ACKNOWLEDGMENT, WAIVER AND AMENDMENT
                                       TO
                               FINANCING AGREEMENT


     This  ACKNOWLEDGMENT,  WAIVER AND AMENDMENT  ("Amendment") TO THE INVENTORY
AND  WORKING  CAPITAL  FINANCING  AGREEMENT  is made  as of May 15,  2000 by and
between  Information   Technology   Services,   Inc.,  a  New  York  corporation
("Customer"), and IBM Credit Corporation, a Delaware Corporation ("IBM Credit").

                                    RECITALS:

     WHEREAS,  Customer and IBM Credit have entered into that certain  Inventory
or Working  Capital  Financing  Agreement  dated as of  September  24,  1996 (as
amended, supplemented or otherwise modified from time to time, the "Agreement");

     WHEREAS,  Customer is in default of one or more of its financial  covenants
contained in the Agreement (as more specifically explained in Section 2 hereof);
and

     WHEREAS,  IBM  Credit is  willing  to waive  such  defaults  subject to the
conditions set forth below.

                                    AGREEMENT

     NOW, THEREFORE,  in consideration of the premises set forth herein, and for
other good and valuable  consideration,  the value and  sufficiency  of which is
hereby  acknowledged,  the parties hereto agree that the Agreement is amended as
follows:

Section 1. Definitions. All capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Agreement.

Section 2. Acknowledgment.

     Customer  acknowledges that the financial covenants set forth in Attachment
A to the Agreement are  applicable to the financial  results of Customer for the
fiscal  quarter ending March 31, 2000 and Customer was required to maintain such
financial  covenants  at all times.  Customer  further  acknowledges  its actual
attainment was as follows:
<TABLE>
<CAPTION>

             Covenant                                      Covenant Requirement                     Covenant Actual
             --------                                      --------------------                     ---------------

<S>          <C>                                           <C>                                      <C>
(a)          Revenue on an Annual Basis to Working         Greater than Zero and
             Capital                                       Equal to or Less than 15.00:1.00         5.55:1.00

(b)          Net Profit after Tax to Revenue               Equal to or Greater than
                                                           $350,000                                 -$1,244,000

(c)          Total Liabilities to Tangible Net Worth       Greater than Zero and
                                                           Equal to or Less than 3.00:1.00          0.59:1.00
</TABLE>

Section 3.  Waivers to  Agreement.  IBM Credit  hereby  waives the  defaults  of
Customer  with the terms of the  Agreement  to the extent such  defaults are set
forth in Section 2 hereof.

Section 4. Amendment. The Agreement is hereby amended as follows:

A. Attachment A to the Agreement is hereby amended by deleting such Attachment A
in its entirety and  substituting,  in lieu thereof,  the  Attachment A attached
hereto. Such new Attachment A shall be effective as of the date specified in the
new Attachment A. The changes contained in the new Attachment A include, without
limitation, the following:

     (a)  A new sub-section (iv) under Borrowing Base:

          (iv) Less an amount  equal to  twenty  percent  (20%) of  outstandings
               under the Credit Line at all times;

     (b)  Credit  Line is  decreased  from  Twenty-Seven  Million  Five  Hundred
          Thousand  Dollars  ($27,500,000)  to  Twenty-Two  Million Five Hundred
          Thousand Dollars ($22,500,000);

     (c)  Customer  shall  be  required  to  maintain  the  following  financial
          percentage(s)  and  ratio(s)  as of the last day of the fiscal  period
          under review by IBM Credit:
<TABLE>
<CAPTION>

         Covenant          Covenant Requirement               Covenant Requirement      Covenant Requirement
         --------          for the Fiscal Quarter             For the Fiscal Quarter    For the Fiscal Year
                           Ending 06/30/00                    Ending 09/30/00           Ending 12/31/00 and at
                           ---------------                    ---------------           all times thereafter
                                                                                        --------------------
<S>    <C>                 <C>                                <C>                       <C>
(i)    Revenue on an       Greater than Zero and Equal        Greater than Zero and     Greater than Zero and
        Annual Basis to    to or Less than 15.00:1.00         Equal to or Less than     Equal to or Less Than
        Working Capital                                       15.00:1.00                15.00:1.00

(ii)   Net Profit after    Equal to or Greater than           Equal to or Greater       Equal to or Greater
        Tax to Revenue     -$500,000                          than -$500,000            than $0

(iii)  Total Liabilities to Greater than Zero and Equal        Greater than Zero and     Greater than Zero and
        Tangible Net        to or Less than 3.00:1.00          Equal to or Less than     Equal to or Less than
        Worth                                                 3.00:1.00                 3.00:1.00
</TABLE>

Section 5. Rights and Remedies. Except to the extent specifically waived herein,
IBM Credit  reserves any and all rights and remedies  that IBM credit now has or
may have in the future with respect to Customer, including any and all rights or
remedies  which it may have in the future as a result of  Customer's  failure to
comply  with  its  financial  covenants  to IBM  Credit.  Except  to the  extent
specifically  waived  herein,  neither  this  Amendment,  any of IBM's  Credit's
actions or IBM's  Credit's  failure to act shall be deemed to be a waiver of any
such rights or remedies.

Section 6. Governing Law. This Amendment shall be governed by and interpreted in
accordance with the laws which govern the Agreement.

