Xerox Wins Three-Year, Multimillion-Dollar Contract with Staples; Staples Copy and Print Centers to Complete Transition to Digital Technology.

ROCHESTER, N.Y. -- Xerox Corporation (NYSE: XRX) announced today that Staples, Inc. (NASDAQ: SPLS), the world's largest office products retailer, has signed a three-year, multimillion-dollar agreement that puts Xerox's advanced digital technology in Staples Copy and Print Centers at 1,100 store locations in the United States.

Xerox is installing nearly 5,000 digital color and black-and-white printers and copiers in Staples stores. The agreement is part of Staples' strategy to upgrade its in-store copy and print center equipment to complete a transition to all-digital technology by early 2005.

"Staples Copy and Print Centers make it easy to get guaranteed high-quality copy and print service at any Staples store," said John Burke, senior vice president of business services, Staples, Inc. "Advanced digital document technology, support and service from Xerox help make Staples the place to shop for all copy and printing needs."

As part of the agreement Xerox will install DocuColor 12 Copier/Printers which are equipped with digital front end image processors from EFI (Nasdaq:EFII). The new technology will support Staples' customized printing services. In addition, the Xerox CopyCentre(TM) line of digital copiers will be used to meet the black-and-white self-service copying needs of Staples customers.

"This agreement demonstrates the strength of Xerox's relationships with leading customers like Staples, the quality of Xerox digital technology, and the increasing momentum of our growth strategy," said Michael Brannigan, president, Xerox North American Solutions Group. "Staples' transformation into an all-digital document service provider reflects the growing market need for color and personalized printing."

About Staples

Staples, Inc. invented the office superstore concept in 1986 and today is the world's largest office products retailer. With 60,000 talented associates, the company is committed to making it easy to buy a wide range of office products, including supplies, technology, furniture, and business services. With 2003 sales of $13 billion, Staples serves consumers and businesses ranging from home-based businesses to Fortune 500 companies in 19 countries throughout North America, Europe and Asia. Headquartered outside of Boston, Staples operates approximately 1,600 office superstores and also serves its customers through mail order catalog, e-commerce and contract businesses. More information is available at www.staples.com.

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For more information about Xerox office products and services, visit www.xerox.com/office or call 800-ASK-XEROX.

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