EXHIBIT 10.11

AGREEMENT FOR INVENTORY FINANCING

This AGREEMENT FOR INVENTORY FINANCING (as amended, supplemented or otherwise
modified from time to time, this "Agreement") is hereby made this 28th day of
February, 2001, by and between IBM Credit Corporation, a Delaware corporation
with a place of business at 5000 Executive Parkway, Suite 450, San Ramon, CA
94583 ("IBM Credit"), and Egghead.Com, Inc., duly organized under the laws of
the State of Delaware with its principal place of business at 1350 Willow Road,
Menlo Park, CA 94025 ("Customer").

W I T N E S S E T H

WHEREAS, in the course of Customer's operations, Customer intends to purchase
from Persons approved in writing by IBM Credit for the purposes of this
Agreement (the "Authorized Suppliers") computer hardware and software products
manufactured or distributed by or bearing any trademark or trade name of such
Authorized Suppliers (the "Products") (as of the date hereof the Authorized
Suppliers are as set forth on Attachment E hereto);

WHEREAS, Customer has requested that IBM Credit finance its purchase of Products
from such Authorized Suppliers and IBM Credit Is willing to provide such
financing to Customer subject to the terms and conditions set forth in this
Agreement.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

SECTION 1. DEFINITIONS; ATTACHMENTS

Special Definitions. The following terms shall have the following respective
meanings in this Agreement (such meanings to be equally applicable to both the
singular and the plural forms of the terms defined):

"Accounts": as defined in the U.C.C.

"Advance": any loan or other extension of credit by IBM Credit to, or on behalf
of, Customer pursuant to this Agreement including, without limitation, Product
Advances.

"Affiliate": with respect to the Customer, any Person meeting one of the
following: (i) at least 10% of such Person's equity is owned, directly or
indirectly, by Customer; (ii) at least 10% of Customer's equity is owned,
directly or indirectly, by such Person; or (iii) at least 10% of Customer's
equity and at least 10% of such Person's equity is owned, directly or
indirectly, by the same Person or Persons. All of Customer's officers,
directors, joint venturers, and partners shall also be deemed to be Affiliates
of Customer for purposes of this Agreement.

"Agreement": as defined in the caption.

"Auditors": a nationally recognized firm of independent certified public
accountants selected by Customer and satisfactory to IBM Credit.

"Authorized Suppliers": as defined in the recitals of this Agreement.

"Available Credit": at any time, (1) the Maximum Advance Amount less (2) the
Outstanding Advances at such time.

"Average Daily Balance": for each Advance for a given period of time, the sum of
the unpaid principal of such Advance as of each day during such period of time,
divided by the number of days in such period of time.

"Bank": as defined in Section 3.3.

"Borrowing Base": as defined in Attachment A.

"Business Day": any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are generally closed or on which IBM
Credit is closed.

"Closing Date": the date on which the conditions precedent to the effectiveness
of this Agreement set forth in Section 5.1 hereof are satisfied or waived in
writing by IBM Credit.

"Code": the Internal Revenue Code of 1986, as amended or any successor statute.

"Collateral": as defined in Section 4.1.

"Collateral Management Report": a report to be delivered by Customer to IBM
Credit from time to time, as provided herein, signed by the chief executive
officer or chief financial officer of Customer, substantially in the form and
detail of Attachment F hereto, detailing and certifying, among other items: a
summary of Customer's inventory on hand financed by IBM Credit and Customers
Eligible Accounts, the amount and aging of all of Customer's Accounts,
Customer's inventory on hand financed by IBM Credit by quantity, type, model,
Authorized Supplier's Invoice price to Customer and the total of the line item
values for all inventory listed on the report, the amounts and aging of
Customer's accounts payable as of a specified date, all of the Customer's IBM
Credit borrowing activity during a specified period and the total amount of
Customer's Borrowing Base as welt as Customer's Outstanding Product Advances,
Available Credit and any Shortfall Amount as of a specified date.

"Common Due Date": (1) the fifth day of a calendar month if the Product
Financing Period expires on the first through tenth of such calendar month; (2)
the fifteenth day of a calendar month if the Product Financing Period expires on
the eleventh through twentieth of such calendar month; and (3) the twenty-fifth
day of a calendar month if the Product Financing Period expires on the
twenty-first through the last day of such calendar month.

"Credit Line": as defined in Section 2 1.

"Customer": as defined in the caption.

"Default": either (1) an Event of Default or (2) any event or condition which,
but for the requirement that notice be given or time lapse or both, would be an
Event of Default.

"Delinquency Fee Rate": as defined on Attachment A.

"Eligible Accounts": as defined in Section 3.1.

"Environmental Laws": all statutes, laws, judicial decisions, regulations,
ordinances, and other governmental restrictions relating to pollution, the
protection of the environment, occupational health and safety, or to emissions,
discharges or release of pollutants, contaminants, hazardous substances or
wastes into the environment.

"Environmental Liability": any claim, demand, obligation, cause of action,
allegation, order, violation, injury, judgment, penalty or fine, cost or
expense, resulting from the violation or alleged violation of any Environmental
Laws or the imposition of any Lien pursuant to any Environmental Laws.

"ERISA": the Employee Retirement Income Security Act of 1974, as amended, or any
successor statutes.

"Event of Default": as defined in Section 9.1.

"Financial Statements": the consolidated balance sheets (including, without
limitation, securities such as stocks and investment bonds), statements of
operations, statements of cash flows and statements of changes in shareholder's
equity of Customer and its Subsidiaries for the period specified, prepared in
accordance with GAAP and consistent with prior practices.

"Floor Plan Lender: any Person who now or hereinafter provides inventory
financing to Customer, provided that such Person executes an Intercreditor
Agreement (as defined in Section 5.1 of this Agreement) or a subordination
agreement with IBM Credit in form and substance satisfactory to IBM Credit.

"Free Financing Period": for each Product Advance, the period, if any, in which
IBM Credit does not charge Customer a financing charge. IBM Credit shall
calculate the Customer's Free Financing Period utilizing a methodology that is
consistent with the methodologies used for similarly situated customers of IBM
Credit. The Customer understands that IBM Credit may not offer, may change or
may cease to offer a Free Financing Period for the Customer's purchases of
Products.

"Free Financing Period Exclusion Fee": as defined in Attachment A. "GAAP":
generally accepted accounting principles in the United States as in effect from
time to time.

"Governmental Authority": 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, and any
corporation or other entity owned or controlled (through stock or capital
ownership or otherwise) by any of the foregoing.

"Hazardous Substances": all substances, wastes or materials, to the extent
subject to regulation as "hazardous substances" or "hazardous waste" under any
Environmental Laws.

"IBM Credit": as defined in the caption.

"Indebtedness": with respect to any Person, (1) all obligations of such Person
for borrowed money or for the deferred purchase price of property or services
(other than trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices) or which is evidenced by a note,
bond, debenture or similar instrument, (2) all obligations of such Person under
capital leases (including obligations under any leases Customer may enter into,
now or in the future, with IBM Credit), (3) all obligations of such Person in
respect of letters of credit, banker's acceptances or similar obligations issued
or created for the account of such Person, (4) liabilities arising under any
interest rate protection, future, option swap, cap or hedge agreement or
arrangement under which such Person is a party or beneficiary, (5) all
obligations under guaranties by such Person and (6) all liabilities secured by
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.

"Intellectual Property": as defined in Section 6.14.

"Investment": with respect to any Person (the "Investor"), (1) any investment by
the Investor in any other Person, whether by means of share purchase, capital
contribution, purchase or other acquisition of a partnership or joint venture
interest, loan, time deposit, demand deposit or otherwise, and (2) any guaranty
by the Investor of any Indebtedness or other obligation of any other Person.

"Lien(s)": any lien, claim, charge, pledge, security interest, deed of trust,
mortgage, other encumbrance or other arrangement having the practical effect of
the foregoing, including the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.

"Lockbox": as defined in Section 3.3.

"Material Adverse Effect": a material adverse effect (1) on the business,
operations, results of operations, assets, or financial condition of the
Customer, (2) on the aggregate value of the Collateral or the aggregate amount
which IBM Credit would be likely to receive (after giving consideration to
reasonably likely delays in payment and reasonable costs of enforcement) in the
liquidation of such Collateral to recover the Obligations in full, or (3) on the
rights and remedies of IBM Credit under this Agreement.

"Maximum Advance Amount": at any time, the lesser of (1) the Credit Line and (2)
the Borrowing Base at such time.

"Obligations": all covenants, agreements, warranties, duties, representations,
loans, advances, interest (including interest accruing on or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Customer, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding), fees,
reasonable expenses, indemnities, liabilities and Indebtedness of any kind and
nature whatsoever now or hereafter arising, owing, due or payable from Customer
to IBM Credit.

"Other Charges": as set forth in Attachment A.

"Other Documents": all security agreements, mortgages, leases, instruments,
documents, guarantees, schedules of assignment, contracts and similar agreements
executed by Customer and delivered to IBM Credit, pursuant to this Agreement or
otherwise, and all amendments, supplements and other modifications to the
foregoing from time to time.

"Outstanding Advances": at any time of determination, the sum of (1) the unpaid
principal amount of all Advances made by IBM Credit under this Agreement; and
(2) any finance charge, fee, expense or other amount related to Advances charged
to Customer's account with IBM Credit.

"Outstanding Product Advances": at any time of determination, the sum of (1) the
unpaid principal amount of all Product Advances made by IBM Credit under this
Agreement; and (2) any finance charge, fee, expense or other amount related to
Product Advances charged to Customer's account with IBM Credit.

"PBGC": as defined in Section 6.12.

"Permitted Indebtedness": any of the following:

(1) Indebtedness to IBM Credit;

(2) Indebtedness described in Section VII of Attachment B;

(3) Indebtedness to any Floor Plan Lender,

(4) Purchase Money Indebtedness;

(5) guaranties in favor of IBM Credit; and

(6) other Indebtedness consented to by IBM Credit in writing prior to incurring
such Indebtedness.

"Permitted Liens": any of the following:

(1) Liens which are the subject of an Intercreditor Agreement, in effect from
time to time between IBM Credit and any other secured creditor;

(2) Purchase Money Security Interests;

(3) Liens described in Section I of Attachment B;

(4) Liens of warehousemen, mechanics, materialmen, workers, repairmen, common
carriers, landlords and other similar Liens arising by operation of law or
otherwise, not waived in connection herewith, for amounts that are not yet due
and payable or being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted if an adequate reserve or other appropriate
provisions shall have been made therefor as required to be in conformity with
GAAP and an adverse determination in such proceedings could not reasonably be
expected to have a Material Adverse Effect;

(5) attachment or judgment Liens individually or in the aggregate not in excess
of $50,000 (exclusive of (A) any amounts that are duly bonded to the
satisfaction of IBM Credit or (B) any amount fully covered by insurance as to
which the insurance company has acknowledged its obligation to pay such judgment
in full);

(6) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of Customer,

(7) extensions and renewals of the foregoing Permitted Liens; provided that (A)
the aggregate amount of such extended or renewed Liens do not exceed the
original principal amount of the Indebtedness which it secures, (B) such Liens
do not extend to any property other than property already previously subject to
the Lien and (C) such extended or renewed Liens are on terms and conditions no
more restrictive than the terms and conditions of the Liens being extended or
renewed;

(8) Liens arising from deposits or pledges to secure bids, tenders, contracts,
leases, surety and appeal bonds and other obligations of like nature arising in
the ordinary course of the Customer's business;

(9) Liens for taxes, assessments or governmental charges not delinquent or being
contested, in good faith, by appropriate proceedings promptly instituted and
diligently conducted if an adequate reserve or other appropriate provisions
shall have been made therefor as required in order to be in conformity with GAAP
and an adverse determination in such proceedings could not reasonably be
expected to have a Material Adverse Effect;

(10) Liens arising out of deposits in connection with workers' compensation,
unemployment insurance or other social security or similar legislation;

(11) Liens arising pursuant to this Agreement; and

(12) other Liens consented to by IBM Credit in writing prior to incurring such
Lien.

"Person": any individual, association, firm, corporation, partnership, trust,
unincorporated organization or other entity whatsoever,

"Plans": as defined in Section 8.12.

"Policies": all policies of insurance required to be maintained by Customer
under this Agreement or any of the Other Documents.

"Prime Rate": as of the date of determination, the average of the rates of
interest announced by Citibank, N.A., Chase Manhattan Bank and Bank of America
National Trust 8 Savings Association (or any other bank which IBM Credit uses in
its normal course of business of determining Prime Rate) as their prime or base
rate, as of the last Business Day of the calendar month immediately preceding
the date of determination, whether or not such announced rates are the actual
rates charged by such banking institutions to their most creditworthy borrowers.

"Products": as defined in the recitals of this Agreement.

"Product Advance": any advance of funds made or committed to be made by IBM
Credit for the account of Customer to an Authorized Supplier in respect of an
invoice delivered or to be delivered by such Authorized Supplier to IBM Credit
describing Products purchased by Customer.

"Product Financing Charge": as specified in a billing statement.

"Product Financing Period": for each Product Advance, equal to the Free
Financing Period for such Product Advance or if there is no Free Financing
Period, such period as IBM Credit may determine from time to time.

"Purchase Money Indebtedness": any Indebtedness (including capital leases)
incurred to finance the acquisition of assets (other than assets manufactured or
distributed by or bearing any trademark or trade name of any Authorized
Supplier) to be used in the Customer's business not to exceed the lesser of (1)
the purchase price or acquisition cost of such asset and (2) the fair market
value of such asset.

"Purchase Money Security Interest": any security interest securing Purchase
Money Indebtedness, which security interest applies solely to the particular
asset acquired with the Purchase Money Indebtedness.

"Requirement of Law": as to any Person, the articles of incorporation and
by-laws of such 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.

"Shortfall Amount": as defined in Section 2.5.

"Shortfall Transaction Fee": as defined in Attachment A.

"Special Account": as defined in Section 3.3.

"Subsidiary": with respect to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by such Person.

"Supplier Credits": as defined in Section 2.2.

"Termination Date": shall mean the first anniversary of the date of this
Agreement or such other date as IBM Credit and Customer may agree to from time
to time.

"Voting Stock": securities, the holders of which are ordinarily, in the absence
of contingencies, entitled to elect the corporate directors (or persons
performing similar functions).

Other Defined Terms. Terms not otherwise defined in this agreement which are
defined in the Uniform Commercial Code as in effect in the State of New York
(the "U.C.C.") shall have the meanings assigned to them therein.

Attachments. All attachments, exhibits, schedules and other addenda hereto,
including, but not limited to, Attachment A and Attachment B, are specifically
incorporated herein by reference and made a part of this Agreement.

