<PAGE>

                                                                    EXHIBIT 10.3

                            COMPUCOM SYSTEMS, INC.

               INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT

                               Table of Contents

<TABLE>
<CAPTION>
<S>                                                                                                         <C>
Section 1.  DEFINITIONS; ATTACHMENTS                                                                                          1
1.1.   Special Definitions                                                                                                    1
1.2.   Other Defined Terms                                                                                                    8
1.3.   Attachments                                                                                                            8
Section 2.  CREDIT LINE/FINANCE CHARGES/OTHER CHARGES                                                                         8
2.1.   Credit Line                                                                                                            8
2.2.   Product Advances                                                                                                       8
2.3.   A/R Advances                                                                                                           9
2.4.   Finance and Other Charges                                                                                             10
2.5.   Customer Account Statements                                                                                           11
2.6.   Shortfall                                                                                                             11
2.7.   Application of Payments                                                                                               11
2.8.   Prepayment and Reborrowing By Customer                                                                                11
Section 3. CREDIT LINE ADDITIONAL PROVISIONS                                                                                 12
3.1.   Ineligible Accounts                                                                                                   12
3.2.   Reimbursement for Charges                                                                                             13
3.3.   Lockbox and Special Account                                                                                           13
3.4.   Collections                                                                                                           13
3.5.   Application of Remittances and Credits                                                                                14
3.6.   Power of Attorney                                                                                                     14
3.7.   Concentration Accounts                                                                                                15
Section 4.  SECURITY -- COLLATERAL                                                                                           15
4.1.   Grant                                                                                                                 15
4.2    Release of Liens and Security Interests; Forbearance from Exercise of Remedies                                        16
4.3.   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                                                                                  18
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                                                                                                        19
6.5.   Locations of Offices, Records and Inventory                                                                           19
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
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                                                     <C>
6.22.   Indebtedness                                                                                                         21
Section 7.  AFFIRMATIVE COVENANTS                                                                                            21
7.1.   Financial and Other Information                                                                                       21
7.2.   Location of Collateral                                                                                                23
7.3.   Changes in Customer                                                                                                   23
7.4.   Corporate Existence                                                                                                   23
7.5.   ERISA                                                                                                                 23
7.6.   Environmental Matters                                                                                                 23
7.7.   Collateral Books and Records/Collateral Audit                                                                         24
7.8.   Insurance; Casualty Loss                                                                                              24
7.9.   Taxes                                                                                                                 25
7.10.   Compliance With Laws                                                                                                 25
7.11.   Fiscal Year                                                                                                          25
7.12.   Intellectual Property                                                                                                25
7.13.   Maintenance of Property                                                                                              25
7.14.   Collateral                                                                                                           25
7.15.   Subsidiaries                                                                                                         26
7.16.   Financial Covenants; Additional Covenants                                                                            26
Section 8.  NEGATIVE COVENANTS                                                                                               26
8.1.   Liens                                                                                                                 26
8.2.   Disposition of Assets                                                                                                 26
8.3.   Corporate Changes                                                                                                     26
8.4.   Guaranties                                                                                                            27
8.5.   Restricted Payments                                                                                                   27
8.6.   Investments                                                                                                           27
8.7.   Affiliate/Subsidiary Transactions                                                                                     27
8.8.   ERISA                                                                                                                 27
8.9.   Additional Negative Pledges                                                                                           28
8.10.   Storage of Collateral with Bailees and Warehousemen                                                                  28
8.11.   Use of Proceeds                                                                                                      28
8.12.   Accounts                                                                                                             28
8.13.   Indebtedness                                                                                                         28
8.14.   Loans                                                                                                                28
8.15  Transaction Documents                                                                                                  28
Section 9.  DEFAULT                                                                                                          28
9.1.   Event of Default                                                                                                      28
9.2.   Acceleration                                                                                                          30
9.3.   Remedies                                                                                                              30
9.4.   Waiver                                                                                                                31
Section 10.  MISCELLANEOUS                                                                                                   31
10.1.   Term; Termination                                                                                                    31
10.2.   Indemnification                                                                                                      31
10.3.   Additional Obligations                                                                                               32
10.4.   LIMITATION OF LIABILITY                                                                                              32
10.5.   Alteration/Waiver                                                                                                    32
10.6.   Severability                                                                                                         32
10.7.   One Loan                                                                                                             32
10.8.   Additional Collateral                                                                                                33
10.9.   No Merger or Novations                                                                                               33
10.10.   Paragraph Titles                                                                                                    33
10.11.   Binding Effect; Assignment                                                                                          33
10.12.   Notices; E-Business Acknowledgment                                                                                  33
10.13.   Counterparts                                                                                                        34
10.14.   ATTACHMENT A MODIFICATIONS                                                                                          34
10.15.   SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW                                                            35
10.16.   JURY TRIAL WAIVER                                                                                                   35
</TABLE>

                                       ii
<PAGE>

                         INVENTORY AND WORKING CAPITAL
                              FINANCING AGREEMENT

     This INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "Agreement") amends
and restates that certain Agreement for Inventory Financing dated September 20,
1996  (as amended from time to time, the "Financing Agreement") and is hereby
made this eleventh day of May, 1999 by and between IBM Credit Corporation, a
Delaware corporation with a place of business at 1500 RiverEdge Parkway,
Atlanta, GA 30328 ("IBM Credit"), and CompuCom Systems, Inc., a Delaware
corporation with a place of business at 7171 Forest Lane, Dallas, TX 75230
("Customer").

