate of the Company.

5.   DEFERRED STOCK UNITS

At such times as determined by the Board of Directors of the Company
(individually, "Grant Date"), each director of the Company who is not an
employee of the Company or any affiliate of the Company may be granted each year
up to 4,000 Deferred Stock Units as determined by



the Board in its sole discretion. The award of any Deferred Stock Units may be
subject to other provisions (whether or not applicable to the Deferred Stock
Unit awarded to any other Participant) as the Committee, in its sole discretion
determines appropriate, including, without limitation, restrictions on resale or
other disposition and such provisions as may be appropriate to comply with
federal or state securities laws and stock exchange requirements.

6.   STOCK UNIT ACCOUNT AND ADJUSTMENT OF DEFERRED STOCK UNITS

     a.   STOCK UNIT ACCOUNTS. A Stock Unit Account will be established for each
     Participant. All Deferred Stock Units shall be credited to the
     Participant's Stock Unit Account. Any settlements or distributions pursuant
     to Section 8(b) shall be deducted from Participant's Stock Unit Account.

     b.   CREDITING OF DIVIDEND EQUIVALENTS. As of each dividend or other
     distribution payment date with respect to Shares, each Participant shall
     have credited to the Participant's Stock Unit Account a dollar amount equal
     to the amount of cash dividends or the fair market value (as determined in
     good faith by the Committee) of the property other than Shares that would
     have been paid or distributed on the number of Shares equal to the number
     of Deferred Stock Units credited to the Participant's Stock Unit Account as
     of the close of business on the record date for such dividend or
     distribution. Such dollar amount shall then be converted into a number of
     Deferred Stock Units equal to the number of whole and fractional Shares
     that could have been purchased at Fair Market Value on the dividend payment
     or distribution date with such dollar amount. In the case of any dividend
     declared on Shares which is payable in Shares, each Participant's Stock
     Unit Account shall be increased by the number of Deferred Stock Units equal
     to the product of (i) the number of Deferred Stock Units credited to the
     Participant's Stock Unit Account on the related dividend record date and
     (ii) the number of Shares (including any fraction thereof) distributable as
     a dividend on a Share. Deferred Stock Units which are credited to a
     Participant's Stock Unit Account pursuant to this Section 6.b. shall be
     subject to the same terms and conditions of the Plan and deferral elections
     of Deferred Stock Units applicable to the Participant's other Deferred
     Stock Units.

     c.   CAPITAL ADJUSTMENTS. If the Shares should, as a result of any stock
     split, other subdivision or combination of Shares, or any reclassification,
     recapitalization or otherwise, be increased or decreased, the number of
     outstanding Deferred Stock Units and the total number of Shares reserved
     for issuance under this Plan shall be adjusted as determined by the
     Committee to reflect such action. Any new Shares or other securities issued
     with respect to Shares shall be deemed Shares. In the event of any stock
     split, recapitalization, reorganization or other transaction affecting the
     capital structure of the Company, the Committee shall make such adjustments
     to the number of Deferred Stock Units credited to each Participant's Stock
     Unit Account as the Committee shall deem necessary or appropriate to
     prevent the dilution or enlargement of such Participant's rights.

     d.   SALE OR REORGANIZATION. Subject to Section 7, in the event the Company
     is merged or consolidated with another entity, or in the event the property
     or Shares of

                                        2


     the Company are acquired by another entity, or in the event of a
     reorganization of the Company, or in the event of any extraordinary
     transaction ("Transaction"), the board of directors of any corporation or
     comparable governing body of any other type of entity, assuming the
     obligations of the Company hereunder or the Committee, as applicable, shall
     have the right to provide for the continuation of Deferred Stock Units
     granted under the Plan with respect to the Shares provided they remain
     publicly-traded or with respect to any publicly-traded equity securities
     into which the Shares are converted. If provision for such continuation of
     Deferred Stock Units after a Change of Control or other Transaction is not
     made, Participants shall receive either prior to such Change of Control or
     other Transaction the number of Shares equal to the Deferred Stock Units
     credited to their Stock Unit Account so they may participate in such Change
     of Control transaction or other Transaction in the same manner and to the
     same extent as stockholders with a number of Shares equal to the
     Participants' number of Deferred Stock Units or shall receive at the same
     time and in the same manner the same securities, cash, notes or other
     property or assets as if they were stockholders with a number of Shares
     equal to the number of Deferred Stock Units credited to their Stock Unit
     Account.

     e.   FAIR MARKET VALUE. Except as otherwise provided herein, "Fair Market
     Value" for a Share for a day shall be the closing price per Share on such
     day on the principal exchange on which Shares are listed or admitted to
     trading; if Shares are listed or admitted to trading on an exchange but
     such day is not a trading day, Fair Market Value shall be determined as of
     the last preceding trading day. If the preceding sentence is not
     applicable, Fair Market Value shall be determined in good faith by the
     Committee.

7.   CHANGE OF CONTROL

     For the purposes of this Plan, a Change of Control means:

     a.   Any "Person" (having the meaning ascribed to such term in Section
     3(a)(9) of the Securities Exchange Act of 1934, as amended ("1934 Act") and
     used in Sections 13(d) and 14(d) thereof, including a "group" within the
     meaning of Section 13(d)(3)) has or acquires "Beneficial Ownership" (within
     the meaning of Rule 13d-3 under the 1934 Act) of 30% or more of the
     combined voting power of the Company's then outstanding voting securities
     entitled to vote generally in the election of directors ("Voting
     Securities"); provided, however, that in determining whether a Change of
     Control has occurred, Voting Securities which are held or acquired by
     (i) the Company or any of its subsidiaries or (ii) an employee benefit plan
     (or a trust forming a part thereof) maintained by the Company or any of its
     subsidiaries shall not constitute a Change of Control. Notwithstanding the
     foregoing, a Change of Control shall not be deemed to occur solely because
     any Person acquired Beneficial Ownership of more than the permitted amount
     of Voting Securities as a result of the issuance of Voting Securities by
     the Company in exchange for assets (including equity interests) or funds
     with a fair value equal to the fair value of the Voting Securities so
     issued; provided that if a Change of Control would occur (but for the
     operation of this sentence) as a result of the issuance of Voting
     Securities by the Company, and after such issuance of Voting Securities by
     the Company, such Person becomes the Beneficial Owner of any additional
     Voting Securities which increases the percentage of the Voting Securities
     Beneficially Owned by such Person to

                                        3


     more than 50% of the Voting Securities of the Company, then a Change of
     Control shall occur.

     b.   At any time during a period of two consecutive years, the individuals
     who at the beginning of such period constituted the Board (the "Incumbent
     Board") cease for any reason to constitute more than 50% of the Board;
     provided, however, that if the election, or nomination for election by the
     Company's stockholders, of any new director was approved by a vote of more
     than 50% of the directors then comprising the Incumbent Board, such new
     director shall, for purposes of this subsection b., be considered as though
     such person were a member of the Incumbent Board; provided, further,
     however, that no individual shall be considered a member of the Incumbent
     Board if such individual initially assumed office as a result of (i) either
     an actual "Election Contest" (as described in Rule 14a-11 promulgated under
     the 1934 Act) or other actual solicitation of proxies or consents by or on
     behalf of a Person other than the Incumbent Board (a "Proxy Contest"), or
     (ii) by reason of any agreement intended to avoid or settle any actual or
     threatened Election Contest or Proxy Contest.

     c.   Consummation of a merger, consolidation or reorganization or approval
     by the Company's stockholders of a liquidation or dissolution of the
     Company or the occurrence of a liquidation or dissolution of the Company
     ("Business Combination"), unless, following such Business Combination:

          (i)  the Persons with Beneficial Ownership of the Company, immediately
          before such Business Combination, have Beneficial Ownership of more
          than 50% of the combined voting power of the then outstanding voting
          securities entitled to vote generally in the election of directors of
          the corporation (or in the election of a comparable governing body of
          any other type of entity) resulting from such Business Combination
          (including, without limitation, an entity which as a result of such
          transaction owns the Company or all or substantially all of the
          Company's assets either directly or through one or more subsidiaries)
          (the "Surviving Company") in substantially the same proportions as
          their Beneficial Ownership of the Voting Securities immediately before
          such Business Combination;

          (ii)  the individuals who were members of the Incumbent Board
          immediately prior to the execution of the initial agreement providing
          for such Business Combination constitute more than 50% of the members
          of the board of directors (or comparable governing body of a
          noncorporate entity) of the Surviving Company; and

          (iii) no Person (other than the Company, any of its subsidiaries or
          any employee benefit plan (or any trust forming a part thereof)
          maintained by the Company, the Surviving Company or any Person who
          immediately prior to such Business Combination had Beneficial
          Ownership of 30% or more of the then Voting Securities) has Beneficial
          Ownership of 30% or more of the then combined voting power of the
          Surviving Company's then outstanding voting securities.
          Notwithstanding this subsection (iii), a Change of Control shall not
          be deemed to occur solely because any Person acquired Beneficial
          Ownership of

                                        4


          more than 30% of Voting Securities as a result of the issuance of
          Voting Securities by the Company in exchange for assets (including
          equity interests) or funds with a fair value equal to the fair value
          of the Voting Securities so issued.

     d.   Approval by the Company's stockholders of an agreement for the
     assignment, sale, conveyance, transfer, lease or other disposition of all
     or substantially all of the assets of the Company to any Person (other than
     a subsidiary of the Company or other entity, the Persons with Beneficial
     Ownership of which are the same Persons with Beneficial Ownership of the
     Company and such Beneficial Ownership is in substantially the same
     proportions), or the occurrence of the same.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person acquired Beneficial Ownership of more than the
permitted amount of Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially Owned by
such Person; provided that if a Change of Control would occur (but for the
operation of this sentence) as a result of the acquisition of Voting Securities
by the Company, and after such acquisition of Voting Securities by the Company,
such Person becomes the Beneficial Owner of any additional Voting Securities
which increases the percentage of the Voting Securities Beneficially Owned by
such Person, then a Change of Control shall occur.

8.   SETTLEMENT OF DEFERRED STOCK UNITS

     a.   TIMING OF PAYMENT.

          (i)  Normal Distribution. Except as otherwise provided by a deferral
          election in accordance with Section 8.a.(iii) or earlier settlement in
          connection with a Change of Control as set forth in Section 8.a.(ii),
          a Participant (or the Participant's beneficiary or guardian, as
          applicable) shall receive or begin receiving a distribution of the
          Participant's vested Deferred Stock Units in the Participant's Stock
          Unit Account in the manner described in Section 8(b) either on or as
          soon as administratively feasible after the earliest of (i) the fifth
          anniversary of the grant of the Deferred Stock Units, (ii) the
          Participant's death, or (iii) the Participant's Disability.

          (ii) Change of Control. A Participant (or the Participant's
          beneficiary or guardian, as applicable) shall receive a distribution
          of the Participant's Deferred Stock Units in the Participant's Stock
          Unit Account in the manner described in Section 8(b) immediately prior
          to a Change of Control.

          (iii) Deferral. Notwithstanding Section 8.a.(i) or 8.a.(ii), a
          Participant may deliver an election to defer the distribution or
          commencement of distribution to the Treasurer of the Company or his or
          her designee at least one year before the fifth anniversary of the
          grant of the Deferred Stock Units. If the Participant has made such an
          election to defer payment in accordance with this Section 8.a.(iii),
          the Participant shall receive or begin receiving a distribution of the
          Participant's vested Deferred Stock Units in the Participant's Stock
          Unit Account on or as soon

                                        5


          as administratively feasible following the date or dates to which the
          Participant elected to defer payment. Notwithstanding the foregoing,
          all deferral elections made by a Participant shall be revoked
          immediately prior to a Transaction described in the second sentence of
          Section 6.d., a Change of Control or the Participant's Disability or
          death unless the Participant's deferral election specifically states
          otherwise.

          (iv) Committee Authority. Notwithstanding anything herein to the
          contrary, the Committee may in its sole discretion at any time
          (including without limitation, upon a Participant's failure to be
          reelected as a director or a Participant's resignation as a director)
          accelerate settlement and payment of Deferred Stock Units.

     b.   PAYMENT. The Participant's Stock Unit Account will be settled by
     delivering to the Participant the number of Shares equal to the number of
     whole Deferred Stock Units then credited to the Participant's Stock Unit
     Account, in either a lump sum or any installment or other method elected in
     accordance with Section 8.a.(iii). Any fractional Deferred Stock Unit
     credited to a Participant's Stock Unit Account at the time of a
     distribution shall be paid in cash at the time of such distribution.

     c.   PAYMENT UPON DEATH OF A PARTICIPANT. If a Participant dies before the
     entire balance of the Participant's Deferred Stock Unit Account has been
     distributed, the balance of the Participant's Deferred Stock Unit Account
     shall be paid to the beneficiary designated by the Participant or if no
     beneficiary has been designated, to the Participant's estate or beneficiary
     deemed appropriate by the Committee.

     d.   CONTINUATION OF DIVIDEND EQUIVALENTS AND OTHER ADJUSTMENTS. If payment
     of Deferred Stock Units is deferred pursuant to Section 8.a.(iii), the
     Participant's Stock Unit Account shall continue to be credited with
     dividend equivalents and be subject to other adjustment as provided in
     Section 6 until the entire balance of the Participant's Stock Unit Account
     has been distributed.

9.   LIMITATIONS ON TRANSFERABILITY

No Deferred Stock Unit granted to a Participant shall be transferable by the
Participant except by will or by the laws of descent and distribution.

10.  LEGAL AND OTHER REQUIREMENTS

Each Deferred Stock Unit granted under this Plan shall be subject to the
requirement that if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the Shares
issuable or transferable upon the settlement of the Deferred Stock Unit upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with the granting of such Deferred Stock Unit, or
the issuance or transfer of Shares thereunder, such Deferred Stock Unit may not
be settled in whole or in part unless such listing, registration, qualification,
consent, or approval shall have been effected or obtained free of any conditions
not acceptable to the Committee. The Company shall not be obligated to sell or
issue any Shares in

                                        6


any manner in contravention of the Securities Act of 1933, as amended
("Securities Act"), or any state securities law. No adjustment with respect to
any Shares with respect to which Deferred Stock Units have been granted other
than pursuant to Section 6 hereof shall be made for dividends or other rights
for which the record date is prior to the date such stock certificate is
delivered.

If a registration statement under the Securities Act with respect to Shares
issuable upon settlement of Deferred Stock Units, is not in effect at the time
such Deferred Stock Units are settled, the Company may require, for the sole
purpose of complying with the Securities Act, that prior to delivering such
common stock to the Participant whose Deferred Stock Units are being settled,
such Participant must deliver to the Secretary of the Company a written
statement (i) representing and warranting that such Shares are being acquired
for investment only and not with a view to the resale or distribution thereof,
(ii) acknowledging and confirming that such Shares may not be sold unless
registered for sale under the Securities Act or pursuant to an exemption from
such registration and (iii) agreeing that the certificates representing such
Shares shall bear a legend to the effect of the foregoing.

11.  WITHHOLDING TAXES

To the extent required by law, the Company shall comply with the obligations
imposed on the Company under applicable tax withholding laws, if any, with
respect to Deferred Stock Units granted hereunder, Shares transferred upon
settlement thereof, and the disposition of such Shares thereafter, and shall be
entitled to do any act or thing to effectuate any such required compliance,
including, without limitation, withholding from amounts payable by the Company
to a Participant and making demand on a Participant for the amounts required to
be withheld.

12.  EFFECT ON DIRECTOR AND STOCKHOLDER STATUS

Neither the adoption of this Plan nor the grant of any Deferred Stock Units, nor
ownership Deferred Stock Units or Shares shall be deemed or construed to
obligate the Company to continue the appointment or engagement of any
Participant as a director or otherwise for any particular period. The Deferred
Stock Units and the Shares acquired pursuant to the settlement of such Deferred
Stock Units are a matter of separate inducement and are not in lieu of any
compensation for services. No Deferred Stock Unit confers upon any Participant
any rights as a stockholder of the Company prior to the date on which the
Participant fulfills all conditions for receipt of such rights.

13.  INDEMNIFICATION OF COMMITTEE

No member or agent of the Committee shall be personally liable for any action,
determination or interpretation made with respect to the Plan and each member of
the Committee shall be indemnified by the Company to the fullest extent
permitted by Delaware law and the governing instruments of the Company.

14.  AMENDMENT OR TERMINATION OF PLAN

The Committee may amend or terminate this Plan at any time, but no such action
shall reduce the number of Shares subject to the then outstanding Deferred Stock
Units granted to any Participant

                                        7


or adversely to the Participant change the terms and conditions of outstanding
Deferred Stock Units without the Participant's consent (or if the Participant is
not alive, the consent of the affected beneficiary of the Participant); provided
that adjustments pursuant to Section 6 shall not be subject to the foregoing
limitations of this Section 14. Without limitation on the foregoing, this Plan
may be terminated prior to any Grant Date and no Deferred Stock Units shall be
granted on such Grant Date or any subsequent Grant Date.

15.  EFFECTIVE DATE

The Plan became effective as of March 28, 2001.

                                        8

EX-10.25

                                                                EXHIBIT 10.25

                          UNITED STATIONERS SUPPLY CO.

                                 First Amendment
                                     to the
                          United Stationers Supply Co.
                           Deferred Compensation Plan

                        Effective as of November 30, 2001



          WHEREAS, United Stationers Supply Co., an Illinois corporation (the
"Company"), maintains the United Stationers Supply Co. Deferred Compensation
Plan (the "Plan"); and

          WHEREAS, pursuant to Section 7, MODIFICATION AND TERMINATION, of
ARTICLE V, Miscellaneous, the Company has reserved the right to amend the Plan
at any time by action of its Board of Directors; and

          WHEREAS, the Company desires to amend the Plan as set forth herein.

          NOW, THEREFORE, effective as of November 30, 2001, the Plan is hereby
amended as follows:

          1.   Section 2, ELECTION TO DEFER, of ARTICLE II, Participation, is
     amended by deleting the first two sentences thereof and substituting the
     following in their place:

          "Each Participant may elect to defer any portion of compensation (for
          purposes hereof, consisting of base salary, cash incentive pay or
          bonus or qualifying severance pay, or any combination thereof)
          ("Deferred Amount") by filling out the applicable deferral election
          form(s) then prescribed by the Committee ("Deferral Election Form")
          and stating thereon the percentage or amount of qualifying
          compensation subject to deferral, as permitted by the Committee (as
          hereinafter defined) in conformity with the Plan. Subject to the
          following two sentences, the election to defer any such compensation
          must be submitted on or before December 31 preceding the calendar year
          to which the election applies."

          2.   Section 1, METHOD OF PAYMENT, of ARTICLE III, Payment of Deferred
Amounts, is amended by adding the following sentence at the end thereof:

          "A Participant may, with the consent of the Committee, defer the
          commencement date or extend the distribution period for any Deferred
          Amount, within the guidelines set forth above, by filing a written
          request with the Committee, in such form as the Committee may require;
          provided, that any such request must be filed not later than six
          months prior to, and in the calendar year preceding, the date
          distribution would otherwise commence."






          3.   In all other respects, the Plan, as amended hereby, shall
continue in full force and effect.



                                   UNITED STATIONERS SUPPLY CO.

                                   By: _____________________________
                                   Its: _____________________________

EX-10.26

EXHIBIT 10.26

                              EMPLOYMENT AGREEMENT

     THIS AGREEMENT, made and entered into as of the 19th day of June, 2001 by
and among United Stationers Inc., a Delaware corporation (the "Parent"), United
Stationers Supply Co., an Illinois corporation ("Supply," and together with the
Parent and their successors and assigns permitted under this Agreement, the
"Company"), and Randall W. Larrimore (the "Executive") is an amendment and
restatement of an agreement made and entered into as of the 23rd day of May,
1997 by and among the Company and the Executive (individually a "Party" and
together the "Parties").

                               W I T N E S S E T H

     WHEREAS, the Company desires to continue to employ the Executive and to
enter into an agreement embodying the terms of such employment (this
"Agreement") and the Executive desires to enter into this Agreement and to
continue such employment, subject to the terms and provisions of this Agreement.

     NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Parties agree as follows:

     1.   DEFINITIONS.

          (a) "Base Salary" shall mean the Executive's base salary as specified
under Section 4 below.

          (b) "Board" shall mean the Board of Directors of the Parent.

          (c) "Cause" shall mean the Executive's:

               (1) conviction of, or plea of NOLO CONTENDERE to, a felony;

               (2)  theft or embezzlement, or attempted theft or embezzlement,
                    of money or property or assets of the Company or any of its
                    affiliates;

               (3)  use of illegal drugs;

               (4)  material breach of this Agreement;

               (5)  commission of any act or acts of moral turpitude in
                    violation of Company policy;

               (6)  gross negligence or willful misconduct in the performance of
                    his duties; or

               (7)  breach of any fiduciary duty owed to the Company, including,
                    without limitation, engaging in directly competitive acts
                    while employed by the Company.




          (d) "Change of Control" shall mean:

               (1)  Any "Person" (having the meaning ascribed to such term in
                    Section 3(a)(9) of the Securities Exchange Act of 1934, as
                    amended ("1934 Act") and used in Sections 13(d) and 14(d)
                    thereof, including a "group" within the meaning of Section
                    13(d)(3)) has or acquires "Beneficial Ownership" (within the
                    meaning of Rule 13d-3 under the 1934 Act) of 30% or more of
                    the combined voting power of the Parent's then outstanding
                    voting securities entitled to vote generally in the election
                    of directors ("Voting Securities"); provided, however, that
                    in determining whether a Change of Control has occurred,
                    Voting Securities which are held or acquired by (i) the
                    Parent or any of its subsidiaries or (ii) an employee
                    benefit plan (or a trust forming a part thereof) maintained
                    by the Parent or any of its subsidiaries shall not
                    constitute a Change of Control. Notwithstanding the
                    foregoing, a Change of Control shall not be deemed to occur
                    solely because any Person acquired Beneficial Ownership of
                    more than the permitted amount of Voting Securities as a
                    result of the issuance of Voting Securities by the Parent in
                    exchange for assets (including equity interests) or funds
                    with a fair value equal to the fair value of the Voting
                    Securities so issued; provided that if a Change of Control
                    would occur (but for the operation of this sentence) as a
                    result of the issuance of Voting Securities by the Parent,
                    and after such issuance of Voting Securities by the Parent,
                    such Person becomes the Beneficial Owner of any additional
                    Voting Securities which increases the percentage of the
                    Voting Securities Beneficially Owned by such Person to more
                    than 50% of the Voting Securities of the Parent, then a
                    Change of Control shall occur.

               (2)  At any time during a period of two consecutive years, the
                    individuals who at the beginning of such period constituted
                    the Board (the "Incumbent Board") cease for any reason to
                    constitute more than 50% of the Board; provided, however,
                    that if the election, or nomination for election by the
                    Parent's stockholders, of any new director was approved by a
                    vote of more than 50% of the directors then comprising the
                    Incumbent Board, such new director shall, for purposes of
                    this paragraph (2), be considered as though such person were
                    a member of the Incumbent Board; provided, further, however,
                    that no individual shall be considered a member of the
                    Incumbent Board if such individual initially assumed office
                    as a result of (i) either an actual "Election Contest" (as
                    described in Rule 14a-11 promulgated under the 1934 Act) or
                    other actual solicitation of proxies or consents by or on
                    behalf of a Person other than the Incumbent Board (a "Proxy
                    Contest"), or (ii) by reason of

                                       -2-


                    any  agreement intended to avoid or settle any
                    actual or threatened Election Contest or Proxy Contest.

               (3)  Consummation of a merger, consolidation or reorganization or
                    approval by the Parent's stockholders of a liquidation or
                    dissolution of the Parent or the occurrence of a liquidation
                    or dissolution of the Parent ("Business Combination"),
                    unless, following such Business Combination:

                    (A)  the Persons with Beneficial Ownership of the Parent,
                         immediately before such Business Combination, have
                         Beneficial Ownership of more than 50% of the combined
                         voting power of the then outstanding voting securities
                         entitled to vote generally in the election of directors
                         of the corporation (or in the election of a comparable
                         governing body of any other type of entity) resulting
                         from such Business Combination (including, without
                         limitation, an entity which as a result of such
                         transaction owns the Parent or all or substantially all
                         of the Parent's assets either directly or through one
                         or more subsidiaries) (the "Surviving Company") in
                         substantially the same proportions as their Beneficial
                         Ownership of the Voting Securities immediately before
                         such Business Combination;

                    (B)  the individuals who were members of the Incumbent Board
                         immediately prior to the execution of the initial
                         agreement providing for such Business Combination
                         constitute more than 50% of the members of the board of
                         directors (or comparable governing body of a
                         noncorporate entity) of the Surviving Company; and

                    (C)  no Person (other than the Parent, any of its
                         subsidiaries or any employee benefit plan (or any trust
                         forming a part thereof) maintained by the Parent, the
                         Surviving Company or any Person who immediately prior
                         to such Business Combination had Beneficial Ownership
                         of 30% or more of the then Voting Securities) has
                         Beneficial Ownership of 30% or more of the then
                         combined voting power of the Surviving Company's then
                         outstanding voting securities. Notwithstanding this
                         paragraph (C), a Change of Control shall not be deemed
                         to occur solely because any Person acquired Beneficial
                         Ownership of more than 30% of Voting Securities as a
                         result of the issuance of Voting Securities by the
                         Parent in exchange for assets (including equity
                         interests) or funds with a fair value equal to the fair
                         value of the Voting Securities so issued.

                                       -3-


                    (4)  Approval by the Parent's stockholders of an agreement
                         for the assignment, sale, conveyance, transfer, lease
                         or other disposition of all or substantially all of the
                         assets of the Parent to any Person (other than a
                         subsidiary of the Parent or other entity, the Persons
                         with Beneficial Ownership of which are the same Persons
                         with Beneficial Ownership of the Parent and such
                         Beneficial Ownership is in substantially the same
                         proportions), or the occurrence of the same.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person acquired Beneficial Ownership of more than the
permitted amount of Voting Securities as a result of the acquisition of Voting
Securities by the Parent which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially Owned by
such Person; provided that if a Change of Control would occur (but for the
operation of this sentence) as a result of the acquisition of Voting Securities
by the Parent, and after such acquisition of Voting Securities by the Parent,
such Person becomes the Beneficial Owner of any additional Voting Securities
which increases the percentage of the Voting Securities Beneficially Owned by
such Person, then a Change of Control shall occur.

          (e) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

          (f) "Common Stock" shall mean the common stock, $.10 par value per
share, of the Parent.

          (g) "Disability" or "Disabled" shall mean a disability as determined
under the Company's long-term disability plan or program as in effect on the
date the disability first occurs, or if no such plan or program exists on the
date the disability first occurs, then a "disability" as defined under Code
Section 22(e)(3).

          (h) "Effective Date" shall mean May 23, 1997.

          (i) "Good Reason" shall mean the occurrence of any of the following,
without the Executive's prior written consent, during the 90-day period
preceding the date on which the Executive terminates his employment with the
Company:

               (1)  any diminution in Executive's position (including status,
                    offices and titles), authority, duties or responsibilities
                    (including the assignment to Executive of any duties
                    inconsistent with Executive's position, authority, duties or
                    responsibilities, excluding for this purpose an isolated,
                    insubstantial and inadvertent action not taken in bad faith
                    and which is remedied promptly and in any event within 10
                    business days after receipt of written notice thereof given
                    by the Executive to the Company in accordance with Section
                    27) including, without limitation, removal of the Executive
                    from the Board or the failure to reelect the Executive to
                    the Board;

                                       -4-


               (2)  the reduction of the Executive's Base Salary (as specified
                    under Section 4 below), bonus, or incentive opportunity, or
                    a substantial reduction in benefits;

               (3)  the exclusion of the Executive from, or diminution in the
                    Executive's participation in, any pension, bonus, management
                    incentive, profit sharing and/or other similar incentive
                    compensation or deferred compensation plans made available
                    generally to senior management personnel of the Company,
                    other than exclusions, changes or diminutions applicable to
                    all senior management personnel;

               (4)  any relocation of Executive's principal office more than 50
                    miles from its location on the date of this amended and
                    restated Agreement;

               (5)  any diminution in expense reimbursement benefits enjoyed by
                    the Executive, except pursuant to a general change in the
                    Company's reimbursement policies;

               (6)  the breach by the Company of any of its covenants or
                    obligations under this Agreement which is not promptly cured
                    after notice from Executive; or

               (7)  the notification by the Company in accordance with Section 2
                    below that the Term of Employment will end on the 2nd or 3rd
                    anniversary, of the Section 2 Notification Date, as may be
                    applicable.

          (j) "Section 2 Notification Date" shall mean the date as specified in
Section 2.

          (k) "Target Award" shall mean the Executive's annual incentive
compensation award opportunity as specified under Section 5 below.

          (l) "Term of Employment" shall mean the period as specified under
Section 2 below.

     2.   TERM OF EMPLOYMENT.

     The Company hereby employs the Executive, and the Executive hereby accepts
such employment, for the Term of Employment, which began on the Effective Date
and shall end on (i) the end of the 90-day period following the date on which
the Executive notifies the Company in writing in accordance with Section 27
below that he wants the Term of Employment to so end or (ii) the 2nd anniversary
(or 3rd anniversary, in the event that the notice pursuant to this Section 2 is
delivered to the Executive within 2 years following a Change of Control) of the
date on which the Company notifies the Executive in writing in accordance with
Section 27 below that it wants the Term of Employment to so end. The date that
the Executive or the Company notifies the other Party under this Section 2 shall
be referred to herein as a "Section 2

                                       -5-


Notification Date." Notwithstanding anything contained herein to the contrary,
the Term of Employment is subject to earlier termination in accordance with
Section 12 below.

     3.   POSITION, DUTIES AND RESPONSIBILITIES.

          (a) Continuing for the remainder of the Term of Employment, the
Executive shall be employed as the Chief Executive Officer and President of the
Company and shall be responsible for the general management of the affairs of
the Company. The Executive shall serve the Company faithfully, conscientiously
and to the best of the Executive's ability and shall promote the interests and
reputation of the Company. Unless prevented by sickness or Disability, the
Executive shall devote substantially all of the Executive's time, attention,
knowledge, energy and skills during normal working hours and at such other times
as the Executive's duties may reasonably require to the duties of the
Executive's employment. The Executive, in carrying out his duties under this
Agreement, shall report to the Board. In addition, it is the intention of the
Parties that continuing through the remainder of the Term of Employment, the
Executive shall be elected and serve as a member of the Board.

          (b) Notwithstanding anything contained herein to the contrary, nothing
shall preclude the Executive from:

               (1)  serving on the boards of directors of a reasonable number of
                    other corporations or the boards of a reasonable number of
                    trade associations and/or charitable organizations, subject
                    to the Board's prior written consent (which shall not be
                    unreasonably withheld);

               (2)  engaging in charitable activities and community affairs; and

               (3)  managing his personal investments and affairs;

PROVIDED, HOWEVER, that such activities do not materially interfere with the
proper performance of his duties and responsibilities as the Company's Chief
Executive Officer and President.

    4.    BASE SALARY.

     The Executive shall be paid a Base Salary at no less than an annual rate of
seven hundred fifty thousand dollars $750,000, payable in accordance with the
regular payroll practices of the Company. The Base Salary shall be reviewed by
the Board no less frequently than annually and may, in the Board's sole
discretion, be increased when deemed appropriate.

     5.   ANNUAL INCENTIVE COMPENSATION PROGRAMS.

     The Executive shall participate in the Company's annual incentive
compensation plans or programs applicable to senior-level executives as
established and modified from time to time by the Board in its sole discretion.
The Executive shall have an annual incentive compensation award opportunity in
the aggregate under all such plans or programs equal to 80 percent of the Base
Salary paid during the relevant performance period ("Target Award"). The actual
annual incentive compensation award paid to the Executive under this Section 5
shall have a payout in an amount ranging from a minimum of 50 percent of the
Target Award to a maximum of 200

                                       -6-


percent of the Target Award. The performance targets with respect to the Target
Award shall be set by the Board and shall be consistent with the performance
targets established for the Company's executive vice presidents with respect to
their annual incentive compensation award opportunities. Payment of the annual
incentive compensation award under this Section 5 shall be made at the same time
that other senior-level executives receive their annual incentive compensation
awards.

     6.   LONG-TERM INCENTIVE COMPENSATION PROGRAMS.

          (a) The Executive shall be eligible to participate in the Company's
applicable long-term incentive compensation plans or programs as may be
established and modified from time to time by the Board in its sole discretion.

          (b) In complete fulfillment of its obligation to issue certain stock
options to Executive under the agreement between the Parties dated May 23, 1997
("Prior Employment Agreement"), the Company by separate stock option agreements
("Option Grants"), also dated May 23, 1997 (the "Date of Grant"), granted
Executive options to purchase 500,000 shares of Common Stock with an exercise
price of $10.8125 (after giving effect to the stock dividend of one share for
each outstanding share on September 29, 1998)(the "Options"). The Options as
that term is used in this Agreement refer to the options granted on May 23, 1997
granted by the Option Grants in accordance with the Prior Employment Agreement
and shall not be construed to refer to a separate additional grant of options to
be made to the Executive. The Options are divided into 3 tranches ("Tranche 1,"
"Tranche 2," and "Tranche 3"). The Parties intend that Tranche 1 shall qualify
as an "incentive stock option" as such term is used under Code Section 422.

               (1)  NUMBER OF SHARES OF COMMON STOCK UNDERLYING EACH TRANCHE.
                    The number of shares of Common Stock underlying Tranche 1 is
                    46,000 shares. The number of shares of Common Stock
                    underlying Tranche 2 is 254,000 shares. The number of shares
                    of Common Stock underlying Tranche 3 is 200,000 shares.

               (2)  EXERCISE OF OPTIONS. The Options shall expire on, and shall
                    not be exercisable on and after the 10th anniversary of the
                    Date of Grant, subject to earlier expiration in accordance
                    with Section 12 below.

               (3)  EXERCISABILITY SCHEDULE OF TRANCHES 1, 2 AND 3. No portion
                    of each of Tranche 1, Tranche 2 and Tranche 3 were
                    exercisable on the Date of Grant, but 20 percent of each of
                    Tranche 1 and Tranche 2 became and shall become exercisable
                    on, and shall remain exercisable on and after, each of the
                    first 5 anniversaries of the Date of Grant, subject to the
                    Options' expiration in accordance with the terms of the
                    Option Grants and Section 12 below. The exercisability of
                    Tranche 3 on the same 20% per year 5-year schedule as
                    Tranche 1 and Tranche 2 was originally contingent upon a
                    specific stock price maintenance condition for 80 days out
                    of a 100 consecutive trading day period, but the price
                    maintenance

                                       -7-


                    condition has already been satisfied and Tranche 3 is now
                    subject to the same exercisability schedule as Tranche 1 and
                    Tranche 2.

          (c) Notwithstanding anything contained herein to the contrary, on the
date of a Change of Control, all stock options (including all tranches of the
Options) held by the Executive on such date shall immediately become exercisable
and shall remain exercisable until the date such stock options are scheduled to
expire, subject to earlier expiration in accordance with Section 12 below.

     7.   EMPLOYEE BENEFIT PROGRAMS.

     During the Term of Employment, the Executive shall be entitled to
participate, to the extent eligible, in all plans, programs and policies
providing general employee benefits for the Company's employees or its senior
management employees (as approved by the Board and in effect from time to time).
The benefit plans, programs and policies presently in effect are listed on
Exhibit A attached to this Agreement. This Section 7 shall not be construed to
require the Company to establish or maintain any plan, program or policy. With
respect to the Executive's participation in any Company health plan, any and all
exclusions with respect to pre-existing medical conditions relating to the
Executive and his dependents shall be waived under such plans. Also, with
respect to the Executive's participation in the Company's Retiree Health Plan,
the Executive shall be deemed to have accrued credit for 5 years of service in
addition to Executive's actual credited service. In addition, the Executive
shall be 100 percent vested in all employee contributions and earnings thereon
made to the United Stationers Inc. 401(k) Savings Plan.

     8.   SUPPLEMENTAL PENSION.

     The Executive shall be entitled to a supplemental pension benefit (a
"Supplemental Pension") with respect to each pension plan (within the meaning of
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended)
which is a defined benefit pension plan or a defined benefit top hat plan
maintained by the Company and in which the Executive participates or will
participate (excluding the benefit provided under Section 13 of this Agreement)
whether or not qualified under Code Section 401(a) and whether presently
established or established hereafter ("Retirement Plan"). With respect to each
Retirement Plan, the Executive shall be entitled to a Supplemental Pension
determined in accordance with the terms of the respective Retirement Plan as in
effect on the date of this amended and restated Agreement, adjusted for any
subsequent changes; PROVIDED, HOWEVER, that with respect to any Retirement Plan
the Supplemental Pension shall be determined as the additional incremental
benefit Executive would be entitled to receive in excess of the actual benefit
under the respective Retirement Plan if the Executive would be entitled to
credit for 5 years of service in addition to the Executive's actual credited
service under the terms of the respective Retirement Plan. Each Supplemental
Pension shall be paid at the same time and in the same manner as when and how
the pension benefit under the respective Retirement Plan is paid to the
Executive. In addition, except as otherwise provided in this Section 8, the
Executive's entitlement to a Supplemental Pension, including without limitation
any survivor benefit, claims procedures, methods of payment, etc. shall be
determined in accordance with the provisions of the respective Retirement Plan;
provided, however, that in the event that Executive's employment is terminated
within two

                                       -8-


years following a Change of Control pursuant to Section 12(d), (e) or (f), then
the Supplemental Pension shall be paid in a lump sum which is the Actuarially
Equivalent (as such term is defined in Section 2.3(b) of the United Stationers
Pension Plan or its successor) to the Executive's aggregate entitlement under
this Section 8 with respect to each Retirement Plan, as soon as practicable
following the termination of Executive's employment, but in no event later than
10 days following the date of such termination.

     9.   REIMBURSEMENT OF BUSINESS EXPENSES.

     The Executive is authorized to incur reasonable business expenses in
carrying out his duties and responsibilities under this Agreement, and the
Company shall reimburse him for all such reasonable business expenses reasonably
incurred in connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy.

     10.  PERQUISITES.

          (a) During the Term of Employment, the Executive shall be entitled to
participate in the Company's executive fringe benefits applicable to the
Company's senior-level executives in accordance with the terms and conditions of
such arrangements as are in effect from time to time.

          (b) Notwithstanding anything contained herein to the contrary, during
the Term of Employment, the Company shall:

               (1)  pay the dues and assessment fees and any business expenses
                    associated with the Executive's membership in the Indian
                    Hill Club (whether under the Company's Club Membership
                    Policy or otherwise);

               (2)  provide the Executive with personal financial (including
                    tax) counseling by a firm to be chosen by the Executive;
                    PROVIDED, HOWEVER, that the normal annual costs associated
                    with this perquisite shall not exceed $5,000 per year unless
                    the Company approves in writing the payment of any such
                    annual costs exceeding $5,000 per year due to special
                    situations;

               (3)  provide the Executive with an appropriate leased automobile
                    to be selected by the Executive, in accordance with the
                    Company's Officers' Leased Automobile Policy; and

               (4)  reimburse the Executive for all premium payments made by him
                    with respect to any individual long-term disability
                    insurance policy owned by him; PROVIDED, HOWEVER, that such
                    reimbursement shall not exceed $12,568 in any calendar year.

          (c) The Parties agree that the Executive shall be liable for any and
all federal, state and local income and employment taxes resulting from the
perquisites provided under this Section 10.

                                       -9-


     11.  VACATION.

     The Executive shall be entitled to 20 paid vacation days per calendar year
which shall accrue and otherwise be subject to the Company's vacation policy.

     12.  TERMINATION OF EMPLOYMENT.

          (a) TERMINATION OF EMPLOYMENT DUE TO DEATH. In the event of the
Executive's death during the Term of Employment, the Term of Employment shall
end as of the date of the Executive's death and his estate and/or beneficiaries,
as the case may be, shall be entitled to the following:

               (1)  Base Salary earned but not paid prior to the date of his
                    death;

               (2)  all annual incentive compensation awards with respect to any
                    year prior to the year of his death which have been earned
                    but not paid;

               (3)  an amount equal to the sum of (i) the Base Salary in effect
                    on the date of the Executive's death and (ii) the annual
                    incentive compensation award paid or payable with respect to
                    the year immediately preceding the year in which the
                    Executive's death occurs, payable over the 12-month period
                    following the date of the Executive's death in equal
                    installments in accordance with the Company's regular
                    payroll practice;

               (4)  the exercisable portion of the Options held by the Executive
                    as of the date of his death shall remain exercisable until
                    the earlier of (i) the end of the 1-year period following
                    the date of the Executive's death or (ii) the date the
                    Options would otherwise expire, and the unexercisable
                    portion of the Options held by the Executive as of such date
                    shall immediately be forfeited;

               (5)  any amounts earned, accrued or owing to the Executive but
                    not yet paid under Section 7, 8, 9, 10 or 11 above; and

               (6)  such other or additional benefits, if any, as may be
                    provided under applicable plans, programs and/or
                    arrangements of the Company.

          (b) TERMINATION OF EMPLOYMENT DUE TO DISABILITY. If the Executive's
employment is terminated due to Disability during the Term of Employment, either
by the Company or by the Executive, the Term of Employment shall end as of the
date of the termination of the Executive's employment and the Executive shall be
entitled to the following:

               (1)  Base Salary earned but not paid prior to the date of the
                    termination of the Executive's employment;

                                      -10-


               (2)  all annual incentive compensation awards with respect to any
                    year prior to the year of the termination of the Executive's
                    employment which have been earned but not paid;

               (3)  an amount equal to the sum of (i) the Base Salary in effect
                    on the date of the termination of the Executive's employment
                    and (ii) the annual incentive compensation award paid or
                    payable with respect to the year immediately preceding the
                    year in which the termination of the Executive's employment
                    occurs, payable over the 12-month period following the date
                    of the termination of the Executive's employment in equal
                    installments in accordance with the Company's regular
                    payroll practice;

               (4)  the exercisable portion of the Options held by the Executive
                    as of the date of the termination of his employment shall
                    remain exercisable until the earlier of (i) the end of the
                    1-year period following the date of the termination of his
                    employment or (ii) the date the Options would otherwise
                    expire, and the unexercisable portion of the options held by
                    the Executive as of such date shall immediately be
                    forfeited;

               (5)  any amounts earned, accrued or owing to the Executive but
                    not yet paid under Section 7, 8, 9, 10 or 11 above; and

               (6)  such other or additional benefits, if any, as are provided
                    under applicable plans, programs and/or arrangements of the
                    Company.

In no event shall a termination of the Executive's employment for Disability
occur unless the Party terminating the Executive's employment gives written
notice to the other Party in accordance with Section 27 below

          (c) TERMINATION OF EMPLOYMENT BY THE COMPANY FOR CAUSE. If the Company
terminates the Executive's employment for Cause during the Term of Employment,
the Term of Employment shall end as of the date of the termination of the
Executive's employment for Cause and the Executive shall be entitled to the
following:

               (1)  Base Salary earned but not paid prior to the date of the
                    termination of his employment;

               (2)  any amounts earned, accrued or owing to the Executive but
                    not yet paid under Section 7, 8, 9, 10 or 11 above; and

               (3)  such other or additional benefits, if any, as are provided
                    under applicable plans, programs and/or arrangements of the
                    Company.

Any termination of the Executive's employment by the Company for Cause under
this Section 12(c) shall be communicated by the Company to the Executive by a
written notice of termination ("Notice of Cause") given in accordance with
Section 27 below. The Notice of Cause shall (i)

                                      -11-


indicate the specific definition of Cause upon which termination under this
Section 12(c) is based, (ii) to the extent applicable, set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment for Cause, and (iii) if the date of the termination
of the Executive's employment is other than the date of receipt of the Notice of
Cause, specify the date of termination of the Executive's employment (which date
shall be not more than 90 days after the giving of such Notice of Cause). If the
event constituting Cause is curable, as determined by the Board in good faith,
the Notice of Cause shall inform the Executive that he will be allowed a
reasonable opportunity to cure the event constituting Cause during the 20-day
period (or such longer period as may be determined by the Board not to exceed 90
days) following the Executive's receipt of the Notice of Cause from the Company;
provided, however, that if Executive has not cured such event to the reasonable
satisfaction of the Company and the Company has not waived in writing
Executive's failure to cure during the period provided in the Notice of Cause,
the Company shall terminate the Executive's employment effective following the
end of such period. The failure by the Company to set forth in the Notice of
Cause any fact or circumstance which contributes to a showing of Cause shall not
waive any right of the Company hereunder or preclude the Company from asserting
such fact or circumstance in enforcing the Company's rights hereunder.