SECTION 2. CREDIT LINE; FINANCE CHARGES; OTHER CHARGES

Credit Line. Subject to the terms and conditions set forth in this Agreement, on
and after the Closing Date to but not including the date that is the earlier of
(i) the date on which this Agreement is terminated pursuant to Section 10.1 and
(ii) the date on which IBM Credit terminates the Credit Line pursuant to Section
9.2, 10.1 Credit agrees to extend to the Customer a credit line ("Credit Line")
in the amount set forth in Attachment A pursuant to which IBM Credit will make
to the Customer, from time to time, Advances in an aggregate amount at any one
time outstanding not to exceed the Credit Line. Notwithstanding any other term
or provision of this Agreement, IBM Credit may, at any time and from time to
time, in its sole and absolute discretion (x) temporarily increase the amount of
the Credit Line set forth in Attachment A and decrease the amount of the Credit
Line to the amount of the Credit Line set forth in Attachment A, in each case
upon written notice to the Customer, and (y) make Advances pursuant to this
Agreement upon the request of Customer in an aggregate amount at any one time
outstanding in excess of the Credit Line.

Product Advances.

Subject to the terms and conditions of this Agreement, IBM Credit shall make
Product Advances in connection with Customer's purchase of Products from
Authorized Suppliers upon at least a two-day prior written notice from
Authorized Suppliers. Customer hereby authorizes and directs IBM Credit to pay
the proceeds of Product Advances directly to the applicable Authorized Supplier
in respect of invoices delivered to IBM Credit for such Products by such
Authorized Supplier and acknowledges that (i) any delivery to IBM Credit of an
invoice by an Authorized Supplier shall be deemed as a request for a Product
Advance by Customer, and (ii) each such Product Advance constitutes a loan by
IBM Credit to Customer pursuant to this Agreement as if the Customer received
the proceeds of the Product Advance directly from IBM Credit. IBM Credit may,
upon written notice to Customer, cease to Include a supplier as an Authorized
Supplier.

No finance charge shall accrue on any Product Advance during the Free Financing
Period, if any, applicable to such Product Advance. Each Product Advance shall
be due and payable on the Common Due Date for such Product Advance. Each Product
Advance shall accrue a finance charge on the Average Daily Balance thereof from
and including the first (1st) day following the end of the Free Financing
Period, if any, for such Product Advance, or if no such Free Financing Period
shall be in effect, from and including the date of invoice for such Product
Advance, in each case, to and including the date such Product Advance shall
become due arid payable in accordance with the terms of this Agreement. In
addition, for any Product Advance with respect to which a Free Financing Period
shall not be in effect, Customer shall pay a Free Financing Period Exclusion
Fee. Such fee shall be due and payable on the Common Due Date for such Product
Advance. If it is determined that amounts received from Customer were in excess
of the highest rate permitted by law, then the amount representing such excess
shall be considered reductions to principal of Advances.

Customer acknowledges that IBM Credit does not warrant the Products. Customer
shall be obligated to pay IBM Credit in full even if the Products are defective
or fail to conform to the warranties extended by the Authorized Supplier. The
Obligations of Customer shall not be affected by any dispute Customer may have
with any manufacturer, distributor or Authorized Supplier. Customer will not
assert any claim or defense which it may have against any manufacturer,
distributor or Authorized Supplier against IBM Credit.

Customer hereby authorizes IBM Credit to collect directly from any Authorized
Supplier any credits, rebates, bonuses or discounts owed by such Authorized
Supplier to Customer ("Supplier Credits"). Any Supplier Credits received by IBM
Credit may be applied by IBM Credit to the Outstanding Advances. Any Supplier
Credits collected by IBM Credit shall in no way reduce Customer's debt to IBM
Credit in respect of the Outstanding Advances until such Supplier Credits are
applied by IBM Credit; provided, however, that in the event any such Supplier
Credits must be returned or disgorged or are otherwise unavailable for
application, then Customer's Obligations will be reinstated as if such Supplier
Credits had never been applied.

IBM Credit may apply any payments and Supplier Credits received by IBM Credit to
reduce finance charges first and then to principal amounts of Advances owed by
Customer. IBM Credit may apply principal payments to the oldest (earliest)
invoices (and related Product Advances) first, but, in any case, all principal
payments will be applied in respect of the Outstanding Product Advances made for
Products which have been sold, lost, stolen, destroyed, damaged or otherwise
disposed of prior to any other application thereof.

Customer will indemnify and hold IBM Credit harmless from and against any claims
or demands asserted by any Person relating to or arising from the Products for
any reason whatsoever, including, without limitation, the condition of the
Products, any misrepresentation made about the Products by any representative of
Customer, or any act or failure to act by Customer except to the extent such
claims or demands are directly attributable to IBM Credit's gross negligence or
willful misconduct. Nothing contained in the foregoing shall impair any rights
or claims which the Customer may have against any manufacturer, distributor or
Authorized Supplier.

Finance and Other Charges.

Finance charges for an Advance for a calendar month shall be equal to (i) one
twelfth (1/12) of the applicable Product Financing Charge multiplied by (ii) the
Average Daily Balance of such Advance for the period when such finance charge
accrues during such calendar month multiplied by (iii) the actual number of days
during such calendar month when such finance charge accrues divided by (iv)
thirty (30).

Late charges pursuant to subsection (D) of this Section 2.3 for an Advance for a
calendar month shall be equal to (i) one twelfth (1/12) of the Delinquency Fee
Rate multiplied by (ii) the Average Daily Balance of such Advance for the period
when such Advance is past due during such calendar month multiplied by (iii) the
actual number of days during such calendar month when such Advance is past due
divided by (iv) thirty (30).

The Customer hereby agrees to pay to IBM Credit the charges set forth as "Other
Charges" in Attachment A. The Customer also agrees to pay IBM Credit additional
charges for any returned items of payment received by IBM Credit. The Customer
hereby acknowledges that any such charges are not interest but that such
charges, if unpaid, will constitute part of the Outstanding Product Advances.

The finance charges and Other Charges owed under this Agreement, and any charges
hereafter agreed to in writing by the parties, are payable monthly on receipt of
IBM Credit's bill or statement therefor or IBM Credit may, in its sole
discretion, add unpaid finance charges and Other Charges to the Customer's
Outstanding Product Advances.

If any amount owed under this Agreement, including, without limitation, any
Advance, is not paid within two (2) Business Days of the date of determination
(whether at maturity, by acceleration or otherwise), the unpaid amount thereof
will bear a late charge from and including the day after it was due and payable
to and including the date IBM Credit receives payment thereof, at a per annum
rate equal to the lesser of (a) the amount set forth in Attachment A to this
Agreement as the "Delinquency Fee Rate" and (b) the highest rate from time to
time permitted by applicable law. In addition, if any Shortfall Amount shall not
be paid when due pursuant to Section 2.5 hereof, Customer shall pay IBM Credit a
Shortfall Transaction Fee. If it is determined that amounts received from
Customer were in excess of such highest rate, then the amount representing such
excess, shall be considered reductions to principal of Advances.

Customer Account Statements. IBM Credit will send statements of each transaction
hereunder as well as monthly billing statements to Customer with respect to
Advances and other charges due on Customer's account with IBM Credit. Each
statement of transaction and monthly billing statement shall be deemed, absent
manifest error, to be correct and shall constitute an account stated with
respect to each transaction or amount described therein unless within seven (7)
Business Days after such statement of transaction or billing statement is
received by Customer, Customer provides IBM Credit written notice objecting that
such amount or transaction is incorrectly described therein and specifying the
error(s), if any, contained therein. IBM Credit may at any time adjust such
statements of transaction or billing statements to comply with applicable law
and this Agreement.

Shortfall. If on any date the Outstanding Advances owed by Customer to IBM
Credit exceeds the Maximum Advance Amount (such excess, the "Shortfall Amount"),
Customer shall immediately pay to IBM Credit within two (2) Business Days an
amount equal to such Shortfall Amount provided, however, payment by Customer to
IBM Credit of such Shortfall Amount is accompanied by a current Collateral
Management Report.

Application of Payments. The Customer hereby agrees that all checks and other
instruments delivered to IBM Credit on account of Customers Obligations shall
constitute conditional payment until such items are actually collected by IBM
Credit. The Customer waives the right to direct the application of any and all
payments at any time or times hereafter received by IBM Credit on account of the
Customer's Obligations. Customer agrees that IBM Credit shall have the
continuing exclusive right to apply and reapply any and all such payments to
Customer's Obligations in such manner as IBM Credit may deem advisable
notwithstanding any entry by IBM Credit upon any of its books and records.

Prepayment and Reborrowing By Customer. (A) Customer may at any time prepay,
without notice or penalty, in whole or in part amounts owed under this
Agreement. IBM Credit may apply payments made to it (whether by the Customer or
otherwise) to pay finance charges and other amounts owing under this Agreement
first and then to the principal amount owed by the Customer.

(B) Subject to the terms and conditions of this Agreement, any amount prepaid or
repaid to IBM Credit in respect to the Outstanding Advances may be reborrowed by
Customer in accordance with the provisions of this Agreement.

SECTION 3. CREDIT LINE ADDITIONAL PROVISIONS

Ineligible Accounts. IBM Credit and Customer agree that IBM Credit shall have
the sole right to determine eligibility of Accounts from an Account debtor for
purposes of determining the Borrowing Base; however, without limiting such
right, the following Accounts will be deemed to be ineligible for purposes of
determining the Borrowing Base:

Accounts created from the sale of goods and/or performance of services on
non-standard terms or that allow for payment to be made more than thirty (30)
days from the date of such sale or performance of services;

Accounts unpaid more than ninety (90) days from date of invoice;

Accounts payable by an account debtor if fifty percent (50%) or more of the
aggregate outstanding balance of all such Accounts remain unpaid for more than
ninety (90) days from the date of invoice;

Accounts payable by an account debtor that is an Affiliate of Customer, or an
officer, employee, agent, guarantor or stockholder of Customer or Affiliate of
Customer, or is related to or has common shareholders, officers or directors
with Customer,

Accounts arising from consignment sales;

Except for state, local and United States government institutions and public
educational institutions, Accounts with respect to which the payment by the
Account debtor is or may be conditional;

Except for state, local and United States government institutions and public
educational institutions, Accounts with respect to which:

the Account debtor is not a commercial entity, or

the Account debtor is not a resident of the United States;

Accounts payable by any Account debtor to which Customer is or may become liable
for goods sold or services rendered by such account debtor to Customer,

Accounts arising from the sale or lease of goods purchased for a personal,
family or household purpose;

Accounts arising from the sale or other disposition of goods that have been used
for demonstration purposes or loaned or leased by the Customer to another party;

Accounts which are progress payment accounts or contra accounts;

Accounts upon which IBM Credit does not have a valid, perfected, first priority
security interest;

Accounts payable by an Account debtor that is or Customer knows will become,
subject to proceedings under United States Bankruptcy Law or other law for the
relief of debtors;

Accounts that are not payable in US dollars;

Accounts payable by any Account debtor that is a remarketer of computer hardware
and software products and whose purchases of such products from Customer have
been financed by another person, other than IBM Credit, who pays the proceeds of
such financing directly to Customer on behalf of such debtor ("Third Party
Financer") unless (i) such Third Party Financer does not have a separate
financing relationship with Customer or (ii) such Third Party Financer has a
separate financing relationship with Customer and has waived its right to set
off its obligations to Customer

Accounts arising from the sale or lease of goods which are billed to any Account
debtor but have not yet been shipped by Customer;

Accounts with respect to which Customer has permitted or agreed to any
extension, compromise or settlement, or made any change or modification of any
kind or nature, including, but not limited to, any change or modification to the
terms relating thereto;

Accounts that do not arise from undisputed bonafide transactions completed in
accordance with the terms and conditions contained in the invoices, purchase
orders and contracts relating thereto;

Accounts that are discounted for the full payment term specified in Customer's
terms and conditions with its Account debtors, or for any longer period of time;

Accounts on cash on delivery (C.O.D.) terms;

Accounts arising from maintenance or service contracts that are billed in
advance of full performance of service;

Accounts arising from bartered transactions;

Accounts arising from Incentive payments, rebates, discounts, credits, and
refunds from a supplier unless (y) each incentive payment, rebate, discount,
credit, and refund is (i) verifiable with Authorized Supplier, (ii) payable in
cash, and (iii) deposited directly or indirectly into the Lockbox and (y)
Authorized Supplier waives its right to setoff such amounts owed to Customer
with any amount Customer may owe to the Authorized Supplier; and

Any and all other Accounts that IBM Credit deems, in its sole and absolute
discretion, to be ineligible.

The aggregate of all Accounts that are not ineligible Accounts shall hereinafter
be referred to as "Eligible Accounts".

Reimbursement for Charges. Customer agrees to pay for all costs and expenses of
Customer's bank in respect to collection of checks and other items of payment,
all fees relating to the use and maintenance of the Lockbox and the Special
Account and with respect to remittances of proceeds of the Advances hereunder.

Lockbox and Special Account. Customer shall establish and maintain lockbox(es)
(each, a "Lockbox") at the address(es) set forth in Attachment A with the
financial institution(s) listed in Attachment A (each, a "Bank") pursuant to an
agreement between the Customer and each Bank in form and substance satisfactory
to IBM Credit. Customer shall also establish and maintain a deposit account
which shall contain only proceeds of Customer's Accounts ("Special Account")
with each Bank. Customer shall enter into and maintain a contingent blocked
account agreement with each Bank for the benefit of IBM Credit in form and
substance satisfactory to IBM Credit pursuant to which, among other things, such
Bank shall agree that, upon an Event of Default, IBM Credit may provide notice
to Bank that disbursements from the Special Account shall be made only as IBM
Credit shall direct. However, upon the cure of such Event of Default, IBM Credit
shall not be required to return the control of the Special Account to the
Customer.

Collections. Customer shall instruct all Account debtors to remit payments
directly to a Lockbox. In addition, Customer shall have such instruction printed
in conspicuous type on all invoices. Customer shall instruct such Bank to
deposit all remittances to such Bank's Lockbox into its Special Account.
Customer further agrees that it shall not deposit or permit any deposits of
funds other than remittances paid in respect of the Accounts into the Special
Account(s) or permit any commingling of funds with such remittances in any
Lockbox or Special Account.

Without limiting the Customer's foregoing obligations, if, at any time, Customer
receives a remittance directly from an Account debtor, then Customer shall make
entries on its books and records in a manner that shall reasonably identify such
remittances and shall keep a separate account on its record books of all
remittances so received and deposit the same into a Special Account. Until so
deposited into the Special Account, Customer shall keep all remittances received
in respect of Accounts separate and apart from customer's other property so that
they are capable of identification as the proceeds of Accounts in which IBM
Credit has a security interest.

Application of Remittances and Credits. Customer shall apply all remittances
against the aggregate of Customer's outstanding Accounts no later than the end
of the Business Day on which such remittances are deposited Into the Special
Account. Customer also agrees to apply each remittance against its respective
Account no later than three (3) Business Days from the date such remittance is
deposited into the Special Account. In addition, Customer shall promptly apply
any credits owing in respect to any Account when due.