                                   WITNESSETH

     WHEREAS, IBM Credit and Customer are parties to that certain Financing
Agreement pursuant to which IBM Credit finances Customer's acquisition of
inventory and equipment;

     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 its working capital requirements,
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 that the Financing Agreement is hereby
amended and restated in its entirety as follows:

                      Section 1.  DEFINITIONS; ATTACHMENTS

1.1.   Special Definitions.  The following terms shall have the following
respective meaning in this Agreement:

"A/R Advance":  any loan or advance of funds made by IBM Credit to or on behalf
of Customer pursuant to Section 2.3 of this Agreement, including, as the context
may require, a WCO Advance, a PRO Advance and a Takeout Advance.

"A/R Advance Date":  the Business Day on which IBM Credit makes an A/R Advance
under this Agreement.

"A/R Advance Term":  shall be the collective or individual reference, as the
context may require, to a PRO Advance Term and a WCO Advance Term.

"A/R Finance Charges":  as defined on Attachment A.

"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, (i)
Product Advances and (ii) A/R Advances.

                                       1
<PAGE>

"Affiliate":  with respect to the Customer, any Person (the "Affiliate"),
excluding Safeguard Scientifics, Inc., E-Certify, Inc. and Global Serve Computer
Services, Ltd., meeting one of the following: (i) at least 10% of the
Affiliate's equity is owned, directly or indirectly, by such Person; (ii) at
least 10% of such Person's equity is owned, directly or indirectly, by the
Affiliate; or (iii) at least 10% of such Person's equity and at least 10% of the
Affiliate'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.

"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.

"Bloomberg": the on-line service provided by Bloomberg Financial Services.

"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, chief financial officer, Treasurer or Controller 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 Customer's Eligible Accounts, the amounts 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 all
of Customer's IBM Credit borrowing activity during a specified period and the
total amount of Customer's Borrowing Base as well as Customer's Outstanding A/R
Advances, 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 or A/R Advance Term, whichever is applicable, expires on the
first through tenth of such calendar month; (2) the fifteenth day of a calendar
month if the Product Financing Period or A/R Advance Term, whichever is
applicable, 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
or A/R Advance Term, whichever is applicable, expires on the twenty-first
through the last day of such calendar month.

                                       2
<PAGE>

"Compliance Certificate":  a certificate substantially in the form of Attachment
C.

"Concentration Accounts": shall mean an Eligible Account that, individually, or
when aggregated with all other outstanding Accounts of the same Account debtor
and such Account debtor's Affiliates, constitute more than five percent (5%) of
the net outstanding balance of all Eligible Accounts of the Customer then
outstanding for all Account debtors.

"Concentration Account Debtor": shall mean, at any time, any Account debtor
obligated to Customer with respect to, or on account of, a Concentration
Account.

"Credit Facilities":  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.

"Final Trust Termination Date":  as defined in Section 12.01 of the Pooling and
Servicing Agreement.

"Financial Statements":  the consolidated balance sheet (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.

                                       3
<PAGE>

"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 of 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.

"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.

"LIBOR": as of the date of determination, the thirty-day average of the one-
month (01M) London Interbank Offering Rate as published in Bloomberg for the
previous calendar month.

"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 Facilities
and (2) the Borrowing Base at such time.

"Note": the promissory note made by CSI Funding, Inc. pursuant to the
Receivables Contribution and Sale Agreement in favor of CompuCom Systems, Inc.
dated May 7, 1999 in the original principal amount of $_______________.

                                       4
<PAGE>

"Notice":  as defined in Section 5.1(M) of this Agreement.

"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 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.

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

"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) the unpaid amount of any finance charge, fee, expense or other amount
related to Advances charged to Customer's account with IBM Credit pursuant to
this Agreement.

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

"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) the unpaid amount of any finance charge, fee, expense or
other amount related to Product Advances charged to Customer's account with IBM
Credit pursuant to this Agreement.

"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 Investments": as set forth in Attachment A.

"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;

                                       5
<PAGE>

(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 $3,000,000 (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.

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

                                       6
<PAGE>

"Pooling and Servicing Agreement" : that certain Pooling and Servicing
Agreement, as amended, modified or supplemented from time to time, by and among
CompuCom Systems, Inc., CSI Funding, Inc. and Norwest Bank Minnesota, National
Association, dated as of May 7, 1999.

"Prepayment Fee": as defined in Attachment A.

"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 & 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.

"PRO Advance":  an A/R Advance, with a PRO Advance Term, made by IBM Credit to
itself on behalf of Customer to repay all or a portion of a Product Advance that
is due and payable.

"PRO Advance Term":  for each PRO Advance, a period, in increments of ten days
as specified by Customer in the Request for A/R Advance with respect to such PRO
Advance, but in no event in excess of thirty days, commencing on the A/R Advance
Date for such PRO Advance.

"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, including any such advance made or
committed to be made as of the date hereof pursuant to the Financing Agreement.

"Product Financing Charge":  as defined on Attachment A.