          (d) TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT CAUSE PRIOR TO A
SECTION 2 NOTIFICATION DATE. If, prior to a Section 2 Notification Date, the
Executive's employment is terminated by the Company without Cause, other than
due to death or Disability, the Term of Employment shall end as of the date of
the termination of the Executive's employment and the Executive shall be
entitled to the following:

               (1)  Base Salary earned but not paid prior to the date of the
                    termination of his employment;

               (2)  all annual incentive compensation awards with respect to any
                    year prior to the year in which the termination of the
                    Executive's employment occurs which have been earned but not
                    paid;

               (3)  a pro rata Target Award for the year in which the
                    termination of the Executive's employment occurs; PROVIDED,
                    HOWEVER, that the Target Award's performance goals
                    established with respect to the year in which the
                    termination of the Executive's employment occurs are met;

               (4)  an amount equal to (i) 2 multiplied by (ii) the sum of (x)
                    the Base Salary with respect to the year in which the
                    termination of his employment occurs and (y) the Target
                    Award with respect to the year in which the termination of
                    his employment occurs (the "Severance Benefit"); provided
                    that in the event termination of the Executive's employment
                    occurs within two years following a Change of Control, then
                    the Severance Benefit shall be an amount equal to (i) 3
                    multiplied by (ii) the sum of (x) the Base Salary with
                    respect to the year in which the termination of his
                    employment occurs and (y) the greater of the Target Award
                    with respect to the

                                      -12-


                    year in which the termination of his employment occurs and
                    the Executive's average incentive award for the immediately
                    preceding 3 years. The Severance Benefit shall be payable
                    over the 24-month period following the date of the
                    termination of his employment (the "Severance Benefit
                    Period") in equal installments in accordance with the
                    Company's regular payroll practice; provided that if the
                    termination of Executive's employment occurs within two
                    years following a Change of Control, the Severance Benefit
                    shall be payable in a lump sum as soon as practicable
                    following termination of the Executive's employment, but in
                    no event later than 10 days following the date of such
                    termination;

               (5)  the exercisable portion of the Options held by the Executive
                    as of the date of the termination of his employment shall
                    remain exercisable until the earlier of (i) the end of the
                    24-month period (36-month period in the event termination of
                    Executive's employment occurs within two years following a
                    Change of Control) following the date of the termination of
                    Executive's employment (the "Severance Period") or (ii) the
                    date the Options would otherwise expire;

               (6)  the unexercisable portion of the Options held by the
                    Executive as of the date of the termination of his
                    employment shall become exercisable on such date of
                    termination to the extent such unexercisable portions would
                    have become exercisable had the Executive remained employed
                    with the Company until the last day of the Severance Period
                    and shall remain exercisable until the end of the Severance
                    Period as if the Executive were still an employee, and any
                    portion of the Options that becomes exercisable pursuant to
                    this Section 12(d)(6) shall remain exercisable until the
                    earlier of (i) the end of the Severance Period or (ii) the
                    date the Options would otherwise expire;

               (7)  continuation of the lease with respect to the automobile
                    provided by the Company in accordance with Section 10(b)(3)
                    above until the end of the Severance Period; provided that
                    unless the termination of Executive's employment occurs
                    within two years after the occurrence of a Change of
                    Control, the lease shall not be continued beyond the date
                    such lease would otherwise expire;

               (8)  continuation of all perquisites provided by the Company to
                    the Executive under Section l0 above, other than
                    reimbursement of the club business expense portion of
                    Section 10(b)(1) above, until the end of the Severance
                    Period;

               (9)  any amounts earned, accrued or owing to the Executive but
                    not yet paid under Section 7, 8, 9, 10 or 11 above;

                                      -13-


               (10) continued participation, as if he were still an employee, in
                    the Company's medical, dental, hospitalization, life and
                    disability insurance plans, programs and/or arrangements and
                    in other perquisites and employee benefit plans, programs
                    and/or arrangements in which he was participating on the
                    date of the termination of his employment until the earlier
                    of:

                    (A)  the end of the Severance Period; or

                    (B)  the date, or dates, he receives equivalent coverage and
                         benefits under the plans, programs and/or arrangements
                         of a subsequent employer (such coverage and benefits to
                         be determined on a coverage-by-coverage or
                         benefit-by-benefit basis)

                    PROVIDED, HOWEVER, that:

                    (X)  if the Executive is precluded from continuing his
                         participation in any employee benefit plan, program or
                         arrangement as provided in this Section 12(d)(10)
                         above, he shall be provided with the after-tax economic
                         equivalent of the benefits provided under the plan,
                         program or arrangement in which he is unable to
                         participate for the period specified in this Section
                         12(d)(10);

                    (Y)  the economic equivalent of any benefit foregone shall
                         be deemed to be the lowest cost that would be incurred
                         by the Executive in obtaining such benefit himself on
                         an individual basis; and

                    (Z)  payment of such after-tax economic equivalent shall be
                         made quarterly in advance;

               (11) such other or additional benefits, if any, as are provided
                    under applicable plans, programs and/or arrangements of the
                    Company; and

               (12) if Executive's termination occurs within two years following
                    a Change of Control,

                    (A)  a lump sum payment with respect to each pension plan
                         (within the meaning of Section 3(2) of the Employee
                         Retirement Income Security Act of 1974, as amended,
                         whether or not qualified under Code Section 401(a))
                         which is a defined contribution plan ("Savings Plan")
                         equal to 3 times the aggregate for the plan year ending
                         immediately prior to Executive's termination of (i) the
                         Company's profit sharing contribution, if any, and (ii)
                         the Company matching contribution that would have been
                         made pursuant to the

                                      -14-


                         terms of the Savings Plan on the Executive's behalf if
                         the Executive made the maximum elective contribution
                         allowed under Code Section 402(g), payable as soon as
                         practicable following the later of the Executive's
                         termination of employment and the date when the
                         Company's contribution for the preceding plan year is
                         finally determined, but in no event later than 10 days
                         following such date;

                    (B)  a lump sum payment which is Actuarially Equivalent to
                         the additional benefits to which Executive would have
                         been entitled if the Executive had continued employment
                         for 3 years following the termination date under each
                         Retirement Plan in which Executive is a participant
                         (including the benefits under Sections 8 and 13),
                         payable as soon as practicable following the
                         termination of Executive's employment, but in no event
                         later than 10 days following the date of such
                         termination; and

                    (C)  a lump sum payment equal to the sum of the amounts
                         which are Actuarially Equivalent to the Supplemental
                         Pension as provided in Section 8 and the Supplemental
                         Retirement Benefit as provided in Section 13(e),
                         respectively.

          (e) TERMINATION OF EMPLOYMENT BY THE COMPANY WITHOUT CAUSE ON OR AFTER
A SECTION 2 NOTIFICATION DATE. If, on or after a Section 2 Notification Date on
which the Company notifies the Executive that the Term of Employment will end in
accordance with Section 2 above, the Executive's employment is terminated by the
Company without Cause, other than due to death or Disability, the Term of
Employment shall end as of the date of the termination of the Executive's
employment and the Executive shall be entitled to the same payments and benefits
as provided in Section 12(d) above; PROVIDED, HOWEVER, that:

               (1)  for purposes of determining benefits and entitlements under
                    Sections 12(d)(5) through 12(d)(11) above, the Severance
                    Period shall begin on the date of the termination of the
                    Executive's employment and shall end on the 2nd anniversary
                    (or 3rd anniversary, if within two years following a Change
                    of Control, the notice is delivered pursuant to Section 2 or
                    Executive's termination of employment occurs) of the Section
                    2 Notification Date (the "Section 12(e) Severance Period");
                    and

               (2)  for purposes of determining the Severance Benefit payable
                    under Section 12(d)(4) above, the Severance Benefit as
                    determined in accordance with Section 12(d)(4) above shall
                    be multiplied by a fraction the numerator of which shall be
                    the number of days in the Section 12(e) Severance Period and
                    the denominator of which shall

                                      -15-


                    be 730 (or 1095 in the event that the notice pursuant to
                    Section 2 is delivered within 2 years following a Change of
                    Control), and such reduced Severance Benefit shall be
                    payable over the Section 12(e) Severance Period in equal
                    installments in accordance with the Company's regular
                    payroll practice; provided that in the event that the notice
                    is delivered pursuant to Section 2 or the Executive's
                    employment is terminated within two years following a Change
                    of Control, such reduced Severance Benefit shall be paid in
                    a lump sum as soon as practicable following the termination
                    of the Executive's employment, but in no event later than 10
                    days following the date of such termination.

          (f) TERMINATION OF EMPLOYMENT BY THE EXECUTIVE FOR GOOD REASON. The
Executive may terminate his employment for Good Reason at the end of the 60-day
period following the date that the Executive notifies the Company in writing in
accordance with Section 27 below that he intends to terminate his employment for
Good Reason (the "Notification Date"), such notice to state in detail the
particular event that constitutes Good Reason. The Company shall have reasonable
opportunity to cure the event constituting Good Reason; PROVIDED, HOWEVER, that
if the Company has not cured such event to the reasonable satisfaction of the
Executive (and the Executive has not waived the Company's failure to cure)
during the 30-day period following the Notification Date (the "Curing Period"),
the Executive may terminate his employment following the end of the Curing
Period; PROVIDED, HOWEVER, that the Executive may not terminate his employment
for Good Reason after the end of the 90-day period following the date the event
constituting Good Reason first occurs. Upon a termination by the Executive of
his employment for Good Reason, the Term of Employment shall end as of the date
of the termination of the Executive's employment and the Executive shall be
entitled to the same payments and benefits as provided in Section 12(d) or 12(e)
above, as applicable; PROVIDED, HOWEVER, that if the Executive terminates his
employment for Good Reason based on a reduction (i) in Base Salary under Section
1(i)(2) above and/or (ii) in his Target Award under Section 1(i) (3) above, then
the Base Salary and/or the Target Award to be used in determining the Severance
Benefits in accordance with Section 12(d) or (e) above shall be the Base Salary
and/or the Target Award in effect immediately prior to such reduction.

          (g) VOLUNTARY TERMINATION OF EMPLOYMENT BY THE EXECUTIVE WITHOUT GOOD
REASON. If the Executive voluntarily terminates his employment without Good
Reason, other than a termination of his employment due to death or Disability,
the Executive shall be entitled to the same payments and benefits as provided in
Section 12(c) above. If the Executive notifies the Company in accordance with
Section 2 above that he wants the Term of Employment to end at the end of the
90-day period following such Section 2 Notification Date, and the Executive
terminates his employment as of the end of the Term of Employment, the
termination of the Executive's employment under this Section 12(g) shall not be
deemed a breach of this Agreement.

          (h) PARACHUTE GROSS-UP. If Executive becomes entitled to any payments
or benefits whether pursuant to the terms of or by reason of this Agreement or
any other plan, arrangement, agreement, policy or program (including without
limitation any deferred stock unit, restricted stock, stock option, stock
appreciation right or similar right, or the lapse or termination

                                      -16-


of any restriction on the vesting or exercisability of any of the foregoing)
with the Company, any successor to the Company or to all or a part of the
business or assets of the Company (whether direct or indirect, by purchase,
merger, consolidation, spin off, or otherwise and regardless of whether such
payment is made by or on behalf of the Company or such successor) or any person
whose actions result in a Change of Control or any person affiliated with the
Company or such persons (in the aggregate, "Payments" or singularly, "Payment"),
which Payments are reasonably determined by an accounting firm mutually agreed
upon by the Executive and the Company ("Accountant") (which agreement neither
party shall unreasonably withhold) to be subject to the tax imposed by Section
4999 or any successor provision of the Code or any similar state or local tax,
or any interest or penalties are incurred by Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), the Company shall pay
Executive an additional amount ("Gross-Up Payment") such that the net amount
retained by Executive, after deduction or payment of (i) any Excise Tax on
Payments, (ii) any federal, state and local income or employment tax and Excise
Tax upon the payment provided for by this Section, and (iii) any additional
interest and penalties imposed because the Excise Tax is not paid when due,
shall be equal to the full amount of the Payments. The Company and Executive
shall use their reasonable efforts to cause the Accountant to complete its
calculation at least ten (10) days prior to the time any Excise Tax is due. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income and employment taxes at the highest marginal rates of
taxation in the applicable state and locality with respect to which Executive is
subject to tax on the date the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. The Gross-Up Payment shall be paid to the
Executive within five (5) days from the earlier of (i) the issuance by the
Internal Revenue Service of a notice stating in effect that an Excise Tax is due
with respect to the Payments or (ii) the receipt by the Company of a written
statement by the Accountant of the amount of the Gross-Up Payments.
Notwithstanding the foregoing, if the Excise Tax is determined by the Internal
Revenue Service or the Accountant subsequent to the payment set forth in the
preceding sentence to exceed the amount taken into account in determining the
Gross-Up Payment calculated at such time, the Company shall pay within ten (10)
days after the time of such determination the amount by which the recalculated
Gross-Up Payment exceeds the Gross-Up Payment paid pursuant to the preceding
sentence. Following payment to Executive of any Gross-Up Payment, including
pursuant to the immediately preceding sentence, Executive shall reasonably
cooperate with the Company, at its sole cost and expense and with full
indemnification by the Company, as the Company shall reasonably request in
efforts to obtain a refund of any Excise Tax which the Company has a reasonable
basis to challenge. Any such refund so obtained shall be paid by Executive to
the Company.

          (i) CONTINUED HEALTH-CARE COVERAGE TO AGE 65. In the event of any
termination of the Executive's employment under Sections 12(b), 12(d), 12(e) or
12(f), the Executive shall be entitled to continued health-care coverage for
himself and his eligible dependents under the Company's "group health plan" (as
such term is defined in Code Section 4980B(g)(2) as in effect from time to time
but subject to any limitations on coverage of nonemployees and their dependents
imposed under the terms of such group health plan or by any insurers or partial
insurers of such group health plan (other than such limitations imposed

                                      -17-


unilaterally and in bad faith by the Company). The Executive shall be entitled
to such health-care coverage until his 65th birthday; the Executive's spouse
shall be entitled to such health-care coverage until her 65th birthday; and each
of the Executive's eligible dependents shall be entitled to such health-care
coverage until his or her 21st birthday. Unless the Company is obligated to
provide continued health-care coverage in accordance with Section 12(d)(11)
above, the Executive shall pay to the Company on an annual basis in advance the
cost of such continued health-care coverage, with such cost to be equal to the
annual "applicable premium" (as such term is used under Code Section
4980B(f)(4)) as determined in good faith by the Company.

          (j) NO MITIGATION; NO OFFSET. In the event of any termination of the
Executive's employment under this Section 12, the Executive shall be under no
obligation to seek other employment and there shall be no offset against amounts
due to the Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that he may obtain except as
specifically provided in this Section 12.

     13.  CHANGE OF CONTROL SUPPLEMENTAL RETIREMENT BENEFIT.

          (a) SUPPLEMENTAL RETIREMENT BENEFIT. In the event a Change of Control
occurs during the Term of Employment, Executive shall be entitled to the
following fully vested nonqualified supplemental retirement benefit (the
"Supplemental Retirement Benefit"): a life annuity, payable monthly, commencing
with the first payment on Executive's 65th birthday in an amount equal to the
excess of (1) the product of (i) 1/12th of 1.67% of Executive's average Eligible
Earnings (as defined below) for the three consecutive calendar years of his
service with the Company immediately preceding the earlier of his termination of
employment or his 65th birthday, multiplied by (ii) the sum of 5 and the number
of full and partial years (such sum not to exceed 30) of Executive's service
with the Company, including the additional service credit under Section 13(c),
with 1/12th of a year being credited for each calendar month or part thereof
during the Term of Employment, over (2) the Retirement Plan Offset.

          (b) ELIGIBLE EARNINGS. "Eligible Earnings" shall mean the sum of
Executive's base salary and bonus compensation paid or deferred for a calendar
year. If the Term of Employment does not cover 3 full calendar years,
Executive's Eligible Earnings will be determined on an annualized basis with
respect to the calendar years in which the Term of Employment commenced and
terminated.

          (c) ADDITIONAL SERVICE CREDIT. If Executive's service with the Company
extends to Executive's 65th birthday, then Executive, to the extent that the sum
of 5 and the Executive's actual years of service is less than 30 at age 65,
shall be credited with an additional number of years of service equal to 30
minus the sum of 5 and the Executive's actual years of service at age 65,
provided however, that such additional years of credited service under this
paragraph (c) shall not exceed 15. If Executive's employment is terminated
before attaining age 65 pursuant to Sections 12(a), (b), (d), (e), or (f) within
2 years following a Change of Control, then Executive, to the extent the sum of
5 and Executive's actual years of service would have been less than 30 had
Executive remained employed until age 65, shall be credited with an additional
number of years of service equal to 30, minus the sum of 5 and the number of
actual years of service Executive would have had at age 65, provided however,
that such additional years of credited service shall not exceed 15.

                                      -18-


          (d) RETIREMENT PLAN OFFSET. The Retirement Plan Offset is the monthly
amount of a life annuity for Executive, payable monthly, commencing with the
first payment on Executive's 65th birthday, which is Actuarially Equivalent to
the aggregate of the vested pension benefits accrued by Executive under every
other Retirement Plan in which the Executive participates, and each similar plan
maintained by a predecessor or successor employer, including the benefit
provided under Section 8 of this Agreement.

          (e) LUMP SUM PAYMENT. In the event that a Change of Control occurs and
Executive is entitled to receive a Supplemental Retirement Benefit, Executive
may, at any time prior the end of the calendar year preceding his 65th birthday
or with the Company's consent, elect to receive a lump sum payment on his 65th
birthday, which is Actuarially Equivalent to the Supplemental Retirement
Benefit. In the event Executive's service with the Company is terminated
pursuant to Section 12(d), (e) or (f) within two years after the occurrence of a
Change of Control and prior to his 65th birthday, Executive shall receive a lump
sum payment which is Actuarially Equivalent to the Supplemental Retirement
Benefit immediately following, but in no event later than 10 days after, such
termination.

          (f) DEATH OR DISABILITY BENEFIT. In the event that Executive's service
with the Company terminates pursuant to Section 12(a) or (b) after a Change of
Control has occurred, the Executive or his Beneficiary (as defined below), as
the case may be, shall receive a lump sum payment which is Actuarially
Equivalent to the Supplemental Retirement Benefit accrued by Executive
determined as of the date immediately preceding Executive's termination of
service with the Company pursuant to Section 12(a) or (b).

          (g) BENEFICIARIES. Executive may designate the beneficiary or
beneficiaries ("Beneficiary") to whom the Supplemental Retirement Benefit shall
be paid or to whom any uncashed checks may be reissued by completing and signing
a beneficiary designation form in such form as the Company may prescribe. In the
event of any conflict between beneficiary designation forms, the last
beneficiary designation form received by the Company shall govern. A beneficiary
designation may be changed without the consent of any prior Beneficiary. If
Executive does not complete a beneficiary designation form, or no designated
Beneficiary survives Executive, the Beneficiary shall be determined in the same
manner as would be determined under the applicable laws of descent and
distribution with respect to Executive's estate. If the Company shall find that
Executive or a Beneficiary is unable to care for his or her affairs because of
illness or accident or is unable to execute a proper receipt for the payment of
the Supplemental Retirement Benefit, the Company may make payment to a relative
or other proper person for the benefit of Executive or such Beneficiary. To the
extent permitted by law, the payment to a person in accordance with this
paragraph shall fully discharge the Company's obligation to pay the Supplemental
Retirement Benefit.

     14.  CONFIDENTIALITY.

          (a) CONFIDENTIAL INFORMATION. The Executive acknowledges the Company's
exclusive ownership of all information useful in the business of the Company,
its parents, subsidiaries or its affiliates (collectively "United") (including
its dealings with suppliers, customers and other third parties, whether or not a
true "trade secret"), which at the time or times concerned is not generally
known to persons engaged in businesses similar to those conducted by

                                      -19-


United, and which has been or is from time to time disclosed to, discovered by,
or otherwise known by the Executive as a consequence of his employment by the
Company (including information conceived, discovered or developed by the
Executive during his employment with the Company) (collectively, "Confidential
Information"). Confidential Information includes, but is not limited to, the
following especially sensitive types of information:

               (1)  the identity, purchase and payment patterns of, and special
                    relations with, the customers of United;

               (2)  the identity, net prices and credit terms of, and special
                    relations with, the suppliers of United;

               (3)  the inventory selection and management techniques of United;

               (4)  the product development and marketing plans of United;

               (5)  the strategic business plans of United; and

               (6)  the finances of United; except to the extent publicly
                    disclosed.

          (b) PROPRIETARY MATERIALS. The term "Proprietary Materials" shall mean
all business records, documents, drawings, writings, software, programs and
other tangible things which were or are created or received by or for United in
furtherance of its business, including, but not limited to, those which contain
Confidential Information. For example, Proprietary Materials include, but are
not limited to, the following especially sensitive types of materials:
applications software, the data bases of Confidential Information maintained in
connection with such software, and printouts generated from such data bases;
market studies and strategic plans; customer, supplier and employee lists;
contracts and correspondence with customers and suppliers; documents evidencing
transactions with customers and supplier; sales calls reports, appointment
books, calendars, expense statements and the like, reflecting conversations with
any company, customer or supplier; architectural plans; and purchasing, sales
and policy manuals. Proprietary Materials also include, but are not limited to,
any such things which are created by the Executive or with the Executive's
assistance and all notes, memoranda and the like prepared using the Proprietary
Materials and/or Confidential Information.

          (c) ACKNOWLEDGEMENTS BY EXECUTIVE. While some of the information
contained in Proprietary Materials may have been known to the Executive prior to
employment with the Company, or may now or in the future be in the public
domain, the Executive acknowledges that the compilation of that information
contained in the Proprietary Materials has or will cost the Company a great
effort and expense, and affords persons to whom Proprietary Materials are
disclosed, including the Executive, a competitive advantage over persons who do
not know the information or have the compilation of the Proprietary Materials.
The Executive further acknowledges that Confidential Information and Proprietary
Materials include commercially valuable trade secrets and automatically become
the Company's exclusive property when they are conceived, created or received.
The Executive shall report to the Company fully and promptly, orally (or, at the
Company's request, in writing) all discoveries, inventions and improvements,
whether or not patentable, and all other ideas, developments, processes,
techniques, designs and other information which may be of benefit to United,
which Executive

                                      -20-


conceives, makes or develops during his employment (whether or not during
working hours or with the use or assistance of the Company's facilities,
materials or personnel) and which either (i) relate to or arise out of any part
of the Company's business in which the Executive participates, or (ii)
incorporate or make use of Confidential Information or Proprietary Materials
(all items referred to in this Section 14 being sometimes collectively referred
to herein as the "Intellectual Property"). All Intellectual Property shall be
deemed Confidential Information of the Company, and any writing or other
tangible things describing, referring to, or containing Intellectual Property
shall be deemed the Company's Proprietary Materials. At the request of the
Company, during or after the Term of Employment, the Executive (or after the
Executive's death, the Executive's personal representative) shall, at the
expense of the Company, make, execute and deliver all papers, assignments,
conveyances, installments or other documents, and perform or cause to be
performed such other lawful acts, and give such testimony, as the Company deems
necessary or desirable to protect United's ownership rights and Intellectual
Property.

          (d) CONFIDENTIALITY DUTIES OF EXECUTIVE. The Executive shall, except
as may be required by law, during the Term of Employment, and thereafter for the
longest period of time permitted by applicable law:

               (1)  comply with all of the Company's reasonable instructions
                    (whether oral or written) for preserving the confidentiality
                    of Confidential Information and Proprietary Materials;

               (2)  use Confidential Information and Proprietary Materials only
                    at places designated by the Company and in furtherance of
                    United's business and pursuant to the Company's direction;

               (3)  exercise appropriate care to advise other employees of the
                    Company (and, as appropriate, subcontractors) of the
                    sensitive nature of Confidential Information and Proprietary
                    Materials prior to their disclosure, and to disclose the
                    same only on a need-to-know basis;

               (4)  not copy all or any part of Proprietary Materials, other
                    than in the course of carrying out the Executive's duties
                    and responsibilities under this Agreement;

               (5)  not sell, give, loan or otherwise transfer any copy of all
                    or any part of Proprietary Materials to any person who is
                    not an employee of the Company, other than in the course of
                    carrying out the Executive's duties and responsibilities
                    under this Agreement;

               (6)  not publish, lecture on or otherwise disclose to any person
                    who is not an employee of the Company, other than in the
                    course of carrying out the Executive's duties and
                    responsibilities under this Agreement, all or any part of
                    Confidential Information or Proprietary Materials; and

                                      -21-


               (7)  not use all or any part of any Confidential Information or
                    Proprietary Materials for the benefit of any third party
                    without the Company's written consent.

          (e) RETURN OF COMPANY PROPERTY. Upon the termination of the
Executive's employment under Section 12 above or upon the end of the Term of
Employment, the Executive (or in the event of death, the Executive's personal
representative) shall promptly surrender to the Company the original and all
copies of Proprietary Materials (including all notes, memoranda and the like
concerning or derived therefrom), whether prepared by the Executive or others,
which are then in the Executive's possession or control. Records of payments
made by the Company to or for the benefit of the Executive, the Executive's copy
of this Agreement, his rolodexes, personal diaries, personal mementos, personal
effects shall not be deemed Proprietary Materials for purposes of this Section
14, and other such things, lawfully possessed by the Executive which relate
solely to taxes payable by the Executive, employee benefits due to the Executive
or the terms of the Executive's employment with the Company, shall also not be
deemed Proprietary Materials for purposes of this Section 14.

     15.  NONCOMPETITION; NONSOLICITATION.

          (a) The Executive covenants and agrees that during the Term of
Employment and during the Severance Period, the Executive shall not, in any way,
directly or indirectly, manage, operate, control (or participate in any of the
foregoing), accept employment or a consulting position with or otherwise advise
or assist or be connected with or directly or indirectly own or have any other
interest in or right with respect to (other than through ownership of not more
than 1 percent of the outstanding shares of a corporation's stock which is
listed on a national securities exchange or the NASDAQ National Market) any
enterprise (other than for the Company or for the benefit of the Company) which
is a wholesaler of office products having annual sales in excess of $1,000,000
or any other business in which United, during the Term of Employment, may be
actively involved or have plans to become actively involved. The Company shall
not unreasonably withhold its consent to a request by the Executive for a waiver
from the strict application of this Section 15(a) with respect to a specific
employment or engagement of, or a specific acquisition of an interest by, the
Executive. The Company shall not be deemed to have unreasonably withheld its
consent, if the Company determines that such employment, engagement, or
acquisition would have a competitive effect on the Company.

          (b) Notwithstanding Section 15(a), following the Employment Term,
Executive may be engaged by any company whose principal business is the
manufacture or resale of office products.

          (c) The Executive covenants and agrees that during the Term of
Employment and during the Severance Period, the Executive shall not at any time,
directly or indirectly, solicit (1) any client or customer to change its
business relationship with United; provided, however, nothing herein is intended
nor should such be construed as precluding Executive from responding to
unsolicited client or customer inquiries at any time, or (2) except for
receiving and following up on publicly placed employment advertisements, any
employee of United for the purposes of causing such employee to terminate
employment with United.

                                      -22-


          (d) If the Executive shall be in violation of any of the foregoing
restrictive covenants and if the Company seeks relief from such breach in any
court or other tribunal, such covenants shall be extended for a period of time
equal to the pendency of such proceedings, including all appeals.

          (e) The Parties acknowledge that in the event of a breach or
threatened breach of Section 15(a) and/or Section 15(c) above, the Company shall
not have an adequate remedy at law. Accordingly, in the event of any breach or
threatened breach of Section 15(a) and/or Section 15(b) above, the Company shall
be entitled to such equitable and injunctive relief as may be available to
restrain the Executive and any business, firm, partnership, individual,
corporation or entity participating in the breach or threatened breach from the
violation of the provisions of Section 15(a) and/or Section 15(c) above. Nothing
in this Agreement shall be construed as prohibiting the Company from pursuing
any other remedies available at law or in equity for breach or threatened breach
of Section 15(a) and/or Section 15(c) above, including the recovery of damages.

          (f) The Executive recognizes, acknowledges and agrees that the
foregoing limitations are reasonable and properly required for the adequate
protection of the business of the Company. If any such limitations are deemed to
be unreasonable by a court having jurisdiction of the matter and parties, the
Executive hereby agrees and submits to the reduction of any such limitations to
such territory or time as to such court shall appear reasonable.

     16.  MUTUAL NON-DISPARAGEMENT  DURING AND AFTER THE EMPLOYMENT TERM.

          (a) Executive shall not, directly or indirectly, make or cause to be
made and shall not intentionally cause the officers, directors, employees,
agents and representatives of any entity or person controlled by Executive to
make or cause to be made, any disparaging, denigrating, derogatory or other
negative or false statement orally or in writing to any person or entity about
United or its respective executive officers or members of its or their boards of
directors, or the business strategy or plans, policies, practices or operations
of United. Executive shall not, directly or indirectly, and shall, within his
reasonable ability to control, cause the officers, directors, employees, agents
and representatives of any entity or person controlled by Executive not to,
directly or indirectly, dissipate or negatively affect the goodwill, business,
prospects or reputation of United or its relationships with its employees,
customers, suppliers, competitors, vendors, stockholders, lenders, prospective
investors or prospective purchasers of any businesses or assets of United.

          (b) The Company shall not, directly or indirectly, make or cause to be
made, and shall not intentionally cause the officers, directors, employees,
agents or representatives of any entity or person controlled by the Company or
by which the Company is controlled, make or cause to be made, any disparaging,
denigrating, derogatory or other negative or false statement orally or in
writing to any person or entity about Executive, any entity controlled by or
with which Executive is affiliated, or any business plans, policies, practices
or reputation of Executive or any entity controlled by or with which he is
affiliated. The Company shall not, directly or indirectly, and shall within its
reasonable ability to control, cause the officers, directors, employees, agents
and representatives of United and its respective executive officers and members
of their respective Boards of Directors not to, directly or indirectly,
dissipate or

                                      -23-


negatively affect the good will, business, prospects or reputation of Executive
or any entity controlled by him or with which he is affiliated.

          17. ASSIGNABILITY; BINDING NATURE. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors,
heirs (in the case of the Executive) and assigns. No rights or obligations of
the Company under this Agreement may be assigned or transferred by the Company
except that such rights or obligations may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity,
or the sale or liquidation of all or substantially all of the assets of the
Company; PROVIDED, HOWEVER, that the assignee or transferee is the successor to
all or substantially all of the assets of the Company and such assignee or
transferee assumes the liabilities, obligations and duties of the Company, as
contained in this Agreement, either contractually or as a matter of law.

          18. REPRESENTATION. The Company represents and warrants that it is
fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization. The Executive
represents and warrants that no agreement exists between him and any other
person, firm or organization that would be violated by the performance of his
obligations under this Agreement.

          19. ENTIRE AGREEMENT. This Agreement contains the entire understanding
and agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties with respect thereto
(including, but not limited to, the agreement between the Parties dated May 23,
1997, which this Agreement amends and restates).

          20. AMENDMENT OR WAIVER. No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company. No waiver by either Party of any breach by
the other Party of any condition or provision contained in this Agreement to be
performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by the Executive or an authorized
officer of the Company, as the case may be.

          21. WITHHOLDING. The Company shall be entitled to withhold from any
and all payments made to the Executive under this Agreement all federal, state,
local and/or other taxes or imposts which the Company determines are required to
be so withheld from such payments or by reason of any other payments made to or
on behalf of the Executive or for his benefit hereunder.

          22. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.

                                      -24-


          23. SURVIVORSHIP. The respective rights and obligations of the Parties
hereunder shall survive any termination of the Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.

          24. BENEFICIARIES/REFERENCES. The Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence,
reference in this Agreement to the Executive shall be deemed, where appropriate,
to refer to his beneficiary, estate or other legal representative.

          25. GOVERNING LAW/JURISDICTION. This Agreement shall be governed by
and construed and interpreted in accordance with the laws of the State of
Illinois without reference to principles of conflict of laws.

          26. ATTORNEY FEES. If the Executive or his estate or designee prevails
in any action to enforce their rights under this Agreement, they shall be
entitled to receive their attorney's fees, costs and expenses incurred in
enforcing their rights under this Agreement, as well as interest at the Prime
Rate as publicly announced by The Northern Trust Company from time to time on
the amount of the judgment from the date of demand for payment hereunder through
the date of receipt of the amount of the judgment.

          27. NOTICES. Any notice given to a Party shall be in writing and shall
be deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:

If to the Company:                      United Stationers Inc.
                                        United Stationers Supply Co.
                                        2200 East Golf Road
                                        Des Plaines, Illinois  60016
                                        Attention:  Chairman of the Board

with a copy to:                         United Stationers Supply Co.
                                        2200 East Golf Road
                                        Des Plaines, Illinois  60016
                                        Attention:  General Counsel

and a copy to:                          Weil, Gotshal & Manges LLP
                                        100 Crescent Court, Suite 1300
                                        Dallas, Texas  75201
                                        Attention:  Mary R. Korby, Esq.

and a copy to:
                                        --------------------------------

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

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

                                      -25-


If to the Executive:                    Mr. Randall W. Larrimore
                                        830 Sheridan Road
                                        Winnetka, Illinois  60093-1929

and a copy to:
                                        --------------------------------

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

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

     28.  HEADINGS. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the
meaning or of any provision of this Agreement.

     29.  COUNTERPARTS. This Agreement may be executed in 2 or more
counterparts.

     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

                                      UNITED STATIONERS INC.

                                      By:
                                         --------------------------
                                           Frederick B. Hegi, Jr.
                                           Chairman of the Board

                                      UNITED STATIONERS SUPPLY CO.

                                      By:
                                         ---------------------------
                                           R. Thomas Helton
                                           Executive Vice President,
                                           Human Resources and Organization
                                           Development of the Company

                                      ------------------------------
                                           Randall W. Larrimore

                                      -26-


                                    EXHIBIT A
                             TO EMPLOYMENT AGREEMENT
                             ----------------------

     The following are benefit plans, programs and policies in which the
Executive is entitled to participate in addition to any benefits specified in
the Employment Agreement as of the date thereof:

     1.   United Stationers Management Incentive Plan

     2.   United Stationers Inc. Management Equity Plan

     3.   United Stationers Inc. Pension Plan

     4.   United Stationers Inc. 401(k) Savings Plan

     5.   United Stationers Supply Co. Deferred Compensation Plan

     6.   Restoration Plan

     7.   United Stationers Inc. Flexible Spending Plan

     8.   United Group Medical and Dental Benefit Plans

     9.   Officer Medical Expense Reimbursement Policy

     10.  Retiree Health Plan

     11.  Annual physical exam at Company expense

     12.  Group Term Life Insurance - 2 1/2 times base salary

     13.  Disability Insurance in accordance with insurance policy

     14.  Travel and Accident Insurance - $300,000

     15.  Split Dollar Life Insurance

     16.  Club and Association Dues - in accordance with Company Policy

     17.  Officer Indemnification and Insurance - D&O insurance is provided on a
          claims made basis; and Restated Certificate of Incorporation, and
          Delaware and Illinois law provide indemnification of officers and
          directors

     18.  Other - Vacations in accordance with Company Policy; other benefits
          that may from time to time be made available to employees generally

EX-10.28

EXHIBIT 10.28

                                    AGREEMENT

          AGREEMENT, effective as of August 10, 2001 (the "AGREEMENT") among
Eileen Kamerick ("EXECUTIVE"), Victor J. Heckler ("SPOUSE"), United Stationers
Inc. (the "COMPANY") and United Stationers Supply Co. ("SUPPLY").

          WHEREAS, the Executive, the Company and Supply are parties to an
Employment Agreement, dated as of July 31, 2000 pursuant to which the Company
and Supply have employed the Executive as Chief Financial Officer and Executive
Vice President (the "EMPLOYMENT AGREEMENT");

          WHEREAS, the parties desire to terminate the Employment Agreement
effective as of the date hereof;

          WHEREAS, Executive desires to continue to be employed, and the Company
and Supply desire to continue to employ Executive, for a limited period of time
pursuant to the terms and conditions set forth herein.

          NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements and promises set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Executive, Spouse, the Company and Supply hereby agree as follows:

     1. DATE OF TERMINATION OF EMPLOYMENT AGREEMENT: The parties hereby agree to
terminate the Employment Agreement in accordance with the provisions hereof as
of the date first set forth above (the "AGREEMENT TERMINATION DATE").

     2. DUTIES; BONUS PAYMENT; TERMINATION OF BENEFITS: (a) From the date hereof
until the earlier of receipt of notice from the Company or September 6, 2001
(the "END DATE"), Executive shall continue to render services as the Chief
Financial Officer and Executive Vice President of the Company, reporting to the
Chief Executive Officer, and, in accordance with the authority and direction of
the Chief Executive Officer, the boards of directors of the Company and Supply
(each, a "BOARD"), and shall render such operational, administrative and other
services to the Company and Supply not inconsistent with duties assigned to
Executive prior to the date of this Agreement as may be required of such
position or as the Chief Executive Officer or either Board may from time to time
direct. Prior to the End Date, Executive shall be available at all reasonable
times for consultation with both Boards on matters relating to the Company's or
its affiliates' business. Executive shall, during normal working hours and at
such other times as Executive's duties may reasonably require, devote her best
efforts and substantially all of her time and attention (except for reasonable
periods of illness or other incapacity) to the business and affairs of the
Company and its affiliates. In addition, Executive acknowledges that the Company
is engaged in preparing a financial and operational restructuring plan
contemplating, among other things, a reduction in costs



and workforce (the "RESTRUCTURING PLAN"). Executive further acknowledges and
agrees that prior to the End Date, she shall assist in the preparation of the
Restructuring Plan, although she will continue to perform the other duties and
responsibilities normally performed by those in commensurate positions.
Therefore, it is expected that until the End Date she shall be on the premises
of the executive offices of the Company and actively engaged in such activities
during normal working hours, unless her duties require offsite meetings or
absences are otherwise reasonably required, including, without limitation, to
the extent that she is expressly asked to do so, meetings with investors or
potential investors in the Company. Executive further agrees to and does hereby
resign effective as of the End Date (or earlier, if so requested by the Company)
from any appointments or positions which she may hold with the Company or any of
its direct or indirect subsidiaries, including, without limitation, her position
as an officer or director of the Company and each of its direct or indirect
subsidiaries. Executive agrees to execute, promptly upon request and without
further consideration, all further documents which the Company may request of
her to effectuate such resignations. Executive and Company agree that following
the End Date, Executive shall, as is reasonably necessary, assist the Company in
a smooth transition of her responsibilities to her successor and make herself
reasonably available from time to time following the End Date for consultation
with the Boards, any committee thereof, any Company officers and senior members
of the Company's finance and accounting staffs in order to assist them in the
completion of the Restructuring Plan.

     (b) On the End Date, Executive shall be paid $150,000 in cash (the "END
DATE PAYMENT"). In addition to the End Date Payment, between the date hereof and
the End Date, Executive shall receive a base salary on a per diem basis equal to
$1,250.00 per full day of employment hereunder, payable in accordance with the
Company's normal payment schedule for management employees.

          (c) On the End Date, subject to the foregoing and Section 3 hereof,
all benefits under all plans, programs and/or arrangements of Company and/or
Supply will terminate, except that Executive may have continuation or conversion
rights under voluntary contributory term life insurance, medical insurance and
accident insurance programs made available to executives of the Company.
Executive agrees that the review of such insurance coverage, and any action to
continue, or exercise conversion rights in respect of, such coverage is her sole
responsibility and that neither the Company nor any direct or indirect
subsidiary thereof shall have any liability or responsibility to Executive in
connection herewith. Executive shall retain any vested benefits under the United
Stationers Inc. 401(k) Savings Plan. In addition, on the End Date, Executive
shall be paid an amount in cash equal to $1,250.00 per day times the number of
Executive's accrued and unused vacation days in full consideration for all
accrued and unused vacation days.

          (d) REIMBURSEMENT OF BUSINESS EXPENSES. Until the End Date, Executive
is authorized to incur reasonable business expenses in carrying out her duties

                                        2


and responsibilities under this Agreement, and the Company shall reimburse her
for all such business expenses reasonably incurred by her in connection with the
carrying on of the business of the Company, subject to documentation in
accordance with the Company's reimbursement policies, from time to time in
effect. The Company agrees to reimburse Executive within thirty days after
written submission, in accordance with the Company's practices and procedures,
for all amounts owed for business-related expenses that were incurred by the
Executive in accordance with the reimbursement policy of the Company.

     3. RESTRICTED SHARES; OPTIONS: (a) Pursuant to Executive's Employment
Agreement, Executive was granted 11,500 shares of common stock of the Company
(the "RESTRICTED SHARES"), subject to vesting as set forth therein. Executive
and the Company agree that, as of the End Date, the Restricted Shares shall vest
in their entirety and shall not be subject to any further restriction, other
than restrictions imposed pursuant to applicable federal and state securities
laws. On the End Date, the Company will deliver to the Executive a stock
certificate, issued in her name, evidencing the Restricted Shares. The stock
certificate delivered to her representing such Restricted Shares will not bear
any restrictive legends, other than usual and customary legends in respect of
restrictions under applicable federal and state securities laws. Upon delivery
of such stock certificate, the Company will also deliver to Executive for
cancellation that certain undated Stock/Bond Power previously executed by
Executive in respect of the Restricted Shares and in favor of the Company. The
Executive acknowledges and agrees that, as of the Agreement Termination Date,
(i) options to purchase an aggregate of 31,667 shares of Company common stock
that were referenced in the Employment Agreement and granted October 2, 2000
have not vested and will lapse and be of no further force or effect and (ii)
60,000 deferred stock units granted pursuant to a Deferred Stock Unit Award
Agreement dated as of June 20, 2001, have not vested and will lapse and be of no
further force or effect. Executive acknowledges and agrees that she has no right
in or to, nor has she been promised or granted, any other options, restricted
shares or other equity-based compensation related to or based upon the Company's
or any affiliate's common stock or other securities.

          (b) Executive acknowledges and agrees that she will remain an
"affiliate" of the Company for purposes of Rule 144 promulgated under the
Securities Act of 1933, as amended, for a period of three months following the
End Date and that, prior to any sale of any Company common stock, she must
comply in all respects with the requirements of Rule 144. In addition Executive
acknowledges and agrees that she will not buy or sell any securities of the
Company during any period in which she is privy to material information not
generally disclosed to the public and that such material information may be
contained in the Restructuring Plan.

     4. RETURN OF ITEMS AND DOCUMENTS: (a) Except as otherwise set forth in
paragraph 4(b) hereof, Executive agrees that she will return to the Company, on
the End Date, all Company property, including but without limitation, (i) the
computer, cellular

                                        3


telephone, pager, and all other business equipment provided for her use by the
Company, and (ii) all originals and all copies of documents, notes, computer
discs, tapes or other tangible information of any sort which she has in her
possession or under her custody or control that are the property of the Company
or any of its direct or indirect subsidiaries or that relate in any manner to
her duties at the Company or Supply, which are not otherwise available to the
public, and will not retain any copies of such materials. The materials required
to be returned pursuant to clause (ii) of this paragraph 4(a) shall not include
personal correspondence that does not relate directly or indirectly to the
Company, its direct or indirect subsidiaries or any of its or their businesses.

          (b) Notwithstanding anything to the contrary contained in paragraph
4(a) hereof, the Company and Supply hereby agree that Executive shall be
entitled to retain the year 2000 model XJ8-L Jaguar automobile currently leased
on her behalf by the Company for the remainder of the term of, and in accordance
with the provisions of, the automobile lease, which expires on September 23,
2003 (the "AUTO LEASE"). A copy of the Auto Lease is attached hereto. Prior to
the End Date, Company and Supply shall cooperate with Executive in endeavoring
to assign the Auto Lease to Executive with an accompanying release of Company
and Supply of any obligation with respect thereto. Executive shall pay any cost
associated with such assignment. If such assignment of the Auto Lease occurs,
upon the assignment, Company shall pay to Jaguar Credit, the lease holder on the
Auto Lease, a sum equal to the remaining lease payments (which, as of August 8,
2001, is $26,650.00). If such Auto Lease is not or cannot be so assigned, and in
any event prior to any such assignment, Executive agrees that she will maintain
the automobile, including its mechanical systems, in good condition, in
accordance with the requirements of the Auto Lease, and that she will be
responsible for any fees and expenses incurred in connection with such
maintenance. Executive will return such automobile not later than September 23,
2003 in good repair and condition, as required by the Auto Lease. To the extent
that the Company or Supply is required to make any payments to the lessor (other
than any standard return charge or any arrearage in lease payments) as a result
of the automobile not having been maintained or otherwise kept in satisfactory
mechanical or physical condition or having been delivered after the required
delivery date (in each case in accordance with the terms of the Auto Lease),
Executive will reimburse the Company or Supply, as appropriate, in the full
amount of such payments. Executive agrees that she will maintain in full force
and effect, with an insurance company reasonably acceptable to the Company (and
naming the Company and/or Supply, as requested by the Company, as an additional
insured), property and casualty insurance covering the automobile in amounts,
with coverages, and with named insureds, at a minimum sufficient to satisfy the
requirements of the Auto Lease and as reasonably requested by the Company.
Executive shall provide written evidence to the Company of such insurance
coverage prior to the End Date. Furthermore, Executive shall provide written
evidence to the Company of renewal of such insurance coverage not later than 30
days prior to the date upon which any existing coverage will lapse. Executive
hereby agrees to fully indemnify, defend, and hold harmless the Company and
Supply in the event there is any claim, charge, or action against the Company
and/or Supply, or any

                                        4


of its affiliates, or any payment must be made by any of them as a result of her
use, maintenance, control or operation of the automobile.

     5. WITHHOLDING: The payments and benefits set forth in paragraphs 2, 3 and
4 shall be subject to applicable federal, state and local withholding (including
Social Security and like employment taxes) and other amounts required to be
withheld by applicable law and to any withholding that would be applicable were
Executive an employee of the Company. Executive agrees that, to the extent that
any individual federal or state taxes of any kind may be due as a result of any
such payment to Executive, Executive shall be solely responsible for such taxes
and will indemnify, defend, and hold harmless the Company and Supply in the
event there is any claim against the Company and/or Supply for such taxes.

     6. GENERAL RELEASE AND COVENANT NOT TO SUE:

        (a) Each of the Executive and Spouse on behalf of herself and himself
and her and his respective heirs, executors, administrators, attorneys,
receivers, successors and assigns ("EXECUTIVE PARTIES") hereby irrevocably and
unconditionally generally releases and forever discharges the Company and its
respective parents, subsidiaries, affiliates, successors and assigns and their
respective past, present and future officers, directors, employees, agents,
representatives, shareholders, insurers, principals, lenders and attorneys, and
the heirs, executors, administrators, receivers, successors and assigns of all
of the foregoing (collectively, the "COMPANY PARTIES"), from any and all claims,
demands, liabilities, suits, damages, losses, expenses, attorneys' fees,
obligations or causes of action, known or unknown of any kind and every nature
whatsoever, and whether or not accrued or matured, which any of the Executive
Parties ever had, now has or may have, for or by reason of any matter, cause or
thing (collectively, the "EXECUTIVE CLAIMS") arising directly or indirectly
pursuant to or out of or relating to any transaction, dealing, relationship,
conduct, act or omission, or any other matters or things occurring or existing
at any time prior to and including the date of this Agreement, including but not
limited to Executive's employment with or service as an officer of the Company
or any other Company Party, the performance of services for the Company or any
other Company Party or the termination of such employment or services and
including, without limitation, any rights and/or Executive Claims (i) arising
under or pursuant to any contract, express or implied, written or oral,
including, without limitation, the Employment Agreement or the Deferred Stock
Unit Award Agreement; (ii) for wrongful discharge, termination of employment,
breach of contract (whether oral or written), tort, fraud, defamation,
disparagement, damage to personal or professional reputation, misrepresentation,
intentional or negligent infliction of emotional distress, negligence or
estoppel; (iii) arising under any federal, state, local or other statutes,
orders, laws, ordinances, regulations or the like that relate to the employment
relationship or that prohibit discrimination based upon age, race, religion,
sex, national origin, disability, sexual orientation or any other unlawful
bases, and (iv) for damages, including, without limitation, punitive or
compensatory damages or for attorneys' fees, expenses, costs,

                                        5


wages or injunctive or equitable relief. Without limiting the generality of the
foregoing, the release contained in this paragraph 6 applies to any rights or
claims that Executive or Spouse has or may have to commence or maintain a charge
or action alleging discrimination under any federal, state or local statute
(whether before a court or an administrative agency), including, but not limited
to, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act
of 1964, the Employee Retirement Income Security Act of 1974, the Americans with
Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards
Act, the Illinois Human Rights Act and the Cook County Human Rights Ordinance,
all as amended from time to time. The release contained in this paragraph 6
shall not apply to any rights or claims that the Executive may have under this
Agreement, including Executive's contractual rights to the Restricted Shares.

          (b) NO LITIGATION. Each of the Executive and Spouse on behalf of
herself and himself, respectively, and the Executive Parties represents and
warrants that neither she, he nor any of the Executive Parties has made,
asserted, filed, prosecuted, commenced, maintained, instituted (or sponsored or
purposely facilitated any person in connection with the foregoing) any
complaint, claim, charge, demand, action or proceeding of any kind, including,
without limitation, any equitable or administrative proceeding, against any
Company Party and each of she and he on behalf of herself and himself and the
Executive Parties agrees not to make, assert, file, prosecute, commence,
maintain, institute (or sponsor or purposely facilitate any person in connection
with the foregoing) any complaint, claim, charge, demand, action or proceeding
of any kind, including, without limitation, any equitable or administrative
proceeding, against any Company Party with respect to any matter at any time
which would be covered by this paragraph 6. Executive represents that no person
or entity has initiated, or to the extent within her control will initiate, any
complaint, claim, charge, demand, action or proceeding of any kind against any
Company Party with respect to any matter at any time which would be covered by
this paragraph 6. Executive and Spouse on behalf of herself and himself,
respectively, and the Executive Parties represent that she, he and the Executive
Parties have not directly or indirectly transferred or assigned any rights or
causes of action against the Company Parties.