Power of Attorney. Customer hereby irrevocably appoints IBM Credit, with full
power of substitution, as its true and lawful attorney-in-fact with full power,
in good faith and in compliance with commercially reasonable standards, in the
discretion of IBM Credit, to:

sign the name of Customer on any document or instrument that IBM Credit shall
deem necessary or appropriate to perfect and maintain perfected the security
interest in the Collateral contemplated under this Agreement and the Other
Documents;

endorse the name of Customer upon any of the items of payment of proceeds and
deposit the same in the account of IBM Credit for application to the
Obligations; and

upon the occurrence and during the continuance of an Event of Default as defined
in Section 9.1 hereof:

demand payment, enforce payment and otherwise exercise all Customer's rights and
remedies with respect to the collection of any Accounts;

settle, adjust, compromise, extend or renew any Accounts;

settle, adjust or compromise any legal proceedings brought to collect any
Accounts;

sell or assign any Accounts upon such terms, for such amounts and at such time
or times as IBM Credit may deem advisable;

discharge and release any Accounts;

prepare, file and sign Customer's name on any Proof of Claim in Bankruptcy or
similar document against any Account debtor;

prepare, file and sign Customers name on any notice of lien, claim of mechanic's
lien, assignment or satisfaction of lien or mechanic's lien, or

similar document in connection with any Accounts;

endorse the name of Customer upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating
to any Account or goods pertaining thereto;

endorse the name of Customer upon any of the items of payment of proceeds and
deposit the same in the account of IBM Credit for application to the Obligation;

sign the name of Customer to requests for verification of Accounts and notices
thereof to Account debtors;

sign the name of Customer on any document or instrument that IBM Credit shall
deem necessary or appropriate to enforce any and all remedies it may have under
this Agreement, at law or otherwise;

make, settle and adjust claims under the Policies with respect to the Collateral
and endorse Customer's name on any check, draft, instrument or other item of
payment of the proceeds of the Policies with respect to the Collateral; and

take control in any manner of any term of payment or proceeds and for such
purpose to notify the postal authorities to change the address for delivery of
mail addressed to Customer to such address as IBM Credit may designate.

The power of attorney granted by this Section is for value and coupled with an
interest and is irrevocable so long as this Agreement is in effect or any
Obligations remain outstanding. Nothing done by IBM Credit pursuant to such
power of attorney will reduce any of Customer's Obligations other than
Customer's payment Obligations to the extent IBM Credit has received monies.

SECTION 4. SECURITY -- COLLATERAL

Grant. To secure Customer's full and punctual payment and performance of the
Obligations (including obligations under any leases Customer may enter into, now
or in the future, with IBM Credit) when due (whether at the stated maturity, by
acceleration or otherwise), Customer hereby grants IBM Credit a security
interest in all of Customers right, title and interest in and to the following
property, whether now owned or hereafter acquired or existing and wherever
located:

all inventory and equipment and all parts thereof, attachments, accessories and
accessions thereto, products thereof and documents therefor;

all accounts, contract rights, chattel paper, instruments, deposit accounts,
obligations of any kind owing to Customer, whether or not arising out of or in
connection with the sale or lease of goods or the rendering of services and all
books, invoices, documents and other records in any form evidencing or relating
to any of the foregoing;

general intangibles;

all rights now or hereafter existing in and to all mortgages, security
agreements, leases or other contracts securing or otherwise relating to any of
the foregoing; and

all substitutions and replacements for all of the foregoing, all proceeds of all
of the foregoing and, to the extent not otherwise included, all payments under
insurance or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing.

All of the above assets shall be collectively defined herein as the
"Collateral", provided, however, that Collateral shall not include leasehold
interests as a lessee, sub-lessee or sub-lessor with regard to real property
leases and provided further that Collateral shall not include leasehold
interests as a lessee under equipment leases. Customer covenants and agrees with
IBM Credit that: (a) the security constituted to by this Agreement is in
addition to any other security from time to time held by IBM Credit and (b) the
security hereby created is a continuing security interest and will cover and
secure the payment of all Obligations both present and future of Customer to IBM
Credit.

Further Assurances. Customer shall, from time to time upon the request of IBM
Credit, execute and deliver to IBM Credit, or cause to be executed and
delivered, at such time or times as IBM Credit may request such other and
further documents, certificates and instruments that IBM Credit may deem
necessary to perfect and maintain perfected IBM Credit's security interests in
the Collateral and in order to fully consummate all of the transactions
contemplated under this Agreement and the Other Documents. Customer shall make
appropriate entries on its books and records disclosing IBM Credits security
interests in the Collateral.

SECTION 5. CONDITIONS PRECEDENT

Conditions Precedent to the Effectiveness of this Agreement. The effectiveness
of this Agreement is subject to the receipt by IBM Credit of, or waiver in
writing by IBM Credit of compliance with, the following conditions precedent;

this Agreement executed and delivered by Customer and IBM Credit;

a favorable opinion of counsel for Customer in substantially the form of
Attachment H;

a certificate of the secretary or an assistant secretary of Customer,
substantially in the form and substance of Attachment I hereto, certifying that,
among other items, (i) Customer is duly organized under the laws of the State of
its organization or incorporation and has its principal place of business as
stated therein, (ii) Customer is registered to conduct business in specified
states and localities, (iii) true and complete copies of the articles of
incorporation, or corresponding organizational documents, as applicable, and
by-laws of Customer are delivered therewith, together with all amendments and
addenda thereto as in effect on the date thereof, (iv) the resolution as stated
in the certificate is a true, accurate and compared copy of the resolution
adopted by the Customer's Board of Directors or, if Customer is a limited
liability company, by Customer's authorized members, authorizing the execution,
delivery and performance of this Agreement and each Other Document executed and
delivered in connection herewith, and (v) the names and true signatures of the
officers of Customer authorized to sign this Agreement and the Other Documents;

certificates dated as of a recent date from the Secretary of State or other
appropriate authority evidencing the good standing of Customer in the
jurisdiction of its organization and in each other jurisdiction where the
ownership or lease of its property or the conduct of its business requires it to
qualify to do business;

copies of all approvals and consents from any Person in each case in form and
substance satisfactory to IBM Credit, which are required to enable Customer to
authorize, or required in connection with, (a) the execution, delivery or
performance of this Agreement and each of the Other Documents, and (b) the
legality, validity, binding effect or enforceability of this Agreement and each
of the Other Documents;

a lockbox agreement executed by Customer and each Bank, in form and substance
satisfactory to IBM Credit;

a contingent blocked account agreement executed by Customer and each Bank in
form and substance satisfactory to IBM Credit;

intercreditor agreements ("Intercreditor Agreement"), in form and substance
satisfactory to IBM Credit, executed by each other secured creditor of Customer
as set forth in Attachment A;

UCC-1 financing statements for each jurisdiction reasonably requested by IBM
Credit executed by Customer and each guarantor whose guaranty to IBM Credit is
intended to be secured by a pledge of its assets;

the statements, certificates, documents, instruments, financing statements,
agreements and information set forth in Attachment A and Attachment B; and

all such other statements, certificates, documents, instruments, financing
statements, agreements and other information with respect to the matters
contemplated by this Agreement as IBM Credit shall have reasonably requested.

Conditions Precedent to Each Advance. No Advance will be required to be made or
renewed by IBM Credit under this Agreement unless, on and as of the date of such
Advance, the following statements shall be true to the satisfaction of IBM
Credit:

The representations and warranties contained in this Agreement or in any
document, instrument or agreement executed in connection herewith are true and
correct in all material respects on and as of the date of such Advance as though
made on and as of such date;

No event has occurred and is continuing or after giving effect to such Advance
or the application of the proceeds thereof would result in or would constitute a
Default;

No event has occurred and is continuing which could reasonably be expected to
have a Material Adverse Effect; and

Both before and after giving effect to the making of such Advance, no Shortfall
Amount exists.

Except as Customer has otherwise disclosed to IBM Credit in writing prior to
each request, each request (or deemed request pursuant to Section 2.2(A)) for an
Advance hereunder shall be deemed to be a representation and warranty by
Customer that, as of and on the date of such Advance, the statements set forth
in (A) through (D) above are true statements. No such disclosures by Customer to
IBM Credit shall in any manner be deemed to satisfy the conditions precedent to
each Advance that are set forth in this Section 5.2.

SECTION 6. REPRESENTATIONS AND WARRANTIES

To induce IBM Credit to enter into this Agreement, Customer represents and
warrants to IBM Credit as follows:

Organization and Qualifications. Customer and each of its Subsidiaries (i) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) has the power and authority to own its
properties and assets and to transact the businesses in which it presently is
engaged and (iii) is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where it presently is engaged in business and
is required to be so qualified. As of the Closing Date, Egghead.com Advertising,
Inc., EO Corporation, Surplus Software, Inc., EH Direct, Inc., MPI Corp., and
D.J. & J. Software Corp. are dormant companies that own no assets.

Rights in Collateral; Priority of Liens. Customer and each of its Subsidiaries
owns the property granted by it respectively as Collateral to IBM Credit, free
and clear of any and all Liens in favor of third parties except for the Liens
otherwise permitted pursuant to Section 8.1. The Liens granted by the Customer
and each of its Subsidiaries pursuant to this Agreement, the Guaranties and the
Other Documents in the Collateral constitute the valid and enforceable first,
prior and perfected Liens on the Collateral, except to the extent any Liens that
are prior to IBM Credit's Liens are (i) the subject of an Intercreditor
Agreement or (ii) Purchase Money Security Interests in product of a brand that
is not financed by IBM Credit.

No Conflicts. The execution, delivery and send performance by Customer of this
Agreement and each of the Other Documents (i) are within its corporate or
limited liability company power, (ii) are duly authorized by all necessary
corporate or limited liability company actions; (iii) are not in contravention
in any respect of any Requirement of Law or any indenture, contract, lease,
agreement, instrument or other commitment to which it is a party or by which it
or any of its properties are bound; (iv) do not require the consent,
registration or approval of any Governmental Authority or any other Person
(except such as have been duly obtained, made or given, and are in full force
and effect); and (v) will not, except as contemplated herein, result in the
imposition of any Liens upon any of its properties.

Enforceability. This Agreement and all of the other documents executed and
delivered by the Customer in connection herewith are the legal, valid and
binding obligations of Customer, and are enforceable in accordance with their
terms, except as such enforceability may be limited by the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally or the general
equitable principles relating thereto.

Locations of Offices, Records and Inventory. The address of the principal place
of business and chief executive office of Customer is as set forth on Attachment
B or on any notice provided by Customer to IBM Credit pursuant to Section 7.7(C)
of this Agreement. The books and records of Customer are maintained exclusively
at such location.

There is no jurisdiction in which Customer has any assets, equipment or
inventory (except for vehicles and inventory in transit for processing) other
than those jurisdictions identified on Attachment B or on any notice provided by
Customer to IBM Credit pursuant to Section 7.7(C) of this Agreement. Attachment
B, as amended from time to time by any notice provided by Customer to IBM Credit
in accordance with Section 7.7(C) of this Agreement, also contains a complete
list of the legal names and addresses of each warehouse at which the Customer's
inventory is stored. None of the receipts received by Customer from any
warehouseman states that the goods covered thereby are to be delivered to bearer
or to the order of a named person or to a named person and such named person's
assigns.

Fictitious Business Names. Customer has not used any company or fictitious name
during the five (5) years preceding the date of this Agreement, other than those
listed on Attachment B.

Organization. If Customer is a corporation, all of the outstanding capital stock
of Customer has been validly issued, is fully paid and nonassessable.

No Judgments or Litigation. Except as set forth on Attachment B, no judgments,
orders, writs or decrees are outstanding against Customer in excess of $100,000
nor is there now pending or, to the best of Customers knowledge after due
inquiry, threatened, any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against Customer which has had or
could reasonably be expected to have a Material Adverse Effect.

No Defaults. The Customer is not in default under any term of any indenture,
contract, lease, agreement, instrument or other commitment to which it is a
party or by which it, or any of its properties are bound. Customer has no
knowledge of any dispute regarding any such indenture, contract, lease,
agreement, instrument or other commitment. No Default or Event of Default has
occurred and is continuing.

Labor Matters. Except as set forth on any notice provided by Customer to IBM
Credit pursuant to Section 7.1(H) of this Agreement, the Customer is not a party
to any labor dispute. There are no strikes or walkouts or labor controversies
pending or threatened against the Customer which could reasonably be expected to
have a Material Adverse Effect.

Compliance with Law. Customer has not violated or failed to comply with any
Requirement of Law or any requirement of any self regulatory organization.

ERISA. Each "employee benefit plan", "employee pension benefit plan", "defined
benefit plan", or "multi-employer benefit plan", which Customer has established,
maintained, or to which it is required to contribute (collectively, the "Plans")
is in compliance with all applicable provisions of ERISA and the Code and the
rules and regulations thereunder as well as the Plan's terms and conditions.
There have been no "prohibited transactions" and no "reportable event" has
occurred within the last 60 months with respect to any Plan. Customer has no
"multi-employer benefit plan". As used in this Agreement the terms "employee
benefit plan", "employee pension benefit plan", "defined benefit plan", and
"multi-employer benefit plan" have the respective meanings assigned to them in
Section 3 of ERISA and any applicable rules and regulations thereunder. The
Customer has not incurred any "accumulated funding deficiency" within the
meaning of ERISA or incurred any liability to the Pension Benefit Guaranty
Corporation (the "PBGC") in connection with a Plan (other than for premiums due
in the ordinary course).

Compliance with Environmental Laws. Except as otherwise disclosed in Attachment
B:

The Customer has obtained all government approvals required with respect to the
operation of their businesses under any Environmental Law.

(i) the Customer has not generated, transported or disposed of any Hazardous
Substances; (ii) the Customer is not currently generating, transporting or
disposing of any Hazardous Substances; (iii) the Customer has no knowledge that
(a) any of its real property (whether owned, leased, or otherwise directly or
indirectly controlled) has been used for the disposal of or has been
contaminated by any Hazardous Substances, or (b) any of its business operations
have contaminated lands or waters of others with any Hazardous Substances; (iv)
the Customer and its respective assets are not subject to any Environmental
Liability and, to the best of the Customer's knowledge, any threatened
Environmental Liability; (v) the Customer has not received any notice of or
otherwise learned of any governmental investigation evaluating whether any
remedial action is necessary to respond to a release or threatened release of
any Hazardous Substance for which the Customer may be liable; (vi) the Customer
is not in violation of any Environmental Law, (vii) there are no proceedings or
investigations pending against Customer with respect to any violation or alleged
violation of any Environmental Law; provided however, that the parties
acknowledge that any generation, transportation, use, storage and disposal of
certain such Hazardous Substances in Customer's or its Subsidiaries' business
shall be excluded from representations (i) and (ii) above, provided, further,
that Customer is at all times generating, transporting, utilizing, storing and
disposing such Hazardous Substances in accordance with all applicable
Environmental Laws and in a manner designed to minimize the risk of any spill,
contamination, release or discharge of Hazardous Substances other than as
authorized by Environmental Laws,

Intellectual Property. Customer possesses such assets, licenses, patents, patent
applications, copyrights, service marks, trademarks, trade names and trade
secrets and all rights and other property relating thereto or arising therefrom
("Intellectual Property") as are necessary or advisable to continue to conduct
its present and proposed business activities.