"Product Financing Period":  for each Product Advance, a period of days equal to
that set forth in Attachment A from time to time, commencing on the invoice date
of such Product Advance.

"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.

"Receivables": as defined in Annex X to the Pooling and Servicing Agreement.

"Receivables Facility":  the transactions evidenced and/or effectuated by the
Transaction Documents.

"Receivables Contribution and Sale Agreement":  that certain Receivables
Contribution and Sale Agreement, as amended, modified or supplemented from time
to time, among CompuCom Systems, Inc., as Seller and initial Servicer, and CSI
Funding, Inc., as Buyer, dated as of May 7, 1999.

"Related Rights":  as defined in the Receivables Contribution and Sale
Agreement.

"Released Liens":  as defined in Section 4.2 of this Agreement.

"Request for A/R Advance": as defined in Section 2.3.

                                       7
<PAGE>

"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.

"Securities and Note Pledge Agreement":  that certain Securities and Note Pledge
Agreement by and between IBM Credit and Customer delivered to IBM Credit in
accordance with Section 5.1(O) of this Agreement.

"Servicing Fee":  as defined in Section 3.02 of the Pooling and Servicing
Agreement.

"Shortfall Amount":  as defined in Section 2.6.

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

"Subsidiary":  with respect to any Person, any corporation excluding Safeguard
Scientifics, Inc. 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.

"Takeout Advance":  upon request by Customer, an A/R Advance made, only on the
Closing Date, to existing creditors of Customer on behalf of Customer, in an
amount sufficient to discharge Customer's indebtedness to such creditor.

"Transaction Documents":  as defined in Annex X to the Pooling and Servicing
Agreement including, without limitation, the Pooling and Servicing Agreement,
any supplement thereto, and the Receivables Contribution and Sale Agreement.

"Transferor Collection Subaccount":  as defined in Section 4.02(a) of the
Pooling and Servicing Agreement.

"Trust Assets":  as defined in Section 2.01 of the Pooling and Servicing
Agreement.

"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.

"Unused Facility Fee": as defined in Attachment A.

"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).

"WCO Advance":  an A/R Advance, with a WCO Advance Term.

"WCO Advance Term":  for each WCO Advance, a period of one hundred eighty (180)
days commencing on the A/R Advance Date for such WCO Advance.

1.2.   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.

                                       8
<PAGE>

1.3.   Attachments.  All attachments, exhibits, schedules and other addenda
hereto, including, without limitation, Attachment A and Attachment B, are
specifically incorporated herein and made a part of this Agreement.

             Section 2.  CREDIT LINE/FINANCE CHARGES/OTHER CHARGES

2.1.   Credit Facilities.  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 (x) the date on which this Agreement is terminated pursuant to
Section 10. and (y) the date on which IBM Credit terminates the Credit
Facilities pursuant to Section 9., IBM Credit agrees to extend to the Customer
credit lines ("Credit Facilities") in the amounts 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
Maximum Advance Amount.  Notwithstanding any other term or provision of this
Agreement, IBM Credit may, at any time and from time to time, in its sole
discretion (x) temporarily increase the amount of the Credit Facilities above
the amounts set forth in Attachment A and decrease the amount of the Credit
Facilities back to the amount of the Credit Facilities 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  Facilities.

2.2.   Product Advances.  (A)  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 (as defined under WITNESSETH).
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 such notice to be given as soon as possible after IBM Credit decides
not to include such supplier as an Authorized Supplier, cease to include a
supplier as an Authorized Supplier.

     (B) 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. Customer may, at its option, repay each Product Advance by requesting
IBM Credit to apply all or any part of the principal amount of an A/R Advance to
the Outstanding Product Advances.  Customer's request for such application shall
be made in accordance with Section 2.  When so requested and subject to the
terms and conditions of this Agreement, IBM Credit shall apply the amount so
requested to the amounts due in respect of the Outstanding Product Advances.
Nothing contained herein shall relieve Customer of its obligation to repay
Product Advances when due.  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 and payable in
accordance with the terms of this Agreement, at a per annum rate equal to the
lesser of (a) the finance charge set forth in Attachment A to this Agreement as
the "Product Financing Charge" and (b) the highest rate from time to time
permitted by applicable law.

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.

                                       9
<PAGE>

     (C) Customer acknowledges that IBM Credit does not warrant the Collateral.
Customer shall be obligated to pay IBM Credit in full even if the Collateral is
defective or fails 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.

     (D) 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 which application by IBM Credit shall not be
unreasonably withheld.

     (E) 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.

     (F) 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
Collateral for any reason whatsoever, including, without limitation, the
condition of the Collateral, any misrepresentation made about the Collateral 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.