          (c) The Company, on its own behalf and on behalf of its subsidiaries,
hereby generally releases and forever discharges the Executive Parties from any
and all claims, demands, liabilities, suits, damages, losses, expenses,
attorneys' fees, obligations or causes of action, known or unknown, of any kind
and every nature whatsoever, and whether or not accrued or matured, which any of
them may have, arising out of or relating to any transaction, dealing,
relationship, conduct, act or omission, or any other matters or things occurring
or existing at any time prior to and including the End Date, including but not
limited to the Executive's employment by the Company or Supply or her services
as an officer or employee of the Company or its direct or indirect subsidiaries;
provided, however, that such general release will not limit or release (i) the
Company's or Supply's rights under this Agreement or (ii) the Company's or
Supply's

                                        6


rights against Executive with respect to any fraudulent or criminal activity.
The Company, on behalf of itself and its subsidiaries, hereby covenants forever
not to assert, file, prosecute, commence or institute (or sponsor or purposely
facilitate any person in connection with the foregoing) any complaint or lawsuit
or any legal, equitable or administrative proceeding of any nature, against any
of the Executive Parties in connection with any matter released in this
paragraph 6, and represents and warrants that no other person or entity has
initiated or will initiate any such proceeding on their behalf.

     7. NON-DISPARAGEMENT: (a) Executive and Spouse shall not, directly or
indirectly, make or cause to be made and shall cause the officers, directors,
employees, agents and representatives of any entity or person controlled by
Executive or Spouse not to make or cause to be made, any disparaging,
denigrating, derogatory or other negative, misleading or false statement orally
or in writing to any person or entity, including members of the investment
community, press, suppliers, customers, competitors, shareholders and advisors
(including, without limitation, accounting firms, executive search firms,
counsel to the Company and like advisors) to the Company or Supply, about the
Company, Supply, its or their respective parents, subsidiaries or affiliates,
its or their respective officers, employees, or members of its or their Boards
of Directors (whether or not any of such officers, employees or directors remain
in any of such rolls), or the business strategy or plans, policies, practices or
operations of the Company or Supply, or of its or their respective parents,
subsidiaries or affiliates. Executive acknowledges and agrees that she will not
affirmatively initiate any written or oral contacts with investors, customers or
suppliers unless expressly requested to do so by an executive officer of the
Company. Furthermore, Executive agrees that if she is contacted by any investor,
customer or supplier of the Company or Supply, she will reply to any such
contact in good faith in accordance with the terms of Section 7(a) and only
acting in the best interest of the Company and its subsidiaries.

          (b) The Company and Supply shall not, directly or indirectly, make or
cause to be made and shall cause the officers, directors, employees, agents and
representatives of any entity or person controlled by the Company or Supply not
to make or cause to be made, any disparaging, denigrating, derogatory or other
negative, misleading or false statement orally or in writing to any person or
entity about the Executive. In addition, the Company and Supply agree that ,
upon request, they shall cause their respective officers, directors and
employees to provide references to potential employers on behalf of the
Executive that are not disparaging, denigrating, derogatory, negative or false.

          (c) Nothing contained in this paragraph 7 shall prevent any party from
responding truthfully to any question posed in a valid legal, regulatory or
administrative proceeding.

     8. STANDSTILL: Executive agrees that, for a period of two years from the
date of this Agreement, neither Executive, Spouse nor any of Executive's or
Spouse's

                                        7


affiliates will (or will cause or assist others to), without the prior written
consent of the Company or its Board of Directors: (i) acquire, offer to acquire,
or agree to acquire, directly or indirectly, by purchase or otherwise, more than
1.0% of the voting securities or direct or indirect rights to acquire more than
1.0% of the voting securities of and issued by, the Company or any direct or
indirect parent or subsidiary hereof, or of any Successor (as defined below), or
any assets of the Company or any parent or direct or indirect subsidiary or
division thereof or of any such Successor, which may be outstanding on the date
hereof or subsequently issued during such two year period; (ii) make or any in
way participate in, directly or indirectly, any "solicitation" of "proxies" (as
such terms are used in the rules of the Securities Exchange Commission) to vote,
or seek to advise or influence any person or entity with respect to the voting
of, any voting securities of the Company (or any parent or direct or indirect
subsidiary thereof); (iii) make any public announcement with respect to, or
submit a proposal for, or offer of (with or without conditions) any
extraordinary transaction involving the Company (or any parent or direct or
indirect subsidiary thereof) or its (or their) securities or assets; (iv) form,
join or in any way participate in a "group" (as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) in connection with any of the
foregoing; (v) otherwise act, alone or in concert with others, to seek control
of or influence the management, Board of Directors or policies of the Company
(or any parent or direct or indirect subsidiary thereof); (vi) disclose any
intention, plan or arrangement inconsistent with the foregoing; (vii) advise,
assist or encourage any other persons in connection with any of the foregoing,
or (viii) contact, discuss with, make comments to or otherwise provide
information to, any analysts, significant stockholders, reporters or other
members of the media respecting the Company (or its parents or direct or
indirect subsidiaries), or its (or their) plans. Executive and Spouse also agree
during such period not to request the Company or any of its representatives,
directly or indirectly, to amend or waive any provision of this paragraph
(including this sentence) or take any action which might require the Company to
make a public announcement regarding the possibility of an extraordinary
transaction involving the Company or its securities or assets. Notwithstanding
the foregoing, Executive and Spouse shall be entitled to receive and own all
securities distributed in respect of, or issued in exchange for, any voting
securities owned by them which were not acquired in violation of this Agreement.
As used herein, "SUCCESSOR" shall mean any entity which in a transaction
succeeds to substantially all of the Company's assets or which acquires
substantially all of its stock so long as, in either case, holders of a majority
of the Company's voting securities immediately prior to such transaction
beneficially own a majority of the voting securities of such entity immediately
hereafter.

     9. CONFIDENTIAL INFORMATION AND PROPRIETARY MATERIAL.

        (a) Executive acknowledges the Company's exclusive ownership of all
information useful in the business of the Company, its parents, subsidiaries or
affiliates (collectively "UNITED") (including dealings with suppliers, customers
and other third parties, whether or not a true "trade secret"), which at the
time or times concerned is

                                        8


not generally known to persons engaged in businesses similar to those conducted
by United, and which has been or is from time to time disclosed to, discovered
by, or otherwise known by Executive as a consequence of her employment by the
Company (including information conceived, discovered or developed by Executive
during her employment with the Company) (collectively, "CONFIDENTIAL
INFORMATION"). Confidential Information includes, but is not limited to the
following especially sensitive types of information:

               (i)   The identity, purchase and payment patterns of, and special
relations with, the customers of United;

               (ii)  The identity, net prices and credit terms of, and special
relations with, the suppliers of United;

               (iii) The inventory selection and management techniques of
United;

               (iv)  The product development and marketing plans of United;

               (v)   The strategic business plans of United; and

               (vi)  The finances of United, except to the extent publicly
disclosed.

          (b) The term "PROPRIETARY MATERIALS" shall mean all business records,
documents, drawings, writings, software, programs, information regarding
employees and other tangible things which were or are created or received by or
for United in furtherance of its business, including, but not limited to, those
which contain Confidential Information. For example, Proprietary Materials
include, but are not limited to, the following especially sensitive types of
materials: applications software, the data bases of Confidential Information
maintained in connection with such software, and printouts generated from such
data bases, market studies and strategic plans; customer, supplier and employee
lists; contracts and correspondence with customers and suppliers; documents
evidencing transactions with customers and suppliers; sales calls reports,
appointment books, calendars, expense statements and the like, reflecting
conversations with any company, customer or supplier; architectural plans; and
purchasing, sales and policy manuals. Proprietary Materials also include, but
are not limited to, any such things which are created by Executive or with
Executive's assistance and all notes, memoranda and the like prepared using the
Proprietary Materials and/or Confidential Information.

          (c) Executive acknowledges that the Proprietary Materials have or will
cost United a great effort and expense, and affords persons to whom Proprietary
Materials are disclosed, including Executive, a competitive advantage over
persons who do not know the information or have the compilation of the
Proprietary Materials.

                                        9


Executive further acknowledges that Confidential Information and Proprietary
Materials include commercially valuable trade secrets and automatically become
the Company's exclusive property when they are conceived, created or received.
Executive shall report to the Company fully and promptly, orally (or, at the
Company's request, in writing) all discoveries, inventions and improvements,
whether or not patentable, and all other ideas, developments, processes,
techniques, designs and other information which may be of benefit to United,
which Executive conceives, makes or develops during her employment (whether or
not during working hours or with use or assistance of Company facilities,
materials or personnel), and which either (i) relate to or arise out of any part
of United's business in which Executive participates, or (ii) incorporate or
make us of Confidential Information or Proprietary Materials (all items referred
to in this paragraph 9(c) being sometimes collectively referred to herein as the
"INTELLECTUAL PROPERTY"). All Intellectual Property shall be deemed Confidential
Information of the Company, and any writing or other tangible things describing,
referring to, or containing Intellectual Property shall be deemed the Company's
Proprietary Materials. At the request of the Company, during or after the term
of employment, Executive (or after Executive's death, Executive's personal
representative) shall, at the expense of the Company, make, execute and deliver
all papers, assignments, conveyances, installments or other documents, and
perform or cause to be performed such other lawful acts, and give such
testimony, as the Company deems necessary or desirable to protect United's
ownership rights and Intellectual Property.

          (d) Executive shall, except as may be required by law, during the term
of this Agreement, and thereafter for the longest time permitted by applicable
law:

               (i)   Comply with all of the Company's instructions (whether oral
or written) for preserving the confidentiality of Confidential Information and
Proprietary Materials.

               (ii)  Use Confidential Information and Proprietary Materials only
in furtherance of United's business, and pursuant to the Company's directions.

               (iii) Exercise appropriate care to advise other employees of the
Company (and, as appropriate, subcontractors) of the sensitive nature of
Confidential Information and Proprietary Materials prior to their disclosure,
and to disclose the same only on a need-to-know basis.

               (iv)  Not copy all or any part of Proprietary Materials, other
than in the course of carrying out Executive's duties and responsibilities under
this Agreement.

               (v)   Not sell, give, loan or otherwise transfer any copy of all
or any part of the Proprietary Materials to any person who is not an employee of
the Company, other than in the course of carrying out Executive's duties and
responsibilities under this Agreement.

                                       10


               (vi)  Not publish, lecture on or otherwise disclose to any person
who is not an employee of the Company, other than in the course of carrying out
Executive's duties and responsibilities under this Agreement, all or any part of
Confidential Information or Proprietary Materials.

               (vii) Not use all or any part of any Confidential Information or
Proprietary Materials for the benefit of any third party without the Company's
written consent.

          Upon the termination of Executive's employment for whatever reason,
Executive (or in the event of death, Executive's personal representative) shall
promptly surrender to the Company the original and all copies of Proprietary
Materials (including all notes, memoranda and the like concerning or derived
therefrom), whether prepared by Executive or others, which are then in
Executive's possession or control. Records of payments made by the Company to or
for the benefit of Executive, Executive's copy of this Agreement and other such
things, lawfully possessed by Executive to the extent relating solely to taxes
payable by Executive, employee benefits due to Executive or the terms of
Executive's employment with the Company, shall not be deemed Proprietary
Materials for purposes of this paragraph 9.

     10. NON-COMPETITION AND NONSOLICITATION.

         (a) During the term of this Agreement, and during the two (2) year
period following the End Date, Executive shall not, in any way, direct or
indirectly, manage, operate, control (or participate in any of the foregoing),
accept employment or a consulting position with, or otherwise advise or assist
or be connected with, or directly or indirectly own or have any other interest
in or right with respect to (other than through ownership or not more than one
percent (1%) of the outstanding shares of a corporation's stock which is listed
on a national securities exchange), any enterprise (other than for the Company
or for the benefit of the Company) which is a wholesaler or retailer of office
products having annual sales in excess of one million dollars ($1,000,000) or
any other business in which United, prior to the End Date, may be actively
involved or have plans to become actively involved. The Company shall not
unreasonably withhold its consent to a request by Executive for a waiver from
the strict application of this paragraph 10(a) with respect to a specific
employment or engagement of, or a specific acquisition of an interest by,
Executive. The Company shall not deemed to have unreasonably withheld its
consent, if the Company determines that such employment, engagement, or
acquisition would have a competitive effect on the Company.

         (b) Notwithstanding paragraph 10(a), following the End Date, Executive
may be engaged by any company whose principal business is the manufacture or
resale of office products.

         (c) During the term of this Agreement, and during the two-year period
following the End Date, Executive shall not at any time, (A) directly or
indirectly, solicit

                                       11


(i) any client or customer of United with whom she had contact while employed by
the Company for the purpose of causing such client or customer to change its
business relationship with United; provided, however, nothing herein is intended
nor should such be construed as precluding Executive from responding to
unsolicited client or customer inquiries at any time, or (ii) except for
receiving and following up on publicly placed employment advertisements, any
employee of United for the purpose of causing such employee to terminate
employment with United or (B) hire or employ, or encourage any person affiliated
(by means of employment, partnership, ownership or otherwise) with the Executive
to hire or employ, any person who is employed by the Company, Supply or any of
their subsidiaries; PROVIDED HOWEVER, that the foregoing limitation will not
apply to employees of the Company, Supply or any of their subsidiaries who
terminated their employment from the Company, Supply or any of their
subsidiaries before July 30, 2001. .

         (d) Executive recognizes that the foregoing limitations are reasonable
and properly required for the adequate protection of the business of the
Company. If any such limitations are deemed unreasonable by a court having
jurisdiction of the matter and parties, Executive hereby agrees and submits to
the reduction of any such limitations to such territory or time as to such court
shall appear reasonable.

     11. COOPERATION: Executive agrees to cooperate with the Company as
reasonably directed by the Company by responding to questions, depositions,
administrative proceedings and court hearings, executing documents, and
cooperating with the Company and its accountants and legal counsel with respect
to business issues, and/or claims and litigation of which she has personal or
corporate knowledge. Executive further agrees, except as required by subpoena or
other applicable legal process (after the Company has been given reasonable
notice and opportunity to seek relief from such requirement) to maintain, in
strict confidence, any information of which she has knowledge regarding current
and/or future claims, administrative proceedings and litigation. Executive
agrees, except as required by subpoena or other applicable legal process (after
the Company has been given reasonable notice and opportunity to seek relief from
such requirement) not to communicate with any party(ies), their legal counsel or
others adverse to the Company, Supply and/or any of their direct or indirect
subsidiaries in any such claims, administrative proceedings or litigation except
through the Company's designated legal counsel. Executive also shall make
herself available at reasonable times and upon reasonable notice to answer
questions or provide other information within her possession and requested by
the Company relating to the Company, its subsidiaries and/or their respective
operations in order to facilitate the smooth transition of Executive's duties to
her successor. The Company shall reimburse Executive for any documented
out-of-pocket expenses, including but not limited to reasonable legal fees,
reasonably incurred by Executive in complying with this paragraph 11. To the
extent Executive's services are required pursuant to this paragraph for any
extended period, the Company will pay to Executive a per diem amount calculated
based

                                       12


on Executive's annual base salary in effect immediately prior to the Agreement
Termination Date.

     12. MAIL: The Company may open and answer, and authorize others to open and
answer, all mail, communications, and other correspondence addressed to
Executive at the Company, Supply or any of their respective direct or indirect
subsidiaries (excluding any such mail, communications or correspondence clearly
marked "personal" or "confidential" or "personal and confidential"), and
Executive shall promptly refer to the Company all inquiries, mail,
communications, and correspondence received by her relating to the Company,
Supply or any of their respective direct or indirect subsidiaries or to
Executive's employment with the Company, Supply or any of their respective
direct or indirect subsidiaries. If any such mail, communications or
correspondence received by the Company includes any threat of any claim against
Executive personally, the Company shall promptly notify Executive thereof.

     13. NOTICES: Any notice required or permitted by this Agreement shall be in
writing, sent by registered or certified mail, return receipt requested,
addressed to the Board of Directors, the Company and Supply at the Company's
then principal office, or to the Executive at the address set forth on the
signature page hereof, as the case may be, or to such other address or addresses
as any party hereto may from time to time specify in writing for the purpose in
a notice given to the other parties in compliance with this paragraph 13.
Notices shall be deemed given when received.

     14. CERTAIN ACKNOWLEDGMENTS: Executive and Spouse acknowledge that before
entering into this Agreement they have had the opportunity to consult with any
attorney or other advisor of their choice, and have done so, and have not relied
in connection therewith on legal counsel for the Company. Executive and Spouse
acknowledge that they have entered into this Agreement of their own free will,
and that no promises or representations have been made to them by any person to
induce them to enter into this Agreement other than the terms expressly set
forth herein.

     15. REPRESENTATIONS BY THE COMPANY AND SUPPLY: Each of the Company and
Supply represents and warrants to Executive that (i) it has the corporate power
and authority to enter into this Agreement and to carry out its respective
obligations hereunder; (ii) the execution, delivery and performance of this
Agreement by it and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of the Company or
Supply, as appropriate; and (iii) this Agreement is a valid and binding
obligation of each of the Company and Supply, enforceable against it in
accordance with its terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, and other laws now or
hereafter in effect relating to the enforcement of creditors' rights generally.

     16. PRIOR AGREEMENTS: This Agreement replaces the whole of all agreements
and understandings of any sort or character between the parties concerning the
subject matter of this Agreement and any other dealings between the parties, and
supersedes all

                                       13


prior negotiations, discussions, or agreements of any sort whatsoever relating
to the subject matter hereof, or any claims that might have ever been made by
one party against any opposing party to this Agreement. There are no
representations, agreements, or inducements except as set forth expressly and
specifically in this Agreement. Further, except as expressly set forth herein,
all prior employment contracts, agreements concerning equity of the Company, and
other agreements, if any, between the parties are superseded by this Agreement.
THERE ARE NO UNWRITTEN, ORAL, OR VERBAL UNDERSTANDINGS, AGREEMENTS, OR
REPRESENTATIONS OF ANY SORT WHATSOEVER, IT BEING STIPULATED THAT THE RIGHTS OF
THE PARTIES SHALL BE GOVERNED EXCLUSIVELY BY THIS AGREEMENT.

     17. MODIFICATION: This Agreement may not be modified or amended except in
writing signed by the parties. No term or condition of this Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A
waiver shall operate only as to the specific term or condition waived and will
not constitute a waiver for the future or act on anything other than that which
is specifically waived.

     18. MATERIAL BREACH. Without limiting any rights on the part of the Company
and/or Supply with respect to the breach by Executive of any other provision of
this Agreement, any breach on the part of Executive and/or Spouse, if
applicable, of any provision of paragraphs 6, 7, 8, 9 or 10 entitles the Company
and/or Supply to pursue any relief to which the Company and/or Supply may be
entitled.

     19. COUNTERPARTS: This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. Any counterpart of this Agreement
that has attached to it separate signature pages which together contain the
signature of all parties hereto shall for all purposes be deemed a fully
executed original. Facsimile signatures shall constitute original signatures.

     20. SUCCESSORS AND ASSIGNS: All the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and to
their respective successors and permitted assigns. Neither this Agreement nor
any rights or obligations hereunder may be assigned by the Executive, other than
by will or the laws of descent or distribution.

     21. SEVERABILITY: All provisions of this Agreement are intended to be
severable. In the event any provision or restriction contained herein is held to
be invalid or unenforceable in any respect, in whole or in part, such finding
shall in no way affect the validity or enforceability of any other provision of
this Agreement. The parties hereto further agree that any such invalid or
unenforceable provision shall be deemed modified so that it shall be enforced to
the greatest extent permissible under law, and to the extent that any court or
arbitrator of competent jurisdiction determines any restriction herein to be
unreasonable in any respect, such court or arbitrator may limit this Agreement
to

                                       14


render it reasonable in the light of the circumstances in which it was entered
into and specifically enforce this Agreement as limited.

     22. INDEMNIFICATION: Executive and Spouse agree, warrant, and represent to
the Company and Supply that Executive and Spouse have full express authority to
settle all claims and demands that are the subject of this Agreement and that
neither Executive nor Spouse has given or made any assignment to anyone,
including Executive's or Spouse's family or legal counsel of any claims against
any person or entity associated with the Company or any Company Parties. To the
extent that any claim related to this Agreement may be brought by persons or
entities claiming by, through, or under Executive, Spouse, their respective
heirs, successors, or assigns, then Executive and Spouse further agree to
indemnify, defend, and hold harmless the Company or any Company Party, its
agents and its successors from any lawsuit, judgment, or settlement arising from
such claims. Executive and Spouse further hereby assign to the Company all
claims and causes of action covered by paragraph 6. Notwithstanding the
foregoing, Executive shall be entitled to the benefits of the Company's
Certificate of Incorporation and any applicable directors' and officers'
insurance policy to the extent that such Certificate of Incorporation or policy
covers acts or omissions on behalf of the Company or any of its subsidiaries in
the Executive's capacity as an officer of the Company during any period covered
hereby while Executive was an officer of the Company and for which Executive
would be entitled to such indemnification or insurance coverage in accordance
with the terms hereof or applicable law. Executive will be entitled to be
covered by the Company's directors' and officers' insurance policies as they are
in effect for actions or omissions through the End Date.

     23. INJUNCTION: Executive and Spouse hereby expressly acknowledge that any
breach or threatened breach by either of them of any of their obligations set
forth in paragraph 7 (Non-Disparagement), or any breach or threatened breach by
Executive of paragraphs 6, 8, 9 or 10, may result in significant and continuing
injury and irreparable harm to the Company and Supply, the monetary value of
which would be impossible to establish. Additionally, the Company hereby
expressly acknowledges that any breach or threatened breach by the Company of
any of its obligations under paragraph 7 (Non-Disparagement) may result in
significant and continuing injury and irreparable harm to the Executive, the
monetary value of which would be impossible to establish. Therefore, Executive
and Spouse agree that the Company and Supply shall be entitled to injunctive
relief in a court of appropriate jurisdiction with respect to such provisions,
and the Company agrees that Executive shall be entitled to injunctive relief in
a court of appropriate jurisdiction with respect to such provision, in each case
as applicable. Attorneys' fees with respect to any action seeking injunctive
relief shall be paid by the party against whom such relief is sought (if such
action is successful) or by the party seeking such relief (if such action is
unsuccessful). Executive and Spouse further agree that this provision is a
material inducement to the Company and Supply entering into this Agreement. The
Company and Supply further agree that this provision is a material inducement to
Executive and Spouse entering into this Agreement.

                                       15


     24. FACILITY OF PAYMENT: All cash payments to be made by the Company to or
on behalf of Executive hereunder shall be an obligation of and made by Supply.

     25. CHOICE OF LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois (without giving effect to
principles of conflict of laws).

     26. NO RIGHT TO ADDITIONAL COMPENSATION: Except as expressly provided in
this Agreement, neither the Company, Supply or any of their respective
predecessors, successors, assigns or affiliates shall have any further
obligation to Executive or Spouse in connection with the Employment Agreement or
Executive's employment by the Company, Supply or any of their respective direct
or indirect subsidiaries, including but not limited to severance, compensation
(including but not limited to deferred compensation, employment contracts, stock
options, bonuses and commissions), health insurance, life insurance, disability
insurance, club dues, vehicle allowances, vacation pay, sick pay and any similar
obligations.

     27. NO ADMISSION: The parties agree that by entering into this Agreement,
no party admits to having engaged in any unlawful, wrongful or unconscionable
conduct, any such conduct being expressly denied.

     28. CONSTRUCTION: The parties agree that this Agreement was negotiated by
the parties and shall not be construed against any party.

     29. PUBLIC ANNOUNCEMENT: The parties hereto agree that Executive shall be
given prior notice of press releases or other public statements regarding the
Executive's termination of employment with the Company and Supply and a
commercially reasonable opportunity to review and comment on such statement;
PROVIDED, HOWEVER, that nothing in this paragraph 29 shall limit the Company's
and Supply's ability to issue any press release or public statement deemed in
good faith by the Board of Directors of the Company necessary to comply with
applicable law or the rules or regulations of any national stock exchange or
interdealer quotation system on which the securities of the Company and/or
Supply are then listed or traded. Each of the Company and Supply and Executive
and Spouse agree not to publicly disclose this Agreement or the terms thereof
without the written consent of the other parties, as applicable; provided,
however, that this provision shall not prohibit or limit disclosure pursuant to
applicable securities laws or regulations, the rules of any securities exchange
on which the company stock is listed or in response to valid legal or regulatory
process.

            [The remainder of this page is intentionally left blank.]

                                       16


          IN WITNESS WHEREOF, the Company and Supply have caused this Agreement
to be executed in their respective corporate names by an officer hereof hereunto
duly authorized, and Executive and Spouse have hereunto set their hands, as of
the day and year first above written.

                                            UNITED STATIONERS INC.


                                            By:
                                               ---------------------------------
                                            Name:
                                            Title:


                                            UNITED STATIONERS SUPPLY CO.


                                            By:
                                               ---------------------------------
                                            Name:
                                            Title:



                                            ------------------------------------
                                            Eileen A. Kamerick
                                            Address:
                                                    ----------------------------

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

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



                                            ------------------------------------
                                            Victor J. Heckler

EX-10.30

EXHIBIT 10.30

                                    AGREEMENT

          AGREEMENT, effective as of September 1, 2001 (the "Agreement") among
Steven R. Schwarz ("Executive"), Vicki Schwarz ("Spouse"), United Stationers
Inc. (the "Company") and United Stationers Supply Co. ("Supply").

          WHEREAS, the Executive, the Company and Supply are parties to an
Employment Agreement, dated as of June 1, 1997, pursuant to which the Company
and Supply have employed the Executive as Executive Vice President (the
"Employment Agreement");

          WHEREAS, the parties desire to terminate the Employment Agreement and
Executive's employment with the Company and Supply; and

          WHEREAS, the parties desire that certain provisions of the Employment
Agreement, as amended hereby, remain in full force and effect, as set forth in
this Agreement;

          NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements, promises set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
Executive, Spouse, the Company and Supply hereby agree as follows:

     1.   TERMINATION: The Executive hereby resigns from his employment with
the Company and Supply as of the date of this Agreement (the "Termination
Date"). Executive agrees that through and including the Termination Date,
Executive has used all accrued vacation time that the Executive was entitled to
take through such date. Executive further agrees to and does hereby resign
effective as of the Termination Date from any other appointments or positions
which he may hold with the Company or any of its direct or indirect
subsidiaries, including without limitation, his position as an officer or
director of the Company and each of its direct or indirect subsidiaries.
Executive agrees to execute all further documents which the Company may request
of him to effectuate such resignations.

     2.   TERMINATION PAYMENT: (a) In connection with such termination of
employment and the execution of this Agreement, the Executive will be paid the
amount of $1,442,196, which is equal to two times the sum of (i) the Executive's
current base salary of $400,000 per year, plus (ii) the Executive's 2000 bonus
of $321,098 payable under the Company's Management Incentive Plan (hereinafter
"Severance Amount"). The Severance Amount will be paid in equal semi-monthly
installments over two years, beginning as of September 1, 2001 and ending on
September 1, 2003. In each case, payments will be made less any applicable
deductions or other amounts to be withheld.




          (b) Until the earlier of September 1, 2003 or the time Executive
receives at least equivalent coverage (determined on a coverage by coverage
basis) from or in connection with a subsequent employer, Executive will be
entitled to health care coverage for himself, his spouse and his eligible
dependents under the group health plan as in effect from time to time and group
term life insurance (currently in the coverage amount of $1,000,000) under the
same terms as though the Executive were still an employee. Notwithstanding the
prior sentence, if Executive is precluded from continuing participation in any
such program or arrangement, or if his Spouse and/or his eligible dependents are
precluded from coverage under any such plan or arrangement due to the fact that
Executive is no longer an employee of the Company and/or Supply, Executive shall
be provided with the after-tax economic equivalent of the benefits to be
provided under such plan or arrangement in which he, his Spouse and/or his
eligible dependents are unable to participate until the time such coverage would
have ended pursuant to the preceding sentence. Such after-tax economic
equivalent payment (determined by the Company as the lowest cost that would be
incurred by Executive in obtaining a comparable benefit on a non-group basis)
will be made quarterly in advance.

          (c) To the extent permitted by the Company's group health plan as in
effect from time to time and any insurers of such plan (other than limitations
imposed unilaterally by such insurers as a result of any bad faith actions aimed
at Executive taken by the Company or Supply), the Company or Supply will provide
health care coverage under the group health plan as in effect from time to time
after the entitlement to group health coverage under subsection (b) expires to
the Executive until he reaches age 65, his Spouse until she reaches age 65 and
each of his eligible dependents until such eligible dependent reaches age 21. To
receive such coverage, the COBRA premium amount (as determined under Section
4980B(f)(4) of the Internal Revenue Code of 1986, as amended through the date
hereof) as determined by the Company must be paid on an annual basis in advance
by the Executive, Spouse and eligible dependents, as applicable.

          (d) Effective as of the date hereof, subject to the foregoing, all
benefits under all other Company plans, programs and/or arrangements will
terminate, except that Executive will be entitled to his vested benefits under
the United Stationers Pension Plan, the United Stationers Inc. 401(k) Savings
Plan and United Stationers Supply Co.'s Deferred Compensation Plan and may have
continuation or conversion rights under the voluntary contributory term life
insurance and accident insurance. Executive agrees that the review of such
insurance coverage, and any action to continue, or exercise conversion rights in
respect of, such coverage is his sole responsibility and that neither the
Company nor any direct or indirect subsidiary thereof shall have any liability
or responsibility to Executive in connection therewith.

          (e) The Company also agrees to reimburse Executive within thirty days
of the Termination Date, amounts owed for business related expenses that were
incurred by the Executive in accordance with the reimbursement policy of the
Company.

                                       2



     3.   OPTIONS: All vested options held by the Executive for the purchase
of the Company's common stock will remain vested and exercisable in accordance
with their terms until expiration under the respective stock option agreements
under which they were granted (including the termination of employment
provisions thereof), at which time they will lapse and be of no further force or
effect, except to the extent previously exercised. The Executive's date of
termination of employment for purposes of determining vesting and expiration
under such stock option grants shall be the date of this Agreement. The
Executive acknowledges and agrees that options to purchase 503,600 shares of
Company common stock have not vested and will lapse and be of no further force
or effect as of the date hereof and, other than vested stock options held by the
Executive on the date of this Agreement (and only to the extent of the
respective terms thereof), Executive shall have no further right with respect to
any options or other equity-based compensation award of the Company.

          Executive acknowledges and agrees that he will remain an "affiliate"
of the Company for purposes of Rule 144 promulgated under the Securities Act of
1933, as amended, for a period of three months following termination of his
employment and that, prior to any sale of any Company common stock, he must
otherwise comply with the requirements of Rule 144. In addition Executive
acknowledges that he will not buy or sell any securities of the Company during
any period in which he is privy to material information not generally disclosed
to the public.

     4.   RETURN OF ITEMS AND DOCUMENTS: Executive agrees that he will return
to the Company, not later than 24 hours following the execution of this
Agreement, all Company property, including but without limitation, (I) the
automobile leased for his use by the Company; (2) the computer, cellular
telephone, pager, dicta-phone, and all other business equipment provided for his
use by the Company; and (3) all originals and all copies of documents, notes,
computer discs, tapes or other tangible information of any sort which he has in
his possession or under his custody or control that are the property of the
Company or any of its direct or indirect subsidiaries or that relate in any
manner to his duties at the Company or Supply, which are not otherwise available
to the public, and will not retain any copies of such matter. The materials
required to be returned pursuant to this paragraph 4(3) shall not include
personal correspondence that does not relate to the Company, its direct or
indirect subsidiaries or any of its businesses.

     5.   WITHHOLDING: The payments and benefits set forth in paragraph 2 and
3 shall be subject to applicable federal, state and local withholding taxes and
to any withholding that would be applicable were Executive an employee of the
Company. Executive agrees that, to the extent that any individual Federal or
State taxes of any kind may be due as a result of any such payment to Executive,
Executive shall be solely responsible for such taxes and wilt indemnify, defend,
and hold harmless the Company and Supply in the event there is any claim against
the Company and/or Supply for such taxes.

                                       3



     6.   GENERAL RELEASE AND COVENANT NOT TO SUE:

          (a)  The Executive and Spouse, on behalf of themselves, their
attorneys, heirs, executors, administrators and assigns (together the "Executive
Parties"), hereby generally release and forever discharge the Company, Supply
and their respective predecessors, successors, assigns, parents, subsidiaries
and affiliates and their respective past and present shareholders, directors,
officers, employees, agents, representatives, principals, insurers and attorneys
(together the "Company Parties") from any and all claims, demands, liabilities,
suits, damages, losses, expenses, attorneys' fees, obligations or causes of
action, known or unknown of any kind and every nature whatsoever, and whether or
not accrued or matured, which any of them may have, arising out of or relating
to (A) any transaction, dealing, relationship, conduct, act or omission, or any
other matters or things occurring or existing at any time prior to and including
the Termination Date, including but not limited to the Executive's employment by
the Company or Supply or his services as an officer or employee of the Company
or its direct or indirect subsidiaries, or otherwise relating to the termination
of such employment or services, and any claim against the Company or Supply
based on, relating to or arising under wrongful discharge, breach of contract
(whether oral or written), tort, fraud, defamation, negligence, promissory
estoppel, Title VII of the Civil Rights Act of 1964, as amended, any other civil
or human rights law, Americans With Disabilities Act, Employee Retirement Income
Security Act of 1974, as amended, or any other Federal, State or local law
relating to employment or discrimination in employment or otherwise, PROVIDED,
HOWEVER, that such General Release will not limit or release (i) Executive s
rights under this Agreement (including hut not limited to the provisions of the
Employment Agreement incorporated herein), (ii) Executive's rights to
indemnification from the Company in respect of his services as an officer or
director of the Company or any of its direct or indirect subsidiaries as
provided by law or the Certificate of Incorporation or Bylaws (or like
constitutive documents) of the Company or any direct or indirect subsidiary
thereof, or (iii) except as set forth herein, Executive's contractual rights
under any Stock Option Agreement that is in effect with respect to Stock Options
that have been granted to Executive prior to the Termination Date. The Executive
and Spouse, on behalf of themselves and the Executive Parties, hereby covenant
forever not to assert, file, prosecute, commence or institute (or sponsor or
purposely facilitate any person in connection with the foregoing) any complaint
or lawsuit or any legal, equitable or administrative proceeding of any nature,
against any of the Company Parties in connection with any matter released in
this paragraph 6, and represent and warrant that no other person or entity has
initiated or, to the extent within his or her control, will initiate any such
proceeding on his, her or their behalf.

          (b)  The Company, on its own behalf and on behalf of the
Company Parties, hereby generally release and forever discharge the Executive
Parties from any and all claims, demands, liabilities, suits, damages, losses,
expenses, attorneys' fees, obligations or causes of action, known or unknown of
any kind and every nature whatsoever, and whether or not accrued or matured,
which any of them may have, arising

                                       4



out of or relating to any transaction,dealing, relationship, conduct, act or
omission, or any other matters or things occurring or existing at any
time prior to and including the Termination Date, including but not limited to
the Executive's employment by the Company or Supply or his services as an
officer or employee of the Company or its direct or indirect subsidiaries, or
otherwise relating to the termination of such employment or services; PROVIDED,
HOWEVER, that such General Release will not limit or release (i) the Company's
or Supply's rights under this Agreement including those provisions of the
Employment Agreement incorporated herein by reference, as amended hereby, (ii)
the Company's or Supply's rights against Executive with respect to any
fraudulent or criminal activity or (iii) the Company's rights under any Stock
Option Agreement that is in effect with respect to stock options that have been
granted to Executive prior to the Termination Date. The Company, on behalf of
itself and the Company Parties, hereby covenants forever not to assert, file,
prosecute, commence or institute (or sponsor or purposely facilitate any person
in connection with the foregoing) any complaint or lawsuit or any legal,
equitable or administrative proceeding of any nature, against any of the
Executive Parties in connection with any matter released in this paragraph 6,
and represents and warrants that no other person or entity has initiated or will
initiate any such proceeding on their behalf.

     7.   NON-DISPARAGEMENT: (a) Executive and Spouse shall not, directly
or indirectly, make or cause to be made and shall cause the officers, directors,
employees, agents and representatives of any entity or person controlled by
Executive or Spouse not to make or cause to be made, any disparaging,
denigrating, derogatory or other negative, misleading or false statement orally
or in writing to any person or entity, including members of the investment
community, press, and customers, competitors and advisors to the Company or
Supply, about the Company, Supply, its or their respective parents, subsidiaries
or affiliates, its or their respective officers or members of its or their
Boards of Directors, or the business strategy or plans, policies, practices or
operations of the Company or Supply, or of its or their respective parents,
subsidiaries or affiliates. Executive acknowledges and agrees that any written
or oral contacts with customers or suppliers of the Company on behalf of the
Company shall be made by Executive in good faith in accordance with the terms of
this Section 7(a) and in the best interest of the Company and its subsidiaries.

          (b) The Company and Supply shall not, directly or indirectly, make or
cause to be made and shall cause the officers, directors, employees, agents and
representatives of any entity or person controlled by the Company or Supply not
to make or cause to be made, any disparaging, denigrating, derogatory or other
negative, misleading or false statement orally or in writing to any person or
entity about the Executive. In addition, the Company and Supply agree that, upon
request, they shall cause their respective officers, directors and employees to
provide references to potential employers on behalf of the Executive that are
not disparaging, denigrating, derogatory, negative or false, and shall negotiate
in good faith with Executive a mutually agreeable response to those requests.

                                       5



     8.   STANDSTILL: Executive agrees that, for a period of two years from
the date of this Agreement, neither Executive, Spouse nor any of Executive's or
Spouse's affiliates will (or will cause or assist others to), without the prior
written consent of the Company or its Board of Directors: (i) acquire, offer to
acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
more than 1.0% of the voting securities or direct or indirect rights to acquire
more than 1.0% of the voting securities of and issued by, the Company or direct
or indirect any parent or subsidiary thereof, or of any Successor (as defined
below), or any assets of the Company or any parent or direct or indirect
subsidiary or division thereof or of any such Successor, which may be
outstanding on the date hereof or subsequently issued during such two year
period; (ii) make or any in way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in the rules of the
Securities Exchange Commission) to vote or seek to advise or influence any
person or entity with respect to the voting of, any voting securities of the
Company (or any parent or direct or indirect subsidiary thereof); (iii) make any
public announcement with respect to, or submit a proposal for, or offer of (with
or without conditions) any extraordinary transaction involving the Company (or
any parent or direct or indirect subsidiary thereof) or its (or their)
securities or assets; (iv) form, join or in any way participate in a "group" (as
defined in Section l3(d)(3) of the Securities Exchange Act of 1934, as amended)
in connection with any of the foregoing; (v) otherwise act, alone or in concert
with others, to seek control or influence the management, Board of Directors or
policies of the Company (or any parent or direct or indirect subsidiary
thereof); (vi) disclose any intention, plan or arrangement inconsistent with the
foregoing; (vii) advise, assist or encourage any other persons in connection
with any of the foregoing, or (viii) contact, discuss with, make comments to or
otherwise provide information to, any analysts, major stockholders, reporters or
other members of the media respecting the Company (or its parents or direct or
indirect subsidiaries), or its (or their) plans. Executive and Spouse also agree
during such period not to request the Company or any of its representatives,
directly or indirectly, to amend or waive any provision of this paragraph
(including this sentence) or take any action which might require the Company to
make a public announcement regarding the possibility of an extraordinary
transaction involving the Company or its securities or assets. Notwithstanding
the foregoing, Executive and Spouse shall be entitled to receive and own all
securities distributed in respect of, or issued in exchange for, any voting
securities owned by them which were not acquired in violation of this Agreement.
As used herein, "Successor" shall mean any entity which in a transaction
succeeds to substantially all of the Company's assets or which acquires
substantially all of its stock so long as, in either case, holders of a majority
of the Company's voting securities immediately prior to such transaction
beneficially own a majority of the voting securities of such entity immediately
thereafter.

     9.   COOPERATION: Executive agrees to cooperate with the Company as
reasonably directed by the Company by responding to questions, depositions,
administrative proceedings and court hearings, executing documents, and
cooperating with the Company and its accountants and legal counsel with respect
to business issues,

                                       6



and/or claims and litigation of which he has personal or corporate knowledge.
Executive further agrees, except as required by subpoena or other applicable
legal process (after the Company has been given reasonable notice and
opportunity to seek relief from such requirement) to maintain, in
strictconfidence, any information of which he has knowledge regarding current
and/or future claims, administrative proceedings and litigation. Executive
agrees,except as required by subpoena or other applicable legal process (after
the Company has been given reasonable notice and opportunity to seek relief from
such requirement) not to communicate with any party(ies), their legal counsel or
others adverse to the Company, Supply and/or any of their direct or indirect
subsidiaries in any such claims, administrative proceedings or litigation except
through the Company's designated legal counsel. Executive also shall make
himself available at reasonable times and upon reasonable notice to answer
questions or provide other information within his possession and requested by
the Company relating to the Company, its subsidiaries and/or their respective
operations in order to facilitate the smooth transition of Executive's duties to
his successor. The Company shall reimburse Executive for any documented
out-of-pocket expenses, including but not limited to reasonable legal fees,
reasonably incurred by Executive in complying with this paragraph 9. To the
extent Executive's services are required pursuant to this paragraph for any
extended period, the Company will pay to Executive a per diem amount calculated
based on Executive's annual base salary in effect immediately prior to the
Termination Date.

     10.  MAIL: The Company may open and answer, and authorize others to
open and answer, all mail, communications, and other correspondence addressed to
Executive at the Company, Supply or any of their respective direct or indirect
subsidiaries (excluding any such mail, communications or correspondence clearly
marked "personal and confidential"), and Executive shall promptly refer to the
Company all inquiries, mail, communications, and correspondence received by him
relating to the Company, Supply or any of their respective direct or indirect
subsidiaries or to Executive's employment with the Company, Supply or any of
their respective direct or indirect subsidiaries. If any such mail,
communications or correspondence received by the Company includes any threat of
any claim against Executive personally, the Company shall promptly notify
Executive thereof.

     11.  NOTICES: Any notice required or permitted by this Agreement
shall be in writing, sent by registered or certified mail, return receipt
requested, addressed to the Board of Directors, the Company and Supply at the
Company's then principal office,or to the Executive at the address set forth on
 the signature page hereof, as the case may be, or to such other address or
addresses as any party hereto may from time to time specify in writing for the
purpose in a notice given to the other parties in compliance with this paragraph
11.  Notices shall be deemed given when received.

     12.  CERTAIN ACKNOWLEDGMENTS: Executive and Spouse acknowledge that
before entering into this Agreement they have had the opportunity to consult
with any attorney or other advisor of their choice, and have done so, and have
not relied in

                                       7



connection herewith on legal counsel for the Company. Executive and Spouse
acknowledge that they have entered into this Agreement of their own free will,
and that no promises or representations have been made to them by any person to
induce them to enter into this Agreement other than the terms expressly set
forth herein.

     13.  REPRESENTATIONS BY THE COMPANY AND SUPPLY: Each of the Company and
Supply represents and warrants to Executive that (i) it has the corporate power
and authority to enter into this Agreement and to carry out its respective
obligations hereunder; (ii) the execution, delivery and performance of this
Agreement by it and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of the Company or
Supply, as appropriate; and (iii) this Agreement is a valid and binding
obligation of each of the Company and Supply, enforceable against it in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium, and other laws now or
hereafter in effect relating to the enforcement of creditors' rights generally.

     14.  PRIOR AGREEMENTS: WITH THE EXCEPTION OF CERTAIN PROVISIONS OF THE
EMPLOYMENT AGREEMENT TO WHICH PARAGRAPH 15 OF THIS AGREEMENT SPECIFICALLY REFERS
AND THE PROVISIONS OF ANY STOCK OPTION AGREEMENT THAT IS IN EFFECT WITH RESPECT
TO STOCK OPTIONS THAT HAVE BEEN GRANTED TO EXECUTIVE PRIOR TO THE TERMINATION
DATE, this Agreement replaces the whole of all agreements and understandings of
any sort or character between the parties concerning the subject matter of this
Agreement and any other dealings between the parties, and supersedes all prior
negotiations, discussions, or agreements of any sort whatsoever relating to the
subject matter hereof or any claims that might have ever been made by one party
against any opposing party to this Agreement. There are no representations,
agreements, or inducements except as set forth expressly and specifically in
this Agreement. Further, except as expressly set forth herein, all prior
employment contracts, if any, between the parties are superseded by this
Agreement. THERE ARE NO UNWRITTEN, ORAL, OR VERBAL UNDERSTANDINGS, AGREEMENTS,
OR REPRESENTATIONS OF ANY SORT WHATSOEVER, IT BEING STIPULATED THAT THE RIGHTS
OF THE PARTIES SHALL BE GOVERNED EXCLUSIVELY BY THIS AGREEMENT.

     15.  SURVIVAL OF OTHER EMPLOYMENT AGREEMENT PROVISIONS: The provisions
of Employment Agreement Sections 12, 13, 14, and 21, which are attached hereto
and incorporated herein by reference, shall survive the Termination Date and
shall continue in full foree and effect; PROVIDED, HOWEVER, that Section 13(c)
shall be amended by adding the letter "(A)" immediately following the word
"indirectly," and before the word "solicit" and adding the following to the end
of such sentence:

     1.        "or (B) hire or employ, or encourage any person affiliated (by
     means of employment, partnership, ownership or otherwise) with the
     Executive to

                                       8



     hire or employ, any person who is employed by the Company, Supply or any of
     their subsidiaries; PROVIDED, HOWEVER, that the foregoing limitation will
     not apply to employees of the Company, Supply or any of their subsidiaries
     who terminated their employment from the Company, Supply or any of their
     subsidiaries before July 8, 2001."

For purposes of the preceding sentence, the terms "hire or employ" shall include
by any means, direct or indirect, including, without limitation, as a
consultant, advisor or agent. Executive affirms and acknowledges his obligations
of confidentiality and his obligations not to compete with the Company or its
direct or indirect subsidiaries or to solicit any employee of Company or its
direct or indirect subsidiaries or their customers as set forth in Sections 12
and 13 (as amended hereby) respectively of the Employment Agreement. Except as
specifically described herein, all of Executive's rights and obligations under
the Employment Agreement are extinguished upon the effectiveness of this
Agreement.

     16.  MODIFICATION: This Agreement may not be modified or amended except
in writing signed by the parties. No term or condition of this Agreement will be
deemed to have been waived except in writing by the party charged with waiver. A
waiver shall operate only as to the specific term or condition waived and will
not constitute a waiver for the future or act on anything other than that which
is specifically waived.