Licenses and Permits. Customer has obtained and holds in full force and effect
all franchises, licenses, leases, permits, certificates, authorizations,
qualifications, easements, rights of way and other rights and approvals which
are necessary for the operation of its businesses as presently conducted.
Customer is not in violation of the terms of any such franchise, license, lease,
permit, certificate, authorization, qualification, easement, right of way, right
or approval.

Investment Company. The Customer is not (i) an investment company or a company
controlled by an investment company within the meaning of the Investment Company
Act of 1940, as amended, (ii) a holding company or a subsidiary of a holding
company, or an Affiliate of a holding company or of a subsidiary of a holding
company, within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (iii) subject to any other law which purports to regulate or
restrict its ability to borrow money or to consummate the transactions
contemplated by this Agreement or the Other Documents or to perform its
obligations hereunder or thereunder.

Taxes and Tax Returns. Customer has timely filed all federal, state, and local
tax returns and other reports which it is required by law to file, and has
either duly paid all taxes, fees and other governmental charges indicated to be
due on the basis of such reports and returns or pursuant to any assessment
received by the Customer, or made provision for the payment thereof in
accordance with GAAP. The charges and reserves on the books of the Customer in
respect of taxes or other governmental charges are in accordance with GAAP. No
tax liens have been filed against Customer or any of its property.

Status of Accounts. Each Account is based on an actual and bonafide sale and
delivery of goods or rendition of services to customers, made by Customer, in
the ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be subject
to any Lien, consignment arrangement, encumbrance, security interest or
financing statement whatsoever (other than Permitted Liens). The Customer's
customers have accepted goods or services and owe and are obligated to pay the
full amounts stated in the invoices according to their terms. There are no
proceedings or actions known to Customer which are pending or threatened against
any Material Account debtor (as defined in Section 7.14(B) of this Agreement) of
any of the Accounts which could reasonably be expected to result in a Material
Adverse Effect on the debtor's ability to pay the full amounts due to Customer.

Affiliate/Subsidiary Transactions. Customer is not a party to or bound by any
agreement or arrangement (whether oral or written) to which any Affiliate or
Subsidiary of the Customer is a party except (i) in the ordinary course of and
pursuant to the reasonable requirements of Customer's business and (ii) upon
fair and reasonable terms no less favorable to Customer than it could obtain in
a comparable arm's-length transaction with an unaffiliated Person.

Accuracy and Completeness of Information. All factual information furnished by
or on behalf of the Customer to IBM Credit or the Auditors for purposes of or in
connection with this Agreement or any of the Other Documents, or any transaction
contemplated hereby or thereby is or will be true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information not misleading at such time.

Recording Taxes. All recording taxes, recording fees, filing fees and other
charges payable in connection with the filing and recording of this Agreement
have either been paid in full by Customer or arrangements for the payment of
such amounts by Customer have been made to the satisfaction of IBM Credit.

Indebtedness. Customer (i) has no indebtedness, other than Permitted
Indebtedness; and (ii) has not guaranteed the obligations of any other Person
(except as permitted by Section 8,4).

SECTION 7. AFFIRMATIVE COVENANTS

Until termination of this Agreement and the indefeasible payment and
satisfaction of all Obligations:

Financial and Other Information. Customer shall cause to be furnished to IBM
Credit the following information within the following time periods: as soon as
available and in any event within ninety (90) days after the end of each fiscal
year of Customer the Form 10-K Annual Report filed with the Securities and
Exchange Commission for that fiscal year just ended;

as soon as available and in any event within forty-five (45) days after the end
of each fiscal quarter of Customer the Form 10-Q Quarterly Report filed with the
Securities and Exchange Commission for that quarter just ended;

as soon as available and in any event within sixty (60) days after the end of
each fiscal year of Customer (i) projected Financial Statements, broken down by
quarter, for the current and following fiscal year; and (ii) if composed, a
narrative discussion relating to such projected Financial Statements;

as soon as available and in any event within thirty (30) days after the end of
each six-month period ending June 30, revised projected Financial Statements,
broken down by quarter, for (i) the current fiscal year from the beginning of
such six-month period to the fiscal year end and (ii) the following fiscal year;

promptly after Customer obtains knowledge of (i) the occurrence of a Default or
Event of Default, or (ii) the existence of any condition or event which would
result in the Customer's failure to satisfy the conditions precedent to Advances
set forth in Section 5, a certificate of the chief executive officer or chief
financial officer of Customer specifying the nature thereof and the Customer's
proposed response thereto, each in reasonable detail;

promptly after Customer obtains knowledge of (i) any proceeding(s) being
instituted or threatened to be instituted by or against Customer in any federal,
state, local or foreign court or before any commission or other regulatory body
(federal, state, local or foreign), or (ii) any actual or prospective change,
development or event which, in any such case, has had or could reasonably be
expected to have a Material Adverse Effect, a certificate of the chief executive
officer or chief financial officer of Customer specifying the nature thereof and
the Customer's proposed response thereto, each in reasonable detail;

promptly after Customer obtains knowledge that (i) any order, judgment or decree
in excess of $100,000 shall have been entered against Customer or any of its
properties or assets, or (ii) it has received any notification of a material
violation of any Requirement of Law from any Governmental Authority, a
certificate of the chief executive officer or chief financial officer of
Customer specifying the nature thereof and the Customer's proposed response
thereto, each in reasonable detail;

promptly after Customer learns of any material labor dispute to which Customer
may become a party, any strikes or walkouts relating to any of its plants or
other facilities, and the expiration of any labor contract to which Customer is
a party or by which it is bound, a certificate of the chief executive officer or
chief financial officer of Customer specifying the nature thereof and the
Customer's proposed response thereto, each in reasonable detail;

within five (5) Business Days after request by IBM Credit, any written
certificates, schedules and reports together with all supporting documents as
IBM Credit may reasonably request relating to the Collateral or the Customer's
or any guarantor's business affairs and financial condition;

by the fifth and twentieth day of each month, or as otherwise agreed in writing,
a Collateral Management Report as of a date no earlier than the last day of the
immediately preceding month and the fifteenth of each month, respectively;

Along with the Financial Statements set forth in Section 7.1(A) and (B), the
name, address and phone number of each of its Account debtors primary contacts
for each Account on the Accounts aging report contained in its most recent
Collateral Management Report; and

upon the request of IBM Credit, copies of all Financial Statements and reports
which Customer sends to its stockholders, and all Financial Statements and
reports which Customer may make to, or file with, the Securities and Exchange
Commission or any successor or analogous governmental authority.

Each certificate, schedule and report provided by Customer to IBM Credit shall
be signed by an authorized officer of Customer, which signature shall be deemed
a representation and warranty that the information contained in such
certificate, schedule or report is true and accurate in all material respects on
the date as of which such certificate, schedule or report is made and does not
omit to state a material fact necessary in order to make the statements
contained therein not misleading at such time. Each Financial Statement
delivered pursuant to this Section 7.1 shall be prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods. Customer shall cause the audited Financial Statements and accompanying
documents set forth in Section 7.1(A)(i) to be delivered directly by the
Auditors to IBM Credit only via first class mail.

Location of Collateral. The inventory, equipment and other tangible Collateral
shall be kept or sold at the addresses as set forth on Attachment B or on any
notice provided by Customer to IBM Credit in accordance with Section 7.7(C).
Such locations shall be certified quarterly to IBM Credit substantially in the
form of Attachment G.

Changes in Customer. Customer shall provide thirty (30) days prior written
notice to IBM Credit of any change in Customer's name, chief executive office
and principal place of business, organization, form of ownership or structure;
provided, however, that Customer's compliance with this covenant shall not
relieve it of any of its other obligations or any other provisions under this
Agreement or any of the Other Documents limiting actions of the type described
in this Section.

Legal Entity Existence. Customer shall (A) maintain its legal entity existence,
maintain in full force and effect all licenses, bonds, franchises, leases and
qualifications to do business, and all contracts and other rights necessary to
the profitable conduct of its business, (B) continue in, and limit Its
operations to, the same general lines of business as presently conducted by it
unless otherwise permitted in writing by IBM Credit and (C) comply with all
Requirements of Law.

ERISA. Customer shall promptly notify IBM Credit in writing after it learns of
the occurrence of any event which would constitute a "reportable event" under
ERISA or any regulations thereunder with respect to any Plan, or that the PBGC
has instituted or will institute proceedings to terminate any Plan.
Notwithstanding the foregoing, the Customer shall have no obligation to notify
IBM Credit as to any "reportable event" as to which the 30-day notice
requirement of Section 4043(b) has been waived by the PBGC, until such time as
such Customer is required to notify the PBGC of such reportable event. Such
notification shall include a certificate of the chief financial officer of
Customer's setting forth details as to such "reportable event" and the action
which Customer proposes to take with respect thereto, together with a copy of
any notice of such "reportable event" which may be required to be filed with the
PBGC, or any notice delivered by the PBGC evidencing its intent to institute
such proceedings. Upon request of IBM Credit, Customer shall furnish, or cause
the plan administrator to furnish, to IBM Credit the most recently filed annual
report for each Plan.

Environmental Matters. (A) Customer and any other Person under Customer's
control (including, without limitation, agents and Affiliates under such
control) shall (1) comply with all Environmental Laws in all material respects,
and (ii) undertake to use commercially reasonable efforts to prevent any
unlawful release of any Hazardous Substance by Customer or such Person into,
upon, over or under any property now or hereinafter owned, leased or otherwise
controlled (directly or indirectly) by Customer.

(B) Customer shall notify IBM Credit, promptly upon its obtaining knowledge of
(i) any non-routine proceeding or investigation by any Governmental Authority
with respect to the presence of any Hazardous Substances on or in any property
now or hereinafter owned, leased or otherwise controlled (directly or
indirectly) by Customer, (ii) all claims made or threatened by any Person or
Governmental Authority against Customer or any of Customer's assets relating to
any loss or injury resulting from any Hazardous Substance, (iii) Customer's
discovery of evidence of unlawful disposal of or environmental contamination by
any Hazardous Substance on any property now or hereinafter owned, leased or
otherwise controlled (directly or indirectly) by Customer, and (iv) any
occurrence or condition which could constitute a violation of any Environmental
Law.

Collateral Books and Records/Collateral Audit. (A) Customer agrees to maintain
books and records pertaining to the Collateral in such detail, form and scope as
is consistent with good business practice, and agrees that such books and
records will reflect IBM Credit's interest in the Collateral.

(B) Customer agrees that IBM Credit or its agents may enter upon the premises of
Customer at any time and from time to time, during normal business hours and
upon reasonable notice under the circumstances, and at any time at all on and
after the occurrence and during the continuance of an Event of Default for the
purposes of (i) inspecting the Collateral, (ii) inspecting and/or copying (at
Customer's expense) any and all records pertaining thereto, and (iii) discussing
the affairs, finances and business of Customer with any officers, employees and
directors of Customer or with the Auditors. Customer also agrees to provide IBM
Credit with such reasonable information and documentation that IBM Credit deems
necessary to conduct the foregoing activities,

Upon the occurrence and during the continuance of an Event of Default which has
not been waived by IBM Credit in writing, IBM Credit may conduct any of the
foregoing activities in any manner that IBM Credit deems reasonably necessary.

(C) Customer shall give IBM Credit thirty (30) days prior written notice of any
change in the location of any Collateral, the location of its books and records
or in the location of its chief executive office or place of business from the
locations specified in Attachment B, and will execute in advance of such change
and cause to be filed and/or delivered to IBM Credit any financing statements,
landlord or other lien waivers, or other documents reasonably required by IBM
Credit, all in form and substance reasonably satisfactory to IBM Credit.

(D) Customer agrees to advise IBM Credit promptly, in reasonably sufficient
detail, of any substantial change relating to the type, quantity or quality of
the Collateral, or any event which could reasonably be expected to have a
Material Adverse Effect on the value of the Collateral or on the security
interests granted to IBM Credit herein.

Insurance; Casualty Loss. (A) Customer agrees to maintain with financially sound
and reputable insurance companies: (i) insurance on its properties, (ii) public
liability insurance against claims for personal injury or death as a result of
the use of any products sold by it and (iii) insurance coverage against other
business risks, in each case, in at least such amounts and against at least such
risks as are usually and prudently insured against in the same general
geographical area by companies of established repute engaged in the same or a
similar business. Customer will furnish to IBM Credit, upon its written request,
the insurance certificates with respect to such insurance. In addition, all
Policies so maintained are to name IBM Credit as an additional insured as its
interest may appear.

(B) Without limiting the generality of the foregoing, Customer shall keep and
maintain, at its sole expense, the Collateral insured for an amount not less
than the amount set forth on Attachment A from time to time opposite the caption
"Collateral Insurance Amount" against all loss or damage under an "all risk"
Policy with companies mutually acceptable to IBM Credit and Customer, with a
lender's loss payable endorsement or mortgage clause in form and substance
reasonably satisfactory to IBM Credit designating that any loss payable
thereunder with respect to such Collateral shall be payable to IBM Credit. Upon
receipt of proceeds by IBM Credit the same shall be applied on account of the
Customer's Outstanding Advances. Customer agrees to instruct each insurer to
give IBM Credit, by endorsement upon the Policy issued by it or by independent
instruments furnished to IBM Credit, at least ten (10) days written notice
before any Policy shall be altered or canceled and that no act or default of
Customer or any other person shall affect the right of IBM Credit to recover
under the Policies. Customer hereby agrees to direct all insurers under the
Policies to pay all proceeds with respect to the Collateral directly to IBM
Credit. If Customer fails to pay any cost, charges or premiums, or if Customer
fails to insure the Collateral, IBM Credit may pay such costs, charges or
premiums. Any amounts paid by IBM Credit hereunder shall be considered an
additional debt owed by Customer to IBM Credit and are due and payable
immediately upon receipt of an invoice by IBM Credit.

Taxes. Customer agrees to pay, when due, all taxes lawfully levied or assessed
against Customer or any of the Collateral before any penalty or interest accrues
thereon unless such taxes are being contested, in good faith, by appropriate
proceedings promptly instituted and diligently conducted and an adequate reserve
or other appropriate provisions have been made therefor as required in order to
be in conformity with GAAP and an adverse determination in such proceedings
could not reasonably be expected to have a Material Adverse Effect.

Compliance With Laws. Customer agrees to comply with all Requirements of Law
applicable to the Collateral or any part thereof, or to the operation of its
business.

Fiscal Year. Customer agrees to maintain its fiscal year as a year ending
December 31 unless Customer provides IBM Credit at least thirty (30) days prior
written notice of any change thereof.