2.3.   A/R Advances.  (A)  Whenever Customer shall desire IBM Credit to provide
an A/R Advance, Customer shall deliver to IBM Credit written notice of
Customer's request for such an Advance ("Request for A/R Advance").  For any
requested A/R Advance pursuant to which monies will be disbursed to Customer or
any Person other than IBM Credit, a Request for A/R Advance shall be delivered
to IBM Credit on or prior to 12:00 p.m. (eastern time) on the Business Day of
the requested A/R Advance Date.  The Request for A/R Advance shall specify (i)
the requested A/R Advance Date; (ii) the amount of the requested A/R Advance;
(iii) whether such A/R Advance is a WCO Advance or a PRO Advance; (iv) if
applicable, the PRO Advance Term for such A/R Advance; (v) for each PRO Advance,
the month, day and year of the Common Due Date, as set forth in Customer's
applicable billing statement from IBM Credit, for the Product Advance to which
the PRO Advance is to be applied; and (vi) if applicable, the amount of the
requested A/R Advance that should be applied to the Outstanding Product Advances
(provided that all PRO Advances shall be applied to Outstanding Product
Advances).  Customer may deliver a Request for A/R Advance via facsimile.  Any
Request for A/R Advance delivered to IBM Credit shall be irrevocable.
Notwithstanding any other provision of this Agreement, Customer shall not (i)
request more than one PRO Advance in respect of any Product Advance; and (ii)
request a PRO Advance for any Common Due Date on which Customer will take a
discount offered by IBM Credit for invoice amounts paid in full within fifteen
days of the invoice date under IBM Credit's High Turnover Option ("HTO")
Program.

     (B) Subject to the terms and conditions of this Agreement, on the A/R
Advance Date specified in a Request for A/R Advance, IBM Credit shall make the
principal amount of each A/R Advance available to the Customer in immediately
available funds to an account maintained by Customer (or in the case of a

                                       10
<PAGE>

Takeout Advance, as directed by Customer).  If IBM Credit is making an A/R
Advance hereunder on a day on which Customer is to repay all or any part of an
Outstanding Advance (or any other amount owing hereunder), IBM Credit shall
apply the proceeds of the A/R Advance to such repayment and only an amount equal
to the difference, if any, between the amount of the A/R Advance and the amount
being repaid shall be made available to Customer as provided in the immediately
preceding sentence.

     (C) Each A/R Advance shall accrue a finance charge on the Average Daily
Balance thereof, from and including the date of each A/R Advance to and
including the date such A/R Advance is due and payable in accordance with the
terms of this Agreement, at a per annum rate equal to the lesser of (a) the
finance charge set forth in Attachment A to this Agreement under the caption
"A/R Finance Charge" for such type of A/R Advance, and (b) the highest rate from
time to time permitted by applicable law.  If it is determined that amounts
received from the Customer were in excess of such highest rate, then the amount
representing such excess shall be considered reductions to principal of
Advances.

     (D) Unless otherwise due and payable at an earlier date, the unpaid
principal amount of each A/R Advance, other than a Takeout Advance, shall be due
and payable on the applicable Common Due Date.  Unless otherwise notified by
Customer in writing prior to the day the principal amount of any WCO Advance
becomes due and payable, the Customer shall be deemed to have provided IBM
Credit with a Request for A/R Advance requesting a WCO Advance on the day such
principal amount is due and payable in an amount equal to the unpaid principal
amount of the WCO Advance so due.  Subject to the terms and conditions of this
Agreement, the principal amount of such WCO Advance shall automatically renew
for an additional WCO Advance Term. Notwithstanding any other provision of this
Agreement, a Takeout Advance may only be requested on the Closing Date and such
Takeout Advance shall be limited to an amount sufficient to discharge the
indebtedness that is the subject of a Takeout Advance.

Unless otherwise agreed in writing, a Takeout Advance shall be due pursuant to
the Schedule of Repayments in Attachment D to this Agreement.

2.4.   Finance and Other Charges.  (A)  Finance charges for an Advance for a
calendar month shall be equal to (i) one twelfth (1/12) of the applicable
Product  Financing Charge or A/R Finance 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 2.4 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).

     (B) 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 Advances.

     (C) 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 Advances.

     (D) If any amount owed under this Agreement, including, without limitation,
any Advance, is not paid when due (whether at maturity, by acceleration or
otherwise), the unpaid amount thereof will bear

                                       11
<PAGE>

a late charge from and including the day after such Advance 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 2.6 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.

2.5.   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.

2.6.   Shortfall.  If, on any date, the Outstanding Advances shall exceed the
Maximum Advance Amount (such excess, the "Shortfall Amount"), then the Customer
shall on such date prepay the Outstanding Advances in an amount equal to such
Shortfall Amount.

2.7.   Application of Payments.  The Customer hereby agrees that all checks and
other instruments delivered to IBM Credit on account of Customer's Obligations
shall constitute conditional payment until such items are actually collected by
IBM Credit. Upon the occurrence of an Event of Default which is neither waived
nor cured within the times specified herein, 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. The Obligations of Customer shall not be affected by any dispute
Customer may have with any manufacturer, distributor or Authorized Supplier.
Notwithstanding the immediately preceding sentence, any delay in payment
resulting from Customer's using a process, approved by IBM Credit and in effect
at the time of such delayed payment, for requesting an adjustment related to an
invoice for Products, shall be governed by such approved process.

2.8.   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.

