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Staples Takes Equity Position in HotOffice; Agreement Includes Strategic Marketing Partnership and Brings Total Financing Round to $14.8 Million for Application Service Provider

Wednesday, August 18, 1999 7:00 am EDT

Dateline:

FRAMINGHAM, Mass. and BOCA RATON, Fla.

Public Company Information:

NASDAQ:
SPLS
"HotOffice is the leader in this category, and our agreement is representative of Staples' ongoing efforts to partner with Internet experts to better serve our customers the way they want to be served."

FRAMINGHAM, Mass. and BOCA RATON, Fla.--(BUSINESS WIRE)--Staples, Inc. (NASDAQ: SPLS) and HotOffice Technologies, Inc. (www.hotoffice.com), today jointly announced that Staples has taken an equity stake in the developer of the award-winning HotOffice Web-Based Intranet Service, investing $6 million in a total financing round of $14.8 million. Additional investors include Intel Corporation; Spyglass Equities 99A L.P., an investment affiliate of The Staubach Company; Blumenstein/Thorne Information Partners; and TBG Information Investors, a partnership of Blumenstein/Thorne Information Partners and GS Capital Partners II, an affiliate of Goldman Sachs Group. Both Intel and TBG Information Investors contributed in previous investment rounds as well.

In addition to its investment, Staples also has formed an aggressive marketing and distribution partnership with HotOffice to further strengthen its position as the online destination for small business. Staples will offer HotOffice's Web-based, low-cost and feature-rich intranet services on www.staples.com as an alternative to expensive, technically complex solutions. In addition, Staples will offer HotOffice in its retail stores and through direct marketing channels.

Staples also announced today its investment in DSL.net, which provides high-speed data communication services and Internet access via digital subscriber line technology. By coupling HotOffice with DSL.net's technology, Staples can offer small businesses an end-to-end high speed intranet service to help grow an expanding business.

"Providing small businesses with a valuable tool to efficiently and effectively host and operate an intranet is just one more way we can help them slash the cost and hassle of running their offices," said Thomas G. Stemberg, chairman and chief executive officer of Staples. "HotOffice is the leader in this category, and our agreement is representative of Staples' ongoing efforts to partner with Internet experts to better serve our customers the way they want to be served."

"Our partnership with Staples fits perfectly into our overall strategic goal of providing small businesses with the tools and resources they need to survive in today's competitive landscape," said R. Michael Franz, chairman and CEO of HotOffice Technologies, Inc. "By continuing to partner with leading companies that have an existing presence in the small business marketplace, we are able to draw upon their extensive customer base while supplying them with a unique value-add solution to help them retain that relationship with their customer. To continue our aggressive growth, we expect to be announcing several more exciting partnerships in the near future as well."

For just $12.95 per user per month, scaling down to $9.95 per user after just 50 users, HotOffice offers an affordable hosted intranet at a fraction of the cost of purchasing and maintaining a traditional system. This subscription service provides a powerful suite of collaboration and communication tools in one simple, easy-to-use interface accessible anytime anywhere. From any PC in the world with an Internet connection, HotOffice provides instant access to document management, Web-based e-mail, group calendar, contact manager, bulletin boards, online conference rooms, a business resource center and more.

About HotOffice Technologies, Inc.

The HotOffice Web-Based Intranet Service is the first product to be awarded both "Premiere Product" at DEMO and "Debut Company" at PC Forum, two of the industry's most prestigious events. Among its many accolades, HotOffice has received the PC Magazine Editors' Choice Award; a "Four Star Award" by PC Computing Magazine; was designated by Windows Magazine as one of the Best Business Sites on the Internet and by PC Computing as the Top Business Technology Service on the Internet; and was listed as the Best Small Office Internet Solution in the Gadget Guru's Guide to the Best (syndicated columnist and NBC Today Show Correspondent). HotOffice Technologies, Inc., founded in 1995, is a privately held company based in Boca Raton, Florida and is funded in part by Intel Corporation and TBG Information Investors, a partnership of Blumenstein/Thorne Information Partners and GS Capital Partners II, an affiliate of Goldman Sachs Group.

About Staples.com

Launched in the fall of 1998, Staples.com is Staples' e-commerce business unit that serves the home office and small-business customer via the Internet. The virtual store offers easy-to-use, customized features and intuitive functions to slash the cost and hassle of purchasing office supplies. More than 6,000 products are available on Staples.com, and it is open for business 24 hours a day, seven days a week. Customers receive free delivery on all orders over $50 and next-business day delivery is available in most U.S. markets.

About Staples

Staples, Inc. is a $7 billion retailer of office supplies, furniture and technology to consumers and businesses, from home-based businesses to Fortune 500 companies in the United States, Canada, the United Kingdom and Germany. Headquartered outside Boston, Staples invented the office superstore concept and today is the largest operator of office superstores in the world. The company has over 44,000 employees serving customers through more than 1,000 office superstores, mail-order catalogs, e-commerce and a contract business. More information about the company is available at http://www.staples.com.

HotOffice and the HotOffice logo are trademarks of HotOffice Technologies, Inc. All rights reserved.

Contact:

HotOffice Technologies, Inc.
Bridgette King, 561/995-5688
bridget@hotoffice.com
www.hotoffice.com
or
Staples, Inc.
Shannon Lapierre, 508/253-8468
shannon.lapierre@staples.com
www.staples.com

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