Intellectual Property. Customer shall do and cause to be done all things
necessary to preserve and keep in full force and effect all registrations of
Intellectual Property which the failure to do or cause to be done could
reasonably be expected to have a Material Adverse Effect.

Maintenance of Property. Customer shall maintain all of its material properties
(business and otherwise) in good condition and repair (ordinary wear and tear
excepted) and pay and discharge all costs of repair and maintenance thereof and
all rental and mortgage payments and related charges pertaining thereto and not
commit or permit any waste with respect to any of its material properties.

Collateral. Customer shall:

from time to time upon request by IBM Credit, provide IBM Credit with access to
copies of all invoices, delivery evidences and other such documents relating to
each Account;

promptly upon Customer's obtaining knowledge thereof, furnish to and inform IBM
Credit of all material adverse information relating to the financial condition
of any Account debtor whose outstanding obligations to Customer constitute two
percent (2%) or more of the Accounts at such time (a "Material Account Debtor");

promptly upon Customer's learning thereof, notify IBM Credit in writing of any
event which would cause any obligation of a Material Account debtor to become an
Ineligible Account;

keep all goods rejected or returned by any Account debtor and all goods
repossessed or stopped in transit by Customer from any Account debtor segregated
from other property of Customer, holding the same in trust for IBM Credit until
Customer applies a credit against such Account debtor's outstanding obligations
to Customer or sells such goods in the ordinary course of business, whichever
occurs earlier;

stamp or otherwise mark chattel paper and instruments now owned or hereafter
acquired by it in conspicuous type to show that the same are subject to IBM
Credit's security interest and immediately thereafter deliver or cause such
chattel paper and instruments to be delivered to IBM Credit or any agent
designated by IBM Credit with appropriate endorsements and assignments to vest
title and possession in IBM Credit;

use commercially reasonable efforts to collect all Accounts owed;

promptly notify IBM Credit of any loss, theft or destruction of or damage to any
of the Collateral. Customer shall diligently file and prosecute its claim for
any award or payment in connection with any such loss, theft, destruction of or
damage to Collateral. Customer shall, upon demand of IBM Credit, make, execute
and deliver any assignments and other instruments sufficient for the purpose of
assigning any such award or payment to IBM Credit, free of encumbrances of any
kind whatsoever;

consistent with reasonable commercial practice, observe and perform all matters
and things necessary or expedient to be observed or performed under or by virtue
of any lease, license, concession or franchise forming part of the Collateral in
order to preserve, protect and maintain all the rights of IBM Credit thereunder;

consistent with reasonable commercial practice, maintain, use and operate the
Collateral and carry on and conduct its business in a proper and efficient
manner so as to preserve and protect the Collateral and the earnings, incomes,
rents, issues and profits thereof; and

at any time and from time to time, upon the request of IBM Credit, and at the
sole expense of Customer, Customer will promptly and duly execute and deliver
such further instruments and documents and take such further action as IBM
Credit may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the security interests granted herein and the payment of any and all
recording taxes and filing fees in connection therewith.

Subsidiaries. Customer shall immediately notify IBM Credit in writing in the
event Egghead.com Advertising, Inc., EO Corporation, Surplus Software, Inc., EH
Direct, Inc., MPI Corp., D.J. & J. Software Corp. or any other Subsidiary of
Customer has assets in excess of $10,000 or otherwise becomes operational or
active. In addition, Customer will immediately, but in no event later than five
(5) days after such notification, cause any Subsidiary that is an operating
company, becomes active or has assets in excess of $10,000, to (i) execute a
collateralized guaranty guarantying Customer's Obligations, such guaranty to be
in form and substance satisfactory to IBM Credit, in its sole discretion, (ii)
grant to IBM Credit a security interest in all of such Subsidiary's assets
pursuant to the collateralized guaranty, and (iii) execute UCC-1 Financing
Statements for each jurisdiction requested by IBM Credit. In connection with the
foregoing, IBM Credit shall receive an opinion of counsel in form and substance
satisfactory to it and from counsel satisfactory to it. IBM Credit may require
that any Subsidiaries of Customer become parties to this Agreement or any other
agreement executed in connection with this Agreement as guarantors or sureties.
Customer will comply, and cause all Subsidiaries of Customer to comply with
Sections 7 and 8 of this Agreement, as if such sections applied directly to such
Subsidiaries.

Financial Covenants; Additional Covenants. Customer acknowledges and agrees that
Customer shall comply with the financial covenants and other covenants set forth
in the attachments, exhibits and other addenda incorporated herein and made a
part of this Agreement.

SECTION 8. NEGATIVE COVENANTS

Until termination of this Agreement and the indefeasible payment and
satisfaction of all Obligations hereunder.

Liens. The Customer will not, directly or indirectly mortgage, assign, pledge,
transfer, create, incur, assume, permit to exist or otherwise permit any Lien or
judgment to exist on any of its property, assets, revenues or goods, whether
real, personal or mixed, whether now owned or hereafter acquired, except for
Permitted Liens.

Disposition of Assets. The Customer will not, directly or indirectly, sell,
lease, assign, transfer or otherwise dispose of any assets other than (i) sales
of inventory in the ordinary course of business and short term rental of
inventory as demonstrations in amounts not material to Customer, and (ii)
voluntary dispositions of individual assets and obsolete or worn out property in
the ordinary course of business, provided, that the aggregate book value of all
such assets and property so sold or disposed of under this section 8.2 (ii) in
any fiscal year shall not exceed 5% of the consolidated assets of the Customer
as of the beginning of such fiscal year.

Legal Entity Changes. The Customer will not, without the prior written consent
of IBM Credit, directly or indirectly, merge, consolidate, liquidate, dissolve
or enter into or engage in any operation or activity materially different from
that presently being conducted by Customer.

Guaranties. The Customer will not, directly or indirectly, assume, guaranty,
endorse, or otherwise become liable upon the obligations of any other Person
except (i) by the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business, (ii) by
the giving of indemnities in connection with the sale of inventory or other
asset dispositions permitted hereunder, and (iii) for guaranties in favor of IBM
Credit.

Restricted Payments. The Customer will not, directly or indirectly: (i) declare
or pay any dividend (other than dividends payable solely in common stock of
Customer or membership interest if Customer is a limited liability company) 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 Customer or any
warrants, options or rights to purchase any such capital stock, 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
Customer; or (ii) make any optional payment or prepayment on or redemption
(including, without limitation, by making payments to a sinking or analogous
fund) or repurchase of any indebtedness (other than the Obligations).

Investments. The Customer will not, directly or indirectly, make, maintain or
acquire any Investment in any Person other than:

interest bearing deposit accounts (including certificates of deposit) which are
insured by the Federal Deposit Insurance Corporation ("FDIC") or a similar
federal insurance program;

direct obligations of the government of the United States of America or any
agency or instrumentality thereof or obligations guaranteed as to principal and
interest by the United States of America or any agency thereof;

stock or obligations issued to Customer in settlement of claims against others
by reason of an event of bankruptcy or a composition or the readjustment of debt
or a reorganization of any debtor of Customer;

commercial paper of any company organized under the laws of any State of the
United States or any bank organized or licensed to conduct a banking business
under the laws of the United States or any State thereof having the short-term
highest rating then given by Moody's Investor's Services, Inc. or Standard &
Poor's Corporation; and

the publicly traded equity or debt obligations of any corporation provided all
such investments shall be and at all times remain rated "investment grade" by
Moody's or S&P.

Affiliate/Subsidiary Transactions. The Customer will not, directly or
indirectly, enter into any transaction with any Affiliate or Subsidiary,
including, without limitation, the purchase, sale or exchange of property or the
rendering of any service to any Affiliate or Subsidiary of Customer except in
the ordinary course of business and pursuant to the reasonable requirements of
Customer's business upon fair and reasonable terms no less favorable to Customer
than could be obtained in a comparable arm's-length transaction with an
unaffiliated Person.

ERISA. The Customer will not (A) terminate any Plan so as to incur a material
liability to the FBGC, (B) permit any "prohibited transaction" involving any
Plan (other than a "multi-employer benefit plan") which would subject the
Customer to a material tax or penalty on "prohibited transactions" under the
Code or ERISA, (C) fail to pay to any Plan any contribution which they are
obligated to pay under the terms of such Plan, if such failure would result in a
material "accumulated funding deficiency", whether or not waived, (D) allow or
suffer to exist any occurrence of a "reportable event" or any other event or
condition, which presents a material risk of termination by the PBGC of any Plan
(other than a "multi-employer benefit plan"), or (E) fail to notify IBM Credit
as required in Section 7.5. As used in this Agreement, the terms "accumulated
funding deficiency" and "reportable event" shall have the respective meanings
assigned to them in ERISA, and the term "prohibited transaction" shall have the
meaning assigned to it in the Code and ERISA. For purposes of this Section 8.8,
the terms "material liability", "tax", "penalty', "accumulated funding
deficiency" and "risk of termination" shall mean a liability, tax, penalty,
accumulated funding deficiency or risk of termination which could reasonably be
expected to have a Material Adverse Effect.

Additional Negative Pledges. Customer will not, directly or indirectly, create
or otherwise cause or permit to exist or become effective any contractual
obligation which may restrict or inhibit IBM Credit's rights or ability to sell
or otherwise dispose of the Collateral or any part thereof after the occurrence
and during the continuance of an Event of Default.

Storage of Collateral with Bailees and Warehousemen. Collateral shall not be
stored with a bailee, warehouseman or similar party without the prior written
consent of IBM Credit unless Customer will, concurrently with the delivery of
such Collateral to such party, cause such party to issue and deliver to IBM
Credit, warehouse receipts in the name of IBM Credit evidencing the storage of
such Collateral.

Accounts. The Customer shall not permit or agree to any extension, compromise or
settlement or make any change or modification of any kind or nature with respect
to any Account, including any of the terns relating thereto, which would affect
IBM Credit's ability to collect payment on any Account in whole or in part,
except for such extensions, compromises or settlements made by Customer in the
ordinary course of its business, provided, however, that the aggregate amount of
such extensions, compromises or settlements does not exceed five percent (5%) of
the Customers Accounts at any time.

Indebtedness. The Customer will not create, incur, assume or permit to exist any
Indebtedness, except for Permitted Indebtedness.

Loans. The Customer will not make any loans, advances, contributions or payments
of money or goods to any Subsidiary, Affiliate or parent company or to any
officer, director or stockholder of Customer or of any such company (except for
compensation for personal services actually rendered), except for transactions
expressly authorized in this Agreement.

SECTION 9. DEFAULT

Event of Default. Any one or more of the following events shall constitute an
Event of Default by the Customer under this Agreement and the Other Documents;

The failure to make timely payment of the Obligations or any part thereof when
due and payable; if such failure shall remain unremedied for two (2) Business
Days after written notice thereof shall have been given to Customer by IBM
Credit during which period Customer shall be charged the Delinquency Fee Rate
set forth in Attachment A beginning on the day after the payment was due and
including the day payment is received;

Customer fails to comply with the financial covenants set forth on Attachment A,
Section 7.4 or Section 8 hereof;

Customer or any of its Affiliates fail to comply with or observe any term,
covenant or agreement contained in this Agreement or any Other Documents (not
covered by (A) or (B) above), if such failure shall remain unremedied for two
(2) Business Days after the earlier of (i) Customer obtains actual knowledge
thereof and (ii) written notice thereof shall have been given to Customer by IBM
Credit or for such other period of time as IBM Credit may agree to in writing;

Any representation, warranty, statement, report or certificate made or delivered
by or on behalf of Customer or any of its officers, employees or agents or by or
on behalf of any guarantor to IBM Credit was false in any material respect at
the time when made or deemed made;

The occurrence of any event or circumstance which could reasonably be expected
to have a Material Adverse Effect;

Customer, any Subsidiary or any guarantor shall generally not pay its debts as
such debts become due, become or otherwise declare itself insolvent, file a
voluntary petition for bankruptcy protection, have filed against it any
involuntary bankruptcy petition, cease to do business as a going concern, make
any assignment for the benefit of creditors, or a custodian, receiver, trustee,
liquidator, administrator or person with similar powers shall be appointed for
Customer, any Subsidiary or any guarantor or any of its respective properties or
have any of its respective properties seized or attached, or take any action to
authorize, or for the purpose of effectuating, the foregoing, provided, however,
that Customer, any Subsidiary or any guarantor shall have a period of forty-five
(45) days within which to discharge any involuntary petition for bankruptcy or
similar proceeding;

The use of any funds borrowed from IBM Credit under this Agreement for any
purpose other than as provided in this Agreement;

The entry of any judgment against Customer or any guarantor in an amount in
excess of $100,000 and such judgment is not satisfied, dismissed, stayed or
superseded by bond within thirty (30) days after the day of entry thereof (and
in the event of a stay or supersedes bond, such judgment is not discharged
within thirty (30) days after termination of any such stay or bond) or such
judgment is not fully covered by insurance as to which the insurance company has
acknowledged its obligation to pay such judgment in full;

The dissolution or liquidation of Customer, any Subsidiary or any guarantor, or
Customer or any guarantor or its directors or stockholders shall take any action
to dissolve or liquidate Customer or any guarantor;

Any "going concern" or like qualification or exception, or qualification arising
out of the scope of an audit by an Auditor of its opinion relative to any
Financial Statement delivered to IBM Credit under this Agreement;

The issuance of a warrant of distress for any rent or taxes with respect to any
premises occupied by Customer in or upon which the Collateral, or any part
thereof, may at any time be situated and such warrant shall continue for a
period of ten (10) Business Days from the date such warrant is issued;

Customer suspends business;

The occurrence of any event or condition that permits the holder of any
Indebtedness arising in one or more related or unrelated transactions to
accelerate the maturity thereof or the failure of Customer to pay when due any
such Indebtedness;

Any guaranty of any or all of the Customer's Obligations executed by any
guarantor in favor of IBM Credit, shall at any time for any reason cease to be
in full force and effect or shall be declared to be null and void by a court of
competent jurisdiction or the validity or enforceability thereof shall be
contested or denied by any such guarantor, or any such guarantor shall deny that
it has any further liability or obligation thereunder or any such guarantor
shall fail to comply with or observe any of the terms, provisions or conditions
contained in any such guaranty;

Customer is in default under the material terms of any of the Other Documents
after the expiration of any applicable cure periods;

There shall occur a "reportable event" with respect to any Plan, or any Plan
shall be subject to termination proceedings (whether voluntary or involuntary)
and there shall result from such "reportable event" or termination proceedings a
liability of Customer to the PBGC which in the reasonable opinion of IBM Credit
will have a Material Adverse Effect;

Any "person" (as defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) acquires a beneficial interest in 50% or more of the Voting
Stock of Customer.