                                       12
<PAGE>

                  Section 3. CREDIT LINE ADDITIONAL PROVISIONS

3.1.   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:

     (A) 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;

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

     (C) 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;

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

     (E) Accounts arising from consignment sales;

     (F) 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;

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

         (i)  the Account debtor is not a commercial entity, or

         (ii) the Account debtor is not a resident of the United States;

     (H) Accounts payable by any Account debtor to the extent Customer is liable
for goods sold or services rendered by such Account debtor to Customer;

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

     (J) 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;

     (K) Accounts which are progress payment accounts or contra accounts;

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

     (M) 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;

     (N) Accounts that are not payable in US dollars;

                                       13
<PAGE>

     (O) 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;

     (P) Accounts arising from the sale or lease of goods which are billed to
any Account debtor but have not yet been shipped by Customer unless there is (i)
written evidence that such Account debtor has agreed to pay for the goods and
requested that Customer retain goods in its possession and (ii) such goods are
kept segregated from all other goods in Customer's possession;

     (Q) 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;

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

     (S) 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;

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

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

     (V) Accounts arising from bartered transactions;

     (W) Accounts arising from incentive payments, rebates, discounts, credits,
warranty claims, and refunds from a supplier; and

     (X) Any and all other Accounts that IBM Credit deems, in its reasonable and
good faith credit judgment consistent with its normal business practice, to be
ineligible.

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

3.2.   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 (each as defined in Section 3.3) and with respect to remittances
of proceeds of the Advances hereunder.

3.3.   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

                                       14
<PAGE>

shall agree that, upon notice from IBM Credit, which IBM Credit shall be
entitled to give only if a continuing Event of Default is in existence,
disbursements from the Special Account shall be made only as IBM Credit shall
direct.

3.4.   Collections.  (A)  Customer agrees that (i) all payments due from Account
debtors with respect to Accounts not conveyed by Customer to CSI Funding, Inc.
pursuant to the Receivables Contribution and Sale Agreement, (ii) any and all
distributions or transfers of cash due from CSI Funding, Inc.,  (iii) incentive
payments, rebates, discounts, credits, warranty claims and refunds from
suppliers, (iv)  Servicing Fee, and (v) any and all amounts paid from the
Transferor Collection Subaccount shall be remitted directly to a Lockbox,
provided however, that to the extent any amount paid from the Transferor
Collection Subaccount is allocable to CSI Funding, Inc., upon the occurrence of
an Event of Default, such amount shall be applied first to the payment of the
Note and the balance, if any, shall be paid to CSI Funding, Inc.  Customer shall
instruct all Persons responsible for payment of any of the foregoing 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 foregoing into
the Special Account(s) or permit any commingling of funds with such remittances
in any Lockbox or Special Account.

(B)  Without limiting the Customer's foregoing obligations, if, at any time,
Customer receives a remittance of the kind described in Section 3.4(A), 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 of the kind described in Section 3.4(A), 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.

(C)  Customer agrees that on and after the Final Trust Termination Date, IBM
Credit shall be a third-party beneficiary of any and all Lock-Box Agreements (as
such term is defined in Section 3.01(i)(D) of the Pooling and Servicing
Agreement, and shall cause the Transaction Documents to be amended to reflect
IBM Credit's status as a third-party beneficiary of such Lock-Box Agreements.

3.5.   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.

3.6.   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:

     (A) 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;

     (B) 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:

                                       15
<PAGE>

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

     (D) settle, adjust, compromise, extend or renew any Accounts;

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

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

     (G) discharge and release any Accounts;

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

     (I) prepare, file and sign Customer's 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;

     (J) 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;

     (K) 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;

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

     (M) 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;

     (N) 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

     (O) 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.

3.7.   Concentration Accounts.  Without limiting IBM Credit's other rights, IBM
Credit reserves the right to, from time to time in its reasonable and good faith
credit judgment consistent with normal business practice, modify the percentage
of the amount of Customer's Concentration Accounts used in calculating
Customer's Borrowing Base or eliminate Concentration Accounts in calculating
Customer's Borrowing Base.

                       Section 4.  SECURITY -- COLLATERAL

                                       16
<PAGE>

4.1.   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 Customer's right, title and interest in and to the following
property, whether now owned or hereafter acquired or existing and wherever
located:

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

     (B) 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;

     (C) general intangibles;

     (D) 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

     (E) 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". 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.

4.2  Release of Liens and Security Interests; Forbearance from Exercise of
Remedies.  Notwithstanding anything to the contrary herein, and only until the
Final Trust Termination Date, IBM Credit hereby releases and discharges its
liens and security interests, now or hereafter arising, insofar as such liens
and/or security interests cover Trust Assets (collectively, such released liens
and security interests, the "Released Liens").  Except for the Released Liens
described above being released herein, the liens and security interests created
and described herein shall remain in full force and effect as to all other
property encumbered hereby, and after the Final Trust Termination Date, the
property covered by the Released Liens shall be subject to the liens and
security interests created hereby, and IBM Credit may file any UCC-1 financing
statement or similar documents to evidence and/or effectuate such liens and
security interests.