     17.  MATERIAL BREACH. Without limiting any rights on the part of the
Company and/or Supply with respect to the breach by Executive of any other
provision of this Agreement, any breach on the part of Executive and/or Spouse,
if applicable, of any provision of paragraphs 7, 8 , 9 or 10, or any breach by
Executive of any provision of Section 12 or 13 of the Employment Agreement
(which provisions survive the execution and delivery of this Agreement and are
incorporated into this Agreement pursuant to paragraph 15, to the extent amended
hereby), is stipulated to be a material breach of this Agreement and, upon the
good faith determination of such a breach hereunder by the Board of Directors of
the Company, entitles the Company and/or Supply upon written notice ("Notice of
Breach") to the Executive delineating the details of such alleged breach and
after giving the Executive 30 days thereafter in which to cure the same and,
Executive has failed to do so to the reasonable satisfaction of the Board of
Directors of the Company, to immediately stop any payments or benefits due to
Executive under this Agreement and/or to pursue any relief to which the Company
and/or Supply may be entitled; PROVIDED, HOWEVER, if a court of competent
jurisdiction determines by its final and appealable order that Executive did not
materially breach the referenced provisions of this Agreement or the Employment
Agreement as delineated by the Company or Supply in the Notice of Breach, the
Company shall upon demand of the Executive, immediately pay to Executive two
times the amount of all sums so withheld calculated from the date such
withholding began until paid, together with an amount equal to Executive's fees
for attorneys incurred by Executive in connection with any such proceeding.

                                       9



     18.  COUNTERPARTS: This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. Any counterpart of this Agreement
that has attached to it separate signature pages which together contain the
signature of all parties hereto shall for all purposes be deemed a fully
executed original. Facsimile signatures shall constitute original signatures.

     19.  SUCCESSORS AND ASSIGNS: All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective successors and permitted assigns. Neither this Agreement
nor any rights or obligations hereunder may be assigned by the Executive, other
than by will or the laws of descent or distribution.

     20.  SEVERABILITY: All provisions of this Agreement are intended to be
severable. In the event any provision or restriction contained herein is held to
be invalid or unenforceable in any respect, in whole or in part, such finding
shall in no way affect the validity or enforceability of any other provision of
this Agreement. The parties hereto further agree that any such invalid or
unenforceable provision shall be deemed modified so that it shall be enforced to
the greatest extent permissible under law, and to the extent that any court or
arbitrator of competent jurisdiction determines any restriction herein to be
unreasonable in any respect, such court or arbitrator may limit this Agreement
to render it reasonable in the light of the circumstances in which it was
entered into and specifically enforce this Agreement as limited.

     21.  INDEMNIFICATION: Executive and Spouse agree, warrant, and represent to
the Company and Supply that Executive and Spouse have full express authority to
settle all claims and demands that are the subject of paragraph 6 of this
Agreement and that neither Executive nor Spouse has given or made any assignment
to anyone, including Executive's or Spouse's family or legal counsel of any
claims against any person or entity associated with the Company or any Company
Parties. To the extent that any claim related to this Agreement may be brought
by persons or entities claiming by, through, or under Executive, Spouse, their
respective heirs, successors, or assigns, then Executive further agrees to
indemnify, defend, and hold harmless the Company or any Company Party, its
agents and its successors from any lawsuit, judgment, or settlement arising from
such claims. Executive and Spouse further hereby assign to the Company all
claims and causes of action covered by paragraph 6. Notwithstanding the
foregoing, Executive shall be entitled to the benefits of the Company's
Certificate of Incorporation and any applicable directors' and officers'
insurance policy to the extent that such Certificate of Incorporation or policy
covers acts or omissions on behalf of the Company or any of its subsidiaries in
the Executive's capacity as an officer of the Company during any period covered
thereby while Executive was an officer of the Company and for which Executive
would be entitled to such indemnification or insurance coverage in accordance
with the terms thereof or applicable law.

                                       10



     22.  INJUNCTION: Executive and Spouse hereby expressly acknowledge that
any breach or threatened breach by either of them of any of their obligations
set forth in paragraph 7 (Non-Disparagement), or any breach or threatened breach
by Executive of Sections 12 or 13 of the Employment Agreement (the provisions of
which shall survive the execution and delivery of this Agreement and which are
incorporated herein, to the extent amended hereby), may result in significant
and continuing injury and irreparable harm to the Company and Supply, the
monetary value of which would be impossible to establish. Additionally, the
Company hereby expressly acknowledges that any breach or threatened breach by
the Company of any of its obligations under paragraph 7 (Non-Disparagement), may
result in significant and continuing injury and irreparable harm to the
Executive, the monetary value of which would be impossible to establish.
Therefore, Executive and Spouse agree that the Company and Supply shall be
entitled to injunctive relief in a court of appropriate jurisdiction with
respect to such provisions, and the Company agrees that Executive shall be
entitled to injunctive relief in a court of appropriate jurisdiction with
respect to such provision, in each case as applicable. Attorneys' fees with
respect to any action seeking injunctive relief shall be paid by the party
against whom such relief is sought (if such action is successful) or by the
party seeking such relief (if such action is unsuccessful). Executive and Spouse
further agree that this provision is a material inducement to the Company and
Supply entering into this Agreement.

     23.  FACILITY OF PAYMENT: All cash payments to be made by the Company to or
on behalf of Executive hereunder shall bean obligation of and made by Supply.

     24.  CHOICE OF LAW: This Agreement, including but not limited to
the provisions of the Employment Agreement that are incorporated herein, shall
be governed by and construed in accordance with the laws of the State of
Illinois (without giving effect to principles of conflict of laws).

     25.  NO RIGHT TO ADDITIONAL COMPENSATION: Except as expressly provided
in this Agreement, neither the Company, Supply or any of their respective
predecessors, successors, assigns or affiliates shall have any further
obligation to Executive or Spouse in connection with the Employment Agreement or
Executive's employment by the Company, Supply or any of their respective direct
or indirect subsidiaries, including but not limited to severance, compensation
(including but not limited to deferred compensation, employment contracts, stock
options, bonuses and commissions), health insurance, life insurance, disability
insurance, club dues, vehicle allowances, vacation pay, sick pay and any similar
obligations.

     26.  NO ADMISSION: The parties agree that by entering into this Agreement,
no party admits to having engaged in any unlawful, wrongful or unconscionable
conduct, any such conduct being expressly denied.

     27.  CONSTRUCTION: The parties agree that this Agreement was negotiated by
the parties and shall not be construed against any party.

                                       11



     28.  PUBLIC ANNOUNCEMENT: The parties hereto agree that Executive shall
be given prior notice of press releases or other public statements regarding the
Executive's termination of employment with the Company and Supply and a
commercially reasonable opportunity to review and comment on such statement;
PROVIDED, HOWEVER, that nothing in this Section 28 shall limit the Company's and
Supply's ability to issue any press release or public statement deemed in good
faith by the Board of Directors of the Company necessary to comply with
applicable law or the rules or regulations of any national stock exchange or
interdealer quotation system on which the securities of the Company and/or
Supply are then listed or traded.

            [The remainder of this page is intentionally left blank.]

                                       12



          IN WITNESS WHEREOF, the Company and Supply have caused this Agreement
to be executed in their respective corporate names by an officer thereof
thereunto duly authorized, and Executive and Spouse have hereunto set their
hands, as of the day and year first above written.

                                              UNITED STATIONERS INC.

                                              By: /s/ Susan Maloney Meyer
                                                 ------------------------------
                                              Name:
                                              Title:  SUSAN MALONEY MEYER
                                                      SENIOR VICE PRESIDENT
                                                        GENERAL COUNSEL,
                                                          AND SECRETARY
                                                   UNITED STATIONERS SUPPLY CO.

                                              By: /s/ Roy T. Helton
                                                 -------------------------------
                                              Name: Roy T. Helton
                                              Title: EVP/HR

                                                 /s/ Steven R. Schwarz
                                                 -------------------------------
                                                 Steven R. Schwarz

                                                 -------------------------------
                                                 Vicki Schwarz



          IN WITNESS WHEREOF, the Company and Supply have caused this Agreement
to be executed in their respective corporate names by an officer thereof
thereunto duly authorized, and Executive and Spouse have hereunto set their
hands, as of the day and year first above written.

                                              UNITED STATIONERS INC.

                                              By:
                                                 ------------------------------
                                              Name:
                                              Title:

                                                   UNITED STATIONERS SUPPLY CO.

                                              By:
                                                 -------------------------------
                                              Name:
                                              Title:

                                              ----------------------------------
                                              [EXECUTIVE]

                                               /s/ Vicki L. Schwarz
                                               -------------------------------
                                               [SPOUSE]

EX-10.31

Exhibit 10.31

                              EMPLOYMENT AGREEMENT

     This Employment Agreement ("Agreement"), made as of June 19, 2001 by and
between United Stationers Supply Co., an Illinois corporation (the "Company"),
and R. Thomas Helton ("Helton") is an amendment and restatement of the agreement
made as of February 1, 1998 by and between the Company and Helton.

     In consideration of the mutual promises and agreements contained in this
Agreement, the Company hereby continues to employ Helton, and Helton accepts
continued employment with the Company, on the terms and conditions contained in
this Agreement.

     1. TERM OF EMPLOYMENT. The term of employment shall continue as of the date
of this Agreement and until January 31, 2002, and thereafter shall be extended
automatically for additional one-year periods unless written notice is given by
either party to the other at least 60 days prior to the end of such term, or any
extension thereof.

     2. POSITION AND DUTIES. During the term of employment, Helton shall serve
as Executive Vice President, Human Resources and Organization Development of the
Company, and, in accordance with the authority and direction of the board of
directors of the Company (the "Board") shall render such operational,
administrative and other services to the Company as may be required of such
position or as the Board may from time to time direct. Helton shall be available
at all reasonable times for consultation with the Board on matters relating to
the Company's or its affiliates' business.

     Helton shall devote his best efforts and his full and exclusive business
time and attention (except for reasonable periods of vacation, illness or other
incapacity) to the business and affairs of the Company and its affiliates.

     3. COMPENSATION. During the term of employment, Helton shall be compensated
as follows:

        3.1. BASE SALARY. Helton shall receive a base salary of no less than Two
Hundred Eighty-five Thousand Dollars ($285,000.00) per year, payable in
accordance with the Company's normal payment schedule for management employees.
The base salary shall be reviewed by the Board annually and may, in the Board's
sole discretion, be increased when deemed appropriate.

        3.2. BONUS. Helton shall be eligible to participate in any bonus plans
approved by the Board and made generally available to senior management
employees of the Company, and shall be entitled to such bonus amounts as shall
be determined in accordance with such plans.. This paragraph shall not be
construed to require the Company to establish or maintain any bonus plan.

        3.3. BENEFITS. Helton shall be included, to the extent eligible, in all
plans, programs and policies providing general benefits for the Company's
employees or its senior management employees (as approved by the Board and in
effect from time to time). The benefit plans, programs and policies presently in
effect are listed on Exhibit A attached to this

                                        1


Agreement. This paragraph shall not be construed to require the Company to
establish or maintain any policy, plan or program.

     4. CONFIDENTIAL INFORMATION AND PROPRIETARY MATERIALS.

        4.1. CONFIDENTIAL INFORMATION. Helton acknowledges the Company's
exclusive ownership of all information useful in the business of the Company,
its parents, subsidiaries or affiliates (collectively "United") (including its
dealings with suppliers, customers and other third parties, whether or not a
true "trade secret"), which at the time or times concerned is not generally
known to persons engaged in businesses similar to those conducted by United, and
which has been or is from time to time disclosed to, discovered by, or otherwise
known by Helton as a consequence of his employment by the Company (including
information conceived, discovered or developed by Helton during his employment
with the Company) (collectively, "Confidential Information"). Confidential
Information includes, but is not limited to, the following especially sensitive
types of information:

               4.1.1. The identity, purchase and payment patterns of, and
     special relations with, the customers of United;

               4.1.2. The identity, net prices and credit terms of, and special
     relations with, the suppliers of United;

               4.1.3. The inventory selection and management techniques of
     United;

               4.1.4. The product development and marketing plans of United;

               4.1.5. The strategic business plans of United; and

               4.1.6. The finances of United, except to the extent publicly

     disclosed.

        4.2. PROPRIETARY MATERIALS. The term "Proprietary Materials" shall mean
all business records, documents, drawings, writings, software, programs and
other tangible things which were or are created or received by or for United in
furtherance of its business, including, but not limited to, those which contain
Confidential Information. For example, Proprietary Materials include, but are
not limited to, the following especially sensitive types of materials:
applications software, the data bases of Confidential Information maintained in
connection with such software, and printouts generated from such data bases;
market studies and strategic plans; customer, supplier and employee lists;
contracts and correspondence with customers and suppliers; documents evidencing
transactions with customers and suppliers; sales calls reports, appointment
books, calendars, expense statements and the like, reflecting conversations with
any company, customer or supplier; architectural plans; and purchasing, sales
and policy manuals. Proprietary Materials also include, but are not limited to,
any such things which are created by Helton or with Helton's assistance and all
notes, memoranda and the like prepared using the Proprietary Materials and/or
Confidential Information.

        4.3. ACKNOWLEDGMENTS AND UNDERTAKINGS. While some of the information
contained in Proprietary Materials may have been known to Helton prior to
employment with the Company, or may now or in the future be in the public
domain, Helton acknowledges that the

                                        2


compilation of that information contained in the Proprietary Materials has or
will cost the Company a great effort and expense, and affords persons to whom
Proprietary Materials are disclosed, including Helton, a competitive advantage
over persons who do not know the information or have the compilation of the
Proprietary Materials. Helton further acknowledges that Confidential Information
and Proprietary Materials include commercially valuable trade secrets and
automatically become the Company's exclusive property when they are conceived,
created or received. Helton shall report to the Company fully and promptly,
orally (or, at the Company's request, in writing) all discoveries, inventions
and improvements, whether or not patentable, and all other ideas, developments,
processes, techniques, designs and other information which may be of benefit to
United, which Helton conceives, makes or develops during his employment (whether
or not during working hours or with use or assistance of Company facilities,
materials or personnel, and which either (i) relate to or arise out of any part
of United's business in which Helton participates, or (ii) incorporate or make
use of Confidential Information or Proprietary Materials) (all items referred to
in this Section 4.3 being sometimes collectively referred to herein as the
"Intellectual Property"). All Intellectual Property shall be deemed Confidential
Information of the Company, and any writing or other tangible things describing,
referring to, or containing Intellectual Property shall be deemed the Company's
Proprietary Materials. At the request of the Company, during or after the term
of employment, Helton (or after Helton's death, Helton's personal
representative) shall, at the expense of the Company, make, execute and deliver
all papers, assignments, conveyances, installments or other documents, and
perform or cause to be performed such other lawful acts, and give such
testimony, as the Company deems necessary or desirable to protect United's
ownership rights and Intellectual Property.

      4.4. CONFIDENTIALITY DUTIES. Helton shall, except as may be required
by law, during the term of employment, and thereafter for the longest time
permitted by applicable law:

               4.4.1. Comply with all of the Company's instructions (whether
     oral or written) for preserving the confidentiality of Confidential
     Information and Proprietary Materials.

               4.4.2. Use Confidential Information and Proprietary Materials
     only in furtherance of United's business, and pursuant to the Company's
     directions.

               4.4.3. Exercise appropriate care to advise other employees of the
     Company (and, as appropriate, subcontractors) of the sensitive nature of
     Confidential Information and Proprietary Materials prior to their
     disclosure, and to disclose the same only on a need-to-know basis.

               4.4.4. Not copy all or any part of Proprietary Materials, other
     than in the course of carrying out Helton's duties and responsibilities
     under this Agreement.

               4.4.5. Not sell, give, loan or otherwise transfer any copy of all
     or any part of Proprietary Materials to any person who is not an employee
     of the Company, other than in the course of carrying out Helton's duties
     and responsibilities under this Agreement.

                                        3


               4.4.6. Not publish, lecture on or otherwise disclose to any
     person who is not an employee of the Company, other than in the course of
     carrying out Helton's duties and responsibilities under this Agreement, all
     or any part of Confidential Information or Proprietary Materials.

               4.4.7. Not use all or any part of any Confidential Information or
     Proprietary Materials for the benefit of any third party without the
     Company's written consent.

     Upon the termination of Helton's employment for whatever reason, Helton (or
in the event of death, Helton's personal representative) shall promptly
surrender to the Company the original and all copies of Proprietary Materials
(including all notes, memoranda and the like concerning or derived therefrom,
whether prepared by Helton or others, which are then in Helton's possession or
control. Records of payments made by the Company to or for the benefit of
Helton, Helton's copy of this Agreement and other such things, lawfully
possessed by Helton to the extent relating solely to taxes payable by Helton,
employee benefits due to Helton or the terms of Helton's employment with the
Company, shall not be deemed Proprietary Materials for purposes of this Section
4.

     5.   NON-COMPETITION.

          5.1. NONCOMPETE. During Helton's term of employment, and during the
two (2) year period following his term of employment, Helton shall not, in any
way, directly or indirectly, manage, operate, control (or participate in any of
the foregoing), accept employment or a consulting position with or otherwise
advise or assist or be connected with or directly or indirectly own or have any
other interest in or right with respect to (other than through ownership of not
more than one percent (1%) of the outstanding shares of a corporation's stock
which is listed on a national securities exchange) any enterprise (other than
for the Company or for the benefit of the Company) which is a wholesaler or
retailer of office products having annual sales in excess of one million dollars
($1,000,000) or any other business in which United, during the term of
employment may be actively involved or have plans to become actively involved.
The Company shall not unreasonably withhold its consent to a request by Helton
for a waiver from the strict application of this Section 5.1 with respect to a
specific employment or engagement of, or a specific acquisition of an interest
by, Helton. The Company shall not be deemed to have unreasonably withheld its
consent, if the Company determines that such employment, engagement, or
acquisition would have a competitive effect on the Company.

          5.2. MANUFACTURING OF OFFICE PRODUCTS. Notwithstanding Section 5.1.,
following the term of employment, Helton may be engaged by any company whose
principal business is the manufacture or resale of office products.

          5.3. NONSOLICITATION. During Helton's term of employment and during
the two (2) year period following his term of employment, Helton shall not at
any time, directly or indirectly, solicit (1) any client or customer of United
with whom he had contact while employed by the Company for the purpose of
causing such client or customer to change its business relationship with United;
provided, however, nothing herein is intended nor should such be construed as
precluding Helton from responding to unsolicited client or customer inquiries at
any time, or (2) except for receiving and following up on publicly placed
employment

                                        4


advertisements, any employee of United for the purposes of causing such employee
to terminate employment with United.

          5.4. LIMITATIONS. Helton recognizes that the foregoing limitations are
reasonable and properly required for the adequate protection of the business of
the Company. If any such limitations are deemed unreasonable by a court having
jurisdiction of the matter and parties, Helton hereby agrees and submits to the
reduction of any such limitations to such territory or time as to such court
shall appear reasonable.

          5.5. REMEDIES. Helton agrees that the remedy at law for any breach of
the provisions of Section 4 or this Section 5 shall be inadequate and that the
Company shall be entitled to injunctive relief in addition to any other remedies
it may have.

     6. MUTUAL NON-DISPARAGEMENT. During and after the term of employment:

          6.1. Helton shall not, directly or indirectly, make or cause to be
made and shall not intentionally cause the officers, directors, employees,
agents and representatives of any entity or person controlled by Helton to make
or cause to be made, any disparaging, denigrating, derogatory or other negative
or false statement orally or in writing to any person or entity about the
Company, its or their respective parents, subsidiaries or affiliates, its or
their respective executive officers or members of its or their boards of
directors, or the business strategy or plans, policies, practices or operations
of the Company, or of its or their respective parents, subsidiaries or
affiliates. Helton shall not, directly or indirectly, and shall, within his
reasonable ability to control, cause the officers, directors, employees, agents
and representatives of any entity or person controlled by Helton not to,
directly or indirectly, dissipate or negatively affect the goodwill, business,
prospects or reputation of United or its relationships with its employees,
customers, suppliers, competitors, vendors, stockholders, lenders, prospective
investors or prospective purchasers of any businesses or assets of United.

          6.2. The Company shall not, directly or indirectly, make or cause to
be made, and shall not intentionally cause the officers, directors, employees,
agents or representatives of any entity or person controlled by the Company or
by which the Company is controlled, make or cause to be made, any disparaging,
denigrating, derogatory or other negative or false statement orally or in
writing to any person or entity about Helton, any entity controlled by or with
which Helton is affiliated, or any business plans, policies, practices or
reputation of Helton or any entity controlled by or with which he is affiliated.
The Company shall not, directly or indirectly, and shall within its reasonable
ability to control, cause the officers, directors, employees, agents and
representatives of the Company, its parent, subsidiaries, and affiliates and
their respective executive officers and members of their respective Boards of
Directors not to, directly or indirectly, dissipate or negatively affect the
goodwill, business, prospects or reputation of Helton or any entity controlled
by him or with which he is affiliated.

     7.   TERMINATION AND SEVERANCE.

          7.1. RESIGNATION. If Helton resigns other than for Good Reason as
defined in Section 7.2.1, or if Helton gives notice to the Company of
non-extension of the term of

                                        5


employment pursuant to Section 1, he shall be entitled to receive only the
unpaid portion of his base salary and accrued vacation attributable to and
including the date of resignation, and reimbursement for reasonable reimbursable
expenses incurred on behalf of the Company prior to the date of termination.

          7.2. BY HELTON FOR GOOD REASON. Helton may elect to terminate his
employment by written notice to the Company within sixty (60) days after the
occurrence, without Helton's consent, of any event which constitutes "Good
Reason" as herein defined.

               7.2.1. "Good Reason" shall mean the occurrence of any of the
following events:

               (a)  any diminution in Helton's position (including status,
                    offices and titles), authority, duties or responsibilities
                    (including the assignment to Helton of any duties
                    inconsistent with Helton's position, authority, duties or
                    responsibilities, excluding for this purpose an isolated,
                    insubstantial and inadvertent action not taken in bad faith
                    and which is remedied promptly and in any event within ten
                    (10) business days after receipt of written notice thereof
                    given by Helton to the Chief Executive Officer in accordance
                    with Section 10.1), excluding a change in the office or
                    officer to whom Helton reports;

               (b)  the reduction of Helton's base salary (as specified under
                    Section 3 above), bonus, or incentive opportunity, or a
                    substantial reduction in benefits;

               (c)  the exclusion of Helton from, or diminution in Helton's
                    participation in, any pension, bonus, management incentive,
                    profit sharing and/or other similar incentive compensation
                    or deferred compensation plans made available generally to
                    senior management personnel of the Company, other than
                    exclusions, changes or diminutions applicable to all senior
                    management personnel;

               (d)  any relocation of Helton's principal office more than fifty
                    (50) miles from its location on the date of this amended and
                    restated Agreement;

               (e)  any diminution in expense reimbursement benefits enjoyed by
                    Helton, except pursuant to a general change in the Company's
                    reimbursement policies; or

               (f)  the breach by the Company of any of its covenants or
                    obligations under this Agreement which is not promptly cured
                    after notice from Helton.

               7.2.2. If the employment is terminated by Helton for Good Reason,
Helton shall be entitled to receive and the Company shall pay:

                                        6


               (a)  the unpaid portion of his base salary and accrued vacation
                    attributable to and including the date of termination;

               (b)  reimbursement for reasonable reimbursable expenses incurred
                    by him on behalf of the Company prior to the date of
                    termination; and

               (c)  a severance amount equal to two (2) years' base salary at
                    the level then in effect immediately prior to such
                    termination, plus an amount equal to his bonuses earned from
                    the Company for the calendar year preceding the year in
                    which notice is given by Helton to the Company
                    (collectively, "Severance Benefit"), payable in equal
                    installments on the Company's regular pay schedule,
                    commencing within thirty (30) days after receipt by the
                    Company of written notice of termination from Helton
                    pursuant to Section 7.2 and continuing for twenty-four (24)
                    months; provided that in the event that Helton terminates
                    his employment pursuant to this Section 7.2 within two (2)
                    years following a Change of Control (as defined in Appendix
                    I), then the Severance Benefit shall be equal to two (2)
                    years' base salary at the level then in effect immediately
                    prior to such termination (except that in the event Helton
                    terminates his employment for Good Reason based on a
                    reduction in base salary, then two (2) years' base salary as
                    in effect immediately prior to such reduction), plus an
                    amount equal to two (2) times the greater of (i) the average
                    of his bonuses earned from the Company for the three (3)
                    calendar years preceding the year in which Helton terminates
                    his employment and (ii) the target bonus for the then
                    current calendar year, or the immediately preceding year if
                    the target bonus has not been established for the then
                    current calendar year (except that in the event Helton
                    terminates his employment for Good Reason based on a
                    reduction in Helton's target bonus, then the target bonus
                    taken into account for the purpose of this Section 7.2.2(c)
                    shall be the target bonus immediately prior to such
                    reduction), payable in a lump sum payment as soon as
                    practicable following the termination of Helton's
                    employment, but in no event later than ten (10) days
                    following the date of such termination; and

               (d)  health care coverage for medical and dental benefits
                    comparable to that in effect for Helton and his qualified
                    dependents immediately prior to such termination at no cost
                    to Helton for two (2) years following such termination.

               7.2.3. If the employment is terminated by Helton for Good Reason
within two (2) years following a Change of Control, Helton shall be entitled to
receive and the Company shall provide the following benefits in addition to the
benefits described in Section 7.2.2:

                                        7


               (a)  in addition to health care coverage for medical and dental
                    benefits pursuant to Section 7.2.2(d), all other welfare
                    benefits and other fringe benefits and perquisites
                    comparable to benefits and perquisites in effect for Helton
                    and his qualified dependents immediately prior to such
                    termination at no cost to Helton for two (2) years following
                    such termination; provided that the Company will not be
                    obligated to provide any welfare benefits or other fringe
                    benefits and perquisites to the extent comparable benefits
                    and perquisites on a coverage-by-coverage and a
                    benefit-by-benefit basis are provided to Helton and his
                    qualified dependents by any subsequent employer, but only
                    for the period such benefits and perquisites are actually
                    provided by a subsequent employer to Helton;

               (b)  a lump sum payment, with respect to each pension plan
                    (within the meaning of Section 3(2) of the Employee
                    Retirement Income Security Act of 1974, as amended, and
                    whether or not qualified under Section 401(a) of the
                    Internal Revenue Code 1986, as amended ("Code")) ("Plan")
                    which is a defined contribution plan ("Savings Plan"), equal
                    to two (2) times the aggregate for the plan year ending
                    immediately prior to Helton's termination of (i) the Company
                    profit sharing contribution on Helton's behalf, if any, and
                    (ii) the Company matching contribution that would have been
                    made pursuant to the terms of the Savings Plan on Helton's
                    behalf, if Helton made the maximum elective contribution
                    allowed under Code Section 402(g), payable as soon as
                    practicable following the later of Helton's termination of
                    employment and the date when the Company's contribution for
                    the preceding plan year is finally determined, but in no
                    event later than ten (10) days following the date of
                    Helton's termination of employment;

               (c)  a lump sum payment which is Actuarially Equivalent (as such
                    term is defined in Section 2.3(b) of the United Stationers
                    Pension Plan or its successor) to the additional benefits to
                    which Helton would have been entitled if Helton had
                    continued employment for two (2) years following the date of
                    Helton's termination of employment under each Plan which is
                    a defined benefit pension plan or a top hat defined benefit
                    plan ("Retirement Plan") in which Helton is a participant
                    (including benefits under Section 8), payable as soon as
                    practicable following the termination of Helton's
                    employment, but in no event later than ten (10) days
                    following the date of such termination; and

               (d)  a lump sum payment which is Actuarially Equivalent to the
                    Supplemental Retirement Benefit as provided in Section 8.5.

                                        8


          7.3. BY EXPIRATION OF THE TERM OF EMPLOYMENT. If the term of
employment expires and notice has been given by the Company that the term will
not be extended or further extended pursuant to Section 1 of this Agreement,
Helton shall be entitled to receive:

               (a)  the unpaid portion of his base salary and accrued vacation
                    pay attributable to and including the date of termination;

               (b)  reimbursement for reasonable reimbursable expenses incurred
                    on behalf of the Company prior to the date of termination;

               (c)  Severance Benefit in an amount equal to and on the same
                    basis as provided in Section 7.2.2(c);

               (d)  health care coverage for medical and dental benefits
                    comparable to that in effect for Helton and his qualified
                    dependents immediately prior to such termination at no cost
                    to Helton for two (2) years following such termination; and

               (e)  if the term of employment is terminated pursuant to this
                    Section 7.3 within two (2) years following a Change of
                    Control, Helton shall be entitled to receive and the Company
                    shall provide the benefits set forth in Section 7.2.3 in
                    addition to the benefits set forth in subsections (a)
                    through (d) of this Section 7.3.

          7.4. BY COMPANY FOR CAUSE. The Company may terminate the employment at
any time for Cause (as hereinafter defined). If Helton is terminated by the
Company for Cause, Helton shall be entitled to receive only the unpaid portion
of his base salary and accrued vacation attributable to all periods prior to and
including the date of his termination, and reimbursement for reasonable
reimbursable expenses incurred on behalf of the Company prior to the date of his
termination.

               7.4.1. "Cause" shall mean Helton's:

               (a)    conviction of, or plea of NOLO CONTENDERE to, a felony;

               (b)    theft or embezzlement, or attempted theft or embezzlement,
                      of money or property or assets of the Company or any of
                      its affiliates;

               (c)    use of illegal drugs;

               (d)    material breach of this Agreement;

               (e)    commission of any act or acts of moral turpitude in
                      violation of Company policy;

               (f)    gross negligence or willful misconduct in the performance
                      of his duties; or

                                        9


               (g)    breach of any fiduciary duty owed to the Company,
                      including, without limitation, engaging in directly
                      competitive acts while employed by the Company.

               7.4.2. If the event constituting Cause is curable, the Company
     shall notify Helton in writing ("Notice of Cause") in accordance with
     Section 10.1 below that it intends to terminate his employment for Cause
     effective at the end of a twenty (20) day period following the date that
     Helton receives a Notice of Cause, such Notice of Cause to state in detail
     the particular event that constitutes Cause. If the event constituting
     Cause is curable, as determined by the Board in good faith, Helton shall
     have a reasonable opportunity to cure the event constituting Cause
     following his receipt of such Notice of Cause from the Company; provided,
     however, if Helton has not cured such event to the reasonable satisfaction
     of the Company and the Company has not waived in writing Helton's failure
     to cure during the twenty (20) day period following the date of the Notice
     of Cause, the Company may terminate Helton's employment effective following
     the end of such twenty (20) day period.

          7.5. BY THE COMPANY OTHER THAN FOR CAUSE. The Company may terminate
Helton's employment on written notice to Helton at any time.

               7.5.1. If Helton's employment is terminated by the Company, other
     than for Cause, Helton shall be entitled to receive and the Company shall
     pay:

               (a) the unpaid portion of his base salary and accrued vacation
                   pay attributable to and including the date of termination;

               (b) reimbursement for reasonable reimbursable expenses incurred
                   by him on behalf of the Company prior to the date of
                   termination;

               (c) Severance Benefit in an amount equal to and on the same
                   basis as provided in Section 7.2.2(c); and

               (d) health care coverage for medical and dental benefits
                   comparable to that in effect for Helton and his qualified
                   dependents immediately prior to such termination at no cost
                   to Helton for two (2) years following such termination.

               7.5.2. If the employment is terminated by the Company, other than
     for Cause, within two (2) years following a Change of Control, Helton shall
     be entitled to receive and the Company shall pay the benefits set forth in
     Section 7.2.3 in addition to the benefits set forth in Section 7.5.1.

          7.6. BY DEATH OR DISABILITY. If Helton's employment is terminated due
to his death or permanent disability, Helton shall be entitled to severance pay
in accordance with the provisions of 7.3.1 and 7.3.2 above. In addition, if
Helton's spouse is then living, for the remainder of such spouse's life the
Company shall continue to provide health coverage for Helton's spouse and
dependent children in accordance with the Company's health plans made generally
available to employees of the Company, without cost to Helton's spouse. Nothing
in

                                       10


this Agreement shall affect Helton's right to receive death benefit payments
under any policy of insurance carried by the Company and payable to Helton or
his designated beneficiary.

        7.7. RETIREMENT. Helton agrees that, in any event, his employment
shall terminate automatically on his sixty-fifth (65th) birthday. If his
employment is terminated pursuant to this Section 7.7., Helton shall be entitled
to:

        7.7.1. accrued vacation pay and reimbursement for reasonable expenses
incurred on behalf of the Company prior to the date of termination, and

        7.7.2. in addition, Helton shall be entitled to participate in the
Company's health plan for retirees.

     8. CHANGE OF CONTROL SUPPLEMENTAL RETIREMENT BENEFIT.

        8.1. SUPPLEMENTAL RETIREMENT BENEFIT. In the event a Change of Control
occurs during the term of employment, Helton shall be entitled to the following
fully vested nonqualified supplemental retirement benefit (the "Supplemental
Retirement Benefit"): a life annuity, payable monthly, commencing with the first
payment on Helton's sixty-fifth (65th) birthday in an amount equal to the excess
of (1) the product of (i) one-twelfth (1/12th) of one and sixty-seven hundredths
percent (1.67%) of Helton's average Eligible Earnings (as defined below) for the
three (3) consecutive calendar years of his service with the Company immediately
preceding the earlier of his termination of employment or his sixty-fifth (65th)
birthday, multiplied by (ii) the number of full and partial years (not to exceed
thirty (30)) of Helton's service with the Company, including the additional
service credit under Section 8.3, with one-twelfth (1/12th) of a year being
credited for each calendar month or part thereof during the term of employment,
over (2) the Retirement Plan Offset.

        8.2. ELIGIBLE EARNINGS. "Eligible Earnings" shall mean the sum of
Helton's base salary and bonus compensation paid or deferred for a calendar
year. If the term of employment does not cover three (3) full calendar years,
Helton's Eligible Earnings will be determined on an annualized basis with
respect to the calendar years in which the term of employment commenced and
terminated.

        8.3. ADDITIONAL SERVICE CREDIT. If Helton's service with the Company
extends to Helton's sixty-fifth (65th) birthday, then Helton to the extent
Helton's actual years of service are less than thirty (30) at age sixty-five
(65), shall be credited with an additional number of years of service equal to
thirty (30) minus Helton's actual years of service at age sixty-five (65),
provided, however, that such additional years of credited service shall not
exceed fifteen (15). If Helton's employment is terminated before attaining age
sixty-five (65) pursuant to Sections 7.2, 7.3, 7.5 or 7.6 within two (2) years
following a Change of Control, then Helton, to the extent Helton's actual years
of service would have been less than thirty (30) had Helton remained employed
until age sixty-five (65), shall be credited with an additional number of years
of service equal to thirty (30) minus what Helton's actual years of service
would have been at age sixty-five (65), provided, however, that such additional
years of credited service shall not exceed fifteen (15).

                                       11


        8.4. RETIREMENT PLAN OFFSET. The Retirement Plan Offset is the monthly
amount of a life annuity for Helton, payable monthly, commencing with the first
payment on Helton's sixty-fifth (65th) birthday, which is Actuarially Equivalent
to the aggregate of the vested pension benefits accrued by Helton under every
other Retirement Plan in which Helton participates, and each similar plan
maintained by a predecessor or successor employer of Helton.

        8.5. LUMP SUM PAYMENT. In the event that a Change of Control occurs and
Helton is entitled to receive a Supplemental Retirement Benefit, Helton may, at
any time prior the end of the calendar year preceding his sixty-fifth (65th)
birthday or with the Company's consent, elect to receive a lump sum payment on
his sixty-fifth (65th) birthday, which is Actuarially Equivalent to the
Supplemental Retirement Benefit. In the event Helton's service with the Company
is terminated pursuant to Sections 7.2, 7.3 or 7.5 within two (2) years after
the occurrence of a Change of Control and prior to his sixty-fifth (65th)
birthday, Helton shall receive a lump sum payment which is Actuarially
Equivalent to the Supplemental Retirement Benefit immediately following, but in
no event later than ten (10) days after, such termination.

        8.6. DEATH OR DISABILITY BENEFIT BENEFIT. In the event that Helton's
service with the Company terminates pursuant to Section 7.6 after a Change of
Control has occurred, Helton or his Beneficiary (as defined below), as the case
may be, shall receive a lump sum payment which is Actuarially Equivalent to the
Supplemental Retirement Benefit accrued by Helton determined as of the date
immediately preceding Helton's termination of Service with the Company pursuant
to Section 7.6.

        8.7. BENEFICIARIES. Helton may designate the beneficiary or
beneficiaries ("Beneficiary") to whom the Supplemental Retirement Benefit shall
be paid or to whom any uncashed checks may be reissued by completing and signing
a beneficiary designation form in such form as the Company may prescribe. In the
event of any conflict between beneficiary designation forms, the last
beneficiary designation form received by the Company shall govern. A beneficiary
designation may be changed without the consent of any prior Beneficiary. If
Helton does not complete a beneficiary designation form, or no designated
Beneficiary survives Helton, the Beneficiary shall be determined in the same
manner as would be determined under the applicable laws of descent and
distribution with respect to Helton's estate. If the Company shall find that
Helton or a Beneficiary is unable to care for his or her affairs because of
illness or accident or is unable to execute a proper receipt for the payment of
the Supplemental Retirement Benefit, the Company may make payment to a relative
or other proper person for the benefit of Helton or such Beneficiary. To the
extent permitted by law, the payment to a person in accordance with this
paragraph shall fully discharge the Company's obligation to pay the Supplemental
Retirement Benefit.

     9. PARACHUTE GROSS-UP. If Helton becomes entitled to any payments or
benefits whether pursuant to the terms of or by reason of this Agreement or any
other plan, arrangement, agreement, policy or program (including without
limitation any deferred stock unit, restricted stock, stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on the vesting or exercisability of any of the foregoing) with the
Company, any successor to the Company or to all or a part of the business or
assets of the Company (whether direct or indirect, by purchase, merger,
consolidation, spin off, or otherwise and regardless of whether such payment is
made by or on behalf of the Company or such successor) or any person

                                       12


whose actions result in a Change of Control or any person affiliated with the
Company or such persons (in the aggregate, "Payments" or singularly, "Payment"),
which Payments are reasonably determined by an accounting firm mutually agreed
upon by Helton and the Company ("Accountant") (which agreement neither party
shall unreasonably withhold) to be subject to the tax imposed by Section 4999 or
any successor provision of the Code or any similar state or local tax, or any
interest or penalties are incurred by Helton with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), the Company shall pay Helton an
additional amount ("Gross-Up Payment") such that the net amount retained by
Helton, after deduction or payment of (i) any Excise Tax on Payments, (ii) any
federal, state and local income or employment tax and Excise Tax upon the
payment provided for by this Section, and (iii) any additional interest and
penalties imposed because the Excise Tax is not paid when due, shall be equal to
the full amount of the Payments. The Company and Helton shall use their
reasonable efforts to cause the Accountant to complete its calculation at least
ten (10) days prior to the time any Excise Tax is due. For purposes of
determining the amount of the Gross-Up Payment, Helton shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be made and state and
local income and employment taxes at the highest marginal rates of taxation in
the applicable state and locality with respect to which Helton is subject to tax
on the date the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes. The Gross-Up Payment shall be paid to Helton within five (5) days
from the earlier of (i) the issuance by the Internal Revenue Service of a notice
stating in effect that an Excise Tax is due with respect to the Payments or (ii)
the receipt by the Company of a written statement by the Accountant of the
amount of the Gross-Up Payments. Notwithstanding the foregoing, if the Excise
Tax is determined by the Internal Revenue Service or the Accountant subsequent
to the payment set forth in the preceding sentence to exceed the amount taken
into account in determining the Gross-Up Payment calculated at such time, the
Company shall pay within ten (10) days after the time of such determination the
amount by which the recalculated Gross-Up Payment exceeds the Gross-Up Payment
paid pursuant to the preceding sentence. Following payment to Helton of any
Gross-Up Payment, including pursuant to the immediately preceding sentence,
Helton shall reasonably cooperate with the Company, at its sole cost and expense
and with full indemnification by the Company, as the Company shall reasonably
request in efforts to obtain a refund of any Excise Tax which the Company has a
reasonable basis to challenge. Any such refund so obtained shall be paid by
Helton to the Company.

     10. MISCELLANEOUS.

         10.1. All notices hereunder shall be given in writing and sent to the
party for whom such is intended by hand delivery or United States certified or
registered mail, return receipt requested, postage prepaid, or overnight courier
service, addressed to the party for whom intended at the following respective
addresses:

                                       13


                          If to the Company:      United Stationers Supply Co.
                                                  2200 E. Golf Road
                                                  Des Plaines, IL  60016
                                                  Attn: CEO

                          With a copy to:         Weil, Gotshal & Manges LLP
                                                  100 Crescent Court, Suite 1300
                                                  Dallas, Texas 75201
                                                  Attn:  Mary R. Korby, Esq.

                          And a copy to:
                                                  -----------------------------

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

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

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

                          If to Helton:           R. Thomas Helton
                                                  20979 North Wildrose
                                                  Barrington, IL  60010

                           And a courtesy copy to:
                                                  -----------------------------

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

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

or to such other persons and/or at such other addresses as may be designated by
written notice served in accordance with the provisions hereof. Such notices
shall be deemed to have been served, if hand delivered, on the day delivered,
and if mailed, on the third (3rd) day following the date deposited in the mail.
Urgent notices shall be given by fax to the same addresses and confirmed by mail
as provided above. All notices sent by facsimile or cable shall be deemed to
have been served upon receipt of the fax, but only if in fact confirmed by mail
promptly after dispatch of the fax.

        10.2. This Agreement and all rights and benefits hereunder are personal
to Helton and neither this Agreement nor any right or interest of Helton herein,
or arising hereunder, shall be voluntarily or involuntarily sold, transferred or
assigned by Helton. Any attempt by Helton to assign, execute, attach, transfer,
pledge, hypothecate or otherwise dispose of any such benefits or amounts or any
rights or interests contrary to the foregoing provisions, or the levy or
attachment or similar process thereupon, shall be null and void and of no effect
and shall relieve the Company of all liabilities hereunder. This Agreement and
all of the Company's right and obligations hereunder may be assigned and/or
delegated, as the case may be, without Helton's consent, to any entity which
merges with the Company or which acquires substantially all of the assets of the
Company and which agrees to be bound hereby. The enforceability of Helton's
rights under the Agreement shall not be affected by any assignment or merger.

        10.3. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective heirs, personal representatives, successors and
permitted assigns.

                                       14


        10.4. This Agreement constitutes the entire agreement between the
parties and contains all the agreements between such parties with respect to the
subject matter hereof. This Agreement supersedes all other agreements, oral or
in writing, between the parties with respect to the subject matter hereof
(including, but not limited to, the agreement between the parties dated February
1, 1998, which this Agreement amends and restates).

        10.5. No change or modification of this Agreement shall be valid unless
the same shall be approved by the Board and in writing and signed by Helton and
an authorized representative of the Company other than Helton. No waiver of any
provisions of this Agreement shall be valid unless in writing and signed by the
person or party to be charged.

        10.6. If any provisions of this Agreement (or portions thereof) shall,
for any reason, be invalid or unenforceable, such provisions (or portions
thereof) shall be ineffective only to the extent of such invalidity or
unenforceability, and the remaining provisions or portions shall nevertheless be
valid, enforceable and of full force and effect.

        10.7. The section or paragraph headings or titles are for convenience
only and shall not be deemed a part of this Agreement.

        10.8. This Agreement may be executed in multiple counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute a single instrument.

        10.9. If Helton or his estate or designee prevails in any action to
enforce their rights under this Agreement, they shall be entitled to receive
their attorneys' fees, costs and expenses incurred in enforcing their rights
under this Agreement, as well as interest at the Prime Rate as publicly
announced by The Northern Trust Company from time to time on the amount of the
judgment from the date of demand for payment hereunder through the date of
receipt of the amount of the judgment.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in its corporate name by an officer thereof duly authorized, and Helton
has hereunto set his hand, as of the day and year first above written.

                                          UNITED STATIONERS SUPPLY CO.,
                                          an Illinois corporation

                                       By:
                                          --------------------------------------
                                                     Randall W. Larrimore
                                                     President and
                                                     President and
                                                     Chief Executive Officer

                                          --------------------------------------
                                                     R. Thomas Helton

                                       15


                                   APPENDIX I

                          CHANGE OF CONTROL DEFINITION

For the purposes of this Agreement, term "Change of Control" shall have the
meaning set forth below:

For the purpose of the definition of a "Change of Control" set forth below, the
term "Company" shall mean United Stationers Inc., and the term "Board" shall
mean the board of directors of the Company.

"CHANGE OF CONTROL" means:

     (a) Any "Person" (having the meaning ascribed to such term in Section
3(a)(9) of the Securities Exchange Act of 1934, as amended ("1934 Act") and used
in Sections 13(d) and 14(d) thereof, including a "group" within the meaning of
Section 13(d)(3)) has or acquires "Beneficial Ownership" (within the meaning of
Rule 13d-3 under the 1934 Act) of 30% or more of the combined voting power of
the Company's then outstanding voting securities entitled to vote generally in
the election of directors ("Voting Securities"); provided, however, that in
determining whether a Change of Control has occurred, Voting Securities which
are held or acquired by (i) the Company or any of its subsidiaries or (ii) an
employee benefit plan (or a trust forming a part thereof) maintained by the
Company or any of its subsidiaries shall not constitute a Change of Control.
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person acquired Beneficial Ownership of more than the
permitted amount of Voting Securities as a result of the issuance of Voting
Securities by the Company in exchange for assets (including equity interests) or
funds with a fair value equal to the fair value of the Voting Securities so
issued; provided that if a Change of Control would occur (but for the operation
of this sentence) as a result of the issuance of Voting Securities by the
Company, and after such issuance of Voting Securities by the Company, such
Person becomes the Beneficial Owner of any additional Voting Securities which
increases the percentage of the Voting Securities Beneficially Owned by such
Person to more than 50% of the Voting Securities of the Company, then a Change
of Control shall occur.

     (b) At any time during a period of two consecutive years, the individuals
who at the beginning of such period constituted the Board (the "Incumbent
Board") cease for any reason to constitute more than 50% of the Board; provided,
however, that if the election, or nomination for election by the Company's
stockholders, of any new director was approved by a vote of more than 50% of the
directors then comprising the Incumbent Board, such new director shall, for
purposes of this subsection (b), be considered as though such person were a
member of the Incumbent Board; provided, further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of (i) either an actual "Election Contest" (as
described in Rule 14a-11 promulgated under the 1934 Act) or other actual
solicitation of proxies or consents by or on behalf of a Person other than the
Incumbent Board (a "Proxy Contest"), or (ii) by reason of any agreement intended
to avoid or settle any actual or threatened Election Contest or Proxy Contest.