Acceleration. Upon the occurrence and during the continuance of an Event of
Default which has not been waived in writing by IBM Credit, IBM Credit may, in
its sole discretion, take any or all of the following actions, without prejudice
to any other rights it may have at law or under this Agreement to enforce its
claims against the Customer. (a) declare all Obligations to be immediately due
and payable (except with respect to any Event of Default set forth in Section
9.1(F) hereof, in which case all Obligations shall automatically become
immediately due and payable without the necessity of any notice or other demand)
without presentment, demand, protest or any other action or obligation of IBM
Credit; and (b) immediately terminate the Credit Line hereunder.

Remedies. (A) Upon the occurrence and during the continuance of any Event of
Default which has not been waived in writing by IBM Credit, IBM Credit may
exercise all rights and remedies of a secured patty under the U.C.C. Without
limiting the generality of the foregoing, IBM Credit may: (i) remove from any
premises where same may be located any and all documents, instruments, files and
records (including the copying of any computer records), and any receptacles or
cabinets containing same, relating to the Collateral, or IBM Credit may use (at
the expense of the Customer) such of the supplies or space of the Customer at
Customer's place of business or otherwise, as may be necessary to properly
administer and control the Collateral or the handling of collections and
realizations thereon; (ii) bring suit, in the name of the Customer or IBM Credit
and generally shall have all other rights respecting said Accounts, including
without limitation the right to accelerate or extend the time of payment,
settle, compromise, release in whole or in part any amounts owing on any
Accounts and issue credits in the name of the Customer or IBM Credit; (iii)
sell, assign and deliver the Accounts and any returned, reclaimed or repossessed
merchandise, with or without advertisement, at public or private sale, for cash,
on credit or otherwise, at IBM Credit's sole option and discretion, and IBM
Credit may bid or become a purchaser at any such sale; and (iv) foreclose the
security interests created pursuant to this Agreement by any available judicial
procedure, or to take possession of any or all of the Collateral without
judicial process and to enter any premises where any Collateral may be located
for the purpose of taking possession of or removing the same.

(B) Upon the occurrence and during the continuance of an Event of Default which
has not been waived in writing by IBM Credit, IBM Credit shall have the right to
sell, lease, or otherwise dispose of all or any part of the Collateral, whether
in its then condition or after further preparation or processing, in the name of
Customer or IBM Credit, or in the name of such other party as IBM Credit may
designate, either at public or private sale or at any broker's board, in lots or
in bulk, for cash or for credit, with or without warranties or representations,
and upon such other terms and conditions as IBM Credit in its sole discretion
may deem advisable, and IBM Credit shall have the right to purchase at any such
sale. If IBM Credit, in its sole discretion determines that any of the
Collateral requires rebuilding, repairing, maintenance or preparation, IBM
Credit shall have the right, at its option, to do such of the aforesaid as it
deems necessary for the purpose of putting such Collateral in such saleable form
as IBM Credit shall deem appropriate. The Customer hereby agrees that any
disposition by IBM Credit of any Collateral pursuant to and in accordance with
the terms of a repurchase agreement between IBM Credit and the manufacturer or
any supplier (including any Authorized Supplier) of such Collateral constitutes
a commercially reasonable sale. The Customer agrees, at the request of IBM
Credit, to assemble the Collateral and to make it available to IBM Credit at
places which IBM Credit shall select, whether at the premises of the Customer or
elsewhere, and to make available to IBM Credit the premises and facilities of
the Customer for the purpose of IBM Credit's taking possession of, removing or
putting such Collateral in saleable form. If notice of intended disposition of
any Collateral is required by law, it is agreed that ten (10) Business Days
notice shall constitute reasonable notification.

(C) Unless expressly prohibited by the licensor thereof, if any, IBM Credit is
hereby granted, upon the occurrence and during the continuance of any Event of
Default which has not been waived in writing by IBM Credit, an irrevocable,
non-exclusive license to use, assign, license or sublicense all computer
software programs, data bases, processes and materials used by the Customer in
its businesses or in connection with any of the Collateral.

(D) The net cash proceeds resulting from IBM Credit's exercise of any of the
foregoing rights (after deducting all charges, costs and expenses, including
reasonable attorneys' fees) shall be applied by IBM Credit to the payment of
Customer's Obligations, whether due or to become due, in such order as IBM
Credit may in it sole discretion elect. Customer shall remain liable to IBM
Credit for any deficiencies, and IBM Credit in turn agrees to remit to Customer
or its successors or assigns, any surplus resulting therefrom.

(E) The enumeration of the foregoing rights is not intended to be exhaustive and
the exercise of any right shall not preclude the exercise of any other rights,
all of which shall be cumulative.

Waiver. If IBM Credit seeks to take possession of any of the Collateral by any
court process Customer hereby irrevocably waives to the extent permitted by
applicable law any bonds, surety and security relating thereto required by any
statute, court rule or otherwise as an incident to such possession and any
demand for possession of the Collateral prior to the commencement of any suit or
action to recover possession thereof. In addition, Customer waives to the extent
permitted by applicable law all rights of set-off it may have against IBM
Credit. Customer further waives to the extent permitted by applicable law
presentment, demand and protest, and notices of non-payment, non-performance,
any right of contribution, dishonor, and any other demands, and notices required
by law.

SECTION 10. MISCELLANEOUS

Term; Termination. This Agreement shall remain in force until the earlier of (i)
the Termination Date, (ii) the date specified in a written notice by the
Customer that they intend to terminate this Agreement which date shall be no
less than thirty (30) days following the receipt by IBM Credit of such written
notice, and (iii) termination by IBM Credit after the occurrence and during the
continuance of an Event of Default. Upon the date that this Agreement is
terminated, all of Customer's Obligations shall be immediately due and payable
in their entirety, even if they are not yet due under their terms.

Until the indefeasible payment in full of all of Customer's Obligations, no
termination of this Agreement or any of the Other Documents shall in any way
affect or impair (i) Customer's Obligations to IBM Credit including, without
limitation, any transaction or event occurring prior to and after such
termination, or (ii) IBM Credit's rights hereunder, including, without
limitation, IBM Credit's security interest in the Collateral. On and after a
Termination Date IBM Credit may, but shall not be obligated to, upon the request
of Customer, continue to provide Advances hereunder.

Indemnification. The Customer hereby agrees to Indemnify and hold harmless IBM
Credit and each of its officers, directors, agents and assigns (collectively,
the "Indemnified Persons") against all losses, claims, damages, liabilities or
other expenses (including reasonable attorneys' fees and court costs now or
hereinafter arising from the enforcement of this Agreement, the "Losses") to
which any of them may become subject insofar as such Losses arise out of or are
based upon any event, circumstance or condition (a) occurring or existing on or
before the date of this Agreement relating to any financing arrangements IBM
Credit may from time to time have with (i) Customer, (ii) any Person that shall
be acquired by Customer or (iii) any Person that Customer may acquire all or
substantially all of the assets of, or (b) directly or indirectly, relating to
the execution, delivery or performance of this Agreement or the consummation of
the transactions contemplated hereby or thereby or to any of the Collateral or
to any act or omission of the Customer in connection therewith. Notwithstanding
the foregoing, the Customer shall not be obligated to indemnify IBM Credit for
any Losses incurred by IBM Credit which are a result of IBM Credit's gross
negligence or willful misconduct. The indemnity provided herein shall survive
the termination of this Agreement.

If either party brings any action or asserts any claim against the other party
which arises out of this Agreement or any Other Documents, the party which does
not prevail in such action or claim shall pay to the prevailing party all costs
and expenses of the prevailing party's defense of such action or claim
including, but not limited to, all attorney's fees.

Additional Obligations. IBM Credit, without waiving or releasing any Obligation
or Default of the Customer, may perform any Obligations of the Customer that the
Customer shall fail or refuse to perform and IBM Credit may, at any time or
times hereafter, but shall be under no obligation to do so, pay, acquire or
accept any assignment of any security interest, lien, encumbrance or claim
against the Collateral asserted by any person. All sums paid by IBM Credit in
performing in satisfaction or on account of the foregoing and any expenses,
including reasonable attorney's fees, court costs, and other charges relating
thereto, shall be a part of the Obligations, payable on demand and secured by
the Collateral.

LIMITATION OF LIABILITY. NEITHER IBM CREDIT NOR ANY OTHER INDEMNIFIED PERSON
SHALL HAVE ANY LIABILITY WITH RESPECT TO ANY SPECIAL, INDIRECT OR CONSEQUENTIAL
DAMAGES SUFFERED BY CUSTOMER IN CONNECTION WITH THIS AGREEMENT, ANY OTHER
AGREEMENT, ANY DELAY, OMISSION OR ERROR IN THE ELECTRONIC TRANSMISSION OR
RECEIPT OF ANY E-DOCUMENT, OR ANY CLAIMS IN ANY MANNER RELATED THERETO. NOR
SHALL IBM CREDIT OR ANY OTHER INDEMNIFIED PERSON HAVE ANY LIABILITY TO CUSTOMER
OR ANY OTHER PERSON FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT OR THEM
HEREUNDER, EXCEPT FOR ITS OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
IN THE EVENT CUSTOMER REQUESTS IBM CREDIT TO EFFECT A WITHDRAWAL OR DEBIT OF
FUNDS FROM AN ACCOUNT OF CUSTOMER, THEN IN NO EVENT SHALL IBM CREDIT BE LIABLE
FOR ANY AMOUNT IN EXCESS OF ANY AMOUNT INCORRECTLY DEBITED, EXCEPT IN THE EVENT
OF IBM CREDIT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. NO PARTY SHALL BE LIABLE
FOR ANY FAILURE TO PERFORM ITS OBLIGATIONS IN CONNECTION WITH ANY E-DOCUMENT,
WHERE SUCH FAILURE RESULTS FROM ANY ACT OF GOD OR OTHER CAUSE BEYOND SUCH
PARTY'S REASONABLE CONTROL (INCLUDING, WITHOUT LIMITATION, ANY MECHANICAL,
ELECTRONIC OR COMMUNICATIONS FAILURE) WHICH PREVENTS SUCH PARTY FROM
TRANSMITTING OR RECEIVING E-DOCUMENTS.

Alteration/Waiver. This Agreement and the Other Documents may not be altered or
amended except by an agreement in writing signed by the Customer and by IBM
Credit. No delay or omission of IBM Credit to exercise any right or remedy
hereunder, whether before or after the occurrence of any Event of Default, shall
impair any such right or remedy or shall operate as a waiver thereof or as a
waiver of any such Event of Default. In the event that IBM Credit at any time or
from time to time dispenses with any one or more of the requirements specified
in this Agreement or any of the Other Documents, such dispensation may be
revoked by IBM Credit at any time and shall not be deemed to constitute a waiver
of any such requirement subsequent thereto. IBM Credit's failure at any time or
times to require strict compliance and performance by the Customer of any
undertakings, agreements, covenants, warranties and representations of this
Agreement or any of the Other Documents shall not waive, affect or diminish any
right of IBM Credit thereafter to demand strict compliance and performance
thereof. Any waiver by IBM Credit of any Default by the Customer under this
Agreement or any of the Other Documents shall not waive or affect any other
Default by the Customer under this Agreement or any of the Other Documents,
whether such Default is prior or subsequent to such other Default and whether of
the same or a different type. None of the undertakings, agreements, warranties,
covenants, and representations of the Customer contained in this Agreement or
the Other Documents and no Default by the Customer shall be deemed waived by IBM
Credit unless such waiver is in writing signed by an authorized representative
of IBM Credit.

Severability. If any provision of this Agreement or the Other Documents or the
application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the Other Documents and the
application of such provision to other Persons or circumstances will not be
affected thereby, the provisions of this Agreement and the Other Documents being
severable in any such instance.

One Loan. All Advances heretofore, now or at any time or times hereafter made by
IBM Credit to the Customer under this Agreement or the Other Documents shall
constitute one loan secured by IBM Credit's security interests in the Collateral
and by all other security interests, liens and encumbrances heretofore, now or
from time to time hereafter granted by the Customer to IBM Credit or any
assignor of IBM Credit.

Additional Collateral. All monies, reserves and proceeds received or collected
by IBM Credit with respect to other property of the Customer in possession of
IBM Credit at any time or limes hereafter are hereby pledged by Customer to IBM
Credit as security for the payment of Customer's Obligations and shall be
applied promptly by IBM Credit on account of the Customer's Obligations;
provided, however, IBM Credit may release to the Customer such portions of such
monies, reserves and proceeds as IBM Credit may from time to time determine, in
its sole discretion.

No Merger or Novations. Notwithstanding anything contained in any document to
the contrary, it is understood and agreed by the Customer and IBM Credit that
the claims of IBM Credit arising hereunder and existing as of the date hereof
constitute continuing claims arising out of the Obligations of Customer under
any Other Documents. Customer acknowledges and agrees that such Obligations
outstanding as of the date hereof have not been satisfied or discharged and that
this Agreement is not intended to effect a novation of the Customer's
Obligations under any Other Documents.

Neither the obtaining of any judgment nor the exercise of any power of seizure
or sale shall operate to extinguish the Obligations of the Customer to IBM
Credit secured by this Agreement and shall not operate as a merger of any
covenant in this Agreement, and the acceptance of any payment or alternate
security shall not constitute or create a novation and the obtaining of a
judgment or judgments under a covenant herein contained shall not operate as a
merger of that covenant or affect IBM Credit's rights under this Agreement.

Paragraph Titles. The Section titles used in this Agreement and the Other
Documents are for convenience only and do not define or limit the contents of
any Section.

Binding Effect; Assignment. This Agreement and the Other Documents shall be
binding upon and inure to the benefit of IBM Credit and the Customer and their
respective successors and assigns: provided, that the Customer shall have no
right to assign this Agreement or any of the Other Documents without the prior
written consent of IBM Credit.

Notices; E-Business Acknowledgment. Except as otherwise expressly provided in
this Agreement, any notice required or desired to be served, given or delivered
hereunder shall be in writing, and shall be deemed to have been validly served,
given or delivered (i) upon receipt if deposited in the United States mails,
first class mail, with proper postage prepaid, (ii) upon receipt of confirmation
or answerback if sent by telecopy, or other similar facsimile transmission,
(iii) one Business Day after deposit with a reputable overnight courier with all
charges prepaid, or (iv) when delivered, if hand-delivered by messenger, all of
which shall be properly addressed to the party to be notified and sent to the
address or number indicated as follows:

(i)     If to IBM Credit at:                     (ii)    If to Customer at:
        IBM Credit Corporation                           Egghead.Com, Inc.
        5000 Executive Parkway, Suite 450                1350 Willow Road
        San Ramon, CA 94583                              Menlo Park, CA 94025
        Attention: Region Manager, West                  Attention: John Labbett
        Facsimile: 925-277-5675                          EVP, Chief Financial Officer
                                                         Facsimile: 650-328-7858

or to such other address or number as each party designates to the other in the
manner prescribed herein.