     Until the Final Trust Termination Date, the term "Collateral" as defined in
Section 4.1 hereof shall not include the Trust Assets.  IBM Credit covenants and
agrees that it will not exercise any of its rights under the Securities and Note
Pledge Agreement prior to the Final Trust Termination Date. IBM Credit further
covenants and agrees that prior to the date which is one year and one day after
all Investor Certificates (as such term is defined in the Pooling and Servicing
Agreement) are paid in full it will not  institute against, or join any other
Person in instituting against, CSI Funding, Inc. or the Trust (as such term is
defined in the Pooling and Servicing Agreement) any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceedings
under the laws of the United States or any state of the United States. IBM
Credit further covenants and agrees that it will not file any UCC-1 financing
statements or other similar documents to evidence any interest in the Trust
Assets until the Final

                                       17
<PAGE>

Trust Termination Date and that it will hereafter execute and deliver any and
all other or additional documents, instruments or other papers (including
without limitation Uniform Commercial Code filings) as Customer, or its
successors and assigns, may reasonably request in order to further evidence
and/or effectuate the release of liens and security interest covering the Trust
Assets.

4.3.   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 reasonably 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 Credit's security
interests in the Collateral.

                        Section 5.  CONDITIONS PRECEDENT

5.1.   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:

     (A) this Agreement executed and delivered by Customer and IBM Credit;

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

     (C) 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 a corporation organized under the laws of the
State of its 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 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 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;

     (D) 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 except where the failure to qualify would not reasonably
be expected to cause a Material Adverse Effect;

     (E) 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;

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

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

                                       18
<PAGE>

     (H) 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;

     (I) 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;

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

     (K) certified copies of the Transaction Documents and any other principal
documents executed in connection with the Receivables Facility provided however
that the certified copies of the Transaction Documents may be delivered to IBM
Credit on or before May 21, 1999;

     (L) copies of the opinion(s) delivered by Morgan Lewis & Bockius on May
___ 1999 in connection with the Receivables Facility and a letter from Morgan
Lewis & Bockius  permitting IBM Credit to rely on such opinions as if IBM Credit
was an original addressee thereof;

     (M) a notice in form and substance satisfactory to IBM Credit signed by
Customer and CSI Funding, Inc. to the Norwest Bank Minnesota, National
Association, as Trustee, which notice shall provide that, effective one Business
Day after delivery of such notice,  the Customer shall cease selling and CSI
Funding shall cease buying the Receivables and the Related Rights pursuant to
Article I of Receivables Contribution and Sale Agreement (the "Notice");

     (N) the Securities and Note Pledge Agreement executed and delivered by
Customer to IBM Credit: and

     (O) 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.

5.2.   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:

     (A) 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, except those representations and warranties
which are stated to be as of a specific date;
     (B) 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;

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

     (D) 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) or 2.3
(D)) for an Advance hereunder and the receipt (or deemed receipt) by the
Customer of the proceeds of any Advance hereunder shall be deemed to be a

                                       19
<PAGE>

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:

6.1.   Organization and Qualifications.  Customer and each of its Subsidiaries
(i) is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (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.

6.2.   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.

6.3.   No Conflicts.  The execution, delivery and performance by Customer of
this Agreement and each of the Other Documents (i) are within its corporate
power; (ii) are duly authorized by all necessary corporate action; (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.

6.4.   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.

6.5.   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, and all of its chattel paper (other than the chattel paper delivered
to IBM Credit pursuant to Section 7.14(E)) and records of Accounts, 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

                                       20
<PAGE>

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.

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

6.7.   Organization.  All of the outstanding capital stock of Customer has been
validly issued, is fully paid and nonassessable.

6.8.   No Judgments or Litigation.  Except as set forth on Attachment B, no
judgments, orders, writs or decrees are outstanding against Customer nor is
there now pending or, to the best of Customer's knowledge after due inquiry,
threatened, any litigation, contested claim, investigation, arbitration, or
governmental proceeding by or against Customer which, in Customer's judgment,
would reasonably be expected to cause a Material Adverse Effect.

6.9.   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 which, in Customer's judgment, would reasonably be
expected to cause a Material Adverse Effect.

6.10.   Labor Matters.  Except as set forth on any notice provided by Customer
to IBM Credit pursuant to Section 7.1(G) 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.

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

6.12.   ERISA.  To the best of Customer's knowledge 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).

6.13.   Compliance with Environmental Laws.    Except as otherwise disclosed in
Attachment B and to the best of Customer's knowledge:

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

                                       21
<PAGE>

     (B) (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 Substances 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.

6.14.   Intellectual Property.  To the best of Customer's knowledge, 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.

6.15.   Licenses and Permits.  To the best of Customer's knowledge, 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.

6.16.   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.

6.17.   Taxes and Tax Returns.  To the best of Customer's knowledge, 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.

6.18.   Status of Accounts.  Each Account is based on an actual and bona fide
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.

                                       22
<PAGE>

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.

6.19.   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.

6.20.   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 Other Document, 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.

6.21.   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.