                                        1


     (c) Consummation of a merger, consolidation or reorganization or approval
by the Company's stockholders of a liquidation or dissolution of the Company or
the occurrence of a liquidation or dissolution of the Company ("Business
Combination"), unless, following such Business Combination:

     (1)  the Persons with Beneficial Ownership of the Company, immediately
          before such Business Combination, have Beneficial Ownership of more
          than 50% of the combined voting power of the then outstanding voting
          securities entitled to vote generally in the election of directors of
          the corporation (or in the election of a comparable governing body of
          any other type of entity) resulting from such Business Combination
          (including, without limitation, an entity which as a result of such
          transaction owns the Company or all or substantially all of the
          Company's assets either directly or through one or more subsidiaries)
          (the "Surviving Company") in substantially the same proportions as
          their Beneficial Ownership of the Voting Securities immediately before
          such Business Combination;

     (2)  the individuals who were members of the Incumbent Board immediately
          prior to the execution of the initial agreement providing for such
          Business Combination constitute more than 50% of the members of the
          board of directors (or comparable governing body of a noncorporate
          entity) of the Surviving Company; and

     (3)  no Person (other than the Company, any of its subsidiaries or any
          employee benefit plan (or any trust forming a part thereof) maintained
          by the Company, the Surviving Company or any Person who immediately
          prior to such Business Combination had Beneficial Ownership of 30% or
          more of the then Voting Securities) has Beneficial Ownership of 30% or
          more of the then combined voting power of the Surviving Company's then
          outstanding voting securities. Notwithstanding this paragraph (3), a
          Change of Control shall not be deemed to occur solely because any
          Person acquired Beneficial Ownership of more than 30% of Voting
          Securities as a result of the issuance of Voting Securities by the
          Company in exchange for assets (including equity interests) or funds
          with a fair value equal to the fair value of the Voting Securities so
          issued.

     (d)  Approval by the Company's stockholders of an agreement for the
assignment, sale, conveyance, transfer, lease or other disposition of all or
substantially all of the assets of the Company to any Person (other than a
subsidiary of the Company or other entity, the Persons with Beneficial Ownership
of which are the same Persons with Beneficial Ownership of the Company and such
Beneficial Ownership is in substantially the same proportions), or the
occurrence of the same.

Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person acquired Beneficial Ownership of more than the
permitted amount of Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of Voting Securities
outstanding, increases the proportional number of shares Beneficially Owned by
such Person; provided that if a Change of Control would occur (but for

                                       -2-


the operation of this sentence) as a result of the acquisition of Voting
Securities by the Company, and after such acquisition of Voting Securities by
the Company, such Person becomes the Beneficial Owner of any additional Voting
Securities which increases the percentage of the Voting Securities Beneficially
Owned by such Person, then a Change of Control shall occur.















                                       -3-


                                    EXHIBIT A
                             TO EMPLOYMENT AGREEMENT
                                R. THOMAS HELTON

     The following are benefit plans, programs and policies in which Helton is
entitled to participate in addition to any benefits specified in the Employment
Agreement as of the date thereof:

          United Stationers Inc. Pension Plan

          United Stationers Inc. 401(k) Savings Plan

          United Stationers Supply Co. Deferred Compensation Plan

          Restoration Plan

          United Stationers Inc. Flexible Spending Plan

          United Stationers Inc. Management Equity Plan

          United Stationers Management Incentive Plan

          United Group Medical and Dental Benefit Plans

          Officer Medical Expense Reimbursement Policy

          Retiree Health Plan

          Annual physical exam at Company expense

          Leased auto or equivalent cash compensation in accordance with

          Policy Group Term Life Insurance - 2 1/2 times base salary

          Travel and Accident Insurance - $300,000

          Split Dollar Life Insurance

          Disability Insurance in accordance with insurance policy

          Club and Association Dues - in accordance with Company Policy

          Financial and Tax Consulting - and tax return preparation, in
               accordance with Company Policy

          Officer Indemnification and Insurance - D&O insurance is provided on a
               claims-made basis; and Restated Certificate of Incorporation, and
               Delaware and Illinois law provide indemnification of officers and
               directors

          Other - Vacations in accordance with Company Policy; other benefits
               that may from time to time be made available to employees
               generally

                                        1

EX-10.32

EXHIBIT 10.32


[UNITED STATIONERS LOGO]
- --------------------------------------------------------
EXECUTIVE OFFICES
2200 E. GOLF ROAD
DES Plaines, IL 60016-1267
708/699-5000

                                                      February 13, 1995



Mr. Ergin Uskup
1910 S. Ridge Road
Lake Forest, Illinois 60045


Dear Ergin:

This letter supplements and, where inconsistent, supercedes the prior
correspondence dated January 7, 1994, February 10, 1994 and October 19, 1994
between you and Bob Cornell.

     It is contemplated that United Stationers Inc. may enter into a transaction
with Associated Holdings, Inc. which would result in a Change in Control of the
Company. It is in the best interests of the Company and its stockholders that
you continue to concentrate on the conduct of the business of the Company, and
be encouraged to maintain your employment relationship with United Stationers
Supply Co. after the Change in Control. (United Stationers Inc. and United
Stationers Supply Co. are referred to in this letter collectively as the
"Company")

     The Company desires to amend the prior correspondence to provide
appropriate incentives for you to continue to perform your duties and
responsibilities, thereby promoting the stability of the business of the Company
both before and after the Change in Control.

     Therefore, the Company agrees, upon your acceptance of the terms and
conditions in this letter, that in the event of a Change in Control on or before
December 31, 1995, the prior correspondence referred to above shall be
supplemented and/or changed as follows:

1. EFFECTIVE DATE. This letter agreement shall become effective on the date the
Change in Control occurs.

2. FIRST YEAR SEVERANCE PAYMENT. If, prior to the first anniversary of the
Change in Control, your employment is terminated by you for good reason (as
defined in paragraph 6 below) or by the Company for any reason other than for
cause (as defined in paragraph 7 below), you will be entitled to receive and the
Company shall pay you a Severance Payment in the amount of THREE HUNDRED FIFTY
THOUSAND DOLLARS ($350,000.00). This First Year Severance Payment shall be
payable in an initial installment of $151,820.77, and 23 equal monthly
installments each in an amount of $8,616.49.




3. STAY BONUS. Provided you are still employed on the first anniversary of the
date of the Change in Control, you will be entitled to receive the sum of ONE
HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($175,000.00) payable in an initial
installment of $80,218.64 and 11 equal monthly installments each in the amount
of $8,616.49, commencing within one month after the date you become entitled
thereto..

4. CONTINUING SEVERANCE BENEFIT. If your employment is terminated by you for
good reason (as defined in paragraph 6 below), or by the Company other than for
cause (as defined in paragraph 7 below), at any time after the first anniversary
of the Change in Control, you will be entitled to receive and the Company shall
pay to you a severance benefit in the amount of ONE HUNDRED SEVENTY-FIVE
THOUSAND DOLLARS ($175,000.00), payable in 12 equal monthly installments of
$14,583.34 each commencing within one month after the date you become entitled
thereto.

5. TIMING OF AND CONDITIONS FOR PAYMENTS. Payments payable hereunder for First
Year Severance Payments or Continuing Severance Payments will commence no later
than the first day of the month following: (a) the date on which your employment
with the Company terminates and (b) the expiration of the seven-day rescission
period following the execution and delivery of the Release and Agreement
attached hereto as Exhibit A. Payments payable hereunder for the Stay Bonus will
commence no later than the first day of the month following the execution and
delivery of the Release and Agreement attached hereto as Exhibit A. The
execution and delivery of the Release are conditions precedent to your
entitlement to any such payments.

6. TERMINATION FOR GOOD REASON. "Good reason", for which you may terminate your
employment immediately upon written notice to the Company, shall mean:

      (a)   the reduction of your salary;

      (b)   any material change in your duties which has the effect of
            materially reducing your status within the Company;

      (c)   during the first year after the Change in Control, your exclusion
            from, or the diminution of your participation in, any profit
            sharing, pension, incentive compensation, supplemental benefit or
            other deferred compensation plans to which you were entitled
            immediately preceding the date on which the Change in Control
            occurred;

      (d)   during the first year after the Change in Control, any material
            diminution in the fringe benefits as enjoyed by you immediately
            preceding the date on which the Change in Control occurred;

      (e)   any relocation of the Company's headquarters outside of the Chicago
            metropolitan area; or


                                        2






      (f)   the breach by the Company of any of its covenants or obligations
            under this agreement.

     If your employment is terminated by you for good reason prior to the first
anniversary of the Change in Control, you shall be entitled to the First Year
Severance Payment. If your employment is terminated by you for good reason on or
after the first anniversary of the Change in Control, you shall be entitled to
the Continuing Severance Benefit.

7. TERMINATION FOR CAUSE. The Company may terminate your employment immediately
upon written notice to you of any breach of any fiduciary duty owed by you to
the Company, including, without limitation, engaging in directly competitive
acts while employed by the Company.

     If your employment is terminated by the Company for cause, you shall not be
entitled to the First Year Severance Payment, the Stay Bonus or the Continuing
Severance Payment.

8. CHANGE IN CONTROL. For purposes of this Agreement, "Change in Control" means
a change in control resulting from an acquisition of USI, whether by
amalgamation, consolidation, merger or acquisition of stock, pursuant to which
any person or firm, or its or their affiliates (as defined in Rule 12b-2 under
the Securities Exchange Act of 1934) becomes the owner of more than fifty
percent (50%) of the outstanding stock of USI either in value or voting power.

9. MEDICAL BENEFITS. The Company makes the following covenants to you with
respect to your medical benefits:

     (a) In the event the United Stationers Medical Plan ("Plan") remains in
effect and your employment with the Company terminates for any reason, you (and
your covered dependents at the time of such termination of employment) shall be
entitled to continue to participate in the Plan until you attain age sixty-five
(65), and your spouse shall be entitled to continue to participate, in her own
right, in the Plan until she attains age sixty-five (65), under the same terms
and conditions applicable to persons who are provided coverage as active
employees under the Plan; provided, however, that a minimum $1,000,000
Comprehensive Medical Lifetime Maximum Payment shall remain applicable to you
(and your covered dependents at the time of your termination of employment).

     (b) In the event of the termination of the Plan or any cessation of
coverage under the Plan not occurring in accordance with the terms of the Plan
as in effect on February 13, 1995 (the date any such event first occurs being
referred to as the "Coverage Cessation Date"), you shall be entitled to and the
Company shall pay to you TWO THOUSAND SEVEN HUNDRED DOLLARS ($2,700.00) per
month for the period commencing on the first day of the month following the
month in which the Coverage Cessation Date occurs and ending on the first to
occur of:

          (i)    the later of the date you or your spouse attains age sixty-five
                 (65);


                                        3






          (ii)   in the event of your death, the date your spouse attains age
                 sixty-five (65);

          (iii)  the end of the eighteen (18) month period commencing on the
                 Coverage Cessation Date; or

          (iv)   the third anniversary of the date on which the Change in
                 Control occurs.

     (c) After the Coverage Cessation Date, the Company shall pay claims or
reimburse expenses for those medical expenses which are considered deductible
under section 213 of the Internal Revenue Code of 1986, as amended, or any
successor provision, (without regard to any applicable threshold for
deductibility) to you, subject to the following terms and conditions:

          (i)    you (or any of your covered dependents as of the Coverage
                 Cessation Date) are not covered by a medical plan maintained by
                 your then current employer or a medical plan maintained by the
                 employer of your spouse, or has exceeded the lifetime maximum
                 benefit provided in such plan;

          (ii)   payment of medical expenses or reimbursement for such claims
                 under this subsection (c) shall not in the aggregate exceed the
                 lesser of the following amounts:

                 (1)   a maximum of $300,000 for you and all your dependents (on
                       an aggregate basis) as of the Coverage Cessation Date; or

                 (2)   the amount by which $700,000 exceeds the aggregate amount
                       of all medical claims under this subsection (c) for the
                       group of Employees referred to as "Contract Officers"
                       under the Plan (including all covered dependents of such
                       Contract Officers as of the date of the Coverage
                       Cessation Date) prior to the date of the requested
                       payment by the Contract Officer; and

          (iii)  Reimbursement for such claims under this subsection shall be
                 made for the period commencing on the Coverage Cessation Date
                 and ending on the first to occur of:

                 (1)   the later of the date you or your spouse attains age 65;

                 (2)   in the event of your death, the date your spouse attains
                       age 65;

                 (3)   the end of the 18 month period commencing on the Coverage
                       Cessation Date; or

                 (4)   the third anniversary of the date on which the Change in
                       Control occurs.


                                        4




     The coverage provided under this paragraph 9(c) shall be separate and in
addition to the coverage provided under paragraph 9(b) above.

10. BENEFITS TRUST. To secure the payment to you of the First Year Severance
Payment and the Stay Bonus provided in paragraphs 2 and 3 above, and the Medical
Benefits provided in paragraph 9 above, the Company will establish a trust to be
known as the USI Employee Benefits Trust (the "Trust") and provide for you to be
a beneficiary thereof. The Company will cause to be furnished to the trustee of
the Trust an irrevocable letter of credit, and the trust agreement will require
the trustee to draw on the letter of credit to pay the First Year Severance
Payment or the Stay Bonus, and the Medical Benefits at such time as you may
become entitled thereto. To receive distributions from the Trust, you shall
furnish the Trustee with any notices described in the trust agreement.

11. DISPUTE RESOLUTION. If the Company disputes your claim that good reason
exists for the termination of your employment pursuant to paragraph 6, or if you
dispute the Company's claim that cause exists for your termination pursuant to
paragraph 7, and the dispute cannot be resolved between the parties within 30
days, (a) the Trustee shall be notified and the parties shall follow the
procedures specified in the Trust Agreement, and (b) the dispute will be
submitted for arbitration in accordance with paragraph 12(a) below.

12. MISCELLANEOUS.

     (a) ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, will be submitted for arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction thereof.

     (b) NOTICES. All notices hereunder shall be given in writing and sent to
the party for whom intended by hand delivery or United States mail, postage
prepaid, addressed to the party for whom intended as follows:

                  If to the Company:

                           United Stationers Inc.
                           2200 East Golf Road
                           Des Plaines, Illinois 60016
                           Attention:   President

                  If to you, at:

                           1910 S.  Ridge Road
                           Lake Forest, Illinois 60045

or to such other persons or such other addresses as may be designated by written
notice served as provided herein.


                                        5




     (c) ASSIGNMENT. All rights and benefits in this letter agreement are
personal to you and neither this agreement nor any of your rights or interests
herein may be voluntarily or involuntarily sold, transferred or assigned by you.
Any attempt by you to assign, transfer, pledge or otherwise dispose of any
benefits or rights or interests contrary to the foregoing provisions, or the
levy or attachment or similar process thereupon, shall be null and void and of
no effect and shall relieve the Company of all liabilities hereunder. This
agreement shall be binding upon, and inure to the benefit of the parties and
their respective heirs, personal representatives, successors and permitted
assigns.

     (d) NOT AN EMPLOYMENT CONTRACT. Nothing in this letter shall confer upon
you any right to continue in the employ of the Company or interfere in any way
with the right of the Company at any time to terminate or modify' the terms and
conditions of employment.

     (e) PRIOR CORRESPONDENCE. This letter supplements but does not replace the
prior correspondence referred to above between you and Bob Cornell relating to
your hiring and employment. Without limitation, the provisions of the
Confidentiality and Non-Competition Agreement dated January 7, 1994 remain in
full force and effect. To the extent any provisions of this letter may conflict
with any provisions of the prior correspondence, the provisions of this letter
shall control.

     (f) ATTORNEY'S FEES. If you or your estate or designee prevail in any
action to enforce your rights under this letter agreement, you or they shall be
entitled to receive your or their attorney's fees, costs and expenses incurred
in enforcing your rights under this letter agreement.

     If you agree with the terms of this letter, please sign the acknowledgement
copy below and return it to me.



                                   Sincerely,
                                   United Stationers Supply Co.


                                   By:
                                         Vice President, Secretary and
                                         General Counsel


AGREED TO AND SIGNED
this 20TH day of MARCH, 1995.



- -----------------------------
Ergin Uskup


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


                                        6





                                    EXHIBIT A



Mr. Ergin Uskup.
1910 S. Ridge Road
Lake Forest, Illinois


Dear Ergin:

       This sets forth the amount of and the conditions to your [Severance
Payment] [Stay Bonus] pursuant to our letter agreement dated February 13, 1995,
as a result of [your termination of employment on _______.] [your continued
employment through_____.]

1. After you sign and return this Agreement to me, the Company will pay you an
amount of [$350,000] [$175,000] payable in an initial installment of $
______________ paid within one month following [your severance] [the first
anniversary of the Change in Control], with 23 [11] equal monthly installments
in the amount of $ ___________ each thereafter.

2. In return for the Company's providing the payment described above, you agree
as follows:

       A. RELEASE. You WAIVE and RELEASE the Company, its parent and any related
or affiliated entities and any predecessor entities to such entities, and each
of their officers, directors, employees, shareholders, agents, successors and
assigns (collectively, "Released Parties") from any claim, liability, cause of
action, damage or charge you have or may have against any of them which arises
out of anything occurring before you sign this Agreement, even those which you
do not know about or suspect that you may have. This includes, but is not
limited to, anything related to your employment or your separation from
employment, and extends to all possible claims, under federal, state or local
law, including, without limitation, any claims, if any, under the Age
Discrimination in Employment Act of 1967, Title Vll of the Civil Rights Act of
1964, the Civil Rights Acts of 1966 and of 1991, the Employment Retirement
Income Security Act of 1974, and the Americans with Disabilities Act of 1990.
(Of course, this Waiver and Release does not waive your right to receive the
[severance] payment described in Paragraph 1 above, or your right to receive
reimbursement for ordinary business expenses previously incurred, or for pending
medical or worker's compensation claims.)

       B. CONFIDENTIALITY AND NON-COMPETITION. You acknowledge that the
provisions of your Confidentiality and Non-Compete Agreement dated January 7,
1994 shall remain in full force and effect and survive the termination of your
employment.

3. Should you violate any of the provisions of Paragraph 2, in addition to its
other remedies, the Company will be released from any obligation to make the
[severance] [Stay Bonus] payments under Paragraph 1, and you shall repay any
such payments previously made to you.







Mr. Ergin Uskup
[Date]
Page 2



4. Should it be necessary for either party to sue to enforce rights hereunder,
the defaulting party will pay the prevailing party's expenses, including
attorneys' fees, in such litigation.

5. This Agreement takes the place of any oral or written promises, agreements or
understandings between the Company and you about any of the subjects of this
Agreement. This Agreement cannot be altered or amended except by written
agreements signed by both you and the President of the Company.

6. This Agreement shall be governed by Illinois law. If any provision is held
overbroad, invalid or unenforceable by a court, you agree to reduce the scope of
such provision as the court deems necessary or appropriate to permit its partial
enforcement.

7. You acknowledge that you have had ample opportunity to consider all of the
terms of this Agreement and to receive independent legal counsel; that you have
read and understand the Agreement and its legal effect; that no promise or
inducement was made to cause you to make this Agreement other than the severance
payment provided in Paragraph 1; and that you sign this Agreement of your own
free will based on your own decision. You also acknowledge that you have been
given 45 days to consider the terms of this Agreement before signing it, and you
understand that you may revoke it by providing me with written notice no later
than 7 days after you have signed it.

8. [insert required information for ADEA waiver at time waiver is delivered for
signature.]

Please consider all of the above very carefully, and contact me if you have any
questions or comments. If you agree with the terms of this Agreement, please
sign below and return the Agreement to me.



Sincerely,
United Stationers Supply Co.                    Agreed to and signed
                                                This day of            , 19


By:______________________                       ___________________________

Its                                              Ergin Uskup




"UNITED STATIONERS SUPPLY CO." [logo]

[LETTERHEAD]

                                  June 29, 2001

Mr.Ergin Uskup
1910 S. Ridge Road
Lake Forest, Illinois 60045

Dear Ergin:

     This letter amends our letter agreement dated February 13, 1995, as
previously amended by the letter dated December 20, 1996 from Robert H. Cornell
to you ("Agreement").

     You have agreed to resign your position with United Stationers Supply Co.
effective June 30, 2001 and assume the position of President of United
Stationers Technology Services LLC effective July 1, 2001 ("Transition"). As a
result of the Transition, there will be no change to you current title as Senior
Vice President of MIS and Chief Information Officer of United Stationers Inc.

     This transfer to United Stationers Technology Services LLC will not
constitute "good reason" under Paragraph 6 of the Agreement and will not
otherwise entitle you to severance under the Agreement or otherwise. For
purposes of the Agreement, "Company" shall hereafter refer collectively to
United Stationers Inc., United Stationers Supply Co. and United Stationers
Technology Services LLC.

     If you agree to this amendment, please execute the copy of this letter and
return it to me. We are very excited about your leading United Technology
Services LLC.

                                   Sincerely,

                                   /s/ Susan Maloney Meyer
                                   Susan Maloney Meyer
                                   Senior Vice President
                                   General Counsel


Agreed and Accepted:


/s/ Ergin Uskup
Ergin Uskup
Date Signed:



"UNITED STATIONERS SUPPLY CO." [logo]

[LETTERHEAD]                              A SUBSIDIARY OF UNITED STATIONERS INC.


February 7, 1996

                             PERSONAL & CONFIDENTIAL

Ergin Uskup
Corporate Office

Dear Ergin,

Tom Sturgess has agreed to provide you with an additional level of protection
regarding your retirement benefits, should a change of control occur in the
Company after the date of this letter.

Three events must take place before the provisions of this letter apply:

1)   A change of control as defined in paragraph 8 of the letter from Otis
     Halleen, dated February 13, 1995 must have occurred and;

2)   Tom Sturgess must leave the employ of the Company at or after such change
     of control and;

3)   Absent cause, you must be (involuntarily) terminated from the Company
     subsequent to events 1 and 2 above.

If the above events occur, the Company will, with regard to your retirement
benefit entitlement, give you credit in the retirement calculation for the loss
of Company service you will suffer as a result of your involuntary termination
from the date you are released to the date you would attain age 65 years. Your
eligible compensation for the years of service loss will be at your actual
compensation level at the time of your release, subject to the definition of
compensation under the Plan, not to exceed the allowable compensation permitted
under IRS regulations. This stipulation is necessary to establish the maximum
amount that may properly be provided from the Plan. It does not diminish the
Company's obligation to you regarding the $60,470 target as referenced in this
correspondence.

Finally, should the above scenarios occur, you will be entitled to a normal
retirement benefit at age 65 years from all sources of no less than $60,470,
such amount being the sum of entitlements due you from your deferred vested
Baxler pension; previous payments made to you from United Stationers during 1995
and final calculations to be made at the time of the above events. Should you
elect to take the payments earlier than age 65, the normal reductions of the
Company's retirement plan will apply. As necessary, you should refer to my prior
correspondence with you relating to your retirement arrangements with the
Company, i.e. correspondence dated 12/20/94 and 5/25/95.

Sincerely,


/s/ Robert H. Cornell
Robert H. Cornell
Vice President, Human Resources

RHC/pr

CC:      T. Sturgess
         O. Halleen
         M. Giblin



"UNITED STATIONERS SUPPLY CO." [logo]

[LETTERHEAD]                              A SUBSIDIARY OF UNITED STATIONERS INC.


          December 20, 1996

          Ergin Uskup
          1910 S. Ridge Road
          Lake Forest, IL 60045

          Dear Ergin,

          This amends our letter agreement dated February 13, 1995. Paragraph 4
          of that letter provides for a "Continuing Severance Benefit".

          Paragraph 4 is amended to read as follows:

                  "4.  CONTINUING SEVERANCE BENEFIT. If you employment is
                       terminated by you for good reason (as defined in
                       Paragraph 6 below), or by the Company other than for
                       cause (as defined in Paragraph 7 below), at any time
                       after the first anniversary of the Change in Control, you
                       will be entitled to receive and the Company shall pay to
                       you a severance benefit in the amount of one year's base
                       pay as in effect at the time of such termination, payable
                       in 12 equal monthly installments commencing within one
                       month after the date you become entitled thereto."

          If acceptable, please acknowledge the copy of this letter and return
          it to me.

          Sincerely,


          /s/ Robert H. Cornell
          Robert H. Cornell
          Vice President, Human Resources

          RHC/pr

          cc:  F. Hegi

          ----------------------------------------------------------------------
                               ACKNOWLEDGEMENT OF ACCEPTANCE
          ----------------------------------------------------------------------
          --------------------------------------------- ------------------------

                SIGNED: /s/ Ergin Uskup     DATE: 12/27/96
                           ERGIN USKUP
          --------------------------------------------- ------------------------

EX-10.33

Exhibit 10.33

"UNITED STATIONERS SUPPLY CO." [logo]     A SUBSIDIARY OF UNITED STATIONERS INC.

August 29,2001

Ergin Uskup
1910 S. Ridge Road
Lake Forest, IL 80045

Dear Ergin,

     This sets forth the Agreement between you and United Stationers Supply Co.
("the Company") about your termination of employment on or before 8/31/02. This
Agreement supersedes all prior employment agreements between the parties.

     After you sign and return this Agreement to me and after the termination of
your employment, (the "Effective Date") the Company will pay you severance, in
accordance with the terms of this Agreement, in the gross amount of 376,979.68
as a lump sum (less payroll taxes and authorized or required deductions) or
installments on regular pay periods of the Company (again, less payroll taxes
and authorized or required deductions). If you choose a lump sum payment, then
you will be responsible for all payments under COBRA, as more fully explained to
you in a separate letter on your COBRA rights and obligations. If you choose to
receive installments on regular pay periods, the company will pay the difference
between your employee contribution for healthcare insurance and COBRA premium
for the period of your severance. You will be responsible for submitting your
contribution as indicated in your COBRA correspondence. After your severance has
been paid, you will be responsible for COBRA premiums for the balance, if any,
of the eighteen (18) month COBRA period. Again, a separate letter to you will
explain your COBRA rights and obligations. You should understand that either
election, your employment and corresponding participation in any and all Company
benefit programs ends on the date of your termination of employment as set forth
in the first paragraph of this Agreement.

     In return for the Company's providing the severance payment described above
and other valuable consideration, the parties agree as follows:

     A.   CONFIDENTIALITY. You agree that, except with the Company's prior
written consent, you will not use or disclose any "Confidential Information",
which shall mean all information proprietary to the Company or any affiliate,
which is not generally known to others, including but not limited to customer
lists, financial packages with customers including pricing, discounts rebates
and other terms and of sale and any other customer information of any kind,
vendor pricing and contract information, business records, sales figures,
advertising and marketing strategies and programs for both the Company and the
Company's customers, and was disclosed to you or developed by you while employed
with the Company. The Confidential Information in this Paragraph shall apply to
items of Confidential Information for the lesser of three years or until the
Information becomes generally known to the public other than by an unauthorized
disclosure of the information by you. Nothing in this Paragraph shall prevent
you from making disclosures that may be required by law.

     To the extent that any prospective employment requires me to disclose such
Confidential Information. I agree to decline such employment.

     Prior to accepting employment with a customer of the Company, its parent or
subsidiary, I agree to give notice to the CEO of United Stationers Inc. for the
purpose of determining that my role with that future employer will not require
disclosure or use of Confidential Information.




          I UNDERSTAND THAT MY FAILURE TO PROVIDE SUCH NOTICE WILL CONSTITUTE A
MATERIAL BREACH OF THE SEPARATION AGREEMENT AND SUBJECT ME TO REPAYMENT OF ALL
SEVERANCE AMOUNTS, INCLUDING THE FORFEITURE OF FUTURE PAYMENTS

     B.   NON-SOLICITATION. You agree that you will not solicit employees of the
Company or current or prospective customers of the Company for a period of one
year from the date of this Agreement.

     C.   NON-DISPARAGEMENT. You agree not to make disparaging or derogatory
remarks regarding the Company or its officers, directors and employees. In the
event the Company is requested to provide references for you, the Company will,
consistent with the Company practice, confirm the dates of employment but make
no statements as to your performance.

     D.   NON-COMPETE. You agree not to work for a competitor of the Company,
its patent or subsidiaries, without the express written consent of the Company,
for a period of one year from the date of this Agreement or the length of time
equal to your severance payments, whichever is longer. Competitors are defined
as wholesalers of office products, including but not limited to wholesalers of
traditional office products, computer consumable products, office furniture,
janitorial and/or sanitation productions, audio/video and business machines (as
those categories are defined by United Stationers), including but not limited to
Daisytek or SP Richards.

     In order to promote uniformity and consistency in the Interpretation of
this Agreement, this Agreement shall be governed and construed in accordance
with the laws of the State of Illinois. If any provision is held to be overly
broad, invalid or otherwise unenforceable by a court, you agree to allow the
court to amend such provision(s) as the court deems necessary or appropriate to
permit enforcement of this Agreement.

     Should it be necessary for either party to sue to enforce rights hereunder,
the parties agree that the prevailing party shall be entitled to the expenses
attendant to such litigation, including, attorney's fees.

     The parties acknowledge that this Agreement was entered into knowingly and
voluntarily and constitutes the entire understanding between the Parties.

     Please consider all of the above very carefully, and contact me or KAREN
SCHUETT if you have any questions or comments. If you agree with the terms of
this Agreement, please sign below and return the Agreement to me. I have already
signed this Agreement in the designated space below.

Sincerely,

/s/ Randall Larrimore
Randall Larrimore
President & Chief Executive Officer


I CHOOSE TO RECEIVE SEVERANCE                       Agreed to and signed;
COMPENSATION VIA THE FOLLOWING
METHOD                                              This __th day of _________

/x/  REGULAR PAY PERIODS                            Name (Print): Ergin Uskup
     OF THE COMPANY

or                                                  Signature: /s/ Ergin Uskup

/ / LUMP SUM

EX-10.34

EXHIBIT 10.34

"UNITED STATIONERS. SUPPLY CO." [logo]

[LETTERHEAD]                              A SUBSIDIARY OF UNITED STATIONERS INC.

May 10, 2001

Ms. Susan Maloney Meyer
34 Canterbury Court
Wilmette, IL 60091

     RE: EMPLOYMENT TERMINATION AND GENERAL RELEASE

Dear Susan:

     This letter confirms the termination of your employment with United
Stationers and its affiliates ("Company"). This letter, if signed by you, also
provides an Agreement for the final and complete resolution of all matters,
whether now known or unknown, arising out of your employment, and termination of
employment, with the Company.

     Your employment will terminate with the Company effective JULY 31, 2001
WHICH DATE MAY BE EXTENDED IN MY SOLE DISCRETION TO A DATE NOT LATER THAN
OCTOBER 30, 2001 (EXTENDED TO 8/31/01) ("Termination"). After your successor has
been retained, you will resign as General Counsel and Secretary and assist your
successor in his or her transition.

     Subject to continuing satisfaction of the terms and conditions of this
Agreement by you and the Company and subject to the condition that you do not
revoke any portion of this Agreement, you will receive the following severance
benefits:

     1.   One (1) year of base salary paid to you in equal monthly installments
          over the one (1) year period commencing at your Termination;

     2.   Payment of an amount equal to your target 2000 bonus in equal monthly
          installments over the same time period;

     3.   The payment of a retainer equal to 50% of your base salary or $107,500
          for a six month period commencing on JANUARY 1, 2002 in exchange for
          payment of this retainer, the Company, at its sole discretion, will
          have the right to use your legal services on a consulting basis for a
          total of three (3) days/month (eighteen (18) days in total) during the
          aforementioned six (6) month period. Failure to fulfill this
          obligation due to your scheduling will not be considered a breach of
          this



May 10, 2001
Page -2-

          agreement but will only serve to reduce the payment set forth on this
          paragraph 3 by a prorated amount.

The Company agrees to pay your COBRA premiums for an eighteen-month period
commencing at Termination. Thereafter, the Company agrees to REIMBURSE you for
comparable health insurance for a further one (1) year period, unless you obtain
employment during that one (1) year period, where you are eligible for health
insurance.

The Company agrees to provide you with continued use of your Company car until
the expiration of the current lease in September 2001 on the condition that you
be solely responsible for the insurance thereon and provide satisfactory
evidence of such insurance.

You will be entitled to the services of an outplacement firm suitable for your
position. IF YOU DO NOT USE THE COMPANY'S OUTPLACEMENT FIRM AND CHOOSE AN
ALTERNATIVE FACILITY THAT PROVIDES PLACEMENT, THE COMPANY WILL PAY ONE HALF OF
THE AMOUNT IT OTHERWISE WOULD HAVE PAID.

You acknowledge that the severance benefits provided above are in lieu of and
exceed the benefits to which you are entitled under the letter of agreement of
July 22, 1998 between the Company and you ("Letter Agreement") and that these
extra benefits are provided by the Company in exchange for your signing this
Agreement.

     The Company may terminate its payment of severance benefits to you under
this Agreement if you fail in a material way to comply with any of your
obligations under this Agreement.

     After your termination date, you will also be compensated for any unused
vacation (earned during this calendar year), as well as accrued vacation (from
prior years).

     You may elect in accordance with a federal statute (COBRA), to continue
your medical and dental benefits under the program for up to eighteen (18)
months following your Termination. Certain welfare programs may be converted to
individual policies per conversion policies in place at the time of your
Termination. Information on COBRA and other conversion privileges will be sent
to you upon Termination.

     Your active participation in the Company's benefit plans and programs will
continue until your Termination date. Your vested accrued benefits, if any, will
be distributed in accordance with the provisions of those benefit plans.



May 10, 2001
Page -3-

     In exchange for the severance benefits provided under this Agreement, on
the date of Termination, you will enter into a release as follows: you waive and
release your right to file or participate individually or as a class member in
any claims or lawsuits (whether or not you now know of the basis for the claims
or lawsuits) in federal or state agencies or courts against the Company and its
employee benefit plans, including their present and former directors, officers,
employees, agents and fiduciaries, unless such waiver agreement is otherwise
prohibited by law or governmental regulation. This waiver and release includes,
but is not limited to, all claims of unlawful discrimination in regard to age,
race, sex, color, religion, national origin or handicap under Title VII of the
Civil Rights Act of 1964, the Age Discrimination In Employment Act, the Older
Workers Benefit Protection Act, The Civil Rights Act of 1991, or any other
federal, state, or local statutes, all claims for wrongful employment
termination or breach of contract and any other claims relating to your
employment or the termination of employment with the Company. This waiver and
release also applies to your heirs, assigns, executors and administrators, and
shall inure to the benefit of any successor or assign of the Company, or any of
its businesses. This waiver and release does not prevent you from filing a claim
or lawsuit against the Company or its employee benefits plan solely for the
purpose of collecting the benefits referred to in this Agreement or any other
right that you may have that cannot be waived as a matter of law or governmental
regulation.

As of the date of Termination, the Company generally releases and
forever discharges you from any and all claims, demands, liabilities, suits,
damages, losses, expenses, attorney's fees, obligations or causes of action
known and unknown of any and every nature whatsoever, and whether or not accrued
or matured which it may have arising out of or relating to any transaction,
dealing relationship, conduct, act or omission, or any other matters or things
occurring or existing at any time prior to the Termination, including but not
limited to your employment by the Company or otherwise relating to the
termination of such employment or services; PROVIDED, HOWEVER, that such general
release will not limit or release the Company's rights under this agreement or
in connection with any activity by you that constitutes fraud or criminal
conduct.

     You and the Company mutually agree: (a) not to intentionally disparage the
other or the Company's employees or products; (b) not to intentionally engage in
actions contrary to the interests of the other, and (c) not to disclose or allow
disclosure of any provisions of this Agreement. You agree not to compete against
the Company for one (1) year from the effective date of this Agreement; and to
return to the Company, effective immediately or as mutually agreed, all Company
property, including proprietary information.



May 10, 2001
Page -4-

     You agree that you will not, except with the Company's prior written
consent, use or disclose any confidential information, which shall mean all
information proprietary to the Company that is not publicly known and which was
disclosed to you or developed by you while employed with the Company. This
includes but is not limited to the following types of information about the
Company:

     1.   marketing programs and studies business strategies

     2.   finances, commissions, pricing including pricing programs

     3.   the identity, needs purchase and payment patterns, special credit
          and/or pricing terms, and special relationships with customers and
          prospects

     4.   the identity, and prices and credit terms of and special relationships
          with suppliers

     5.   all business records, documents, drawings, writings, software,
          databases, programs and other tangible things which were or are
          created or received by or for the Company in furtherance of its
          business,

     6.   any other information that you have been told or reasonable ought to
          know are regarded by the Company as confidential.

     All amounts payable to you or on your behalf under this Agreement will be
reported to appropriate governmental agencies as taxable income to the extent
required, and appropriate withholding will be made where necessary. In addition,
all amounts payable to you under this Agreement are expressed as amounts prior
to payment or withholding of any taxes, and the Company will not gross-up the
amounts or otherwise reimburse you for the taxes you pay relating to such
amounts.

     You acknowledge that no promises have been made which are not included in
this Agreement, and that this Agreement contains the entire understanding
between you and the Company. You acknowledge that the terms of this Agreement
are contractually binding. If any portion of this Agreement is declared invalid
or unenforceable, the remaining portions of this Agreement will continue in
force.

     You acknowledge that you have carefully read the terms of this Agreement
and that you know and understand its content and meaning.

     You are specifically advised to consult with an attorney prior to executing
this Agreement.



May 10, 2001
Page -5-

     You have twenty-one calendar days from today within which to consider this
Agreement before executing it. If you agree to the terms of this Agreement,
please sign two copies, and return one of them to me. You have a full seven
calendar days following your execution of this Agreement to revoke this
Agreement and have been and hereby are advised in writing that this Agreement
shall not become effective or enforceable until the revocation period has
expired. You may, of course, sign and return this Agreement before the
completion of the twenty-one day period. If I have not received a fully signed
copy of this Agreement by the end of business on May 30, 2001, I will assume you
have rejected this Agreement.

                                        Sincerely,

                                        /s/ Randall W. Larrimore
                                        Randall W. Larrimore
                                        President and Chief Executive Officer



May 10, 2001
Page -6-

ACCEPTED AND AGREED BY EMPLOYEE:


/s/ Susan Maloney-Meyer                               6.1.01
(Signature)                                           (Date)

ACCEPTED AND AGREED ON BEHALF OF THE COMPANY:


/s/ R. W. Larrimore                                June 11, 2001
(Signature)                                           (Date)

EX-10.35

EXHIBIT 10.35


                 MEDICAL EXECUTIVE REIMBURSEMENT PROGRAM (MERP)
                                Revised 03/28/02


ELIGIBILITY
Participation in the Medical Executive Reimbursement Program ("MERP") will be
limited to those active key associates in exempt grades 1 - 4 of United
Stationers Supply Co. or its subsidiaries ("Company") as determined solely by
CEO discretion. Under no circumstances will the program apply to spouses or
dependents.

PROGRAM
The Company will reimburse MERP participants for their medical care expenses in
recognition of their key role and services provided to the Company.

GENERAL
ALLOWABLE MEDICAL CARE EXPENSES

Medical care expenses include the diagnosis, care, medication, treatment or
prevention of disease. Expenses paid for medical care shall include those paid
for the purpose of affecting any structure or function of the body and for the
transportation and lodging primarily for and essential to medical care.
Allowable operations or treatments affecting any portion of the body include:

          o   Therapy or X-ray treatments.

          o   Hospital services.

          o   Nursing services (including nurse's board when paid by the
              participant).

          o   Medical laboratory.

          o   Surgery.

          o   Dental services.

          o   X-rays.

          o   Medicines and drugs (only items which are legally procured and
              generally accepted as falling within the category of medicines and
              drugs, whether or not requiring a prescription).

          o   Eye exams.

          o   Eye glasses and contact lenses.

          o   Artificial teeth or limbs.

          o   Ambulance hire.

          o   Other diagnostic and healing services.

Expenses paid for transportation primarily for, and essential to, the rendering
of medical care are allowable expenses. This includes expenses for the cost of
any meals and lodging while away from home receiving medical treatment. The
person's condition must be such that the particular medical care at the
institution is vital to recovery.

Annual exams are covered under the Annual Physical Exam Program.

An expenditure, which is merely beneficial to general health, such as a
vacation, is NOT an allowable expense.



REIMBURSEMENT OF MEDICAL CARE EXPENSES
The Company will reimburse participants for allowable medical care expenses
AFTER all other Company or non-company insurance policies and medical plans
(including Medicare and/or any other government sponsored plan) covering the
participant, have paid benefits.

Active officers will be reimbursed per the schedule:

BY SALARY GRADES
Grade 1  $75,000 maximum
Grade 2  $30,000 maximum
Grade 3  $25,000 maximum
Grade 4  $15,000 maximum


PROCEDURE

RESPONSIBILITY                             ACTION

Participant                   Submit medical, dental and prescription invoices
                                  to group medical plan provider.

                              Submit all other medical expense bills to group
                                  medical plan provider with "MERP" written
                                  across the top of the claim form.



         NOTE:                    Reimbursement will only be allowed through
                                  this procedure.

EX-10.36

                                                                  EXHIBIT 10.36

                            INDEMNIFICATION AGREEMENT

     This INDEMNIFICATION AGREEMENT is made and entered into as of the       day
of         ,200   (the "Agreement"), by and between United Stationers Inc., a
Delaware corporation (the "Company"), the director or executive officer of the
Company whose name appears on the signature page of this Agreement
("Indemnitee"), and for purposes of Section 9 only, United Stationers Supply
Co., an Illinois corporation and wholly-owned subsidiary of the Company
("USSCO").

     WHEREAS, highly competent persons are becoming more reluctant to serve
publicly-held corporations as directors or executive officers or in other
capacities unless they are provided with reasonable protection through insurance
or indemnification against risks of claims and actions against them arising out
of their service to and activities on behalf of the corporations.

     WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the Company should act to assure its directors and executive officers that
there will be increased certainty of such protection in the future.

     WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified.

     WHEREAS, Indemnitee is willing to serve, to continue to serve and to take
on additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified.

     WHEREAS, in consideration of the benefits received and to be received by
the Company in connection with actions taken and to be taken by the Board and by
the officers of the Company, the Company has determined that it is in the best
interest of the Company for the reasons set forth above to be a party to this
Agreement and to provide indemnification to the directors and executive officers
of the Company in connection with their service to and activities on behalf of
the Company and its subsidiaries.

     WHEREAS, the Company acknowledges that for purposes of this Agreement the
directors and executive officers of the Company who enter into this Agreement
are serving in such capacities at the request of the Company.

     WHEREAS, the Company further acknowledges that such directors and executive
officers are willing to serve, to continue to serve and to take on additional
service for or on behalf of the Company, thereby benefiting the Company and its
subsidiaries, on the condition that the Company enter into, and provide
indemnification pursuant to, this Agreement.

     NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:



     1.   DEFINITIONS.

          (a)  For purposes of this Agreement:

               (i) "Affiliate" shall mean any corporation, partnership, joint
venture, trust or other enterprise in respect of which Indemnitee is or was or
will be serving directly or indirectly at the request of the Company.

               (ii) "Disinterested Director" shall mean a director of the
Company who is not or was not a party to the Proceeding in respect of which
indemnification is being sought by Indemnitee.

               (iii) "Expenses" shall include all attorneys' fees and costs,
retainers, court costs, transcripts, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and all other disbursements or expenses incurred
in connection with asserting or defending claims.

               (iv) "Independent Counsel" shall mean a law firm or lawyer that
neither is presently nor in the past year has been retained to represent: (i)
the Company or Indemnitee in any matter material to any such party or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder in any matter material to such other party. Notwithstanding the
foregoing, the term "Independent Counsel" shall not include any firm or person
who, under the applicable standards of professional conduct then prevailing,
would have a conflict of interest in representing any of the Company or
Indemnitee in an action to determine Indemnitee's right to indemnification under
this Agreement. All Expenses of the Independent Counsel incurred in connection
with acting pursuant to this Agreement shall be borne by the Company.

               (v) "Losses" shall mean all liabilities, losses and claims
(including judgments, fines, penalties and amounts to be paid in settlement)
incurred in connection with any Proceeding.

               (vi) "Proceeding" shall include any threatened, pending or
completed action, suit, arbitration, mediation, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative.

     2.   SERVICE BY INDEMNITEE. Indemnitee agrees to begin or continue to serve
the Company or any Affiliate as a director or an executive officer.
Notwithstanding anything contained herein, this Agreement shall not create a
contract of employment between the Company and Indemnitee, and the termination
of Indemnitee's relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

     3.   INDEMNIFICATION. The Company agrees to indemnify Indemnitee for, and
hold Indemnitee harmless from and against, any Losses or Expenses at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as a director or an executive officer of the Company
or in any capacity for an Affiliate at the request of the Company (collectively
referred to as a "Director or an Officer of the Company") to the fullest extent

                                        2


permitted by the laws of the State of Delaware in effect on the date hereof or
as such laws may from time to time hereafter be amended to increase the scope of
such permitted indemnification. Without diminishing the scope of the
indemnification provided by this Section 3, the rights of indemnification of
Indemnitee provided hereunder shall include but shall not be limited to those
rights set forth hereinafter.

     4.   ACTION OR PROCEEDING OTHER THAN AN ACTION BY OR IN THE RIGHT OF THE
COMPANY. Indemnitee shall be entitled to the indemnification rights provided
herein if Indemnitee is a person who was or is made a party or is threatened to
be made a party to or is involved (including, without limitation, as a witness)
in any Proceeding, other than an action by or in the right of the Company, as
the case may be, by reason of (a) the fact that Indemnitee is or was a Director
or an Officer of the Company or (b) anything done or not done by Indemnitee in
any such capacity.

     5.   ACTIONS BY OR IN THE RIGHT OF THE COMPANY. Indemnitee shall be
entitled to the indemnification rights provided herein if Indemnitee is a person
who was or is a party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any Proceeding brought by or in
the right of the Company to procure a judgment in its favor by reason of (a) the
fact that Indemnitee is or was a Director or an Officer of the Company or (b)
anything done or not done by Indemnitee in any such capacity. Pursuant to this
Section, Indemnitee shall be indemnified against Losses or Expenses incurred or
suffered by Indemnitee or on Indemnitee's behalf in connection with the defense
or settlement of any Proceeding if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company. Notwithstanding the foregoing provisions of this
Section, no such indemnification shall be made in respect of any claim, issue or
matter as to which Delaware law expressly prohibits such indemnification by
reason of an adjudication of liability of Indemnitee to the Company unless and
only to the extent that the Court of Chancery of the State of Delaware or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for such
Losses and Expenses which the Court of Chancery or such other court shall deem
proper.

     6.   INDEMNIFICATION FOR LOSSES AND EXPENSES OF PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been wholly successful on the merits or otherwise in
any Proceeding referred to in Section 3, 4 or 5 hereof on any claim, issue or
matter therein, Indemnitee shall be indemnified against all Losses and Expenses
incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If
Indemnitee is not wholly successful in such Proceeding but is successful, on the
merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding, the Company agrees to indemnify Indemnitee to the
maximum extent permitted by law against all Losses and Expenses incurred by
Indemnitee in connection with each successfully resolved claim, issue or matter.
In any review or Proceeding to determine the extent of indemnification, the
Company shall bear the burden of proving any lack of success and which amounts
sought in indemnity are allocable to claims, issues or matters which were not
successfully resolved. For purposes of this Section and without limitation, the
termination of any such claim, issue or matter by dismissal with or without
prejudice shall be deemed to be a successful resolution as to such claim, issue
or matter.

                                        3


     7.   PAYMENT FOR EXPENSES OF A WITNESS. Notwithstanding any other
provision of this Agreement, to the extent that Indemnitee is, by reason of the
fact that Indemnitee is or was a Director or an Officer of the Company, a
witness in any Proceeding, the Company agrees to pay to Indemnitee all Expenses
actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith.