Each party may electronically transmit to or receive from the other party
certain documents set forth in Attachment J ("E-Documents") via the Internet or
electronic data interchange ("EDI"). Any transmission of data which is not an
E-Document shall have no force or effect between the parties. EDI transmissions
may be sent directly or through any third party service provider ("Provider")
with which either party may contract. Each party shall be liable for the acts or
omissions of its Provider while handling E-Documents for such party, provided,
that if both parties use the same Provider, the originating party shall be
liable for the acts or omissions of such Provider as to such E-Document. Some
information to be made available to Customer will be specific to Customer and
will require Customer's registration with IBM Credit before access is provided.
After IBM Credit has approved the registration submitted by Customer, IBM Credit
shall provide an ID and password(s) to an individual designated by Customer
("Customer Recipient"). Customer accepts responsibility for the designated
individual's distribution of the ID and password(s) within its organization and
Customer will take reasonable measures to ensure that passwords are not shared
or disclosed to unauthorized individuals. Customer will conduct an annual review
of all IDs and passwords to ensure they are accurate and properly authorized.
IBM CREDIT MAY CHANGE OR DISCONTINUE USE OF AN ID OR PASSWORD AT ITS DISCRETION
AT ANY TIME. E-Documents shall not be deemed to have been properly received, and
no E-Document shall give rise to any obligation, until accessible to the
receiving party at such party's receipt computer at the address specified
herein. Upon proper receipt of an E-Document, the receiving party shall promptly
transmit a functional acknowledgment in return. A functional acknowledgment
shall constitute conclusive evidence that an E-Document has been properly
received. If any transmitted E-Document is received in an unintelligible or
garbled form, the receiving party shall promptly notify the originating party in
a reasonable manner. In the absence of such a notice, the originating party's
records of the contents of such E-Document shall control.

Each party shall use those security procedures which are reasonably sufficient
to ensure that all transmissions of E-Documents are authorized and to protect
its business records and data from improper access. Any E-Document received
pursuant to this Section 10.12 shall have the same effect as if the contents of
the E-Document had been sent in paper rather than electronic form. The conduct
of the parties pursuant to this Section 10.12 shall, for all legal purposes,
evidence a course of dealing and a course of performance accepted by the
parties. The parties agree not to contest the validity or enforceability of
E-Documents under the provisions of any applicable law relating to whether
certain agreements are to be in writing or signed by the party to be bound
thereby, The parties agree, as to any E-Document accompanied by the Customer's
ID, that IBM Credit can reasonably rely on the fact that such E-Document is
properly authorized by Customer. E-Documents, if introduced as evidence on paper
in any judicial, arbitration, mediation or administrative proceedings, will be
admissible as between the parties to the same extent and under the same
conditions as other business records originated and maintained in documentary
form. Neither party shall contest the admissibility of copies of E-Documents
under either the business records exception to the hearsay rule or the best
evidence rule on the basis that the E-Documents were not originated or
maintained in documentary form.

CUSTOMER RECIPIENT INFORMATION for Internet transmissions:

Name of Customer's Designated Central Contact Authorized to Receive IDs and
Passwords:

John Labbett, Executive Vice President, Chief Financial Officer

e-mail Address: jlabbett@egghead.com

Phone Number: (650) 470-2783

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

ATTACHMENT A MODIFICATIONS. IBM Credit may modify the Collateral Insurance
Amount set forth in Attachment A from time to time by providing Customer with a
new Attachment A. Any such new Attachment A shall be effective as of the date
specified in the new Attachment A.

SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW. TO INDUCE IBM CREDIT
TO ACCEPT THIS AGREEMENT AND THE OTHER DOCUMENTS, THE CUSTOMER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

SUBMITS ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT AND ANY OTHER AGREEMENT, OR FOR THE RECOGNITION AND ENFORCEMENT
OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND ANY FEDERAL DISTRICT COURT IN NEW YORK;

CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREINAFTER 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;

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 CUSTOMER AT ITS ADDRESS SET FORTH IN
SECTION 10.13 OR AT SUCH OTHER ADDRESS OF WHICH IBM CREDIT SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO;

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.

AGREES THAT THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT AND
THE OTHER DOCUMENTS SHALL BE GOVERNED BY THE LAWS (WITHOUT GIVING EFFECT TO
CONFLICT OF LAW PROVISIONS) OF THE STATE OF NEW YORK.

JURY TRIAL WAIVER. EACH OF IBM CREDIT AND THE CUSTOMER HEREBY IRREVOCABLY WAIVES
THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY
COUNTERCLAIM) OF ANY TYPE IN WHICH IBM CREDIT AND THE CUSTOMER ARE PARTIES AS TO
ALL MATTERS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY
DOCUMENT, INSTRUMENT OR AGREEMENT EXECUTED IN CONNECTION HEREWITH.

IN WITNESS WHEREOF, the Customer has read this entire Agreement, and has caused
its authorized representatives to execute this Agreement and has caused its
corporate seal, if any, to be affixed hereto as of the date first written above.

IBM Credit Corporation                  Egghead.Com, Inc.
By:  /s/ Thomas S. Curcio               By:   /s/ John E. Labbett
Print Name: Thomas S. Curcio            Print Name: John E. Labbett
Title: Manager of Credit                Title: Executive Vice President/Chief Financial Officer

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

ATTACHMENT A, ("AIF ATTACHMENT A") TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

DATED February 28, 2001

Customer Name: Egghead.com, Inc.

Effective Date of this AIF Attachment A: February 28, 2001

Fees, Rates and Repayment Terms:

Credit Line: Twenty Million Dollars ($20,000,000.00);

Borrowing Base:

70% of the amount of the Customer's Eligible Accounts as of the date of
determination as reflected in the Customer's most recent Collateral Management
Report;

Notwithstanding the terms of Section 3.1(W) of the Agreement, Accounts arising
from Incentive payments, rebates, discounts and refunds which are (i) verifiable
by Authorized Suppliers, and (ii) payable by Authorized Suppliers by check to
the Lockbox will be deemed to be Eligible Accounts.

100% of the Customer's inventory in the Customer's possession as of the date of
determination as reflected in the Customer's most recent Collateral Management
Report constituting Products (other than service parts) financed through a
Product Advance by IBM Credit, provided, however, IBM Credit has a first
priority security interest in such Products and such Products are new and in
un-opened boxes. The value to be assigned to such inventory shall be based upon
the Authorized Supplier's invoice price to Customer for Products net of all
applicable price reduction credits.

Collateral Insurance Amount: Eight Million Dollars ($8,000,000.00)

Delinquency Fee Rate: Prime Rate plus 6.500%

Shortfall Transaction Fee: Shortfall Amount multiplied by 0.30%

Free Financing Period Exclusion Fee: For each Product Advance made by IBM Credit
pursuant to Customers financing plan where there is no Free Financing Period
associated with such Product Advance there will be a fee equal to the Free
Financing Period Exclusion Fee. For a 30 day payment plan when Prime Rate is 8%
the Free Financing Period Exclusion Fee is 1.08% of the invoice amount. This fee
will very by .0125% with each .25% change in Prime Rate (e.g. Prime Rate of
7.25%, the charge is 1.0425% of the invoice amount). The fee accrues as of the
Date of Note and is payable as stated in the billing Statement.

Other Charges:

Application Processing Fee: $15,000.00 (Paid)

Closing Fee: $25,000.00

Annual Facility Fee (payable annually on the facility anniversary date):
$40,000.00, or .20% of the maximum credit line, whichever is greater.

Bank Account

Customer's Lockbox(es) and Special Account(s) will be maintained at the
following Bank(s):

Name of Bank:

Address:

Phone:

Lockbox Address:

Special Account #:

Financial Covenants: Not Applicable

Additional Conditions Precedent Pursuant to Section 5.1(J) of the Agreement:

Executed Contingent Blocked Account Amendment:

Executed Waiver of Landlord Lien for all premises in which a landlord has the
right of levy for rent;

A Certificate of Location of Collateral whereby the Customer certifies where
Customer presently keeps or sells inventory, equipment and other tangible
Collateral;

Subordination or Intercreditor Agreements from all creditors having a lien which
is superior to IBM Credit in any assets that IBM Credit relies on to satisfy
Customer's obligations to IBM Credit;

Listing of all creditors providing accounts receivable financing to Customer;

A Collateral Management Report in the form of Attachment F as of the Closing
Date;

An Opinion of Counsel substantially in the form and substance of Attachment H
whereby the Customers counsel states his or her opinion about the execution,
delivery and performance of the Agreement and other documents by the Customer;

A Corporate Secretary's Certificate substantially in the form and substance of
Attachment I certifying to, among other items, the resolutions of Customer's
Board of Directors authorizing borrowing by Customer;

Termination or release of Uniform Commercial Code filing by another creditor as
required by IBM Credit;

A copy of an all-risk insurance certificate pursuant to Section 7.8 (B) of the
Agreement;

AIF ATTACHMENT B TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: Egghead.com, Inc.

Liens:

Locations of Offices, Records and Inventory:

Principal Place of Business and Chief Executive Office:

Locations of Assets, Inventory and Equipment (including warehouses):

Location Leased (Y/N)

 

Fictitious Names:

Organization:

Subsidiaries:

Name

Jurisdiction

Owner

% Owned

 

 

 

 

 

 

 

 

 

 

 

 

Affiliates:

Name

Capacity

 

 

 

 

 

 

Judgments:

Environmental Matters:

Indebtedness:

AIF ATTACHMENT B TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: Egghead.com, Inc.

Liens:

Locations of Offices, Records and Inventory:

Principal Place of Business and Chief Executive Office:

1350 Willow Road, Menlo Park, CA 94025

Locations of Assets, Inventory and Equipment (including warehouses):

Location Leased (Y/N)

521 Chkalou Drive, Vancouver, WA 98683 Y

3301 SE Columbia Way, Bldg 45, Vancouver, WA 98661 Y

Fictitious Names:

Organization:

Subsidiaries:

Name

Jurisdiction

Owner

% Owned

See attached list. None operational.

 

 

 

 

 

 

 

Affiliates:

Name

Capacity

None.

 

 

 

Judgments:

None.

Environmental Matters:

None.

Indebtedness:

None.

Egghead.com, Inc.

Subsidiaries

Item IV.(A) Subsidiaries

Legal/dba Name

Address

Relation

FEIN

E O Corporation

1350 Willow Road, Menlo Park CA 94025

Subsidiary

 

D J & J Software Corporation

1350 Willow Road, Menlo Park CA 94025

Subsidiary

91-1233491

Surplus Software, Inc.

1350 Willow Road, Menlo Park CA 94025

Subsidiary

93-1083982

EH Direct, Inc.

1350 Willow Road, Menlo Park CA 94025

Subsidiary

91-1610131

MPI Corporation

1350 Willow Road, Menlo Park CA 94025

Subsidiary

91-1610133

Egghead.com Advertising, Inc.

1350 Willow Road, Menlo Park CA 94025

Subsidiary

 

EH Direct is known as Surplus Direct

 

IF ATTACHMENT E TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: Egghead.com, Inc.

AUTHORIZED SUPPLIERS

IBM

Tech Data Corp.

Ingram

AIF ATTACHMENT F TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer. Egghead.com, Inc.
Collateral Management Report (CMR)
Accounts as of _________ (Date)

COLLATERAL STATUS

:

Accounts Receivable less than 90 days aged from invoice date:

Commercial

 

 

Total Eligible

X 70%

 

 

plus

 

IBMCC Financed Inventory

 

X 100%

Total Collateral

 

=

LOAN STATUS

:

 

 

 

IBMCC Loan Value

 

less

 

 

 

*

* if negative please include paydown.

Signatures:

Authorized Customer Signature (Date)

IBM Credit Corporation (Date)

The above officer or delegated individual of _________________ certifies that he
or she is authorized to provide this information on behalf of _________________
and agrees that to the best of his or her knowledge the information is accurate.

 

AIF ATTACHMENT F TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT')

Customer (Legal Name) Egghead.com, Inc.

Collateral Management Report (CMR)

Accounts as of: 2-21-2001

COLLATERAL STATUS

:

 

Other
Values

Gross
Collateral

Advance %

Net Collateral

1. Previous assigned A/R balance:

 

$0

 

 

(previous CMR line 4) Date: __/__/__

 

 

 

 

2. Additions to A/R (2A+B):

 

$0

 

 

A. New Billings

$0

 

 

 

B. Adjustments

$0

 

 

 

3. Deductions from A/R (3A+B+C):

 

$0

 

 

A. Cash Receipts

$0

 

 

 

B. Credits

$0

 

 

 

C. Adjustments

$0

 

 

 

4. New Assigned A/R balance (1+2-3):

 

$0

 

 

5. A/R Aging Report (Date: __/__/__)

 

$0

 

 

**New Assigned A/R Balance and A/R Aging Report

 

 

 

 

(Lines 4 and 5) must be equal**

 

 

 

 

6. Less Adjustments:

 

$0

 

 

A. Unapplied Cash

$0

 

 

 

B. Other

$0

 

 

 

7. Adjusted assigned A/R balance (4-6):

 

$27,651,231

 

 

8. Less Ineligible A/R:

 

$0

 

 

A. A/R Over 90 Days

$671,597

 

 

 

B. 50% Rule (estimate)

$30,000

 

 

 

C. Contra Accts (A/P offsets)

$0

 

 

 

D. Other

$0

 

 

 

E. Non-Trade (see Note below)

$22,066,094

 

 

 

F. Egghead.com related

$43,018

 

 

 

G. ____________________

$0

 

 

 

H. ____________________

$0

 

 

 

9. Total Eligible A/R Collateral:

 

$4,840,522

70%

$3,388,365

(Line 7 - Line 8 X Advance Rate)

 

 

 

 

10. Other A/R Collateral:

 

 

 

 

A. MDF (<90 days)

 

$596,646

70%

$417,652

B. ____________________

 

$0

$0

$0

11. Inventory Collateral:

 

 

 

 

A. IBM Credit Financed Eligible Inventory

 

$0

$0

$0

B. ____________________

 

$0

$0

$0

C. ____________________

 

$0

$0

$0

12. Other Collateral:

 

 

 

 

A. RMA

 

$0

$0

$0

B. Price Protection

 

$0

$0

$0

C. ____________________

 

$0

$0

$0

D. ____________________

 

$0

$0

$0

13. Total Net Eligible Collateral (9+10+11+12)

 

 

 

$3,806,017

Note: Non-trade account balance is high do to several days credit card cash
receipts not yet applied to Accounts Receivable

 

LOAN STATUS

:

 

Other
Values

Gross
Collateral

Advance %

Net Collateral

1. Net IBM Credit Outstandings

 

$0

 

 

(1A- (B+C+D+E+F+G+H+I)+J)

 

 

 

 

A. Gross IBM Credit Outstandings (RFS):

$0

 

 

 

Less:

$0

 

 

 

B. Suspense

$0

 

 

 

C. Disputes

$0

 

 

 

D. In Transit (__ Days)

$0

 

 

 

E. QSL / QSA

$0

 

 

 

F. Other

$0

 

 

 

G. ____________________

$0

 

 

 

H. ____________________

$0

 

 

 

I. ____________________

$0

 

 

 

Plus:

 

 

 

 

J. Product Received Not Billed (RNB)

$0

 

 

 

2. Funds in Lockbox (2A+B)

 

$0

 

 

A. Cleared Funds (transferred not posted)

$0

 

 

 

B. Unavailable Funds (float)

$0

 

 

 

3. Loan Balance (Line 1 - Line 2)

 

$0

 

 

4. Collateral Excess / Shortfall:

 

$0

 

 

(Collateral Line 13 - Loan Line 3:

 

 

 

 

(Loan balance available)

 

 

 

 

5. Advances from IBM Credit to Customer

 

$0

 

 

(5A+B+C)

 

 

 

 

A. Cash Advances from Lockbox

$0

 

 

 

B. Cash Advances from IBM Credit

$0

 

 

 

C. WCO Cash Advance

$0

 

 

 

6. New Adjusted O/S Balance (3+5)

 

$0

 

 

7. Remaining Credit Line Availability

 

$0

 

 

(Collateral Line 13 - Loan Line 6)

 

 

 

 

8. WCO Payment Advance

$0

 

 

 

 

Signatures:

/s/ John E. Labbett 2/21/01

Authorized Customer Signature (Date)

IBM Credit Corporation (Date)

The above officer or delegated individual of Egghead.com, Inc. certifies that he
or she is authorized to provide this information on behalf of Egghead.com, Inc.
and agrees that to the best of his or her knowledge the information is accurate.