6.22.   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:

7.1.   Financial and Other Information.   Customer shall cause the following
information to be made available to IBM Credit within the following time
periods:

     (A) as soon as available and in any event within ninety-one (91) days after
the end of each fiscal year of Customer (i) audited Financial Statements as of
the close of the fiscal year and for the fiscal year, together with a comparison
to the Financial Statements for the prior year, in each case accompanied by (a)
either an opinion of the Auditors without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit or, if so qualified, an opinion which shall be in scope and substance
reasonably satisfactory to IBM Credit, (b) such Auditors' "Management Letter" to
Customer, if any, and (ii) a Compliance Certificate along with a schedule, in
substantially the form of Attachment C hereto, of the calculations used in
determining, as of the end of such fiscal year, whether Customer is in
compliance with the financial covenants set forth in Attachment A;

     (B) as soon as available and in any event within forty-six (46) days after
the end of each fiscal quarter of Customer (i) Financial Statements as of the
end of such period and for the fiscal year to date, together with a comparison
to the Financial Statements for the same periods in the prior year, all in
reasonable detail and duly certified (subject to normal year-end audit
adjustments and except for the absence of footnotes) by the chief executive
officer, chief financial officer, Treasurer or Controller of Customer as having
been prepared in accordance with GAAP; and (ii) a Compliance Certificate along
with a schedule, in substantially the form of Attachment C hereto, of the
calculations used in determining, as of the end of such fiscal quarter, whether
Customer is in compliance with the financial covenants set forth in Attachment
A;

                                       23
<PAGE>

     (C) 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;

     (D) 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, chief financial officer, Treasurer or Controller of Customer specifying
the nature thereof and the Customer's proposed response thereto, each in
reasonable detail;

     (E) 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, chief financial officer, Treasurer or Controller of
Customer specifying the nature thereof and the Customer's proposed response
thereto, each in reasonable detail;

     (F) promptly after Customer obtains knowledge that (i) any order, judgment
or decree in excess of $3,000,000 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, chief financial officer, Treasurer
or Controller of Customer specifying the nature thereof and the Customer's
proposed response thereto, each in reasonable detail;

     (G) 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, chief financial officer, Treasurer or Controller of Customer
specifying the nature thereof and the Customer's proposed response thereto, each
in reasonable detail;

     (H) 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;

     (I) by the fifth (5th) 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;

     (J) within five (5) days after the same are sent, copies of all Financial
Statements and reports which Customer sends to its stockholders, and within five
(5) days after the same are filed, copies of 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; and

     (K) immediately upon issuance or receipt, as the case may be, copies of all
notices, reports, certificates or schedules issued or received by Customer or
CSI Funding, Inc. in accordance with the Transaction Documents.

Each certificate, schedule and report provided by Customer to IBM Credit shall
be signed by an authorized officer of Customer, and 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

                                       24
<PAGE>

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.

7.2.   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.

7.3.   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
corporate 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 Other Document limiting actions of the
type described in this Section.

7.4.   Corporate Existence.  Customer shall (A) maintain its corporate
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 those in the information technology industry unless otherwise
permitted in writing by IBM Credit and (C) comply with all Requirements of Law.

7.5.   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 (as defined in Section 6.12 of this Agreement) 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,
Treasurer or Controller of Customer 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.

7.6.   Environmental Matters.  (A)  Customer and any other Person under
Customer's control (including, without limitation, agents and Affiliates under
such control) shall (i) 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.

                                       25
<PAGE>

7.7.   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 Accounts.

     (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) as reasonable and
appropriate given the particular circumstances existing at the time, inspecting
and/or copying (at Customer's expense) any and all records pertaining thereto,
(iii) as reasonable and appropriate given the particular circumstances existing
at the time, discussing the affairs, finances and business of Customer with any
officers, employees and directors of Customer or with the Auditors and (iv)
verifying Eligible Accounts and other Collateral.  Customer also agrees to
provide IBM Credit with such reasonable information and documentation that IBM
Credit deems necessary to conduct the foregoing activities, including, without
limitation, reasonably requested samplings of purchase orders, invoices and
evidences of delivery or other performance.

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 therein.

7.8.   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 mortgagee 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 Product Advances first, then to the Outstanding A/R
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

                                       26
<PAGE>

or cancelled 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
such 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.

7.9.   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.

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

7.11.   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.

7.12.   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.

7.13.   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.

7.14.   Collateral.  Customer shall:

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

     (B) 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");

     (C) 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;

     (D) 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;

     (E) 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

                                       27
<PAGE>

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;

     (F) use commercially reasonable efforts to collect all Accounts owed;

     (G) promptly notify IBM Credit of any material 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 any encumbrances of any kind whatsoever;

     (H) 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;

     (I) 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

     (J) 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.

7.15.   Subsidiaries.  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 such Subsidiaries of Customer to comply with Sections 7 and 8 of this
Agreement, as if such sections applied directly to such Subsidiaries.

7.16.   Financial Covenants; Additional Covenants.  Customer acknowledges and
agrees that Customer shall maintain the financial covenants and other covenants
set forth in the attachments, exhibits and other addenda incorporated in this
Agreement.

                         Section 8.  NEGATIVE COVENANTS

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

8.1.   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.

8.2.   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

                                       28
<PAGE>

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.

8.3.   Corporate 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.

8.4.   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.

8.5.   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) 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)
provided, however that Customer may declare and pay regularly scheduled
dividends on it preferred stock held by Safeguard Scientifics, Inc. further
provided that such declaration or payment shall not create an Event of Default .

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

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

     (B) 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;

     (C) 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; and

     (D) commercial paper of any corporation 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.

8.7.   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.

                                       29
<PAGE>

8.8.   ERISA.  The Customer will not (A) terminate any Plan so as to incur a
material liability to the PBGC (as defined in Section 6.12 of this Agreement),
(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.

8.9.   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.

8.10.   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.