     8.   ADVANCEMENT OF EXPENSES. All Expenses incurred by or on behalf of
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding shall be paid by the
Company in advance of the final disposition of such Proceeding within twenty
days after the receipt by the Company of a statement or statements from
Indemnitee requesting from time to time such advance or advances, whether or not
a determination to indemnify has been made under Section 10. Indemnitee's
entitlement to such advancement of Expenses shall include those incurred in
connection with any Proceeding by Indemnitee seeking an adjudication or award in
arbitration pursuant to this Agreement. The financial ability of Indemnitee to
repay an advance shall not be a prerequisite to the making of such advance. Such
statement or statements shall reasonably evidence such Expenses incurred (or
reasonably expected to be incurred) by Indemnitee in connection therewith and
shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms of
this Agreement.

     9.   GUARANTEE. In the event that the Company fails or is unable to
perform any of its payment obligations under the terms of this Agreement, USSCO
hereby unconditionally guarantees that it will perform the obligations of the
Company and pay Indemnitee for any Losses or Expenses for which Indemnitee is
entitled to be indemnified or for Expenses to be advanced hereunder. Such
payment will be made promptly upon request and without the necessity of a
demand.

     10.  PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.

          (a)  When seeking indemnification under this Agreement (which shall
not include in any case the right of Indemnitee to receive payments pursuant to
Section 7 and Section 8 hereof, which shall not be subject to this Section 10),
Indemnitee shall submit a written request for indemnification to the Company.
Determination of Indemnitee's entitlement to indemnification shall be made
promptly, but in no event later than 30 days after receipt by the Company of
Indemnitee's written request for indemnification. The Secretary of the Company
shall, promptly upon receipt of Indemnitee's request for indemnification, advise
the Board that Indemnitee has made such request for indemnification.

          (b)  The entitlement of Indemnitee to indemnification under this
Agreement shall be determined in the specific case (1) by the Board by a
majority vote of the Disinterested Directors, even though less than a quorum, or
(2) if there are no Disinterested Directors, or if such Disinterested Directors
so direct, by Independent Counsel or (3) by the stockholders.

          (c)  In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the
Indemnitee, subject to the approval of the Board, such approval not to be
unreasonably withheld. Upon failure of the Indemnitee to so select such
Independent Counsel or upon failure of the Board to so approve, such Independent

                                        4


Counsel shall be selected by the American Arbitration Association of New York,
New York or such other person as such Association shall designate to make such
selection.

          (d)  If the determination made pursuant to Section 10(b) is that
Indemnitee is not entitled to indemnification to the full extent of Indemnitee's
request, Indemnitee shall have the right to seek entitlement to indemnification
in accordance with the procedures set forth in Section 11 hereof.

          (e)  If the person or persons empowered pursuant to Section 10(b) to
make a determination with respect to entitlement to indemnification shall have
failed to make the requested determination within 30 days after receipt by the
Company of such request, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
absolutely entitled to such indemnification, absent (i) misrepresentation by
Indemnitee of a material fact in the request for indemnification or (ii) a final
judicial determination that all or any part of such indemnification is expressly
prohibited by law.

          (f)  The termination of any Proceeding by judgment, order, settlement
or conviction, or upon a plea of nolo contendere or its equivalent, shall not,
of itself, adversely affect the rights of Indemnitee to indemnification
hereunder except as may be specifically provided herein, or create a presumption
that Indemnitee did not act in good faith and in a manner which Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, as the case may be, or create a presumption that (with respect to any
criminal action or proceeding) Indemnitee had reasonable cause to believe that
Indemnitee's conduct was unlawful.

          (g)  For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if in taking such action
Indemnitee relied on the records or books of account of the Company or an
Affiliate, including financial statements, or on information supplied to
Indemnitee by the officers of the Company or an Affiliate in the course of their
duties, or on the advice of legal counsel for the Company or an Affiliate or on
information or records given or reports made to the Company or an Affiliate by
an independent certified public accountant or by an appraiser or other expert
selected with reasonable care to the Company or an Affiliate. The Company shall
have the burden of establishing the absence of good faith. The provisions of
this Section 10(g) shall not be deemed to be exclusive or to limit in any way
the other circumstances in which Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.

          (h)  The knowledge and/or actions, or failure to act, of any other
director, officer, agent or employee of the Company or an Affiliate shall not be
imputed to Indemnitee for purposes of determining the right to indemnification
under this Agreement.

     11.  REMEDIES IN CASES OF DETERMINATION NOT TO INDEMNIFY OR TO ADVANCE
EXPENSES.

          (a)  In the event that (i) a determination is made that Indemnitee is
not entitled to indemnification hereunder, (ii) advances are not made pursuant
to Section 8 hereof or (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to Section 10 hereof,
Indemnitee shall be entitled to seek a final adjudication either through an

                                        5


arbitration proceeding or in an appropriate court of the State of Delaware or
any other court of competent jurisdiction of Indemnitee's entitlement to such
indemnification or advance.

          (b)  In the event a determination has been made in accordance with the
procedures set forth in Section 10 hereof, in whole or in part, that Indemnitee
is not entitled to indemnification, any judicial proceeding or arbitration
referred to in Section 11(a) shall be de novo and Indemnitee shall not be
prejudiced by reason of any such prior determination that Indemnitee is not
entitled to indemnification, and the Company shall bear the burdens of proof
specified in Sections 6 and 10 hereof in such proceeding.

          (c)  If a determination is made or deemed to have been made pursuant
to the terms of Section 10 hereof or this Section 11 that Indemnitee is entitled
to indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

          (d)  To the extent deemed appropriate by the court, interest shall be
paid by the Company to Indemnitee at a rate equal to the rate paid by the
Company or its subsidiaries to the principal senior secured lender thereto for
amounts which the Company indemnifies or is obliged to indemnify Indemnitee for
the period commencing with the date on which Indemnitee requested
indemnification (or reimbursement or advancement of any Expenses) and ending
with the date on which such payment is made to Indemnitee by the Company.

     12.  EXPENSES INCURRED BY INDEMNITEE TO ENFORCE THIS AGREEMENT. All
Expenses incurred by Indemnitee in connection with the preparation and
submission of Indemnitee's request for indemnification hereunder shall be borne
by the Company. In the event that Indemnitee is a party to or intervenes in any
proceeding in which the validity or enforceability of this Agreement is at issue
or seeks an adjudication to enforce Indemnitee's rights under, or to recover
damages for breach of, this Agreement, Indemnitee, if Indemnitee prevails in
whole in such action, shall be entitled to recover from the Company, and shall
be indemnified by the Company against, any Expenses incurred by Indemnitee. If
it is determined that Indemnitee is entitled to indemnification for part (but
not all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which Indemnitee is entitled to
indemnification and for claims, issues or matters for which Indemnitee is not so
entitled.

     13.  NON-EXCLUSIVITY. The rights of indemnification and to receive
advances as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under any law,
certificate of incorporation, by-law, other agreement, vote of stockholders or
resolution of directors or otherwise, both as to action in Indemnitee's official
capacity and as to action in another capacity while holding such directorship or
office. To the extent Indemnitee would be prejudiced thereby, no amendment,
alteration, rescission or replacement of this Agreement or any provision hereof
shall be effective as to Indemnitee with respect to any action taken or omitted
by such Indemnitee in Indemnitee's position with the Company or an Affiliate or
any other entity which Indemnitee is or was serving at the request of the
Company prior to such amendment, alteration, rescission or replacement.

                                        6


     14.  DURATION OF AGREEMENT. This Agreement shall apply to any claim
asserted and any Losses and Expenses incurred in connection with any claim
asserted on or after the effective date of this Agreement and shall continue
until and terminate upon the later of: (a) ten years after Indemnitee has ceased
to occupy any of the positions or have any of the relationships described in
Section 3, 4 or 5 hereof; or (b) one year after the final termination of all
pending or threatened Proceedings of the kind described herein with respect to
Indemnitee. This Agreement shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of Indemnitee and Indemnitee's
spouse, assigns, heirs, devisee, executors, administrators or other legal
representatives.

     15.  MAINTENANCE OF D&O INSURANCE.

          (a)  The Company hereby covenants and agrees with Indemnitee that, so
long as Indemnitee shall continue to serve as a Director or an Officer of the
Company and thereafter so long as Indemnitee shall be subject to any possible
claim or threatened, pending or completed Proceeding, whether civil, criminal or
investigative, by reason of the fact that Indemnitee was a Director or an
Officer of the Company or any other entity which Indemnitee was serving at the
request of the Company, the Company shall maintain in full force and effect (i)
the directors' and officers' liability insurance issued by the insurer and
having the policy amount and deductible as currently in effect with respect to
directors and officers of the Company or any of its subsidiaries and (ii) any
replacement or substitute policies issued by one or more reputable insurers
providing in all respects coverage at least comparable to and in the same amount
as that currently provided under such existing policy (collectively, "D&O
Insurance").

          (b)  In all policies of D&O Insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits,
subject to the same limitations, as are accorded to the Company's directors or
officers most favorably insured by such policy.

          (c)  Notwithstanding anything to the contrary set forth in (a) above,
the Company shall have no obligation to maintain D&O Insurance if the Company
determines in good faith that such insurance is not reasonably available, the
premium cost for such insurance is disproportionate to the amount of coverage
provided or the coverage provided by such insurance is limited by exclusions so
as to provide an insufficient benefit.

     16.  SEVERABILITY. Should any part, term or condition hereof be declared
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions hereof shall not be affected thereby, and the
illegal or unenforceable portions hereof shall be and hereby are redrafted to
conform with applicable law, while leaving the remaining portions hereof intact.

     17.  COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

     18.  HEADINGS. Section headings are for convenience only and do not control
or affect meaning or interpretation of any terms or provisions hereof.

                                        7


     19.  MODIFICATION AND WAIVER. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by each of the
parties hereto.

     20.  NO DUPLICATIVE PAYMENT. The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that Indemnitee has otherwise actually received such payment
(net of Expenses incurred in collecting such payment) under any insurance
policy, contract, agreement or otherwise.

     21.  NOTICES. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed,
enclosed in a registered or certified postpaid envelope, in any general or
branch office of the United States Postal Service, or sent by Federal Express or
other similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answer back is received.

          (a)  If to Indemnitee, to the address appearing on the signature page
hereof.

          (b)  If to the Company to:

               United Stationers Inc.
               2200 East Golf Road
               Des Plaines, Illinois 60016-1267
               Attention: General Counsel

     22.  GOVERNING LAW. The parties agree that this Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of Delaware without regard to its conflicts of law rules.

     23.  ENTIRE AGREEMENT. Subject to the provisions of Section 13 hereof,
this Agreement constitutes the entire understanding between the parties and
supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter hereof. This Agreement may not be amended
or otherwise modified except in writing duly executed by all of the parties. A
waiver by any party of any breach or violation of this Agreement shall not be
deemed or construed as a waiver of any subsequent breach or violation thereof.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

                                        8


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

                                    UNITED STATIONERS INC.

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    INDEMNITEE

                                    BY:
                                       ----------------------------------------


                                    Name:
                                         --------------------------------------
                                    Address:
                                            -----------------------------------
                                    City and State:
                                                   ----------------------------


                                    For the purposes of Section 9 only,

                                    UNITED STATIONERS SUPPLY CO.


                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                       9

EX-13

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is quoted through the Nasdaq National Market System
under the symbol USTR. The following table shows the high and low closing sale
prices per share for the Company's common stock as reported by Nasdaq.



                                    High           Low
                                  --------       --------
                                           
    2001
    --------------
    First Quarter                 $  27.56       $  22.00
    Second Quarter                   31.56          22.63
    Third Quarter                    34.25          27.25
    Fourth Quarter                   34.95          26.50

    2000
    --------------
    First Quarter                    37.25          25.31
    Second Quarter                   37.81          28.31
    Third Quarter                    32.75          26.88
    Fourth Quarter                   30.63          21.50


On March 11, 2002, there were approximately 841 holders of record of common
stock.

The Company's policy has been to reinvest earnings to fund future growth.
Accordingly, the Company has not paid cash dividends and does not anticipate
declaring cash dividends on its common stock in the foreseeable future.
Furthermore, as a holding company, United's ability to pay cash dividends in the
future depends upon the receipt of dividends or other payments from its
operating subsidiary, USSC. The payment of these dividends is subject to certain
restrictions imposed by the Company's debt agreements. See Note 7 to the
Consolidated Financial Statements.

On October 23, 2000, the Company's Board of Directors authorized the repurchase
of up to $50.0 million of its common stock. Under this authorization, the
Company purchased 467,500 shares at a cost of approximately $12.4 million during
2001. During 2000, the Company purchased 857,100 shares of its common stock at a
cost of approximately $22.4 million. Acquired shares are included in the issued
shares of the Company, but are not included in average shares outstanding when
calculating earnings per share data. During 2001 and 2000, the Company reissued
621,453 and 309,674 shares of treasury stock, respectively, to fulfill its
obligations under its management equity plan.

Common Stock
100,000,000 shares authorized, $0.10 par value, 37,217,814 and 37,213,207 shares
issued as of December 31, 2001 and 2000, respectively.

Preferred Stock
15,000,000 shares authorized, without par value, no shares outstanding as of
December 31, 2001 and 2000.



ITEM 6.    SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data of the Company for the years ended
December 31, 1997 through 2001 have been derived from the Consolidated Financial
Statements of the Company, which have been audited by Ernst & Young LLP,
independent auditors. All selected consolidated financial data set forth below
should be read in conjunction with, and is qualified in its entirety by
Management's Discussion and Analysis of Financial Condition and Results of
Operations and the Consolidated Financial Statements of the Company.



                                                                   Years Ended December 31,
                                      -----------------------------------------------------------------------------------
                                          2001              2000              1999              1998              1997
                                      -----------       -----------       -----------       -----------       -----------
                                                         (dollars in thousands, except per share data)
                                                                                               
INCOME STATEMENT DATA:
Net sales                             $ 3,925,936       $ 3,944,862       $ 3,442,696       $ 3,097,595       $ 2,585,826
Cost of goods sold                      3,306,143         3,301,018         2,878,539         2,566,158         2,137,551
                                     -------------     -------------     -------------     -------------     -------------
Gross profit                              619,793           643,844           564,157           531,437           448,275

Operating expenses:
 Warehousing, marketing
 and administrative
 expenses                                 450,135           441,298           381,963           362,074           313,346
 Restructuring charge                      47,603(1)             --                --                --                --
 Non-recurring charges                         --                --                --            13,852(2)         64,698(3)
                                      -----------       -----------       -----------       -----------       -----------
Total operating expenses                  497,738           441,298           381,963           375,926           378,044
                                      -----------       -----------       -----------       -----------       -----------
Income from operations                    122,055           202,546           182,194           155,511            70,231
Interest expense                          (25,872)          (30,171)          (30,044)          (37,095)          (53,741)
Interest income                             2,079             2,942               849               794               230
Other expense, net                         (4,621)(4)       (11,201)(4)        (9,432)(4)        (8,221)(4)            --
                                      -----------       -----------       -----------       -----------       -----------
Income before income
  taxes and extraordinary item             93,641           164,116           143,567           110,989            16,720
Income taxes                               36,663            65,473            60,158            47,064             8,532
                                      -----------       -----------       -----------       -----------       -----------
Income before
   extraordinary item                      56,978            98,643            83,409            63,925             8,188
Extraordinary item - loss
 on early retirement of debt,
 net of tax benefit of $4,248
 in 2000, $3,970 in 1998, and
 $3,956 in 1997                                --            (6,476)               --            (5,907)           (5,884)
                                      -----------       -----------       -----------       -----------       -----------

Net income                            $    56,978       $    92,167       $    83,409       $    58,018       $     2,304
                                      ===========       ===========       ===========       ===========       ===========
Net income attributable to
 common stockholders                  $    56,978       $    92,167       $    83,409       $    58,018       $       776
                                      ===========       ===========       ===========       ===========       ===========
Net income per common
 share - assuming dilution
 Income before extraordinary
   item                               $      1.68       $      2.84       $      2.37       $      1.76       $      0.22
 Extraordinary item                            --             (0.19)               --             (0.16)            (0.19)
                                      -----------       -----------       -----------       -----------       -----------
 Net income                           $      1.68       $      2.65       $      2.37       $      1.60       $      0.03
                                      ===========       ===========       ===========       ===========       ===========
Cash dividends declared per
 common share                         $        --       $        --       $        --       $        --       $        --

OPERATING AND OTHER DATA:
EBITDA (5)                                160,596           233,651           211,642           182,449            96,272
EBITDA margin (6)                             4.1%              5.9%              6.1%              5.9%              3.7%
Depreciation and
 amortization (7)                     $    38,541       $    31,105       $    29,448       $    26,938       $    26,041
Capital expenditures, net                  28,618            39,301            21,331            24,616            12,991


                                        1




                                                                   Years Ended December 31,
                                      -----------------------------------------------------------------------------------
                                        2001(8)           2000(9)            1999             1998(10)          1997(11)
                                      -----------       -----------       -----------       -----------       -----------
                                                        (dollars in thousands, except per share data)
                                                                                               
OPERATING RESULTS BEFORE CHARGES:
Income from operations                $   169,658       $   202,546       $   182,194       $   169,363       $   134,929
Net income attributable to
 common stockholders                       85,921            98,643            83,409            72,212            45,364
Net income per common
 share - assuming dilution                   2.53              2.84              2.37              2.00              1.47
EBITDA                                    208,199           233,651           211,642           196,301           160,970
EBITDA margin                                 5.3%              5.9%              6.1%              6.3%              6.2%


                                                                       As of December 31,
                                      -----------------------------------------------------------------------------------
                                          2001              2000              1999              1998              1997
                                      -----------       -----------       -----------       -----------       -----------
                                                                    (dollars in thousands)
                                                                                               
BALANCE SHEET DATA
Working capital                       $   412,766(12)   $   495,456(12)   $   415,548(12)   $   357,024(12)   $   451,449
Total assets                            1,339,587(12)     1,447,027(12)     1,279,903(12)     1,166,991(12)     1,148,021
Total debt and capital
 leases(13)                               271,705           409,867           336,927           315,384           537,135
Total stockholders' equity                538,681           478,439           406,009           370,563           223,308


 (1)      In the third quarter of 2001, the Company recorded a restructuring
          charge of $47.6 million ($28.9 million net of tax benefit of $18.7
          million). See Note 3 to the Consolidated Financial Statements.

 (2)      In the second quarter of 1998, the Company recognized a non-recurring
          charge of $13.9 million ($8.3 million net of tax benefit of $5.6
          million) related to the write-off of the remaining payments and
          prepaid expense under a contract for computer services from a vendor.

 (3)      In the fourth quarter of 1997, the Company recognized a non-recurring
          non-cash charge of $59.4 million ($35.5 million net of tax benefit of
          $23.9 million), and a non-recurring cash charge of $5.3 million ($3.2
          million net of tax benefit of $2.1 million) related to the vesting of
          stock options and the termination of certain management advisory
          service agreements.

 (4)      Represents the loss on the sale of certain trade accounts receivable
          through an asset-backed securitization program and the gain or loss on
          the sale of certain capital assets. See Note 5 to the Consolidated
          Financial Statements.

 (5)      EBITDA is defined as earnings before interest, taxes, depreciation and
          amortization, and extraordinary items. EBITDA is commonly used by
          certain investors to analyze operating performance and to determine a
          company's ability to service and incur debt. EBITDA should not be
          considered in isolation from, or as a substitute for, measurements
          prepared in accordance with generally accepted accounting principles.

 (6)      EBITDA margin represents EBITDA as a percent of net sales.

 (7)      Excludes amortization related to deferred financing costs, which is a
          component of interest expense.

 (8)      In the third quarter of 2001, the Company recorded a restructuring
          charge of $47.6 million ($28.9 million net of tax benefit of $18.7
          million). See Note 3 to the Consolidated Financial Statements.

 (9)      In the second quarter of 2000, the Company recorded an extraordinary
          charge of $10.7 million ($6.5 million net of tax benefit of $4.2
          million) related to the early retirement of debt. See Note 7 to the
          Consolidated Financial Statements.

                                       2


 (10)     In the second quarter of 1998, the Company recognized a non-recurring
          charge of $13.9 million ($8.3 million net of tax benefit of $5.6
          million) related to the write-off of the remaining payments and
          prepaid expense under a contract for computer services from a vendor.
          In addition, during the second quarter of 1998 the Company recorded an
          extraordinary charge of $9.9 million ($5.9 million net of tax benefit
          of $4.0 million) related to the early retirement of debt.

 (11)     In the fourth quarter of 1997, the Company recognized a non-recurring
          non-cash charge of $59.4 million ($35.5 million net of tax benefit of
          $23.9 million) and a non-recurring cash charge of $5.3 million ($3.2
          million net of tax benefit of $2.1 million) related to the vesting of
          stock options and the termination of certain management advisory
          service agreements. In addition, during the fourth quarter of 1997 the
          Company recorded an extraordinary charge of $9.8 million ($5.9 million
          net of tax benefit of $3.9 million) related to early retirement of
          debt.

 (12)     Excludes $125.0 million in 2001, $150.0 million in 2000 and $160.0
          million in 1999 and 1998 of certain trade accounts receivable sold
          through an asset-backed securitization program. See Note 5 to the
          Consolidated Financial Statements.

 (13)     Total debt and capital leases include current maturities.

                                       3


ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

The following Management's Discussion and Analysis and other parts of this
Annual Report contain "forward-looking statements," within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, that are
based on current management expectations, forecasts and assumptions. These
include, without limitation, statements using forward-looking terminology such
as "may," "will," "future," "expect," "intend," "anticipate," "believe,"
"estimate," "project," "forecast" or "continue" or the negative thereof or other
variations thereon or comparable terminology. All statements other than
statements of historical fact included in this Annual Report, including those
regarding the Company's financial position, business strategy, projected costs
and plans and objectives of management for future operations are forward-looking
statements. Certain risks and uncertainties could cause actual results to differ
materially from those in such forward-looking statements. Such risks and
uncertainties include, but are not limited to, uncertainties relating to: the
Company's restructuring plan, including its ability to realize expected cost
savings from facility rationalization, systems integration and other initiatives
and the timing of those savings; the Company's ability to streamline its
organization and operation, successfully integrate Azerty and implement general
cost-reduction initiatives; the Company's reliance on key suppliers and the
impact of fluctuations in their pricing and variability in vendor allowances
based on sales volume; the Company's ability to anticipate and respond to
changes in end-user demand; competitive activity and the resulting impact on
pricing and product offerings and mix; reliance on key management personnel; and
economic conditions and changes affecting the business products industry and the
general economic conditions. A description of these factors, as well as other
factors, which could affect the Company's business, can be found in certain
filings by the Company with the Securities and Exchange Commission.

Readers are cautioned not to place undue reliance on forward-looking statements
contained in this Annual Report. The Company undertakes no obligation to release
the results of any updates or revisions to these forward-looking statements that
may be made to reflect any future events or circumstances.

The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and related notes appearing elsewhere in this
Annual Report.

OVERVIEW

United Stationers Inc. through its wholly owned operating subsidiary United
Stationers Supply Co. ("USSC"), and USSC's subsidiaries (collectively, the
"Company") is the largest general line business products wholesaler in the
United States, with 2001 net sales of $3.9 billion. The Company sells its
products through a national distribution network to more than 20,000 resellers,
who in turn sell directly to end-users. These products are distributed through a
computer-based network of 36 USSC regional distribution centers, 24 dedicated
Lagasse, Inc. ("Lagasse") distribution centers that serve the janitorial and
sanitation industry, four Azerty Incorporated ("Azerty") distribution centers
that serve the U.S. and two in Mexico that serve computer supply resellers, two
distribution centers that serve the Canadian marketplace and a mega-center that
supports USSC, Azerty, Lagasse, and The Order People. During the second quarter
of 2002, Azerty's computer systems and product offering will be integrated into
USSC and the Company intends to close the four Azerty distribution centers.
Following the integration the Company intends to continue to market computer
consumables using the Azerty name.

During 2000, the Company established The Order People ("TOP") to operate as its
third-party fulfillment provider for product categories beyond office products.
To become a full service provider, the Company acquired CallCenter Services,
Inc. which was a customer relationship management outsourcing service company
with inbound call centers in Wilkes-Barre, Pennsylvania, and Salisbury,
Maryland. In 2001, the Company did not achieve the estimated revenue to support
TOP's cost structure. As a result, the Company began to significantly reduce the
operating expenses of TOP. Therefore, in November 2001, the Wilkes-Barre portion
of CallCenter Services, Inc. was sold to Customer Satisfaction First and the
Salisbury portion was sold to 1-800-BARNONE, a Financial Corporation, Inc. in
January 2002. However, the Company remains committed to building the third-party
fulfillment business and to providing outstanding customer service to current
and future clients. To accomplish this, TOP's clients will be serviced utilizing
the resources within the Company's Supply Division. TOP will use the Memphis
distribution center as its lead distribution point with USSC's facilities
providing support where necessary.

The Company is focused on leveraging its infrastructure across all business
units to lower its operating expenses and increase cash flow. In addition, the
Company's entire distribution network is continuously under review to improve
productivity and efficiency, including the ability to reduce working capital
requirements.

                                        1


RESTRUCTURING CHARGE. In the third quarter of 2001, the Company's Board of
Directors approved a restructuring plan that includes:

   -    An organizational restructuring aimed at eliminating certain layers of
        management to achieve a lower cost structure and provide better customer
        service;
   -    The consolidation of certain distribution facilities and call center
        operations;
   -    An information technology platform consolidation;
   -    Divestiture of The Order People's call center operations and certain
        other assets; and
   -    A significant reduction to The Order People's cost structure.

The restructuring plan calls for a workforce reduction of 1,375. These positions
primarily are related to The Order People and call center operations. The
associate groups that will be affected by the restructuring plan include
management personnel, inside and outside sales representatives, call center
associates, distribution workers, and hourly administrative staff. The
restructuring plan is designed to have all initiatives completed within
approximately one year from the commitment date.

During the third quarter of 2001, the Company recorded a pre-tax restructuring
charge of $47.6 million, or $0.85 per share (on an after-tax basis). This charge
includes a pre-tax cash charge of $31.7 million and a $15.9 million non-cash
charge. The major components of the restructuring charge and the remaining
accrual balance as of December 31, 2001, are as follows:



                                            Non-Cash         Employment                        Total
                                              Asset       Termination and     Accrued      Restructuring
(dollars in thousands)                     Write-Downs    Severance Costs    Exit Costs       Charge
- ----------------------                     -----------    ---------------    ----------    -------------
                                                                               
Restructuring Charge                       $    15,925    $        19,189    $   12,489    $      47,603
Amounts Utilized -
   as of December 31, 2001                     (15,925)            (3,023)       (1,226)         (20,174)
                                           -----------    ---------------    ----------    -------------
Accrued Restructuring Costs -
   as of December 31, 2001                 $        --    $        16,166    $   11,263    $      27,429
                                           ===========    ===============    ==========    =============


The non-cash asset write-downs of $15.9 million were primarily the result of
facility closures and business divestitures, including $8.8 million related to
property, plant and equipment and $7.1 million related to goodwill. Asset
write-downs are based on management's estimate of net realizable value.

Employment termination and severance costs are related to voluntary and
involuntary terminations and reflect cash termination payments to be paid to
associates affected by the restructuring plan. Healthcare benefits and career
transition services are included in the termination and severance costs. The
restructuring plan allows associates to continue their participation in the
Company's healthcare plan during the term of their severance.

Accrued exit costs are primarily contractual lease obligations that existed
prior to September 30, 2001, for buildings that the Company has closed or will
be closing in the near future.

Implementation costs will be recognized as incurred and consist of incremental
costs directly related to the realization of the restructuring plan. The Company
estimates that the total cost of implementation will be approximately $6.7
million incurred ratably through approximately September 30, 2002. These costs
include training, stay bonuses, consulting fees, costs to relocate inventory,
and accelerated depreciation. Implementation costs incurred through December 31,
2001, were $2.2 million.

As of December 31, 2001, the Company completed the closure of three distribution
centers and one USSC call center, eliminated one administrative office, divested
a portion of the call center operations dedicated to serving The Order People's
clients and began the implementation of its organizational restructuring and
workforce reduction. As a result, the Company reduced its workforce by 580
associates through its voluntary and involuntary termination programs. The
remaining 795 associates will be terminated throughout the implementation period
of approximately one year.

                                        2


COMMON STOCK REPURCHASE. On October 23, 2000, the Company's Board of Directors
authorized the repurchase of up to $50.0 million of its common stock. Under this
authorization, the Company purchased 467,500 and 857,100 shares of its common
stock at a cost of approximately $12.4 million and $22.4 million, during 2001
and 2000, respectively. Acquired shares are included in the issued shares of the
Company, but are not included in average shares outstanding when calculating
earnings per share data. During 2001 and 2000, the Company reissued 621,453 and
309,674 shares of treasury stock, respectively, to fulfill its obligations under
its management equity plan.

CRITICAL ACCOUNTING POLICIES

The Company's accounting policies are more fully described in Note 2 to the
Consolidated Financial Statements. As disclosed in Note 2, the preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions about future events that
affect the amounts reported in the financial statements and accompanying notes.
Future events and their effects cannot be determined with absolute certainty.
Therefore, the determination of estimates requires the exercise of judgment.
Actual results inevitably will differ from those estimates, and such differences
may be material to the financial statements. The most significant accounting
estimates inherent in the preparation of the Company's financial statements
include the following:

- - REVENUE RECOGNITION

Revenue is recognized when a service is rendered or when a product is shipped
and title has transferred to the customer.

- - VALUATION OF ACCOUNTS RECEIVABLE

The Company makes judgments as to the collectibility of accounts receivable
based on historical trends and future expectations. Management estimates an
allowance for sales returns and doubtful accounts, which represents the
collectibility of trade accounts receivable. These allowances adjust gross trade
accounts receivable down to net realizable value. To determine the allowance for
sales returns, management uses historical trends to estimate future period
product returns. To determine the allowance for doubtful accounts, management
reviews specific customers and the Company's accounts receivable aging.

- - CUSTOMER REBATES

Customer rebates and discounts are common practice in the business products
industry. Customer rebates consist of volume rebates, sales growth incentives,
participation in promotions and other miscellaneous discount programs. These
rebates are recorded as a reduction to gross sales. Customer rebates are
estimated based on customer participation and are recorded as revenue is
recognized. These estimates are adjusted, if necessary, as new information
becomes available.

- - MANUFACTURERS' ALLOWANCES

Manufacturers' allowances and promotional incentives are common practice in the
business products industry and contribute significantly to the Company's gross
margin. Manufacturers' allowances are recorded at the time of sale based upon
the Company's inventory purchase volume estimates. Promotional incentives are
based on vendor participation in the Company's various advertising programs.
These programs are recorded as a reduction to cost of goods sold to reflect the
net inventory purchase cost and the net advertising cost.

- - INVENTORY

Inventories constituting approximately 77% of total inventories at December 31,
2001, have been valued under the last-in, first-out ("LIFO") method. The
remaining inventories are valued under the first-in, first-out ("FIFO") method.
Inventory valued under the FIFO and LIFO accounting methods is recorded at the
lower of cost or market. Inventory reserves are

                                        3


recorded for shrinkage, obsolete, damaged, defective, and slow-moving inventory.
These reserve estimates are determined using historical trends and are adjusted,
if necessary, as new information becomes available.




Various assumptions and other factors underlie the determination of significant
accounting estimates. The process of determining significant estimates is fact
specific and takes into account factors such as historical experience, current
and expected economic conditions, product mix, and in some cases, actuarial
techniques. The Company periodically reevaluates these significant factors and
makes adjustments where facts and circumstances dictate. Historically, actual
results have not significantly deviated from those determined using the
estimates described above.

RESULTS FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

The following table presents the Consolidated Statements of Income as a
percentage of net sales:



                                                               2001       2000       1999
                                                             --------   --------   --------
                                                                           
Net sales                                                     100.0%     100.0%     100.0%
Cost of goods sold                                             84.2       83.7       83.6
                                                             --------   --------   --------
Gross margin                                                   15.8       16.3       16.4

Operating expenses:
 Warehouse, marketing and administrative expenses              11.5       11.2       11.1
 Restructuring charge                                           1.2         --         --
                                                             --------   --------   --------
Total operating expenses                                       12.7       11.2       11.1
                                                             --------   --------   --------

Income from operations                                          3.1        5.1        5.3

Interest expense                                               (0.7)      (0.8)      (0.8)
Interest income                                                 0.1        0.1         --
Other expense, net                                             (0.1)      (0.3)      (0.3)
                                                             --------   --------   --------

Income before income taxes and extraordinary item               2.4        4.1        4.2

Income taxes                                                    0.9        1.7        1.8
                                                             --------   --------   --------

Income before extraordinary item                                1.5        2.4        2.4

Extraordinary item - loss on early retirement of debt,
 net of tax benefit                                              --       (0.1)        --
                                                             --------   --------   --------

Net income                                                      1.5%       2.3%       2.4%
                                                             ========   ========   ========


COMPARISON OF RESULTS FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

NET SALES. Net sales were flat at $3.9 billion for 2001 and 2000. The lower
sales in the categories of traditional office products and furniture were offset
by growth in janitorial and sanitation products and computer consumables, both
of which were supported by acquisitions in 2001 and 2000. There were several
factors that contributed to flat sales. First, sales volume to Corporate Express
Inc. and US Office Products ("USOP") declined by approximately $100 million.
This primarily is due to the integration of USOP into the Corporate Express
business model, which is designed to buy more products directly from the
manufacturer. Second, at the end of July 2001, the Company completed the sale of
the Positive ID business unit. This sale reduced sales growth for the year by
approximately 1%. Finally, a worsening macroeconomic environment negatively
impacted all product categories.

Office furniture sales declined by mid-single-digits, compared with the prior
year. These results continue to reflect slowing consumer demand and weak
macroeconomic conditions. While the current economic environment presents
challenges, the Company sees an opportunity for sales growth as dealers shift
their inventory investment to wholesalers to limit their working capital
requirements. Furthermore, in a weak economy consumers tend to shift their
demand toward the mid-priced furniture lines offered by the Company. However,
the Company is challenged by the excess supply of premium grade furniture
available in the marketplace due to the failure of Internet and other companies.
Typical purchasers of mid-grade furniture are purchasing used premium grade
furniture at extremely attractive prices.

                                        4


The janitorial and sanitation product category, primarily distributed through
the Lagasse operating unit, achieved a 31% growth rate, compared with the prior
year. This growth primarily reflected Lagasse's January 5, 2001, acquisition of
Peerless Paper Mills, Inc. ("Peerless") as well as a growth rate in the high
single-digits with Lagasse's existing customer base. Peerless was a wholesale
distributor of janitorial/sanitation, paper, and food service products. This
acquisition enabled the Company to expand the Lagasse product line, enhance
scale and infrastructure, and add experienced management to the Lagasse
operation.

Sales of traditional office products experienced a decline of 7% versus the
prior year. Uncertainty surrounding the economy and workforce reductions slowed
consumption of office products within the commercial sector, particularly in
medium-to-large companies.

GROSS MARGIN. Gross margin in 2001 was $619.8 million, or 15.8% of net sales,
compared with $643.8 million, or 16.3% of net sales, in 2000. The rate decline
is due to lower pricing margin due to a shift in product mix toward computer
consumables, partially offset by incremental vendor allowances, lower inventory
shrinkage and lower distressed inventory losses. Approximately 55% of the
Company's vendor rebates are variable and are directly linked to achieving
certain purchase volume hurdles. During 2001, inventory purchase levels declined
significantly as evidenced by the Company's lower working capital requirements.
Manufacturers' allowances as a percentage of net sales increased by
approximately 0.5% resulting from a change in product mix and the impact of new
vendor agreements.

OPERATING EXPENSES. Operating expenses for 2001 were up 12.8% to $497.7 million
and were 12.7% of net sales, compared with $441.3 million, or 11.2% of net
sales, in the prior year. The increase in operating expenses was partially due
to the $47.6 million restructuring charge (see Note 3 to the Consolidated
Financial Statements), which resulted in a 1.2% increase to the operating
expense ratio. The increase was also a result of investments in The Order
People, the Company's third-party fulfillment business. Operating expenses
related to TOP for 2001, excluding the TOP portion of the restructuring charge,
and 2000, totaled $18.2 million and $9.0 million, respectively, resulting in a
0.5% and a 0.2% increase in the operating expense ratio.

INCOME FROM OPERATIONS. Income from operations decreased 39.7% to $122.1
million, or 3.1% of net sales, compared with $202.5 million, or 5.1% of net
sales in 2000. Excluding the investments in The Order People and the
restructuring charge, income from operations decreased 9.1% to $191.4 million or
4.9% of net sales in 2001, compared with an increase of 15.5% to $210.5 million
or 5.4% of net sales in 2000.

INTEREST EXPENSE. Interest expense for 2001 was $25.9 million, or 0.7% of net
sales, compared with $30.2 million, or 0.8% of net sales, in 2000. This
reduction reflected the interest expense savings related to the redemption of
the 12.75% Notes (as defined) as well as lower interest rates on variable rate
debt.

INTEREST INCOME. Interest income for 2001 was $2.1 million, or 0.1% of net
sales, compared with $2.9 million, or 0.1% of net sales, in 2000.

OTHER EXPENSE. Other expense for 2001 was $4.6 million, or 0.1% of net sales,
compared with $11.2 million, or 0.3% of net sales in 2000. This expense
primarily represented the costs associated with the sale of certain trade
accounts receivable through the Receivables Securitization Program (as defined)
partially offset by a gain on the sale of fixed assets of $2.4 million.

INCOME TAXES. Income tax expense as a percent of net sales was 0.9% in 2001 and
1.7% in 2000. The effective tax rate declined to 39.2% in 2001 from 39.9% in
2000. This was due to a change in the mix of pre-tax earnings between states.

NET INCOME. Net income for 2001 decreased 38.2% to $57.0 million, or 1.5% of net
sales, from $92.2 million, or 2.3% of net sales, in 2000. Excluding the
restructuring charge, net income for 2001 was $85.9 million, compared with $98.6
million in 2000, excluding the extraordinary item.

FOURTH QUARTER RESULTS. Certain expense and cost of sale estimates are recorded
throughout the year, including inventory shrinkage and obsolescence, required
LIFO reserve, manufacturers' allowances, advertising costs and various expense
items. During the fourth quarter of 2001, the Company recorded a favorable net
income adjustment of approximately $5.8 million related to the refinement of
estimates recorded in the prior three quarters.

                                        5


COMPARISON OF RESULTS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

NET SALES. Net sales increased 14.6% to $3.9 billion for 2000, compared with
$3.4 billion for 1999. This increase reflected growth in the Company's core
business, incremental sales from acquisitions completed in 2000, and increases
in freight revenue. The Company's sales growth within its core business was
broad based, with strength in all geographic regions, across all product
categories and customer channels. Specifically, the janitorial and sanitation
products, computer consumables and office furniture categories experienced
strong sales growth. Sales growth for the year ended December 31, 2000,
excluding the acquisitions of Azerty Canada and CallCenter Services, Inc.,
increased 12.2%.

GROSS MARGIN. Gross margin in 2000 reached $643.8 million, up 14.1% from last
year and was 16.3% of net sales, compared with $564.2 million, or 16.4% of net
sales, in 1999. The 0.1% rate decline was due to lower pricing margin partially
offset by incremental vendor allowances earned as a result of higher sales
volume.

OPERATING EXPENSES. Operating expenses for 2000 were up 15.5% to $441.3 million
and were 11.2% of net sales, compared with $382.0 million, or 11.1% of net
sales, in the prior year. The increase in the operating expense rate was
attributable to investments in The Order People, the Company's third-party
fulfillment business. Operating expenses for 2000 related to The Order People
totaled $9.0 million resulting in a 0.2% increase in the operating expense
ratio.

INCOME FROM OPERATIONS. Income from operations increased 11.1% to $202.5
million, or 5.1% of net sales, compared with $182.2 million, or 5.3% of net
sales, in 1999. Excluding the investments in The Order People, income from
operations increased 15.5% to $210.5 million or 5.4% of net sales.

INTEREST EXPENSE. Interest expense for 2000 was $30.2 million, or 0.8% of net
sales, compared with $30.0 million, or 0.8% of net sales, in 1999. This
reduction reflected the Company's continued leveraging of interest costs against
higher sales, and the interest expense savings related to the redemption of the
12.75% Notes (as defined) partially offset by slightly higher interest rates on
variable rate debt.

INTEREST INCOME. Interest income for 2000 was $2.9 million, or 0.1% of net
sales, compared with $0.8 million in 1999. This increase was primarily due to an
increase in interest earned on notes receivable.

OTHER EXPENSE. Other expense for 2000 reached $11.2 million, or 0.3% of net
sales, compared with $9.4 million, or 0.3% of net sales, in 1999. This expense
primarily represents the costs associated with the sale of certain trade
accounts receivable through the Receivables Securitization Program (as defined).
These costs vary on a monthly basis and generally are related to certain
short-term interest rates.

INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM. Income before income taxes
and extraordinary item was $164.1 million, or 4.1% of net sales, compared with
$143.6 million, or 4.2% of net sales, in 1999.

INCOME TAXES. Income tax expense as a percent of net sales was 1.7% in 2000
compared to 1.8% in 1999. The effective tax rate declined to 39.9% in 2000 from
41.9% in 1999. This was due to a change in the mix of pre-tax earnings between
states and higher pre-tax earnings with relatively constant nondeductible
expenses, such as goodwill.

NET INCOME. Net income for 2000 increased 10.6% to $92.2 million, or 2.3% of net
sales, from $83.4 million, or 2.4% of net sales, in 1999. Net income for 2000,
excluding the impact of the extraordinary item, increased 18.2% to $98.6
million, or 2.4% of net sales.

FOURTH QUARTER RESULTS. Certain expense and cost of sale estimates are recorded
throughout the year, including inventory shrinkage and obsolescence, required
LIFO reserve, manufacturers' allowances, advertising costs and various expense
items. During the fourth quarter of 2000, the Company recorded a favorable net
income adjustment of approximately $5.9 million related to the refinement of
estimates recorded in the prior three quarters.

                                        6


LIQUIDITY AND CAPITAL RESOURCES

United is a holding company and, as a result, its primary source of funds is
cash generated from operating activities of its operating subsidiary, USSC, and
bank borrowings by USSC. The Credit Agreement and the indentures governing the
Notes contain restrictions on the ability of USSC to transfer cash to United.

The Company's outstanding debt and liquidity sources (1) consisted of the
following amounts (dollars in thousands):



                                                                         As of December 31,
                                                                     -------------------------
                                                                        2001           2000
                                                                     ----------     ----------
                                                                              
  Revolver - $250.0 million less letter of credit liabilities        $       --     $   98,000
  Tranche A term loan, due in installments until March 31, 2004          32,331         44,325
  Tranche A-1 term loan due in installments until June 30, 2005         109,375        137,500
  8.375% Senior Subordinated Notes, due April 15, 2008                  100,000        100,000
  Industrial development bonds, at market interest rates,
  maturing at various dates through 2011                                 14,300         14,300
  Industrial development bonds, at 66% to 78% of prime,
  maturing at various dates through 2004                                 15,500         15,500
  Other long-term debt                                                      199            242
                                                                     ----------     ----------
  Total debt                                                            271,705        409,867
  Receivables Securitization (liquidity sources)(1)                     125,000        150,000
                                                                     ----------     ----------
  Total outstanding debt and liquidity sources(1)                    $  396,705     $  559,867
                                                                     ==========     ==========


(1) See discussion under Receivables Securitization Program.

DISCLOSURES ABOUT CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following table aggregates all contractual commitments and commercial
obligations that affect financial condition and liquidity as of December 31,
2001.



Dollars in thousands                                                      Payment due by period
- --------------------                                                      ---------------------
                                                   Less than 1       1 - 3         4 - 5       After 5
Contractual obligations                               year           years         years        years         Total
- -----------------------                            -----------     ---------     ---------    ----------    ---------
                                                                                             
Long-term debt                                     $    52,970     $ 111,935     $      --    $  106,800    $ 271,705
Operating leases                                        43,887        95,018        36,101        36,867      211,873
                                                   -----------     ---------     ---------    ----------    ---------
Total contractual cash obligations                 $    96,857     $ 206,953     $  36,101    $  143,667    $ 483,578
                                                   ===========     =========     =========    ==========    =========


In addition, the Company obtains up to $160.0 million of liquidity from the
Company's Receivable Securitization program (as defined). At December 31, 2001,
the Company had liquidity of $125.0 million from the sale of accounts receivable
under this program. Continued sales of receivables under this program depend
upon stand-by liquidity funding that is subject to annual renewal. If the
stand-by liquidity funding were unavailable, no new sale of accounts receivable
would occur and collections against accounts receivable would largely be
dedicated to reducing the balance of accounts receivable sold under the
Receivables Securitization Program and as a result debt may increase or liquid
assets may decrease.

CREDIT AGREEMENT

In order to restate and further amend the Second Amended and Restated Credit
Agreement, dated April 3, 1998 (the "Prior Credit Agreement"), USSC, as issuer,
entered into the Third Amended and Restated Revolving Credit Agreement, dated
June 29, 2000, with various lenders and the administrative agent named therein
(the "Credit Agreement"). The Credit Agreement, among other things, provides a
facility ("Tranche A Term Loan Facility") for the continuation of the term loans
outstanding as of its effective date under the Prior Credit Agreement, an
additional $150.0 million aggregate principal amount, five-year term loan
facility (the "Tranche A-1 Term Loan Facility" and, together with the Tranche A
Term Loan Facility, the "Term Loan Facilities"), and a revolving credit facility
of up to $250.0 million aggregate principal amount (the "Revolving Credit
Facility"). Availability under the Revolving Credit Facility is reduced by the
amount of letters of credit outstanding under the facility.

                                        7


As of December 31, 2001, the available credit under the Term Loan Facilities
included $141.7 million of term loan borrowings. In addition, the Company has
$100.0 million of 8.375% Senior Subordinated Notes due 2008, and $29.8 million
of industrial revenue bonds.

As of December 31, 2001, principal amounts borrowed and outstanding under the
Term Loan Facilities consisted of a $32.3 million Tranche A Term Loan Facility
and a $109.4 million Tranche A-1 Term Loan Facility. Amounts outstanding under
the Tranche A Term Loan Facility are to be repaid in nine quarterly installments
ranging from $3.1 million at March 31, 2002, to $3.7 million at March 31, 2004.
Amounts outstanding under the Tranche A-1 Term Loan Facility are to be repaid in
14 quarterly installments of $7.8 million.

The Revolving Credit Facility is limited to $250.0 million, less the aggregate
amount of letter of credit liabilities under the facility, and contains a
provision for swingline loans in an aggregate amount up to $25.0 million. The
Revolving Credit Facility matures on March 31, 2004. The Company had no
borrowings outstanding under the Revolving Credit Facility at December 31, 2001.
As of December 31, 2001, the Company had $215.8 million available under its
Revolving Credit Facility after deducting certain outstanding letter-of-credit
liabilities of $34.2 million.

As collateral security for the obligations of USSC and security interests, liens
have been placed upon accounts receivable and related instruments, inventory,
equipment, contract rights, intellectual property and all other tangible and
intangible personal property (including proceeds) and fixtures and certain real
property of USSC and its domestic subsidiaries, other than accounts receivables
sold in connection with the Receivables Securitization Program. Also securing
these obligations are first priority pledges of all of the outstanding stock of
USSC and of its domestic direct and indirect subsidiaries, including Lagasse and
Azerty but excluding The Order People, as well as certain of the stock of
identified foreign direct and indirect subsidiaries of USSC (excluding USS
Receivables Company, Ltd.).