 

AIF ATTACHMENT H TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Form of Opinion of Customer's Counsel

{LETTERHEAD OF CUSTOMER'S COUNSEL}

{DATE}

IBM Credit Corporation
_____________________
_____________________

Re: ________________________

Ladies and Gentlemen:

We have acted as counsel for _________________________, a
_________________________ corporation (the "Borrower") in connection with (A)
the execution and delivery of that certain Agreement for Inventory Financing,
dated as of _________________________, 20___ (the "Financing Agreement"), by and
among the Borrower and IBM Credit Corporation ("IBM Credit"), and (B) the other
agreements, instruments, and documents executed and delivered by the Borrower in
connection with the Financing Agreement. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to such terms in
the Financing Agreement.

In this connection, we have examined the following documents:

i. The Certificate of Incorporation and the By-laws of the Borrower, each as
amended to date;

ii. The records of the proceedings taken by the Board of Directors of the
Borrower in connection with the execution, delivery, and performance of the
Financing Documents to which they are a party (as defined below);

iii. The Financing Agreement;

iv. The Contingent Blocked Account Amendment;

v. Acknowledgment copies of the UCC-1 Financing Statements listed on Exhibit A
hereto (the "Financing Statements") executed by the Borrower naming it as Debtor
and IBM Credit as Secured Party and filed in the offices set forth on Exhibit A;

vi. {Additional Documents ff necessary}

The documents referred to in clauses (iii) through (vi) above are hereinafter
referred to as the Financing Documents.

In our examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, and the authenticity of the originals of
such latter documents, and, regarding documents executed by parties other than
the Borrower, that those parties had the power and the capacity to enter into,
execute, deliver and perform all obligations under such documents, the due
authorization of all requisite action with respect to such documents, and the
validity and binding effect of such documents upon such other patties.

As to any facts material to this opinion, we have relied upon the
representations and warranties of the Borrower contained in each of the
Financing Documents, and in certificates delivered by the Borrower pursuant to
each of the Financing Documents, statements, and representations of officers and
other representatives of the Borrower, and, as to the matters addressed therein,
certificates or correspondence from public officials. For purposes of the
opinion set forth in Paragraph 4, the term "Material Contracts" means the
agreements and instruments to which the Borrower is subject which have been
identified to us by officers of the Borrower and set forth on Exhibit B hereto
as the agreements and instruments which are material to the business or
financial condition of the Borrower; and the term "Material Orders" means those
orders and decrees to which the Borrower is subject which have been identified
to us by officers of the Borrower and set forth in Exhibit C hereto as the
orders and decrees, agreements, and instruments which are material to the
business or financial condition of the Borrower.

As used herein, the term "UCC" refers to the Uniform Commercial Code as in
effect in the State of New York.

We are members of the bar in the State of ____________ and express no opinion as
to the laws of any other jurisdiction except the General Corporation Law of the
State of ________________ and the federal laws of the United States of America.

Based on the foregoing, and subject to the assumptions and qualifications set
forth herein, we are of the opinion that:

1. Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and is duly
qualified and authorized to do business and in good standing as a foreign
corporation in each jurisdiction where, to our knowledge, it presently is
engaged in business and is required to be qualified.

2. Borrower has all requisite corporate power and authority (a) to own, lease,
and operate its properties and assets and to carry on its business as now being
conducted; and (b) to execute, delivery, and performance of the Financing
Documents to which it is a party.

3. All corporate action on the part of the Borrower requisite for the execution,
delivery, and performance of the Financing Documents to which it is a party has
been duly taken.

4. The execution, delivery, and performance by the Borrower of the Financing
Documents to which it is a party will not (a) violate, be in conflict with,
result in the breach of, or constitute (with due notice or lapse of time, or
both) a default under (i) the Certificate of Incorporation or By-laws of
Borrower or any resolution of its Board of Directors or any committee thereof,
(ii) any Material Contract, or (iii) any federal or state law (including,
without limitation, environmental or occupational health, and safety law),
regulation, rule, Material Order, or legal requirement of any federal, state, or
public authority or agency applicable to Borrower; or (b) result in the creation
or imposition of a lien of any nature whatsoever upon any of the Borrower's
property or assets other than as represented by the Financing Documents.

5. Borrower has obtained any and all consents, approvals, or other
authorizations required to be obtained pursuant to its Certificate of
Incorporation and By-laws in connection with the execution, delivery, and
performance of the Financing Documents. No consent, approval, or authorization
of or by any court, administrative agency, other governmental authority, or any
other Person is required in connection with the execution, delivery, and
performance by the Borrower of the Financing Documents that has not already been
obtained.

6. To our knowledge, there are no actions, proceedings, or investigations
pending or threatened against the Borrower which question the validity of the
Financing Documents to which it is a party or relating to the transactions
contemplated thereby.

7. Each of the Financing Documents has been duly executed and delivered by duly
authorized officer of the Borrower and constitutes the legal, valid, and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except that, in each case, (i) enforcement may be subject to and
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
other laws now or hereafter in effect relating to creditors' rights generally,
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought, and (iii) certain
of the remedial provisions including waivers with respect to the exercise of
remedies against the Collateral contained in the Financing Documents may be
unenforceable in whole or in part, but the inclusion of such provisions does not
affect the validity of the Financing Documents, each taken as a whole and, the
Financing Documents, each taken as a whole, contain adequate remedial provisions
for the practical realization of the security purported to be afforded thereby.

8. The Financing Agreement is effective to create in favor of IBM Credit a valid
security interest within the meaning of the UCC in the Collateral as security
for the obligations purported to be secured thereby; and (ii) the Financing
Statements are in appropriate form and upon filing in the state where Customer's
principal place of business and chief executive office is located will result in
a perfected security interest (as such term is defined in Section 9-303 of the
UCC) of IBM Credit in the Collateral in which security interests to which
Article 9 of the UCC applies.

9. Borrower is not an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.

This opinion is rendered solely to and for the benefit of IBM Credit in
connection with the execution and delivery of the Financing Documents and may
not be relied upon by any other person, firm, or corporation without our prior
written consent, except that it may be furnished to any prospective purchaser of
a participation in the rights of IBM Credit and may be furnished to and relied
upon by any Person which hereafter acquires such a participation.

This opinion is limited to laws as currently in effect on the date hereto and to
the facts as they currently exist, We assume no obligation to revise, supplement
or otherwise update this opinion.

Very truly yours,

 

 

AIF ATTACHMENT I TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

CORPORATE SECRETARY'S CERTIFICATE AS TO RESOLUTIONS

AUTHORIZING BORROWING BY CORPORATION

IBM CREDIT CORPORATION

I, John Labbett, certify that I am the Secretary of Egghead.com, Inc.
("Customer") and that I am custodian of the Customer's organizational books and
records, including the minutes of the meetings of the Customer's Board of
Directors. I further certify as follows:

1. Customer is a corporation organized under the laws of the State of Delaware,
and has its principal of business at 1350 Willow Road, Menlo Park, CA 94025.

2. Customer is registered to conduct business or as otherwise required in the
following states and localities: California, Washington

3. True and complete copies of the Customer's Articles of Incorporation and
By-laws ("Governing Documents") are delivered herewith, together with all
amendments and addenda thereto as in effect on the date hereof.

4. The following is a true, accurate and compared copy of a Resolution (the
"Resolution") adopted by the Customer's Board of Directors at a special meeting
thereof held on due notice at which there was present a quorum authorized to
adopt the Resolution and the entire proceedings of which were proper and in
accordance with the Customer's Governing Documents. The Resolution was duly
made, seconded and unanimously adopted, remains in full force and effect and has
not been revoked, annulled, amended or modified in any manner whatsoever, and
each authorization and empowerment contained in the Resolution is permitted and
proper under the Customer's Governing Documents:

Please see attached as a true excerpt from the minutes of the board of directors
meeting held on January 10, 2001.

5. Appearing below are the names, titles and specimen signatures of at least
three Authorized Person as defined in the Resolution cited in the preceding
paragraph, (list at least three such Authorized Persons):

Authorized Person(s) Title Signature

(print) (print)

Jeffrey F. Sheahan President & CEO /s/ Jeffrey F. Sheahan

John E. Labbett EVP & CFO /s/ John E. Labbett

David D. Tilton Director of Finance /s/ David D. Tilton

The foregoing is not intended to be a comprehensive or exclusive list of the
Customer's Authorized Persons. Upon request, Customer will promptly provide to
IBM Credit additional certificates containing the name, title and specimen
signature of other Authorized Persons, and IBM Credit may now and in the future
rely on the signature of any Authorized Person whether or not listed on this or
any other certificate or on the signature page(s) hereof, if consistent with the
books and records of the Customer.

IN WITNESS WHEREOF, I have signed this certificate this 28th day of February,
2001.

/s/ John E. Labbett

Name: John E. Labbett

 

 

AIF ATTACHMENT J TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

E-BUSINESS SCHEDULE A ("SCHEDULE A")

Customer Name: Egghead.com, Inc.

Effective Date of This Schedule A: , 20___

E-DOCUMENTS - SUPPLIERS:

Invoices

Payment Report/Remittance Advice

E-DOCUMENTS - CUSTOMERS:

Invoices

Remittance Advice

Transaction Approval

Billing Statement

Payment Planner

Auto Cash

Statements of Transaction

Common Dispute Form

 

 

Omitted Attachments to Exhibit 10.11

Attachment C - Compliance Certificate - Not applicable

Attachment D

Attachment G - Certificate of Location of Collateral

Section 1. DEFINITIONS; ATTACHMENTS 1

1.1 Special Definitions 1

1.2 Other Defined Terms 7

1.3 Attachments 7

Section 2. CREDIT LINE; FINANCE CHARGES; OTHER CHARGES 8

2.1 Credit Line 8

2.2 Product Advances. 8

2.3 Finance and Other Charges. 9

2.4 Customer Account Statements 10

2.5 Shortfall 10

2.6 Application of Payments 10

2.7 Prepayment and Reborrowing By Customer 11

Section 3. CREDIT LINE ADDITIONAL PROVISIONS 11

3.1 Ineligible Accounts 11

3.2 Reimbursement for Charges 13

3.3 Lockbox and Special Account 13

3.4 Collections. 13

3.5 Application of Remittances and Credits 13

3.6 Power of Attorney 14

Section 4. SECURITY -- COLLATERAL 15

4.1 Grant 15

4.2 Further Assurances 16

Section 5. CONDITIONS PRECEDENT 16

5.1 Conditions Precedent to the Effectiveness of this Agreement 16

5.2 Conditions Precedent to Each Advance 17

Section 6. REPRESENTATIONS AND WARRANTIES 18

6.1 Organization and Qualifications 18

6.2 Rights in Collateral; Priority of Liens 18

6.3 No Conflicts 18

6.4 Enforceability 18

6.5 Locations of Offices, Records and Inventory 18

6.6 Fictitious Business Names 19

6.7 Organization 19

6.8 No Judgments or Litigation 19

6.9 No Defaults 19

6.10 Labor Matters 19

6.11 Compliance with Law 19

6.12 ERISA 19

6.13 Compliance with Environmental Laws. 20

6.14 Intellectual Property 20

6.15 Licenses and Permits 20

6.16 Investment Company 20

6.17 Taxes and Tax Returns 21

6.18 Status of Accounts 21

6.19 Affiliate/Subsidiary Transactions 21

6.20 Accuracy and Completeness of Information 21

6.21 Recording Taxes 21

6.22 Indebtedness 21

Section 7. AFFIRMATIVE COVENANTS 21

7.1 Financial and Other Information 22

7.2 Location of Collateral 23

7.3 Changes in Customer 23

7.4 Legal Entity Existence 23

7.5 ERISA 24

7.6 Environmental Matters 24

7.7 Collateral Books and Records/Collateral Audit 24

7.8 Insurance; Casualty Loss 25

7.9 Taxes 25

7.10 Compliance With Laws 26

7.11 Fiscal Year 26

7.12 Intellectual Property 26

7.13 Maintenance of Property 26

7.14 Collateral 26

7.15 Subsidiaries 27

7.16 Financial Covenants; Additional Covenants 27

Section 8. NEGATIVE COVENANTS 28

8.1 Liens 28

8.2 Disposition of Assets 28

8.3 Legal Entity Changes 28

8.4 Guaranties 28

8.5 Restricted Payments 28

8.6 Investments 28

8.7 Affiliate/Subsidiary Transactions 29

8.8 ERISA 29

8.9 Additional Negative Pledges 29

8.10 Storage of Collateral with Bailees and Warehousemen 29

8.11 Accounts 30

8.12 Indebtedness 30

8.13 Loans 30

Section 9. DEFAULT 30

9.1 Event of Default 30

9.2 Acceleration 32

9.3 Remedies 32

9.4 Waiver 33

Section 10. MISCELLANEOUS 33

10.1 Term; Termination 33

10.2 Indemnification 34

10.3 Additional Obligations 34

10.4 LIMITATION OF LIABILITY 34

10.5 Alteration/Waiver 35

10.6 Severability 35

10.7 One Loan 35

10.8 Additional Collateral 36

10.9 No Merger or Novations 36

10.10 Paragraph Titles 36

10.11 Binding Effect; Assignment 36

10.12 Notices; E-Business Acknowledgment 36

10.13 Counterparts 38

10.14 ATTACHMENT A MODIFICATIONS 38

10.15 SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW 38

10.16 JURY TRIAL WAIVER 39

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