8.11.   Use of Proceeds.  Without the prior written consent of IBM Credit which
consent shall not be unreasonably withheld or delayed,  the Customer shall not
use any portion of the proceeds of any Advances other than to acquire Products
from Authorized Suppliers and for its general working capital requirements and
capital expenditures which shall not exceed the aggregate amount of $15,000,000
in any single fiscal year.

8.12.   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 terms 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 Customer's Accounts at any time.

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

8.14.   Loans. The Customer will not make any loans, advances, contributions or
payments of money or goods to any Subsidiary, Affiliate or parent corporation or
to any officer, director or stockholder of Customer or of any such corporation
(except for compensation for personal services actually rendered), except for
transactions expressly authorized in this Agreement, provided, however, that
Customer may make loans to officers and further provided that the aggregate loan
amount outstanding shall at no time exceed $7,000,000.

                                       30
<PAGE>

8.15  Transaction Documents.  The Customer shall not amend, modify or supplement
any of the Transaction Documents or enter into any new agreement with respect to
the Receivables Facility without the prior written consent of IBM Credit, which
consent shall not be unreasonably withheld.

                              Section 9.  DEFAULT

9.1.   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:

     (A) The failure to make timely payment of the Obligations or any part
thereof when due and payable if such failure shall remain unremedied for five
(5) days after written notice thereof shall have been given to Customer by IBM
Credit or ten (10) days after such payment is due, whichever is earlier, during
which period Customer shall be charged the Delinquency Fee rate set forth in
Attachment A beginning on the day after the date payment was due and including
the date payment is received;

     (B) Customer fails to comply with or observe any term, covenant or
agreement contained in this Agreement or any Other Documents which could
reasonably be expected to have a Material Adverse effect if such failure shall
remain unremedied for five (5) days or such other period of time as IBM Credit
may agree to in writing;

     (C) 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;

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

     (E) 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 sixty (60)
days within which to discharge any involuntary petition for bankruptcy or
similar proceeding;

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

     (G) The entry of any judgment against Customer or any guarantor in an
amount in excess of $3,000,000 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 supersedeas 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;

     (H) 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;

                                       31
<PAGE>

     (I) 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;

     (J) There issues 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;

     (K)  Customer suspends business;

     (L) The occurrence of any event or condition that permits the holder of any
material 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;

     (M) 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;

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

     (O) 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;

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

     (Q) the occurrence of an Early Amortization Event as defined in the Pooling
and Servicing Agreement.

9.2.   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(E) 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 Facilities
hereunder.

9.3.   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 party 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 Accounts, or IBM Credit
may use (at the expense of the Customer) such of the

                                       32
<PAGE>

supplies or space of the Customer at Customer's place of business or otherwise,
as may be necessary to properly administer and control the Accounts 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; and (v) deliver the Notice to Norwest Bank Minnesota, as Trustee.

     (B) Upon the occurrence and during the continuance of any 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 reasonable 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.

9.4.   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

                                       33
<PAGE>

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

10.1.   Term; Termination.  (A)  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 it intends 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.

     (B) 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.

10.2.   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.

10.3.   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.

10.4.   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

                                       34
<PAGE>

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.

10.5.   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 Other Document 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.

10.6.   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.

10.7.   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.

10.8.   Additional Collateral.  All monies, reserves and proceeds received or
collected by IBM Credit with respect to Accounts and other property of the
Customer in possession of IBM Credit at any time or times 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.

10.9.   No Merger or Novations.    (A)  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 the Financing Agreement and any Other Document. Customer

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<PAGE>

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 the Financing Agreement or
any Other Document.

     (B) 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.

10.10.   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.

10.11.   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.

10.12. Notices; E-Business Acknowledgment.  (A)  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                  CompuCom Systems, Inc.
      1500 RiverEdge Parkway                  7171 Forest Lane
      Atlanta, GA 30328                       Dallas, TX  75230
      Attention:  Region Loan Manager         Attention: Treasurer or Controller
      Facsimile:  770 / 644 - 4826            Facsimile:  972 / 856 - 5395

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

     (B) (i) 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

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<PAGE>

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.

(ii) 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:

(PLEASE PRINT)
Name of Customer's Designated Central Contact Authorized to Receive IDs and
Passwords:
________________________________________________________________________________
e-mail Address: ________________________________________________________________
Phone Number: __________________________________________________________________

10.13.   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.

10.14.   ATTACHMENT A MODIFICATIONS.  IBM Credit may modify the Product
Financing Period set forth in Attachment A from time to time if on at least two
occasions during any three-month period a Shortfall Amount has become due and
payable and may modify the Collateral Insurance Amount set forth in Attachment A
from time to time, in each case, 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.

10.15.   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:

     (A) SUBMITS ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND ANY OTHER DOCUMENT, 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.

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<PAGE>

     (B) 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.

     (C) 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;

     (D) 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.

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

10.16.   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 to be affixed hereto as of the date first written above.

<TABLE>
<CAPTION>
IBM CREDIT CORPORATION                                                   CompuCom Systems, Inc.
<S>                                                      <C>

By: _____________________________________                By: _____________________________________

Print Name: ______________________________               Print Name: ______________________________

Title: ____________________________________              Title: ____________________________________
</TABLE>

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