The loans outstanding under the Term Loan Facilities and the Revolving Credit
Facility bear interest as determined within a pricing matrix. The interest rate
is based on the ratio of total debt to earnings before interest, taxes,
depreciation, and amortization ("EBITDA"). The Tranche A Facility and Revolving
Credit Facility bear interest at the prime rate plus 0% to 1.00%, or, at the
Company's option, the London Interbank Offered Rate ("LIBOR") plus 1.25% to
2.25%. The Tranche A-1 Facility bears interest at the prime rate plus 0.25% to
1.25%, or, at the Company's option, LIBOR plus 1.50% to 2.50%.

The Credit Agreement contains representations and warranties, affirmative and
negative covenants, and events of default customary for financing of this type.
At December 31, 2001, the Company was in compliance with all covenants contained
in the Credit Agreement.

The right of United to participate in any distribution of earnings or assets of
USSC is subject to the prior claims of the creditors of USSC. In addition, the
Credit Agreement contains certain restrictive covenants, including covenants
that restrict or prohibit USSC's ability to pay cash dividends and make other
distributions to United.

The Company is exposed to market risk for changes in interest rates. The Company
may enter into interest rate protection agreements, including collar agreements,
to reduce the impact of fluctuations in interest rates on a portion of its
variable rate debt. These agreements generally require the Company to pay to or
entitle the Company to receive from the other party the amount, if any, by which
the Company's interest payments fluctuate beyond the rates specified in the
agreements. The Company is subject to the credit risk that the other party may
fail to perform under such agreements. The Company's cost for these agreements
was amortized to interest expense over the term of the agreements, and the
unamortized cost was included in other assets. Any payments received or made as
a result of the agreements were recorded as an addition to or a reduction from
interest expense. For the year ended December 31, 1999, the Company recorded
$0.2 million to interest expense resulting from LIBOR rate fluctuations below
the floor rate specified in the collar agreements. The Company's interest rate
collar agreements on $200.0 million of borrowings at LIBOR rates between 5.2%
and 8.0% expired on October 29, 1999. As of December 31, 2001, the Company has
not entered into any new interest rate collar agreements.

Management believes that the Company's cash on hand, anticipated funds generated
from operations and borrowings available under the Credit Agreement will be
sufficient to meet the short-term (fewer than 12 months) and long-term operating
and capital needs of the Company, as well as to service its debt in accordance
with its terms. There is, however, no assurance that this will be accomplished.

                                        8


12.75% SENIOR SUBORDINATED NOTES

The 12.75% Senior Subordinated Notes ("12.75% Notes") were originally issued on
May 3, 1995, pursuant to the 12.75% Notes Indenture. On May 2, 2000, the Company
redeemed the remaining $100.0 million of its 12.75% Senior Subordinated Notes
(the "12.75% Notes"). The 12.75% Notes were redeemed at the redemption price of
106.375% of the principal amount plus accrued interest. As a result, the Company
recognized an extraordinary loss on the early retirement of debt of
approximately $10.7 million ($6.5 million net of tax benefit of $4.2 million).
This charge included the write-off of approximately $4.3 million ($2.6 million
net of tax benefit of $1.7 million) of capitalized costs. The redemption was
funded through the Company's Revolving Credit Facility.

8.375% SENIOR SUBORDINATED NOTES

The 8.375% Senior Subordinated Notes ("8.375% Notes") were issued on April 15,
1998, pursuant to the 8.375% Notes Indenture. As of December 31, 2001, the
aggregate outstanding principal amount of 8.375% Notes was $100.0 million. The
8.375% Notes are unsecured senior subordinated obligations of USSC, and payment
of the 8.375% Notes is fully and unconditionally guaranteed by the Company and
USSC's domestic "restricted" subsidiaries that incur indebtedness (as defined in
the 8.375% Notes Indenture) on a senior subordinated basis. The Notes are
redeemable on April 15, 2003, in whole or in part, at a redemption price of
104.188% (percentage of principal amount). The 8.375% Notes mature on April 15,
2008, and bear interest at the rate of 8.375% per annum, payable semi-annually
on April 15 and October 15 of each year.

RECEIVABLES SECURITIZATION PROGRAM

As part of an overall financing strategy, the Company utilizes a standard
third-party receivables securitization program to provide low-cost funding.
Under this $163.0 million program, the Company sells its eligible accounts
receivable (except for certain excluded accounts receivable, which initially
includes all accounts receivable from Azerty and Lagasse) to the Receivables
Company, a wholly owned offshore, bankruptcy-remote special purpose limited
liability company. This company in turn ultimately transfers the eligible
accounts receivable to a third-party, multi-seller asset-backed commercial paper
program, existing solely for the purpose of issuing commercial paper rated
A-1/P-1 or higher. The sale of trade accounts receivable includes not only those
eligible accounts receivable that existed on the closing date of the Receivables
Securitization Program, but also eligible accounts receivable created
thereafter. Costs related to this facility vary on a monthly basis and generally
are related to certain short-term interest rates. These costs are included in
the Consolidated Statements of Income under the caption Other Expense.

Affiliates of PNC Bank and JP Morgan Chase act as funding agents. The funding
agents, together with other commercial banks rated at least A-1/P-1, provide
standby liquidity funding to support the sale of the accounts receivable by the
Receivables Company under 364-day liquidity facilities. The Receivables Company
retains an interest in the eligible receivables transferred to the third party.
As a result of the Receivables Securitization Program, the balance sheet assets
of the Company as of December 31, 2001 and 2000 exclude $125.0 million and
$150.0 million, respectively, of accounts receivable sold to the Receivables
Company.

CASH FLOW INFORMATION

The statements of cash flows for the Company for the periods indicated are
summarized below:



                                                                    Years Ended December 31,
                                                             --------------------------------------
                                                                2001           2000         1999
                                                             ----------     ---------     ---------
                                                                      (dollars in thousands)
                                                                                 
Net cash provided by operating activities                    $  191,140     $  38,670     $  53,581
Net cash used in investing activities                           (46,327)      (83,534)      (26,011)
Net cash (used in) provided by financing activities            (135,783)       45,655       (27,615)


                                        9


Net cash provided by operating activities for the year ended December 31, 2001,
reached $191.1 million, including a $105.7 million decline in inventory, $57.0
million in net income, $39.9 million in depreciation and amortization, a $23.4
million decline in accounts receivable, a $20.0 million increase in accrued
liabilities, and a $9.4 million increase in other liabilities partially offset
by a $52.6 million decline in accounts payable and a $12.8 million increase in
other assets. Net cash provided by operating activities was $38.7 million for
the year ended December 31, 2000. This was primarily due to net income of $92.2
million, an increase in accounts payable of $46.2 million, and $32.9 million of
depreciation and amortization, partially offset by a $73.7 million increase in
inventory, a $49.5 million increase in accounts receivable and a $14.9 million
increase in other assets. Net cash provided by operating activities for the year
ended December 31, 1999, was $53.6 million. This was primarily driven by net
income of $83.4 million and depreciation and amortization of $31.3 million,
partially offset by a $62.0 million increase in net operating assets and
liabilities.

Net cash used in investing activities for the year ended December 31, 2001, was
$46.3 million, which includes $32.7 million for the acquisition of Peerless
Paper Mills, Inc., and $32.5 million for capital expenditures, partially offset
by $14.9 million of proceeds from the sale of Positive ID and $3.9 million in
proceeds from the disposition of property, plant and equipment. Net cash used in
investing activities for the year ended December 31, 2000, was $83.5 million,
including capital expenditures of $43.6 million and business acquisitions of
$44.2 million, partially offset by $4.3 million of proceeds from disposition of
property, plant and equipment. Net cash used in investing activities for the
year ended December 31, 1999, was $26.0 million, resulting primarily from
capital expenditures of $25.5 million.

Net cash used in financing activities for the year ended December 31, 2001,
reached $135.8 million, including a $98.0 million repayment under the Revolving
Credit Facility, $40.2 million Term Loan repayment and $12.4 million related to
the acquisition of treasury stock partially offset by $15.8 million in proceeds
from the issuance of treasury stock. Net cash provided by financing activities
for the year ended December 31, 2000, was $45.7 million, including $150.0
million of Term Loan borrowings and $45.0 million of net borrowings under the
Revolving Credit Facility, partially offset by $128.5 million of Term Loan
retirements and principal payments and $22.4 million related to the acquisition
of treasury stock. Net cash used in financing activities for the year ended
December 31, 1999, was $27.6 million, including $49.6 million of common stock
repurchases, partially offset by net borrowings of $21.5 million.

SEASONALITY

The Company's sales generally are relatively steady throughout the year.
However, sales vary to the extent of seasonal buying patterns of consumers of
office products. In particular, the Company's sales usually are higher than
average during January, when many businesses begin operating under new annual
budgets.

The Company experiences seasonality in its working capital needs, with highest
requirements in December through February, reflecting a build-up in inventory
prior to and during the peak sales period. The Company believes that its current
availability under the Revolving Credit Facility is sufficient to satisfy the
seasonal working capital needs for the foreseeable future.

INFLATION/DEFLATION AND CHANGING PRICES

The Company maintains substantial inventories to accommodate the prompt service
and delivery requirements of its customers. Accordingly, the Company purchases
its products on a regular basis in an effort to maintain its inventory at levels
that it believes are sufficient to satisfy the anticipated needs of its
customers, based upon historical buying practices and market conditions.
Although the Company historically has been able to pass through manufacturers'
price increases to its customers on a timely basis, competitive conditions will
influence how much of future price increases can be passed on to the Company's
customers. Conversely, when manufacturers' prices decline, lower sales prices
could result in lower margins as the Company sells existing inventory. As a
result, changes in the prices paid by the Company for its products could have a
material adverse effect on the Company's net sales, gross margins and net
income.

NEW ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 144, "ACCOUNTING FOR
THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS," which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
SFAS 144 is effective for fiscal years beginning after December 15, 2001. The
Company will adopt SFAS 144 as of January 1, 2002 and it does not expect that
the adoption of the Statement will have a significant impact on its financial
position and results of operations.

                                       10


In June 2001, the FASB issued SFAS No. 141, "BUSINESS COMBINATIONS," and SFAS
No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS." SFAS 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. In addition, SFAS 141 includes guidance on the initial
recognition and measurement of goodwill and other intangible assets arising from
business combinations completed after June 30, 2001. The amortization of
goodwill and intangible assets with indefinite useful lives is prohibited under
SFAS 142. SFAS 142 requires that these assets be reviewed for impairment at
least annually. Intangible assets with finite lives will continue to be
amortized over their estimated useful lives. Additionally, SFAS 142 requires
that goodwill included in the carrying value of equity method investments no
longer be amortized.

The Company will apply SFAS 142 beginning in the first half of 2002. Application
of the non-amortization provisions of SFAS 142 is expected to result in an
increase in net income of approximately $4.9 million, or $0.15 per share, in
2002. Changes in the estimated useful lives of intangible assets are not
expected to have a material impact on net income in 2002. The Company will test
goodwill for impairment using the two-step process prescribed in SFAS 142. The
first step is a screen for potential impairment, while the second step measures
the amount of the impairment, if any. The Company expects to perform the first
of the required impairment tests of goodwill and indefinite lived intangible
assets in the first half of 2002. Any impairment charge resulting from these
transitional impairment tests will be reflected as the cumulative effect of a
change in accounting principle in the first half of 2002. The Company has not
yet determined what the effect of these tests will be on its earnings and
financial position.

In June 2001, the FASB issued SFAS No. 143, "ACCOUNTING FOR ASSET RETIREMENT
OBLIGATIONS," which is effective for fiscal years beginning after June 15, 2002.
The Statement requires legal obligations associated with the retirement of
long-lived assets to be recognized at their fair value at the time that the
obligations are incurred. Upon initial recognition of a liability, that cost
should be capitalized as part of the related long-lived asset and allocated to
expense over the useful life of the asset. The Company will adopt SFAS 143 on
January 1, 2003, and, based on current circumstances, does not believe that the
impact of adoption of SFAS 143 will have a material impact on its financial
position or results of operations.

Effective January 1, 2001, the Company adopted the provisions of SFAS No. 133,
"ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES" issued by the
FASB. SFAS No. 133, as amended by SFAS Nos. 137 and 138, establishes accounting
and reporting standards for derivative instruments and hedging activities. It
requires an entity to recognize all derivatives as either assets or liabilities
on the balance sheet. The statement also requires changes in the fair value of
the derivative instruments to be recorded in either net earnings or other
comprehensive income depending on their intended use. The adoption of SFAS Nos.
133, 137, and 138 did not have a material impact on the Company's Consolidated
Financial Statements.

                                       11


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company is subject to market risk associated principally with changes in
interest rates and foreign currency exchange rates. Interest rate exposure is
principally limited to the Company's outstanding long-term debt at December 31,
2001, of $271.7 million, and $125.0 million of receivables sold under the
Receivables Securitization Program, whose discount rate varies with market
interest rates ("Receivables Exposure"). Approximately 25% of the outstanding
debt and Receivables Exposure, is priced at interest rates that are fixed. The
remaining debt and Receivables Exposure are priced at interest rates that
re-price with the market. A 50 basis point movement in interest rates would
result in an annualized increase or decrease of approximately $1.5 million in
interest expense, loss on the sale of certain accounts receivable and cash
flows. The Company may from time-to-time enter into interest rate swaps, options
or collars. The Company does not use financial or commodity derivative
instruments for trading purposes. Typically, the use of such derivative
instruments is limited to interest rate swaps, options or collars on the
Company's outstanding long-term debt. The Company's exposure related to such
derivative instruments is, in the aggregate, not material to its financial
position, results of operations and cash flows. As of December 31, 2001, the
Company had no financial or commodity derivative instruments outstanding.

The Company's foreign currency exchange rate risk is limited principally to the
Mexican Peso, Canadian Dollar, as well as product purchases from
Asian countries currently paid in U.S. dollars. Many of the products the Company
sells in Mexico and Canada are purchased in U.S. dollars, while the sale is
invoiced in the local currency. The Company's foreign currency exchange rate
risk is not material to its financial position, results of operations and cash
flows. The Company has not previously hedged these transactions, but it may
enter into such transactions when it believes there is a financial advantage.



ITEM 8.   FINANCIAL STATEMENTS

REPORT OF INDEPENDENT AUDITORS

TO THE STOCKHOLDERS AND BOARD OF
DIRECTORS OF UNITED STATIONERS INC.

We have audited the accompanying consolidated balance sheets of United
Stationers Inc. and Subsidiaries as of December 31, 2001 and 2000 and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for each of the three years in the period ended December 31, 2001.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of United Stationers
Inc. and Subsidiaries at December 31, 2001 and 2000, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001 in conformity with accounting principles
generally accepted in the United States.

                                /s/ERNST & YOUNG LLP

Chicago, Illinois
January 29, 2002

                                        1


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (dollars in thousands, except per share data)



                                                                         Years Ended December 31,
                                                                 ----------------------------------------
                                                                     2001           2000         1999
                                                                 -----------    -----------   -----------
                                                                                     
Net sales                                                        $ 3,925,936    $ 3,944,862   $ 3,442,696
Cost of goods sold                                                 3,306,143      3,301,018     2,878,539
                                                                 -----------    -----------   -----------
Gross profit                                                         619,793        643,844       564,157

Operating expenses:
   Warehousing, marketing and administrative expenses                450,135        441,298       381,963
   Restructuring charge                                               47,603             --            --
                                                                 -----------    -----------   -----------
Total operating expenses                                             497,738        441,298       381,963
                                                                 -----------    -----------   -----------
Income from operations                                               122,055        202,546       182,194

Interest expense                                                     (25,872)       (30,171)      (30,044)
Interest income                                                        2,079          2,942           849
Other expense, net                                                    (4,621)       (11,201)       (9,432)
                                                                 -----------    -----------   -----------

Income before income taxes and extraordinary item                     93,641        164,116       143,567

Income taxes                                                          36,663         65,473        60,158
                                                                 -----------    -----------   -----------
Income before extraordinary item                                      56,978         98,643        83,409

Extraordinary item - loss on early retirement of debt, net of
   tax benefit of $4,248                                                  --         (6,476)           --
                                                                 -----------    -----------   -----------
Net income                                                       $    56,978    $    92,167   $    83,409
                                                                 ===========    ===========   ===========
Net income per common share:
  Income before extraordinary item                               $      1.70    $      2.89   $      2.40
  Extraordinary item                                                      --          (0.19)           --
                                                                 -----------    -----------   -----------
  Net income per common share                                    $      1.70    $      2.70   $      2.40
                                                                 ===========    ===========   ===========
  Average number of common shares (in thousands)                      33,561         34,101        34,708
                                                                 ===========    ===========   ===========
Net income per common share-assuming dilution:
  Income before extraordinary item                               $      1.68    $      2.84   $      2.37
  Extraordinary item                                                     --           (0.19)           --
                                                                 -----------    -----------   -----------
  Net income per common share                                    $      1.68    $      2.65   $      2.37
                                                                 ===========    ===========   ===========
  Average number of common shares (in thousands)                      33,928         34,775        35,208
                                                                 ===========    ===========   ===========


  SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                        2


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)



                                                                         As of December 31,
                                                                 --------------------------------
                                                                      2001               2000
                                                                 -------------       ------------
                                                                               
ASSETS

Current assets:

 Cash and cash equivalents                                       $      28,814       $     19,784

 Accounts receivable, less allowance for doubtful accounts
    of $13,462 in 2001 and $14,376 in 2000                             311,047            329,934

 Inventories                                                           581,705            688,926

 Other current assets                                                   28,532             15,843
                                                                 -------------       ------------

    Total current assets                                               950,098          1,054,487

Property, plant and equipment, at cost:

 Land                                                                   19,423             19,898

 Buildings                                                              92,855             93,471

 Fixtures and equipment                                                235,039            213,257

 Leasehold improvements                                                  3,433              2,906
                                                                 -------------       ------------

Total property, plant and equipment                                    350,750            329,532

 Less - accumulated depreciation and amortization                      161,738            139,745
                                                                 -------------       ------------

Net property, plant and equipment                                      189,012            189,787

Goodwill                                                               180,117            181,923

Other                                                                   20,360             20,830
                                                                 -------------       ------------

    Total assets                                                 $   1,339,587       $  1,447,027
                                                                 =============       ============


  SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                        3


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (dollars in thousands, except share data)



                                                                    As of December 31,
                                                              ------------------------------
                                                                  2001             2000
                                                              -------------    -------------
                                                                         
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

 Accounts payable                                             $     336,722    $     392,789

 Accrued expenses                                                   147,640          125,969

 Current maturities of long-term debt                                52,970           40,273
                                                              -------------    -------------

   Total current liabilities                                        537,332          559,031

Deferred income taxes                                                18,228           22,703

Long-term debt                                                      218,735          369,594

Other long-term liabilities                                          26,611           17,260
                                                              -------------    -------------

   Total liabilities                                                800,906          968,588

Stockholders' equity:

 Common stock, $0.10 par value; authorized -
  100,000,000 shares, issued - 37,217,814 shares in
  2001 and 37,213,207 shares in 2000                                  3,722            3,721

 Capital in excess of par value                                     310,150          302,837

 Treasury stock, at cost- 3,613,954 shares in 2001
   and 3,767,907 shares in 2000                                     (69,402)         (66,832)

 Retained earnings                                                  297,407          240,429

 Accumulated translation adjustment                                  (3,196)          (1,716)
                                                              -------------    -------------

   Total stockholders' equity                                       538,681          478,439
                                                              -------------    -------------

   Total liabilities and stockholders' equity                 $   1,339,587    $   1,447,027
                                                              =============    =============


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                        4


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)



                                                                         Years Ended December 31,
                                                               ---------------------------------------
                                                                   2001         2000          1999
                                                               -----------   -----------   -----------
                                                                                  
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                     $    56,978   $    92,167   $    83,409
Adjustments to reconcile net income to net cash provided
 by operating activities:
   Depreciation                                                     29,210        22,835        22,817
   Amortization                                                      9,331         8,270         6,631
   Amortization of capitalized financing costs                       1,310         1,748         1,828
   Restructuring charge - write-down of assets                      15,925            --            --
   Gain on sale of property, plant and equipment                    (2,424)           --            --
   Extraordinary item - early retirement of debt                        --        10,724            --
   Deferred income taxes                                           (11,320)        5,320           662
   Other                                                            (1,060)         (546)          236
Changes in operating assets and liabilities,
 net of acquisitions and dispositions:
   Decrease (increase) in accounts receivable                       23,414       (49,506)      (59,965)
   Decrease (increase) in inventory                                105,723       (73,663)      (52,742)
   Increase in other assets                                        (12,758)      (14,943)       (2,831)
   (Decrease) increase in accounts payable                         (52,555)       46,231        44,606
   Increase (decrease) in accrued liabilities                       20,014        (6,894)       11,120
   Increase (decrease) in other liabilities                          9,352        (3,073)       (2,190)
                                                               -----------   -----------   -----------
     Net cash provided by operating activities                     191,140        38,670        53,581

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions                                                       (32,650)      (44,233)       (4,680)
Sale of Positive ID                                                 14,941            --            --
Capital expenditures                                               (32,503)      (43,638)      (25,461)
Proceeds from the disposition of property, plant & equipment         3,885         4,337         4,130
                                                               -----------   -----------   -----------
     Net cash used in investing activities                         (46,327)      (83,534)      (26,011)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under revolver                         (98,000)       45,000        29,000
Retirements and principal payments of debt                         (40,163)     (128,509)       (7,604)
Borrowings under financing agreements                                   --       150,000           145
Financing costs                                                         --            --           250
Issuance of common stock                                                --            --         2,523
Issuance of treasury stock                                          15,796         4,247           323
Acquisition of treasury stock, at cost                             (12,383)      (22,437)      (49,600)
Payment of employee withholding tax related to stock
 option exercises                                                   (1,033)       (2,646)       (2,652)
                                                               -----------   -----------   -----------
     Net cash (used in) provided by financing activities          (135,783)       45,655       (27,615)
                                                               -----------   -----------   -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS                              9,030           791           (45)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                        19,784        18,993        19,038
                                                               -----------   -----------   -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                         $    28,814   $    19,784   $    18,993
                                                               ===========   ===========   ===========


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                        5


                     UNITED STATIONERS INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    (dollars in thousands, except share data)



                                 Number                   Number                    Capital                                Total
                                   of                       of        Treasury        in         Other                     Stock-
                                 Common       Common     Treasury       Stock       Excess     Comprehen-    Retained     holders'
                                 Shares        Stock      Shares       at Cost      of Par    sive Income    Earnings      Equity
                               ----------   ---------   ----------   ----------   ----------  -----------   ----------   ----------
                                                                                                 
As of December 31, 1998        36,912,173   $   3,691           --   $       --   $  303,330  $    (1,311)  $   64,853   $  370,563

Net income                             --          --           --           --           --           --       83,409       83,409
Unrealized translation
 adjustment                            --          --           --           --           --          194           --          194
                                                                                              -----------   ----------   ----------
  Comprehensive income                 --          --           --           --           --          194       83,409       83,603
Acquisition of treasury
 stock                                 --          --   (3,250,000)     (49,600)          --           --           --      (49,600)
Stock options exercised           299,254          30       29,519          455          666           --           --        1,151
Other                               1,780          --           --           --          292           --           --          292
                               ----------   ---------   ----------   ----------   ----------  -----------   ----------   ----------

As of December 31, 1999        37,213,207       3,721   (3,220,481)     (49,145)     304,288       (1,117)     148,262      406,009

Net income                             --          --           --           --           --           --       92,167       92,167
Unrealized translation
 adjustment                            --          --           --           --           --         (599)          --         (599)
                                                                                              -----------   ----------   ----------
  Comprehensive income                 --          --           --           --           --         (599)      92,167       91,568
Acquisition of treasury
 stock                                 --          --     (857,100)     (22,437)          --           --           --      (22,437)
Stock options exercised                --          --      309,674        4,750       (1,451)          --           --        3,299
                               ----------   ---------   ----------   ----------   ----------  -----------   ----------   ----------
As of December 31, 2000        37,213,207       3,721   (3,767,907)     (66,832)     302,837       (1,716)     240,429      478,439

Net income                             --          --           --           --           --           --       56,978       56,978
Unrealized translation
 adjustment                            --          --           --           --           --       (1,480)          --       (1,480)
                                                                                              -----------   ----------   ----------
  Comprehensive income                 --          --           --           --           --       (1,480)      56,978       55,498
Acquisition of treasury
 stock                                 --          --     (467,500)     (12,383)          --           --           --      (12,383)
Stock options exercised             4,607           1      621,453        9,813        7,313           --           --       17,127
                               ----------   ---------   ----------   ----------   ----------  -----------   ----------   ----------

As of December 31, 2001        37,217,814   $   3,722   (3,613,954)  $  (69,402)  $  310,150    $  (3,196)  $  297,407   $  538,681
                               ==========   =========   ==========   ==========   ==========  ===========   ==========   ==========


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                        6


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION

The Consolidated Financial Statements represent United Stationers Inc.
("United") with its wholly owned subsidiary United Stationers Supply Co.
("USSC") and its subsidiaries - collectively (the "Company"). The Company is the
largest general line business products wholesaler in the United States, with
2001 net sales of $3.9 billion. The Company operates in a single reportable
segment as a national wholesale distributor of business products. The Company
offers approximately 40,000 items from more than 500 manufacturers. This
includes a broad spectrum of office products, computer supplies, office
furniture, business machines, presentation products and facilities management
supplies. The Company primarily serves commercial and contract office products
dealers. The Company sells its products through a national distribution network
to more than 20,000 resellers, who in turn sell directly to end-users. These
products are distributed through a computer-based network of 36 USSC regional
distribution centers, 24 dedicated Lagasse, Inc. ("Lagasse") distribution
centers that serve the janitorial and sanitation industry, four Azerty
Incorporated ("Azerty") distribution centers that serve the U.S. and two in
Mexico that serve computer supply resellers, two distribution centers that serve
the Canadian marketplace and a mega-center that supports USSC, Azerty, Lagasse,
and The Order People. During the second quarter of 2002, Azerty's computer
systems and product offering will be integrated into USSC. In connection with
this integration, the Company intends to close the four Azerty distribution
centers.

ACQUISITION OF PEERLESS PAPER MILLS, INC.

On January 5, 2001, the Company's subsidiary Lagasse acquired all of the capital
stock of Peerless Paper Mills, Inc. ("Peerless"). Subsequently, Peerless was
merged into Lagasse. Peerless was a wholesale distributor of
janitorial/sanitation, paper and food service products. The purchase price of
approximately $32.7 million was financed through the Company's Senior Credit
Facility. The acquisition was accounted for using the purchase method of
accounting and, accordingly, the purchase price was allocated to the assets
purchased and the liabilities assumed, based upon the estimated fair values at
the date of acquisition. The excess of cost over fair value of approximately
$15.5 million was allocated to goodwill. The pro forma effects of the
acquisition are not material.

ACQUISITION OF CALLCENTER SERVICES, INC.

On July 1, 2000, the Company acquired all of the capital stock of CallCenter
Services, Inc. from Corporate Express, a Buhrmann Company. The purchase price
was approximately $10.7 million financed through the Company's Senior Credit
Facility. CallCenter Services, Inc. was a customer relationship management
outsourcing service company with inbound call centers in Wilkes-Barre,
Pennsylvania, and Salisbury, Maryland. The acquisition was accounted for using
the purchase method of accounting and, accordingly, the purchase price was
allocated to the assets purchased and the liabilities assumed, based upon the
estimated fair values at the date of acquisition. The excess of cost over fair
value of approximately $3.1 million was allocated to goodwill. The pro forma
effects of the acquisition were not material.

In November 2001, the Wilkes-Barre portion of CallCenter Services, Inc. was sold
to Customer Satisfaction First. In addition, the Salisbury portion of CallCenter
Services, Inc. was sold to 1-800-BARNONE, a Financial Corporation, Inc. in
January 2002 for $1.2 million in cash and the assumption of $1.7 million of
debt. The sale of these assets did not have a material impact on the Company's
Consolidated Financial Statements.

ACQUISITION OF AZERTY CANADA

On July 5, 2000, the Company completed the acquisition of the net assets of
Azerty Canada from MCSi, Inc. The purchase price was approximately $33.5 million
(U.S. dollars) financed through the Company's Senior Credit Facility. Azerty
Canada is a specialty wholesale distributor of computer consumables, peripherals
and accessories. The acquisition was accounted for using the purchase method of
accounting and, accordingly, the purchase price was allocated to the assets
purchased and the liabilities assumed, based upon the estimated fair values at
the date of acquisition. The excess of cost over fair value of approximately
$11.8 million was allocated to goodwill. The pro forma effects of the
acquisition were not material.

ESTABLISHING THE ORDER PEOPLE

During 2000, the Company established The Order People ("TOP") to operate as its
third-party fulfillment provider for product categories beyond office products.
In 2001, the Company did not achieve the estimated revenue to support TOP's cost
structure. As a result, the Company began to reduce the operating expenses of
TOP. However, the Company remains committed to building the third-party
fulfillment business.

                                        7


COMMON STOCK REPURCHASE

On October 23, 2000, the Company's Board of Directors authorized the repurchase
of up to $50.0 million of its Common Stock. Under this authorization, the
Company purchased 467,500 shares at a cost of approximately $12.4 million,
during 2001. During 2000, the Company purchased 857,100 shares of its Common
Stock at a cost of approximately $22.4 million. Acquired shares are included in
the issued shares of the Company and treasury stock, but are not included in
average shares outstanding when calculating earnings per share data. During 2001
and 2000, the Company reissued 621,453 and 309,674 shares of treasury stock,
respectively, to fulfill its obligations under its management equity plan.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The Consolidated Financial Statements include the accounts of the Company. All
intercompany accounts and transactions have been eliminated in consolidation.
For all acquisitions, account balances and results of operations are included in
the Consolidated Financial Statements as of the date acquired.

REVENUE RECOGNITION

Revenue is recognized when a service is rendered or when a product is shipped
and title is transferred to the customer.

CASH EQUIVALENTS

All highly liquid debt instruments with an original maturity of three months or
less are considered cash equivalents. Cash equivalents are stated at cost, which
approximates market value.

INVENTORIES

Inventories constituting approximately 77% and 73% of total inventories at
December 31, 2001 and 2000, respectively, have been valued under the last-in,
first-out ("LIFO") method. The increase in the percentage of inventory on LIFO
resulted from a decline in inventory levels at business units whose inventory is
valued under the first-in, first-out ("FIFO") method. Inventory valued under the
FIFO and LIFO accounting methods is recorded at the lower of cost or market. If
the lower of FIFO cost or market method of inventory accounting had been used by
the Company for all inventories, merchandise inventories would have been
approximately $26.2 million and $19.0 million higher than reported at December
31, 2001 and 2000, respectively.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recorded at cost. Depreciation and
amortization are determined by using the straight-line method over the estimated
useful lives of the assets.

The estimated useful life assigned to fixtures and equipment is from two to 10
years; the estimated useful life assigned to buildings does not exceed 40 years;
leasehold improvements are amortized over the lesser of their useful lives or
the term of the applicable lease.

GOODWILL

Goodwill represents the excess of cost over the value of net assets of
businesses acquired and is amortized on a straight-line basis over periods
ranging between 10 and 40 years. The Company periodically evaluates whether
events or circumstances have occurred indicating that the remaining estimated
useful life of goodwill may not be appropriate. If factors indicate that
goodwill should be evaluated for possible impairment, the Company will use an
estimate of undiscounted future operating income compared with the carrying
value of goodwill to determine if a write-off is necessary. The cumulative
amount of goodwill amortized at December 31, 2001 and 2000 is $27.9 million and
$22.2 million, respectively. During 2000, the Company reversed approximately
$9.2 million of goodwill related to certain purchase accounting reserves
recorded in conjunction with the 1995 ASI/USI merger. See New Accounting
Pronouncements within this note regarding changes in goodwill accounting.

                                        8


SOFTWARE CAPITALIZATION

The Company capitalizes internal use software development costs in accordance
with the American Institute of Certified Public Accountants' Statement of
Position No. 98-1 "ACCOUNTING FOR COSTS OF COMPUTER SOFTWARE DEVELOPED OR
OBTAINED FOR INTERNAL USE." Amortization is recorded on a straight-line basis
over the estimated useful life of the software, generally not to exceed seven
years.

INCOME TAXES

Income taxes are accounted for using the liability method, under which deferred
income taxes are recognized for the estimated tax consequences for temporary
differences between the financial statement carrying amounts and the tax basis
of assets and liabilities. Provision has not been made for deferred U.S. income
taxes on the undistributed earnings of the Company's foreign subsidiaries
because these earnings are intended to be permanently invested.

FOREIGN CURRENCY TRANSLATION

The functional currency for the Company's foreign operations is the local
currency. Assets and liabilities of these operations are translated at the rates
of exchange at the balance sheet date. The resulting translation adjustments are
included in accumulated other comprehensive income, a separate component of
stockholders' equity. Income and expense items are translated at average monthly
rates of exchange. Gains and losses from foreign currency transactions were not
material.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the Consolidated Financial
Statements and accompanying notes. Actual results could differ from these
estimates.

NEW ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards ("SFAS") No. 144, "ACCOUNTING FOR
THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS," which addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
SFAS 144 is effective for fiscal years beginning after December 15, 2001. The
Company will adopt SFAS 144 as of January 1, 2002 and it does not expect that
the adoption of the Statement will have a significant impact on its financial
position and results of operations.

In June 2001, the FASB issued SFAS No. 141, "BUSINESS COMBINATIONS," and SFAS
No. 142, "GOODWILL AND OTHER INTANGIBLE ASSETS." SFAS 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. In addition, SFAS 141 includes guidance on the initial
recognition and measurement of goodwill and other intangible assets arising from
business combinations completed after June 30, 2001. The amortization of
goodwill and intangible assets with indefinite useful lives is prohibited under
SFAS 142. SFAS 142 requires that these assets be reviewed for impairment at
least annually. Intangible assets with finite lives will continue to be
amortized over their estimated useful lives. Additionally, SFAS 142 requires
that goodwill included in the carrying value of equity method investments no
longer be amortized.

The Company will apply SFAS 142 beginning in the first half of 2002. Application
of the non-amortization provisions of SFAS 142 is expected to result in an
increase in net income of approximately $4.9 million, or $0.15 per share, in
2002. Changes in the estimated useful lives of intangible assets are not
expected to have a material impact on net income in 2002. The Company will test
goodwill for impairment using the two-step process prescribed in SFAS 142. The
first step is a screen for potential impairment, while the second step measures
the amount of the impairment, if any. The Company expects to perform the first
of the required impairment tests of goodwill and indefinite lived intangible
assets in the first half of 2002. Any impairment charge resulting from these
transitional impairment tests will be reflected as the cumulative effect of a
change in accounting principle in the first half of 2002. The Company has not
yet determined what the effect of these tests will be on its earnings and
financial position.

In June 2001, the FASB issued SFAS No. 143, "ACCOUNTING FOR ASSET RETIREMENT
OBLIGATIONS," which is effective for fiscal years beginning after June 15, 2002.
The Statement requires legal obligations associated with the retirement of
long-lived assets to be recognized at their fair value at the time that the
obligations are incurred. Upon initial recognition of a liability, that cost
should be capitalized as part of the related long-lived asset and allocated to
expense over the useful life of the asset. The Company will adopt SFAS 143 on
January 1, 2003, and, based on current circumstances, does not believe that the
impact of adoption of SFAS 143 will have a material impact on its financial
position or results of operations.

                                        9


Effective January 1, 2001, the Company adopted the provisions of SFAS No. 133,
"ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES" issued by the
Financial Accounting Standards Board. SFAS No. 133, as amended by SFAS Nos. 137
and 138, establishes accounting and reporting standards for derivative
instruments and hedging activities. It requires an entity to recognize all
derivatives as either assets or liabilities on the balance sheet. The statement
also requires changes in the fair value of the derivative instruments to be
recorded in either net earnings or other comprehensive income depending on their
intended use. The adoption of SFAS Nos. 133, 137, and 138 did not have a
material impact on the Company's Consolidated Financial Statements.

3.   RESTRUCTURING CHARGE

In the third quarter of 2001, the Company's board of directors approved a
restructuring plan that includes:

   - An organizational restructuring aimed at eliminating certain layers of
     management to achieve a lower cost structure and provide better customer
     service;
   - The consolidation of certain distribution facilities and call center
     operations;
   - An information technology platform consolidation;
   - Divestiture of The Order People's call center operations and certain other
     assets; and
   - A significant reduction to The Order People's cost structure.

The restructuring plan calls for a workforce reduction of 1,375. These positions
primarily are related to The Order People and call center operations. The
associate groups that will be affected by the restructuring plan include
management personnel, inside and outside sales representatives, call center
associates, distribution workers, and hourly administrative staff. The
restructuring plan is designed to have all initiatives completed within
approximately one year from the commitment date.

During the third quarter 2001, the Company recorded a pre-tax restructuring
charge of $47.6 million, or $0.85 per share (on an after-tax basis). This charge
includes a pre-tax cash charge of $31.7 million and a $15.9 million non-cash
charge. The major components of the restructuring charge and the remaining
accrual balance as of December 31, 2001, are as follows:



                                      Non-Cash
                                        Asset         Employment                          Total
                                        Write-      Termination and      Accrued       Restructuring
(dollars in thousands)                  Downs       Severance Costs     Exit Costs        Charge
- ----------------------                --------      ---------------     ----------     -------------
                                                                           
Restructuring Charge                  $ 15,925      $        19,189     $   12,489     $      47,603
Amounts Utilized-
 as of December 31, 2001               (15,925)              (3,023)        (1,226)          (20,174)
                                      --------      ---------------     ----------     -------------
Accrued Restructuring Costs-
 as of December 31, 2001              $     --      $        16,166     $   11,263      $     27,429
                                      ========      ===============     ==========     =============


The non-cash asset write-downs of $15.9 million were primarily the result of
facility closures and business divestitures, including $8.8 million related to
property, plant and equipment and $7.1 million related to goodwill. Asset
write-downs are based on management's estimate of net realizable value.

Employment termination and severance costs are related to voluntary and
involuntary terminations and reflect cash termination payments to be paid to
associates affected by the restructuring plan. Healthcare benefits and career
transition services are included in the termination and severance costs. The
restructuring plan allows associates to continue their participation in the
Company's healthcare plan during the term of their severance.

Accrued exit costs are primarily contractual lease obligations that existed
prior to September 30, 2001, for buildings that the Company has closed or will
be closing in the near future.

Implementation costs will be recognized as incurred and consist of incremental
costs directly related to the realization of the restructuring plan. The Company
estimates that the total cost of implementation will be approximately $6.7
million incurred ratably through approximately September 30, 2002. These costs
include training, stay bonuses, consulting fees, costs to relocate inventory,
and accelerated depreciation. Implementation costs incurred through December 31,
2001, were $2.2 million.

                                       10


As of December 31, 2001, the Company completed the closure of three distribution
centers and one USSC call center, eliminated one administrative office, divested
a portion of the call center operations dedicated to serving The Order People's
clients and began the implementation of its organizational restructuring and
workforce reduction. As a result, the Company reduced its workforce by 580
associates through its voluntary and involuntary termination programs. The
remaining 795 associates will be terminated throughout the implementation period
of approximately one year.

4.   SEGMENT INFORMATION

The Company adopted SFAS No. 131, "DISCLOSURE ABOUT SEGMENTS OF AN ENTERPRISE
AND RELATED INFORMATION," in 1998. SFAS No. 131 requires companies to report
financial and descriptive information about their reportable operating segments,
including segment profit or loss, certain specific revenue and expense items,
and segment assets, as well as information about the revenues derived from the
company's products and services, the countries in which the company earns
revenues and holds assets, and major customers. This statement also requires
companies that have a single reportable segment to disclose information about
products and services, information about geographic areas, and information about
major customers. This statement requires the use of the management approach to
determine the information to be reported. The management approach is based on
the way management organizes the enterprise to assess performance and make
operating decisions regarding the allocation of resources. It is management's
opinion that, at this time, the Company has several operating segments, however
only one reportable segment.

The following discussion sets forth the required disclosure regarding single
segment information:

The Company operates as a single reportable segment as the largest general line
business products wholesaler in the United States with 2001 net sales of $3.9
billion - including operations outside the United States, which were immaterial.
The Company sells its products through a national distribution network to more
than 20,000 resellers, who in turn sell directly to end-users. These products
are distributed through a computer-based network of 36 USSC regional
distribution centers, 24 dedicated Lagasse distribution centers that serve the
janitorial and sanitation industry, four Azerty distribution centers that serve
the U.S. and two in Mexico that serve computer supply resellers, two
distribution centers that serve the Canadian marketplace and a mega-center that
supports USSC, Azerty, Lagasse, and The Order People. During the second quarter
of 2002, Azerty's computer systems and product offering will be integrated into
USSC. In connection with this integration, the Company intends to close the four
Azerty distribution centers.

The Company's product offerings, comprised of more than 40,000 stockkeeping
units (SKUs), may be divided into five primary categories. (i) The Company's
core business continues to be traditional office products, which includes both
brand name products and the Company's private brand products. Traditional office
products include writing instruments, paper products, organizers and calendars
and various office accessories. (ii) The Company also offers computer supplies,
and peripherals to computer resellers and office products dealers. (iii) The
Company sells office furniture, such as leather chairs, wooden and steel desks
and computer furniture. The Company currently offers nearly 5,500 furniture
items from 60 different manufacturers. (iv) A fourth category is facility
supplies, including janitorial and sanitation supplies, safety and security
items, and shipping and mailing supplies. The Company distributes these products
through 24 Lagasse distribution centers to sanitary supply dealers. (v) The
Company also distributes business machines and presentation products.

The Company's customers include office products dealers, mega-dealers, office
furniture dealers, office products superstores and mass merchandisers, mail
order companies, computer products resellers, sanitary supply distributors and
e-commerce dealers. For the year ended December 31, 2001, Corporate Express,
Inc. ("Corporate Express") accounted for approximately 10% of the Company's net
sales. This percentage includes the combined 12-month volume for Corporate
Express and U.S. Office Products ("USOP"). On March 5, 2001, USOP filed for
Chapter 11 bankruptcy protection to facilitate its sale to Corporate Express. On
May 14, 2001, the sale of USOP to Corporate Express was completed. Other than
Corporate Express, no single customer accounted for more than 6% of the
Company's net sales in 2001.

                                       11


The following table sets forth net sales by product category (dollars in
millions):



                                                      Years Ended December 31,
                                                    ---------------------------
                                                     2001      2000      1999
                                                    -------   -------   -------
                                                               
Traditional office products                         $ 1,245   $ 1,356   $ 1,204
Computer consumables                                  1,349     1,288     1,136
Office furniture                                        499       513       435
Facilities supplies                                     402       310       240
Business machines and presentation products             352       385       344
Freight revenue                                          60        64        50
Other                                                    19        29        34
                                                    -------   -------   -------
Total net sales                                     $ 3,926   $ 3,945   $ 3,443
                                                    =======   =======   =======


5.   OTHER EXPENSE

The following table sets forth the components of other expense (dollars in
thousands):



                                                       Years Ended December 31,
                                                    ------------------------------
                                                      2001        2000       1999
                                                    -------     --------   -------
                                                                  
Loss on the sale of accounts receivable, net of
  servicing revenue                                 $ 7,045     $ 11,133   $ 9,393
Other                                                (2,424)(1)       68        39
                                                    -------     --------   -------
Total                                               $ 4,621     $ 11,201   $ 9,432
                                                    =======     ========   =======


(1)  Represents a net gain on the sale of a distribution center.

RECEIVABLES SECURITIZATION PROGRAM

As part of an overall financing strategy, the Company utilizes a standard
third-party receivables securitization program, to provide low-cost funding.
Under this $163.0 million program the Company sells, on a revolving basis, its
eligible accounts receivable (except for certain excluded accounts receivable,
which initially includes all accounts receivable from Azerty and Lagasse) to the
Receivables Company, a wholly owned offshore, bankruptcy-remote special purpose
limited liability company. This company in turn ultimately transfers the
eligible accounts receivable to a third-party, multi-seller asset-backed
commercial paper program, existing solely for the purpose of issuing commercial
paper rated A-1/P-1 or higher. The sale of trade accounts receivable includes
not only those eligible receivables that existed on the closing date of the
Receivables Securitization Program, but also eligible accounts receivable
created thereafter. Affiliates of PNC Bank and JP Morgan Chase act as funding
agents. The funding agents, together with other commercial banks rated at least
A-1/P-1, provide standby liquidity funding to support the sale of the accounts
receivable by the Receivables Company under 364-day liquidity facilities.

The Receivables Securitization Program is accounted for as a sale in accordance
with FASB Statement No. 140 "ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL
ASSETS AND EXTINGUISHMENTS OF LIABILITIES." The Company formed a master trust
for purposes of pooling its eligible accounts receivable. The Company transfers
all of its right, title and interest in, to and under these accounts receivable
to the master trust. At the direction of the Company, this master trust issues
investor certificates that represent undivided interests in the eligible
accounts receivable. Accounts receivable sold under these arrangements are
excluded from accounts receivable in the Consolidated Balance Sheets. The
interest rate on the certificates issued under the Receivables Securitization
Program during 2001 ranged between 2.1% and 6.5% annually. The Company's
retained interests on $244.8 million and $248.2 million of receivables in the
master trust as of December 31, 2001 and 2000, were approximately $119.8 million
and $98.2 million, respectively. Accordingly, as of December 31, 2001 and 2000,
the Company had sold $125.0 and $150.0 million, respectively, of accounts
receivable through the Receivables Securitization Program. The retained
interest, which is included in the accounts receivable balance reflected in the
Consolidated Balance Sheets, is recorded at fair value. Due to a short average
collection cycle for such accounts receivable of approximately 40 days and the
Company's collection history, the fair value of the Company's retained interest
approximates book value. Losses recognized on the sale of accounts receivable
totaled approximately $7.0 million, $11.1 million and $9.4 million in 2001,
2000, and 1999, respectively. These costs vary on a monthly basis and generally
are related to certain short-term interest rates. These costs are included in
the Consolidated Statements of Income under the caption Other Expense. As a
result of the short average collection cycle referenced above, proceeds from the
collections under this revolving agreement were $2.8 billion, $2.9 billion and
$2.8 billion in 2001, 2000, and 1999, respectively. The Company has retained the
responsibility for servicing

                                       12


accounts receivable transferred to the master trust. No servicing asset or
liability has been recorded because the fees the Company receives for servicing
the receivables approximate the related costs. No accounts receivable sold to
the master trust were written off during 2001, 2000 or 1999.

6.   EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share is calculated by dividing net income by the weighted average number of
common and common equivalent shares outstanding during the period. Stock options
and deferred stock units are considered common equivalent shares.

The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):



                                                        Years Ended December 31,
                                                   --------------------------------
                                                     2001       2000       1999
                                                   --------   --------   --------
                                                                
Numerator:

 Income before extraordinary item                  $ 56,978   $ 98,643   $ 83,409
 Extraordinary item                                      --     (6,476)        --
                                                   --------   --------   --------
 Net income                                        $ 56,978   $ 92,167   $ 83,409
                                                   ========   ========   ========

Denominator:

 Denominator for basic earnings per
 share - weighted average shares                     33,561     34,101     34,708

 Effect of dilutive securities:
  Employee stock options                                367        674        500
                                                   --------   --------   --------
 Denominator for diluted earnings per
 share                                               33,928     34,775     35,208
                                                   ========   ========   ========

Earnings per common share:

 Basic
  Income before extraordinary item                 $   1.70   $   2.89    $  2.40
  Extraordinary item                                     --      (0.19)        --
                                                   --------   --------   --------
  Net income per share                             $   1.70   $   2.70    $  2.40
                                                   ========   ========   ========

 Diluted
  Income before extraordinary item                 $   1.68   $   2.84    $  2.37
  Extraordinary item                                     --      (0.19)        --
                                                   --------   --------   --------
  Net income per share                             $   1.68   $   2.65    $  2.37
                                                   ========   ========   ========


7.   LONG-TERM DEBT

United is a holding company and, as a result, its primary source of funds is
cash generated from operating activities of its operating subsidiary, USSC, and
bank borrowings by USSC. The Credit Agreement and the indentures governing the
8.375% Notes (as defined) contain restrictions on the ability of USSC to
transfer cash to United.

                                       13


Long-term debt consisted of the following amounts (dollars in thousands):



                                                                           As of December 31,
                                                                          ----------------------
                                                                             2001         2000
                                                                          ---------    ---------
                                                                                 
   Revolver                                                               $      --    $  98,000
   Tranche A term loan, due in installments until March 31, 2004             32,331       44,325
   Tranche A-1 term loan due in installments until June 30, 2005            109,375      137,500
   8.375% Senior Subordinated Notes, due April 15, 2008                     100,000      100,000
   Industrial development bonds, at market interest rates,
    maturing at various dates through 2011                                   14,300       14,300
   Industrial development bonds, at 66% to 78% of prime,
    maturing at various dates through 2004                                   15,500       15,500
   Other long-term debt                                                         199          242
                                                                          ---------    ---------
    Subtotal                                                                271,705      409,867
    Less - current maturities                                               (52,970)     (40,273)
                                                                          ---------    ---------
   Total                                                                  $ 218,735    $ 369,594
                                                                          =========    =========


The prevailing prime interest rates at the end of 2001 and 2000 were 4.75% and
9.50%, respectively.

In order to restate and further amend the Second Amended and Restated Credit
Agreement, dated April 3, 1998 (the "Prior Credit Agreement"), USSC, as issuer,
entered into the Third Amended and Restated Revolving Credit Agreement, dated
June 29, 2000, with various lenders and the administrative agent named therein
(the "Credit Agreement"). The Credit Agreement, among other things, provides a
facility ("Tranche A Term Loan Facility") for the continuation of the term loans
outstanding as of its effective date under the Prior Credit Agreement, an
additional $150.0 million aggregate principal amount, five-year term loan
facility (the "Tranche A-1 Term Loan Facility" and, together with the Tranche A
Term Loan Facility, the "Term Loan Facilities"), and a revolving credit facility
of up to $250.0 million aggregate principal amount (the "Revolving Credit
Facility").

As of December 31, 2001, the available credit under Term Loan Facilities
included $141.7 million of term loan borrowings. In addition, the Company has
$100.0 million of 8.375% Senior Subordinated Notes due 2008, and $29.8 million
of industrial development bonds.

As of December 31, 2001, principal amounts borrowed and outstanding under the
Term Loan Facilities consisted of a $32.3 million Tranche A Term Loan Facility
and a $109.4 million Tranche A-1 Term Loan Facility. Amounts outstanding under
the Tranche A Term Loan Facility are to be repaid in nine quarterly installments
ranging from $3.1 million at March 31, 2002, to $3.7 million at March 31, 2004.
Amounts outstanding under the Tranche A-1 Term Loan Facility are to be repaid in
14 quarterly installments of $7.8 million.

The Revolving Credit Facility is limited to $250.0 million, less the aggregate
amount of letter of credit liabilities under the facility, and contains a
provision for swingline loans in an aggregate amount up to $25.0 million. The
Revolving Credit Facility matures on March 31, 2004. The Company had no
borrowings outstanding under the Revolving Credit Facility at December 31, 2001.
As of December 31, 2001, the Company had $215.8 million available under its
Revolving Credit Facility after deducting certain outstanding letter-of-credit
liabilities of $34.2 million.

As collateral security for the obligations of USSC and security interests,
liens have been placed upon accounts receivable and related instruments,
inventory, equipment, contract rights, intellectual property and all other
tangible and intangible personal property (including proceeds) and fixtures and
certain real property of USSC and its domestic subsidiaries, other than accounts
receivables sold in connection with the Receivables Securitization Program. Also
securing these obligations are first priority pledges of all of the outstanding
stock of USSC and of its domestic direct and indirect subsidiaries, including
Lagasse and Azerty but excluding The Order People Company, as well as certain of
the stock of identified foreign direct and indirect subsidiaries of USSC
(excluding USS Receivables Company, Ltd.).

The loans outstanding under the Term Loan Facilities and the Revolving Credit
Facility bear interest as determined within a pricing matrix. The interest rate
is based on the ratio of total debt to earnings before interest, taxes,
depreciation, and amortization ("EBITDA"). The Tranche A Term Loan Facility and
Revolving Credit Facility bear interest at the prime rate plus 0% to 1.00%, or,
at the Company's option, the London Interbank Offered Rate ("LIBOR") plus 1.25%
to 2.25%. The Tranche A-1 Term Loan Facility bears interest at the prime rate
plus 0.25% to 1.25%, or, at the Company's option, LIBOR plus 1.50% to 2.50%.

The Credit Agreement contains representations and warranties, affirmative and
negative covenants, and events of default customary for financings of this type.
At December 31, 2001, the Company was in compliance with all covenants contained
in the Credit Agreement.

                                       14


The right of United to participate in any distribution of earnings or assets of
USSC is subject to the prior claims of the creditors of USSC. In addition, the
Credit Agreement contains certain restrictive covenants, including covenants
that restrict or prohibit USSC's ability to pay cash dividends and make other
distributions to United.

The Company is exposed to market risk for changes in interest rates. The Company
may enter into interest rate protection agreements, including collar agreements,
to reduce the impact of fluctuations in interest rates on a portion of its
variable rate debt. These agreements generally require the Company to pay to or
entitle the Company to receive from the other party the amount, if any, by which
the Company's interest payments fluctuate beyond the rates specified in the
agreements. The Company is subject to the credit risk that the other party may
fail to perform under such agreements. The Company's cost for these agreements
was amortized to interest expense over the term of the agreements, and the
unamortized cost was included in other assets. Any payments received or made as
a result of the agreements were recorded as an addition to or a reduction from
interest expense. For the year ended December 31, 1999, the Company recorded
$0.2 million to interest expense resulting from LIBOR rate fluctuations below
the floor rate specified in the collar agreements. The Company's interest rate
collar agreements on $200.0 million of borrowings at LIBOR rates between 5.2%
and 8.0% expired on October 29, 1999. As of December 31, 2001, the Company has
not entered into any new interest rate collar agreements.

Debt maturities for the years subsequent to December 31, 2001, are as follows
(dollars in thousands):



Year                                Amount
- ----                                ------
                              
2002                             $   52,970
2003                                 53,401
2004                                 42,909
2005                                 15,625
2006                                     --
Later years                         106,800
                                 ----------
Total                            $  271,705
                                 ==========


As of December 31, 2001 and 2000, the Company had issued letters of credit of
$38.6 million and $53.0 million, respectively, of which $36.0 million and $49.6
million, respectively, were outstanding.

12.75% SENIOR SUBORDINATED NOTES

The 12.75% Senior Subordinated Notes ("12.75% Notes") were originally issued on
May 3, 1995, under the 12.75% Notes Indenture. On May 2, 2000, the Company
redeemed the remaining $100.0 million of its 12.75% Senior Subordinated Notes.
The 12.75% Notes were redeemed at the redemption price of 106.375% of the
principal amount plus accrued interest. As a result, the Company recognized an
extraordinary loss on the early retirement of debt of approximately $10.7
million ($6.5 million net of tax benefit of $4.2 million). This charge included
the write-off of approximately $4.3 million ($2.6 million net of tax benefit of
$1.7 million) of capitalized costs. The redemption was funded through the
Company's Revolving Credit Facility.

8.375% SENIOR SUBORDINATED NOTES

The 8.375% Senior Subordinated Notes ("8.375% Notes") were issued on April 15,
1998, under the 8.375% Notes Indenture. As of December 31, 2001, the aggregate
outstanding principal amount of 8.375% Notes was $100.0 million. The 8.375%
Notes are unsecured senior subordinated obligations of USSC, and payment of the
8.375% Notes is fully and unconditionally guaranteed by the Company and USSC's
domestic "restricted" subsidiaries that incur indebtedness (as defined in the
8.375% Notes Indenture) on a senior subordinated basis. The 8.375% Notes mature
on April 15, 2008, and bear interest at the rate of 8.375% per annum, payable
semi-annually on April 15 and October 15 of each year.

                                       15


The 8.375% Notes are redeemable at the option of USSC at any time on or after
April 15, 2003, in whole or in part, at the following redemption prices
(expressed as percentages of principal amount):



                                                           Redemption
                  Year Beginning April 15,                    Price
                  ------------------------              -----------------
                                                         
                  2003..................................    104.188%
                  2004..................................    102.792%
                  2005..................................    101.396%


After 2005 the Notes are payable at 100% of the principal amount, in each case
together with accrued and unpaid interest, if any, to the redemption date.

Upon the occurrence of a change of control (which includes the acquisition by
any person or group of more than 50% of the voting power of the outstanding
Common Stock of either the Company or USSC, or certain significant changes in
the composition of the Board of Directors of either the Company or USSC), USSC
shall be obligated to offer to redeem all or a portion of each holder's 8.375%
Notes at 101% of the principal amount, together with accrued and unpaid
interest, if any, to the date of the redemption. This obligation, if it arose,
could have a material adverse effect on the Company. The 8.375% Notes Indenture
governing the 8.375% Notes contains certain covenants, including limitations on
the incurrence of indebtedness, the making of restricted payments, transactions
with affiliates, the existence of liens, disposition of proceeds of asset sales,
the making of guarantees by restricted subsidiaries, transfer and issuances of
stock of subsidiaries, the imposition of certain payment restrictions on
restricted subsidiaries and certain mergers and sales of assets. In addition,
the 8.375% Notes Indenture provides for the issuance of up to $100.0 million
aggregate principal amount of additional 8.375% Notes having substantially
identical terms and conditions to the 8.375% Notes, subject to compliance with
the covenants contained in the 8.375% Notes Indenture, including compliance with
the restrictions contained in the 8.375% Notes Indenture relating to incurrence
of indebtedness.

8.   LEASES

The Company has entered into non-cancelable long-term leases for certain
property and equipment. Future minimum lease payments under operating leases in
effect at December 31, 2001 having initial or remaining non-cancelable lease
terms in excess of one year are as follows (dollars in thousands):



                                            Operating
Year                                        Leases(1)
- ----                                        ---------
                                         
2002                                        $  43,887
2003                                           36,286
2004                                           31,840
2005                                           26,892
2006                                           19,647
Later years                                    53,321
                                            ---------
Total minimum lease payments                $ 211,873
                                            =========


(1)  Operating leases are net of immaterial sublease income.

Operating lease expense was approximately $44.7 million, $31.0 million, and
$27.1 million in 2001, 2000, and 1999, respectively.

9.   PENSION PLANS AND DEFINED CONTRIBUTION PLAN

PENSION PLANS

As of December 31, 2001, the Company has pension plans covering approximately
4,600 of its employees. Non-contributory plans covering non-union employees
provide pension benefits that are based on years of credited service and a
percentage of annual compensation. Non-contributory plans covering union members
generally provide benefits of stated amounts based on years of service. The
Company funds the plans in accordance with current tax laws.

                                       16


The following table sets forth the plans' changes in Projected Benefit
Obligation for the years ended December 31, 2001 and 2000 (dollars in
thousands):



                                                    2001        2000
                                                  --------    --------
                                                        
Benefit obligation at beginning of year           $ 44,419    $ 35,647
Service cost - benefit earned during the period      3,452       3,171
Interest cost on projected benefit obligation        3,463       2,997
Amendments                                              --         267
Actuarial loss                                       6,053       3,447
Curtailment gain                                      (486)         --
Benefits paid                                       (1,375)     (1,110)
                                                  --------    --------
Benefit obligation at end of year                 $ 55,526    $ 44,419
                                                  ========    ========


The plans' assets consist of corporate and government debt securities and equity
securities. The following table sets forth the change in the plans' assets for
the years ended December 31, 2001 and 2000 (dollars in thousands):



                                                    2001        2000
                                                  --------    --------
                                                        
Fair value of assets at beginning of year         $ 56,847    $ 47,891
Actual return on plan assets                       (12,213)      8,015
Company contributions                                  430       2,051
Benefits paid                                       (1,375)     (1,110)
                                                  --------    --------
Fair value of plan assets at end of year          $ 43,689    $ 56,847
                                                  ========    ========


The following table sets forth the plans' funded status as of December 31, 2001
and 2000 (dollars in thousands):



                                                    2001        2000
                                                  --------    --------
                                                        
Funded status of the plan                         $(11,836)   $ 12,428
Unrecognized prior service cost                      1,293       1,429
Unrecognized net actuarial loss (gain)               8,300     (15,113)
                                                  --------    --------
Pension liability recognized
   in the Consolidated Balance Sheets             $ (2,243)   $ (1,256)
                                                  ========    ========


Net periodic pension cost for 2001, 2000 and 1999 for pension and supplemental
benefit plans includes the following components (dollars in thousands):



                                                    2001       2000       1999
                                                  -------    -------    -------
                                                               
Service cost - benefit earned during the period   $ 3,452    $ 3,171    $ 3,231
Interest cost on projected benefit obligation       3,463      2,997      2,598
Expected return on plan assets                     (4,809)    (4,114)    (3,485)
Amortization of prior service cost                    126        111         99
Plan curtailment loss                                  10         --        193
Amortization of actuarial gain                       (825)      (623)       (13)
                                                  -------    -------    -------
Net periodic pension cost                         $ 1,417    $ 1,542    $ 2,623
                                                  =======    =======    =======


The assumptions used in accounting for the Company's defined benefit plans are
set forth below:



                                                     2001       2000       1999
                                                   -------    -------    -------
                                                                  
Assumed discount rate                                7.25%      7.75%      7.75%
Rate of compensation increase                        5.00%      5.50%      5.50%
Expected long-term rate of return on plan assets     8.50%      8.50%      8.50%


DEFINED CONTRIBUTION PLAN

The Company has a defined contribution plan. Salaried employees and non-union
hourly paid employees are eligible to participate after completing six
consecutive months of employment. The plan permits employees to have
contributions made as 401(k) salary deferrals on their behalf, or as voluntary
after-tax contributions, and provides for Company contributions, or
contributions matching employees' salary deferral contributions, at the
discretion of the Board of Directors. Company contributions to match employees'
contributions were approximately $3.6 million, $3.1 million and $1.5 million in
2001, 2000 and 1999, respectively.

                                       17


10.  POSTRETIREMENT BENEFITS

The Company maintains a postretirement plan. The plan is unfunded and provides
health care benefits to substantially all retired non-union employees and their
dependents. Eligibility requirements are based on the individual's age (minimum
age of 55), years of service and hire date. The benefits are subject to retiree
contributions, deductible, co-payment provision and other limitations. The
following tables set forth the plan's change in Accrued Postretirement Benefit
Obligation ("APBO"), plan assets and funded status for the years ended December
31, 2001 and 2000 (dollars in thousands):



                                                    2001       2000
                                                  -------    -------
                                                       
Benefit obligation at beginning of year           $ 4,780    $ 3,606
Service cost - benefit earned during the period       620        574
Interest cost on projected benefit obligation         366        335
Plan participants' contributions                      151        111
Actuarial loss                                         93        613
Curtailment gain                                     (202)        --
Benefits paid                                        (266)      (459)
                                                  -------    -------
Benefit obligation at end of year                 $ 5,542    $ 4,780
                                                  =======    =======

Fair value of assets at beginning of year         $    --    $    --
Company contributions                                 115        348
Plan participants' contributions                      151        111
Benefits paid                                        (266)      (459)
                                                  -------    -------
Fair value of plan assets at end of year          $    --    $    --
                                                  =======    =======

Funded status of the plan                         $(5,542)   $(4,780)
Unrecognized net actuarial gain                        --        (65)
                                                  -------    -------
Accrued postretirement benefit obligation
   in the Consolidated Balance Sheets             $(5,542)   $(4,845)
                                                  =======    =======


The costs of postretirement health care benefits for the years ended December
31, 2001, 2000 and 1999 were as follows (dollars in thousands):



                                                   2001     2000     1999
                                                  -----    -----   ------
                                                          
Service cost - benefit earned during the period   $ 620    $ 574   $  498
Interest cost on projected benefit obligation       366      335      229
Curtailment gain                                   (174)      --       --
Amortization of actuarial gain                       --       --       (7)
                                                  -----    -----   ------
Net periodic postretirement benefit cost          $ 812    $ 909   $  720
                                                  =====    =====   ======


The assumptions used in accounting for the Company's postretirement plan for the
three years presented are set forth below:



                                                 2001    2000     1999
                                                -----   -----    -----
                                                         
Assumed average health care cost trend           3.00%   3.00%    3.00%
Assumed discount rate                            7.25%   7.75%    7.75%


The postretirement plan states that the Company's medical cost increases for
current and future retirees and their dependents are capped at 3%. Because
annual medical cost increases are trending above 4% and the Company's portion of
any increase is capped at 3%, a 1% increase or decrease in these costs will have
no effect on the APBO, the service cost or the interest cost.

11.  STOCK OPTION PLAN

The Management Equity Plan (the "Plan") is administered by the Human Resources
Committee, or the Board of Directors or by such other committee, as determined
by the Board of Directors of the Company. The Plan provides for the issuance of
Common Stock, through the exercise of options, to members of the Board of
Directors and to key employees of the Company, either as incentive stock options
or as non-qualified stock options.

                                       18


In May 2000, the Company's stockholders approved the 2000 Management Equity
Plan, which provided for the issuance of up to 3.7 million shares of Common
Stock through the exercise of options, to members of the Board of Directors and
to key employees of the Company. During 2001, 2000 and 1999, options of
approximately 1.0 million, 1.0 million and 1.3 million, respectively, were
granted to management employees and directors, with option exercise prices equal
to fair market value, generally vesting ratably between three and five years and
generally expire 10 years from the date of grant. As of December 31, 2001, there
were 3.2 million shares available for future grant.

An optionee under the Plan must pay the full option price upon exercise of an
option (i) in cash; (ii) with the consent of the Board of Directors, by
delivering mature shares of Common Stock already owned by the optionee and
having a fair market value at least equal to the exercise price; or (iii) in any
combination of the above. The Company may require the optionee to satisfy
federal tax withholding obligations with respect to the exercise of options by
(i) additional withholding from the employee's salary, (ii) requiring the
optionee to pay in cash, or (iii) reducing the number of shares of Common Stock
to be issued to meet only the minimum statutory withholding requirement (except
in the case of incentive stock options).

The following table summarizes the transactions of the Plan for the last three
years:



                                                    Weighted                          Weighted                        Weighted
                                                     Average                           Average                         Average
     Management Equity Plan                         Exercise                          Exercise                        Exercise
  (excluding restricted stock)      2001             Prices          2000              Prices          1999            Prices
- ------------------------------    ---------         ---------      ---------         ---------      ---------         ---------
                                                                                                    
Options outstanding at
 beginning of the year            3,430,555         $   23.13      2,968,875         $   19.60      2,212,578         $   15.28
Granted                           1,093,740             32.87        984,100             28.85      1,293,025             22.89
Exercised                          (640,084)            20.43       (396,480)            10.82       (434,978)             6.52
Canceled                           (700,283)            27.61       (125,940)            23.40       (101,750)            23.41
                                  ---------         ---------      ---------         ---------      ---------         ---------
Options outstanding at
 end of the year                  3,183,928         $   25.29      3,430,555         $   23.13      2,968,875         $   19.60
                                  =========         =========      =========         =========      =========         =========
Number of options
 exercisable                        977,253         $   19.66        834,225         $   19.04        701,160         $   12.98
                                  =========         =========      =========         =========      =========         =========


The following table summarizes information concerning the Plan's outstanding
options as of December 31, 2001:



                                Remaining
     Exercise                   Contractual
      Prices   Outstanding      Life (Years)  Exercisable
     --------  -----------      ------------  -----------
                                       
     $  10.81     500,000          5.5          400,000
        22.00     237,130          7.6           59,080
        22.13      30,000          6.0           24,000
        23.38     332,740          6.2          110,380
        23.38     448,060          7.2          139,640
        26.25      30,000          8.2            6,000
        26.83      30,000          9.0            6,000
        29.13     627,158          8.7          190,153
        30.56       3,600          6.5            2,400
        30.84      51,000         10.0               --
        31.63      30,000          6.3           18,000
        32.40      20,000          9.7               --
        32.99     810,640          9.7               --
        33.06      30,000          6.7           18,000
        33.56       3,600          6.7            3,600
                ---------                     ---------
        Total   3,183,928                       977,253
                =========                     =========


The Company elected the supplemental disclosure requirements of SFAS No. 123,
"ACCOUNTING FOR STOCK-BASED Compensation." Accordingly, the Company is required
to disclose pro forma net income and earnings per share as if the fair
value-based accounting method in SFAS No. 123 had been used to account for
stock-based compensation cost.

                                       19


Options granted under the Plan during 2001, 2000 and 1999 did not require
compensation cost to be recognized in the income statement. However, they are
subject to the supplemental disclosure requirements of SFAS No. 123. Had
compensation cost been determined on the basis of SFAS No. 123 for options
granted during 2001, 2000 and 1999, net income and earnings per share would have
been adjusted as follows (in thousands, except per share data):



                                                      2001         2000         1999
                                                   ----------   ----------  -----------
                                                                   
Net Income Attributable to Common Stockholders:
 As reported                                       $   56,978   $   92,167  $    83,409
 Pro forma                                             52,488       87,951       79,821

Net Income per Common Share - Basic:
 As reported                                       $     1.70   $     2.70  $      2.40
 Pro forma                                               1.56         2.58         2.30
 Average number of common shares (in thousands)        33,561       34,101       34,708

Net Income per Common Share - Diluted:
 As reported                                       $     1.68   $     2.65  $      2.37
 Pro forma                                               1.55         2.53         2.27
 Average number of common shares (in thousands)        33,928       34,775       35,208


The Company uses a binomial option pricing model to estimate the fair value of
options at the date of grant. The weighted average assumptions used to value
options and the weighted average fair value of options granted during 2001, 2000
and 1999 were as follows:



                                                   2001          2000          1999
                                                 --------    ----------     ----------
                                                                   
Fair value of options granted                    $  12.73     $   13.84     $    13.20
Exercise price                                      32.87         28.85          22.89
Expected stock price volatility                      51.0%         52.8%          55.5%
Expected dividend yield                               0.0%          0.0%           0.0%
Risk-free interest rate                               4.6%          6.1%           5.1%
Expected life of options                           3 years       4 years        6 years


RETENTION GRANT PLAN

During 2001, the Company established a Retention Grant Plan (the "Retention
Plan") to retain key executives and to provide additional incentive for such key
executives to achieve the objectives and promote the business success of the
Company by providing such individuals opportunities to acquire common shares of
the Company through the settlement of deferred stock units. Each deferred stock
unit is equal to one share of the Company's Common Stock. The maximum number of
deferred stock units that may be granted under the Retention Plan is 270,000.
During 2001, 100,000 deferred stock units were granted with a cliff vesting of
eight years, subject to certain accelerated vesting conditions. The value of the
grant of $24.25 per deferred stock unit was established by the market price of
the Company's Common Stock on the date of the grant. During 2001, the Company
recorded approximately $0.2 million of expense in connection with the Retention
Plan.

DIRECTORS GRANT PLAN

During 2001, the Company established a Directors Grant Plan (the "Directors
Plan") to retain directors who are not employees of the Company and to provide
additional incentive for such directors to achieve the objectives and promote
the business success of the Company by providing such individuals opportunities
to acquire common shares of the Company through the settlement of deferred stock
units. Each deferred stock unit is equal to one share of the Company's Common
Stock. At such times as determined by the Board of Directors of the Company,
each director of the Company who is not an employee of the Company may be
granted up to 4,000 deferred stock units each year as determined by the Board of
Directors in its sole discretion. Vesting terms will be determined at the time
of the grant. During 2001, 19,200 deferred stock units were granted to certain
members of the Board of Directors, which vested immediately. The value of the
grant was established by the market price of the Company's Common Stock on the
date of the grant. During 2001, the Company recorded approximately $0.6 million
of expense, which represented the entire value of the grant, in connection with
the Directors Plan.

                                       20


12.  PREFERRED STOCK

The Company's authorized capital shares include 15.0 million shares of preferred
stock. The rights and preferences of preferred stock are established by the
Company's Board of Directors upon issuance. At December 31, 2001, the Company
had no preferred stock outstanding and all 15.0 million shares are specified as
undesignated preferred stock.

13.  INCOME TAXES

The provision for income taxes consisted of the following (dollars in
thousands):



                                               Years Ended December 31,
                                          -------------------------------
                                             2001        2000       1999
                                          --------    --------   --------
                                                        
Currently Payable-
 Federal                                  $ 41,271    $ 49,329   $ 47,774
 State                                       6,712      10,824     11,722
                                          --------    --------   --------
   Total currently payable                  47,983      60,153     59,496

Deferred, net-
 Federal                                    (9,857)      4,491        530
 State                                      (1,463)        829        132
                                          --------    --------   --------
   Total deferred, net                     (11,320)      5,320        662
                                          --------    --------   --------
Provision for income taxes                $ 36,663    $ 65,473   $ 60,158
                                          ========    ========   ========


The Company's effective income tax rates for the years ended December 31, 2001,
2000 and 1999 varied from the statutory federal income tax rate as set forth in
the following table (dollars in thousands):



                                                                  Years Ended December 31,
                                  --------------------------------------------------------------------------------------------
                                          2001                               2000                               1999
                                  ------------------------         --------------------------         -------------------------
                                                 % of Pre-                         % of Pre-                         % of Pre-
                                    Amount      tax Income          Amount         tax Income          Amount        tax Income
                                  ---------     ----------         --------       -----------         --------       ----------
                                                                                                         
Tax provision based on the
 federal statutory rate           $  32,774           35.0%        $ 57,441              35.0%        $ 50,248             35.0%
State and local income
 taxes - net of federal
 income tax benefit                   3,371            3.6            7,713               4.7            7,710              5.4
Non-deductible and other                518            0.6              319               0.2            2,200              1.5
                                  ---------     ----------         --------       -----------         --------       ----------
Provision for income taxes        $  36,663           39.2%        $ 65,473              39.9%        $ 60,158             41.9%
                                  =========     ==========         ========       ===========         ========       ==========


The deferred tax assets and liabilities resulted from temporary differences in
the recognition of certain income and expense items for financial and tax
accounting purposes. The sources of these differences and the related tax
effects were as follows (dollars in thousands):



                                                             As of December 31,
                                           ---------------------------------------------------
                                                      2001                     2000
                                           -------------------------   -----------------------
                                              Assets     Liabilities     Assets    Liabilities
                                           -----------   -----------   ---------   -----------
                                                                       
Accrued expenses                           $    12,233   $        --   $  13,926   $        --
Allowance for doubtful accounts                  5,930            --       6,251            --
Inventory reserves and adjustments                  --        14,125          --        13,411
Depreciation and amortization                       --        29,784          --        28,604
Restructuring costs                             13,968            --          --            --
Reserve for stock option compensation            1,394            --         447            --
Other                                            5,397            --       5,858            --
                                           -----------   -----------   ---------   -----------
Total                                      $    38,922   $    43,909   $  26,482   $    42,015
                                           ===========   ===========   =========   ===========


In the Consolidated Balance Sheets, these deferred assets and liabilities were
classified on a net basis as current and non-current, based on the
classification of the related asset or liability or the expected reversal date
of the temporary difference.

                                       21


14.  SUPPLEMENTAL CASH FLOW INFORMATION

In addition to the information provided in the Consolidated Statements of Cash
Flows, the following are supplemental disclosures of cash flow information for
the years ended December 31, 2001, 2000 and 1999 (dollars in thousands):



                                                            2001             2000              1999
                                                         ----------       ----------        ----------
                                                                                   
Cash Paid During the Year for:
  Interest                                               $   27,036       $   28,555        $   27,449
  Discount on the sale of accounts receivable                 6,882           10,632             8,919
  Income taxes                                               41,075           62,691            54,520


15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments is as follows
(dollars in thousands):



                                                          As of December 31, 2001                     As of December 31, 2000
                                                   ----------------------------------         -------------------------------------
                                                    Carrying Amount        Fair Value         Carrying Amount          Fair Value
                                                   ----------------        ----------         ----------------         ------------
                                                                                                           
Cash and cash equivalents                          $         28,814         $  28,814         $       19,784           $     19,784
Current maturities of long-term debt                         52,970            52,970                 40,273                 40,273
Long-term debt:
   8.375% Subordinated Notes                                100,000           101,020                100,000                 92,950
   All other                                                118,735           118,735                269,594                269,594


The fair value of the Notes are based on quoted market prices and quotes from
counterparties, respectively.

16.  QUARTERLY FINANCIAL DATA - UNAUDITED



                                                                                                         Income /
                                                                       Income /                           (Loss)            Net
                                                                       (Loss)                           Per Diluted       Income /
(dollars in                                                             Before              Net         Share Before       (Loss)
thousands,                                                         Extraordinary          Income /      Extraordinary   Per Diluted
except share data)               Net Sales       Gross Profit           Item               (Loss)         Item (1)        Share (1)
                               ------------      ------------      -------------         ----------     -------------   -----------
                                                                                                       
YEAR ENDED DECEMBER 31, 2001

First Quarter                  $  1,059,842       $   166,123      $      21,613         $   21,613       $     0.64     $    0.64
Second Quarter                      978,886           155,003             21,841             21,841             0.65          0.65
Third Quarter                       950,910           152,403             (5,943)            (5,943)           (0.18)        (0.18)
Fourth Quarter                      936,298           146,264             19,467             19,467             0.57          0.57
                               ------------      ------------      -------------         ----------
Total                          $  3,925,936       $   619,793      $      56,978         $   56,978             1.68          1.68
                               ============      ============      =============         ==========

YEAR ENDED DECEMBER 31, 2000

First Quarter                  $    994,883       $   158,130      $      23,924         $   23,924       $     0.69     $    0.69
Second Quarter                      944,023           148,795             22,768             16,292             0.65          0.47
Third Quarter                     1,015,441           164,516             26,427             26,427             0.76          0.76
Fourth Quarter                      990,515           172,403             25,524             25,524             0.74          0.74
                               ------------      ------------      -------------         ----------
Total                          $  3,944,862       $   643,844      $      98,643         $   92,167             2.84          2.65
                               ============      ============      =============         ==========


(1)  As a result of changes in the number of common and common equivalent shares
     during the year, the sum of quarterly earnings per share will not
     necessarily equal earnings per share for the total year.

                                       22


17.  CONDENSED CONSOLIDATING FINANCIAL STATEMENTS  - UNAUDITED

The following table presents condensed consolidating financial information, as
required by the Company's 8.375% Notes, for United Stationers Inc., the parent
holding company; United Stationers Supply Co., the issuer; Azerty Incorporated,
The Order People, Lagasse, Inc, United Stationers Financial Services LLC, and
United Stationers Technology Services LLC, the guarantors; United Worldwide
Limited, United Stationers Hong Kong Limited and USS Receivables Company, LTD.,
are non-guarantors; and elimination adjustments. Separate financial statements
of the guarantors are not presented, as the Company believes the condensed
consolidating financial information is more meaningful in understanding the
statements of operations, balance sheets, and cash flows of the guarantor
subsidiaries. Therefore, the following condensed consolidating financial
information has been prepared using the equity method of accounting in
accordance with the requirements for presentation of such information.

                                       23


                     CONDENSED CONSOLIDATING BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)



                                                United        United
                                              Stationers    Stationers
                                                 Inc.       Supply Co.     Subsidiary     Subsidiary
                                               (Parent)      (Issuer)      Guarantors   Non-Guarantors   Eliminations   Consolidated
                                              ----------   ------------   -----------   --------------  --------------  ------------
                                                                                                      
DECEMBER 31, 2001
ASSETS
  Cash and cash equivalents                   $      424   $     19,349   $     7,673   $        1,368  $            -  $     28,814
  Accounts receivable, net                             -         48,764       170,429          220,031        (128,177)      311,047
  Inventories                                          -        450,278       131,427                -               -       581,705
  Other current assets                                 -         30,287         5,214               16          (6,985)       28,532
  Property, plant and equipment, net                   -        171,031        17,963               18               -       189,012
  Goodwill, net                                        -         67,674       112,443                -               -       180,117
  Intercompany notes receivable                  109,539         51,155        54,978                -        (215,672)            -
  Investment in subsidiaries                     630,880        249,309        30,630                -        (910,819)            -
  Other noncurrent assets                              4         11,303        12,540                -          (3,487)       20,360
                                              ----------   ------------   -----------   --------------  --------------  ------------
   Total assets                                  740,847      1,099,150       543,297          221,433      (1,265,140)    1,339,587
                                              ==========   ============   ===========   ==============  ==============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY
  Accounts payable                                     -        253,561        87,261                -          (4,100)      336,722
  Accrued liabilities                              2,549         92,935        52,592            5,016          (5,452)      147,640
  Current maturities of long-term debt                 -         52,830           140                -               -        52,970
  Deferred income taxes                                -         18,418          (190)               -               -        18,228
  Long-term obligations                                -        261,390       (16,044)         125,000        (125,000)      245,346
  Intercompany notes payable                           -        109,539        51,155           54,978        (215,672)            -
  Stockholders' equity                           738,298        310,477       368,383           36,439        (914,916)      538,681
                                              ----------   ------------   -----------   --------------  --------------  ------------
   Total liabilities and stockholders' equity $  740,847   $  1,099,150   $   543,297   $      221,433  $   (1,265,140) $  1,339,587
                                              ==========   ============   ===========   ==============  ==============  ============
DECEMBER 31, 2000
ASSETS
  Cash and cash equivalents                   $      424   $     13,202   $     4,201   $        1,957  $            -  $     19,784
  Accounts receivable, net                             -        139,905       124,451          241,572        (175,994)      329,934
  Inventories                                          -        524,120       164,806                -               -       688,926
  Other current assets                                 -         10,599         5,239                5               -        15,843
  Property, plant and equipment, net                   -        179,370        10,412                5               -       189,787
  Goodwill, net                                        -         77,914       104,009                -               -       181,923
  Intercompany notes receivable                  102,317        112,555             -                -        (214,872)            -
  Investment in subsidiaries                     525,011        197,198             -                -        (722,209)            -
  Other noncurrent assets                              2         21,157             -                -            (329)       20,830
                                              ----------   ------------   -----------   --------------  --------------  ------------
   Total assets                                  627,754      1,276,020       413,118          243,539      (1,113,404)    1,447,027
                                              ==========   ============   ===========   ==============  ==============  ============
LIABILITIES AND STOCKHOLDERS' EQUITY
  Accounts payable                                     -        273,697       119,092                -               -       392,789
  Accrued liabilities                              3,102         95,001        27,563            5,575          (5,272)      125,969
  Current maturities of long-term debt                 -         40,193            80                -               -        40,273
  Deferred income taxes                                -         22,301           402                -               -        22,703
  Long-term obligations                                -        393,178        (6,324)         150,000        (150,000)      386,854
  Intercompany notes payable                           -        102,317        47,098           65,457        (214,872)            -
  Stockholders' equity                           624,652        349,333       225,207           22,507        (743,260)      478,439
                                              ----------   ------------   -----------   --------------  --------------  ------------
   Total liabilities and stockholders' equity $  627,754   $  1,276,020   $   413,118   $      243,539  $   (1,113,404) $  1,447,027
                                              ==========   ============   ===========   ==============  ==============  ============


                                       26


                  CONDENSED CONSOLIDATING STATEMENTS OF INCOME
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)



                                                              United
                                            United          Stationers
                                         Stationers Inc.    Supply Co.    Subsidiary     Subsidiary
                                           (Parent)           (Issuer)    Guarantors    Non-Guarantors  Eliminations  Consolidated
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
                                                                                                    
FOR THE YEAR ENDED DECEMBER 31, 2001:

Net revenue                              $             -   $  2,867,543   $ 1,150,939   $       27,190  $   (119,736) $   3,925,936
Cost of goods sold                                     -      2,350,790       967,160               -        (11,807)     3,306,143
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Gross profit                                           -        516,753       183,779           27,190      (107,929)       619,793
Warehouse, marketing and
  administrative expenses                              -        388,786       106,850            3,350       (48,851)       450,135
Restructuring charge                                   -         30,072        17,531                -             -         47,603
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Total operating expenses                               -        418,858       124,381            3,350       (48,851)       497,738
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Income (loss) from operations                          -         97,895        59,398           23,840       (59,078)       122,055
Other expense (income)                                 -         76,813       (30,044)               -       (42,148)         4,621
Interest (income) expense                         (7,222)        27,559         6,949          13,437        (16,930)        23,793
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Income before income taxes                         7,222         (6,477)       82,493           10,403             -         93,641
Income taxes                                       2,549            245        29,717            4,152             -         36,663
Equity from subsidiaries                          52,305          6,251             -                -       (58,556)             -
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Net income (loss)                        $        56,978   $       (471)  $    52,776  $         6,251  $    (58,556) $      56,978
                                         ===============   ============   ===========  ===============  ============  =============

FOR THE YEAR ENDED DECEMBER 31, 2000:

Net revenue                              $             -   $  2,965,590   $   982,904  $        33,305  $    (36,937) $   3,944,862
Cost of goods sold                                     -      2,417,632       885,179                -        (1,793)     3,301,018
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Gross profit                                           -        547,958        97,725           33,305       (35,144)       643,844
Warehouse, marketing and
  administrative expenses                              -        381,623        59,212            3,495        (3,032)       441,298
Other expense                                          -         32,180             -                -       (20,979)        11,201
Interest expense                                  (8,793)        24,575         4,220           18,360       (11,133)        27,229
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Income before income taxes and
  and extraordinary item                           8,793        109,580        34,293           11,450             -        164,116
Income taxes                                       3,103         43,655        14,196            4,519             -         65,473
Equity from subsidiaries                          91,117          6,931             -                -       (98,048)             -
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Income before extraordinary item                  96,807         72,856        20,097            6,931       (98,048)        98,643
Extraordinary item - loss on early
  retirement of debt, net of tax                       -          6,476             -                -             -          6,476
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Net income                               $        96,807   $     66,380   $    20,097  $         6,931  $    (98,048) $      92,167
                                         ===============   ============   ===========  ===============  ============  =============
FOR THE YEAR ENDED DECEMBER 31, 1999:

Net revenue                              $             -   $  2,624,564   $   819,448  $        31,570  $    (32,886) $   3,442,696
Cost of goods sold                                     -      2,138,757       739,782                -             -      2,878,539
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Gross profit                                           -        485,807        79,666           31,570       (32,886)       564,157
Warehouse, marketing and
  administrative expenses                              -        330,162        51,045            3,444        (2,688)       381,963
Other expense                                          -         30,237             -                -       (20,805)         9,432
Interest expense                                  (6,978)        25,364         4,894           15,308        (9,393)        29,195
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Income before income taxes                         6,978        100,044        23,727           12,818             -        143,567
Income taxes                                       2,491         42,127        10,293            5,247             -         60,158
Equity from subsidiaries                          78,922          7,571             -                -       (86,493)             -
                                         ---------------   ------------   -----------  ---------------  ------------  -------------
Net income                               $        83,409   $     65,488   $    13,434  $         7,571  $    (86,493) $      83,409
                                         ===============   ============   ===========  ===============  ============  =============


                                       27


                CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)



                                                                    United
                                                      United      Stationers
                                                 Stationers Inc.  Supply Co.    Subsidiary   Subsidiary
                                                     (Parent)       (Issuer)    Guarantors  Non-Guarantors Eliminations Consolidated
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
                                                                                                      
FOR THE YEAR ENDED DECEMBER 31, 2001:

Net cash flows (used in) provided by
 operating activities                            $       (15,796) $    169,433  $   26,813  $       34,890 $    (24,200)$   191,140

Cash flows from investing activities:
  Acquisitions                                                                     (32,650)                                 (32,650)
  Capital expenditures                                                 (22,729)     (9,774)                                 (32,503)
  Proceeds from the disposition of
   property, plant and equipment                                         3,800          85                                    3,885
  Proceeds from the sale of Positive ID.                                            14,941                                   14,941
  Investment in subsidiaries                              12,383                                                (12,383)         --
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Net cash provided by (used in)
 investing activities                                     12,383       (18,929)    (27,398)             --      (12,383)    (46,327)

Cash flows from financing activities:
  Net repayments under revolver                                        (98,000)                                             (98,000)
  Retirements and principal payments of debt                           (40,163)                    (25,000)      25,000     (40,163)
  Issuance of treasury stock                              15,796                                                             15,796
  Acquisition of treasury stock, at cost                 (12,383)                                                           (12,383)
  Intercompany dividend                                                (12,383)                                  12,383          --
  Intercompany notes payable                                             7,222       4,057         (10,479)        (800)         --
  Payment of employee withholding
   tax related to stock option exercises                                (1,033)                                              (1,033)
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Net cash provided (used in)
 financing activities                                      3,413      (144,357)      4,057         (35,479)      36,583    (135,783)

Net change in cash and cash equivalents                       --         6,147       3,472            (589)          --       9,030
Cash and cash equivalents, beginning of year                 424        13,202       4,201           1,957           --      19,784
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Cash and cash equivalents, end of year           $           424  $     19,349  $    7,673  $        1,368 $         -- $    28,814
                                                 ===============  ============  ==========  ============== ============ ============
FOR THE YEAR ENDED DECEMBER 31, 2000:

Net cash flows (used in) provided by
 operating activities                            $        (4,247) $     30,087  $   27,957  $        1,576 $    (16,703)$    38,670
Cash flows from investing activities:
  Acquisitions                                                --       (44,233)         --              --           --     (44,233)
  Capital expenditures                                        --       (41,079)     (2,559)             --           --     (43,638)
  Investment in subsidiaries                              22,437            --          --              --      (22,437)        --
  Proceeds from the disposition of property,
     plant and equipment                                      --         4,337          --              --           --       4,337
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Net cash provided by (used in)
 investing activities                                     22,437       (80,975)     (2,559)             --      (22,437)    (83,534)

Cash flows from financing activities:
  Net borrowings under revolver                               --        45,000          --              --           --      45,000
  Retirements and principal payments of debt                  --      (128,509)         --         (10,000)      10,000    (128,509)
  Borrowings under financing agreements                       --       150,000          --              --           --     150,000
  Issuance of treasury stock                               4,247            --          --              --           --       4,247
  Acquisition of treasury stock, at cost                 (22,437)           --          --              --           --     (22,437)
  Intercompany dividend                                       --       (22,437)         --             --        22,437          --
  Intercompany notes payable                                  --         8,793     (23,703)          8,207        6,703          --
  Payment of employee withholding
   tax related to stock option exercises                      --        (2,646)         --              --           --      (2,646)
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Net cash (used in) provided by
 financing activities                                    (18,190)       50,201     (23,703)         (1,793)       39,140     45,655

Net change in cash and cash equivalents                       --          (687)      1,695            (217)          --         791
Cash and cash equivalents, beginning of year                 424        13,889       2,506           2,174           --      18,993
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Cash and cash equivalents, end of year           $           424  $     13,202  $    4,201  $        1,957 $         -- $    19,784
                                                 ===============  ============  ==========  ============== ============ ============
FOR THE YEAR ENDED DECEMBER 31, 1999:

Net cash flows (used in) provided by
 operating activities                            $        (2,848) $     54,589  $  (46,712) $       11,597 $     36,955 $    53,581

Cash flows from investing activities:
  Acquisitions                                                --        (4,680)         --              --           --      (4,680)
  Capital expenditures                                        --       (21,910)     (3,551)             --           --     (25,461)
  Investment in subsidiaries                              49,600            --          --              --      (49,600)         --
  Proceeds from the disposition of property,
     plant and equipment                                      --         4,130          --              --           --       4,130
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Net cash provided by (used in)
 investing activities                                     49,600       (22,460)     (3,551)             --      (49,600)    (26,011)

Cash flows from financing activities:
  Net borrowings under revolver                               --        29,000          --              --           --      29,000
  Retirements and principal payments of debt                  --        (7,604)         --              --           --      (7,604)
  Borrowings under financing agreements                       --           145          --              --           --         145
  Financing costs                                             --           250          --              --           --         250
  Issuance of common stock                                 2,523            --          --              --           --       2,523
  Issuance of treasury stock                                 323            --          --              --           --         323
  Acquisition of treasury stock, at cost                 (49,600)           --          --              --           --     (49,600)
  Intercompany dividend                                       --       (49,600)        --               --       49,600          --
  Intercompany notes payable                                  --          (234)     47,618         (10,429)     (36,955)         --
  Payment of employee withholding tax related to
    stock option exercises                                    --        (2,652)         --              --           --      (2,652)
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Net cash (used in) provided by
 financing activities                                    (46,754)      (30,695)     47,618         (10,429)      12,645     (27,615)

Net change in cash and cash equivalents                       (2)        1,434      (2,645)          1,168           --         (45)
Cash and cash equivalents, beginning of year                 426        12,455       5,151           1,006           --      19,038
                                                 ---------------  ------------  ----------  -------------- ------------ ------------
Cash and cash equivalents, end of year           $           424  $     13,889  $    2,506  $        2,174 $         -- $    18,993
                                                 ===============  ============  ==========  ============== ============ ============


                                       28

EX-21

Exhibit 21

                     SUBSIDIARIES OF UNITED STATIONERS INC.

UNITED STATIONERS INC.

  UNITED STATIONERS SUPPLY CO.

     AZERTY INCORPORATED
     AZERTY de MEXICO, S.A. de C.V.
     LAGASSE, INC. (f/k/a LAGASSE BROS., INC.)
     THE ORDER PEOPLE COMPANY
     UNITED STATIONERS FINANCIAL SERVICES LLC
        USS RECEIVABLES COMPANY, LTD.
     UNITED STATIONERS TECHNOLOGY SERVICES LLC
     UNITED WORLDWIDE LIMITED
     UNITED STATIONERS HONG KONG LIMITED

EX-23

EXHIBIT 23

                         CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 333-37665) pertaining to the Management Equity Plan of United Stationers
Inc., of our report dated January 29, 2002, with respect to the consolidated
financial statements of United Stationers Inc. and subsidiaries, included in
this Annual Report (Form 10-K) for the year ended December 31, 2001.



                                             /s/ Ernst & Young LLP

Chicago, Illinois
March 29, 2002