Section  7.  Counterparts.  This  Amendment  may be  executed  in any  number of
counterparts,  each  of  which  shall  be an  original  and all of  which  shall
constitute one agreement.

     IN WITNESS  WHEREOF,  this  Amendment has been executed by duly  authorized
representatives of the undersigned as of the day and year first above written.


IBM CREDIT CORPORATION                     INFORMATION TECHNOLOGY SERVICES, INC.

By:  /s/ John Olsen                        By: /s/ Thomas F. Belleau
     --------------                             ---------------------
Print Name: John Olsen                     Print Name: Thomas F. Belleau

Title: Region Loan Manager                 Title: VP - Finance/CFO

<PAGE>




        ATTACHMENT A, EFFECTIVE DATE APRIL 1, 2000 ("IWCF ATTACHMENT A")
              TO INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT
                               ("IWCF AGREEMENT")
                            DATED September 24, 1996


Customer:  Information Technology Services, Inc.

I.       Fees, Rates and Repayment Terms:

     (A)  Credit  Line:   Twenty-Two   Million  Five  Hundred  Thousand  Dollars
          ($22,500,000.00)

     (B)  Borrowing Base:

          (i) 85% of the amount of the  Customer's  Eligible  Accounts as of the
          date of  determination  as  reflected  in the  Customer's  most recent
          Collateral Management Report;

          (ii) a percentage,  determined  from time to time by IBM Credit in its
          sole discretion,  of the amount of Customer's  Concentration  Accounts
          for a  specific  Concentration  Account  Debtor  as  of  the  date  of
          determination  as reflected in the Customer's  most recent  Collateral
          Management  Report;  unless  otherwise  notified  by  IBM  Credit,  in
          writing,  the  percentage  for  Concentration  Accounts for a specific
          Concentration  Account  Debtor shall be the same as the percentage set
          forth in paragraph (i) of the Borrowing Base;

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

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

          (iv) Less an  amount  equal to twenty  percent  (20%) of  outstandings
          under the credit line at all times;

     (C)  Product Financing Charge: Prime Rate

     (D)  Product Financing Period: 90 days

     (E)  Collateral Insurance Amount: Seven Million Dollars ($7,000,000.00)


<PAGE>
                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")


     I.   Fees, Rates and Repayment Terms (continued):

          (F)  A/R Finance Charge:

               (i)  PRO Advance Charge: Prime Rate plus 0.25%

               (ii) WCO Advance Charge: Prime Rate plus 0.25%

          (G)  Delinquency Fee Rate: Prime Rate plus 6.500%

          (H)  Shortfall Transaction Fee: Shortfall Amount multiplied by 0.30%.

          (I)  Free Financing Period  Exclusion Fee: Product Advance  multiplied
               by 0.40%

          (J)  Other Charges:

               (i)  Application Processing Fee: $__N/A ___.00

               (ii) Monthly Service Fee: $ ____1,500.00

               (iii) Closing Fee: $__N/A ___.00

               (iv) Commitment Fee: $__N/A ___.00



<PAGE>
                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")


II.  Bank Account

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

Name of Bank:  The Chase Manhattan Bank

Address:          1 Chase Manhattan Plaza
                  New York, NY  10081

Phone:            (212) 403-5010

Lockbox Address:

Special Account #:         910-1-821826


Name of Bank:

Address:


Phone:

Lockbox Address:

Special Account #:


Name of Bank:

Address:


Phone:

Lockbox Address:

Special Account #:


Name of Bank:

Address:


Phone:

Lockbox Address:

Special Account #:



<PAGE>

                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")

III. Financial Covenants:

Definitions: The following terms shall have the following respective meanings in
this  Attachment A. All amounts shall be determined in accordance with generally
accepted accounting principles (GAAP).

     Consolidated  Net Income  shall mean,  for any  period,  the net income (or
     loss),  after taxes,  of Customer on a  consolidated  basis for such period
     determined in accordance with GAAP.

     Current shall mean within the ongoing twelve-month period.

     Current  Assets  shall mean assets that are cash or expected to become cash
     within the ongoing twelve months.

     Current Liabilities shall mean payment  obligations  resulting from past or
     current   transactions   that   require   settlement   within  the  ongoing
     twelve-month  period.  All indebtedness to IBM Credit shall be considered a
     Current Liability for purposes of determining compliance with the Financial
     Covenants.

     EBITDA shall mean, for any period  (determined  on a consolidated  basis in
     accordance with GAAP), (a) the Consolidated Net Income of Customer for such
     period,  plus (b)  each of the  following  to the  extent  reflected  as an
     expense in the  determination  of such  Consolidated  Net  Income:  (i) the
     Customer's  provisions  for taxes  based on income  for such  period;  (ii)
     Interest Expense for such period;  and (iii)  depreciation and amortization
     of tangible and intangible assets of Customer for such period.

     Fixed  Charges  shall  mean,  for any period,  an amount  equal to the sum,
     without duplication, of the amounts for such as determined for the Customer
     on a consolidated  basis,  of (i) scheduled  repayments of principal of all
     Indebtedness  (as reduced by  repayments  thereon  previously  made),  (ii)
     Interest Expense, (iii) capital expenditures, (iv) dividends, (v) leasehold
     improvement  expenditures,  and (vi) all  provisions  for U.S. and non-U.S.
     Federal, state and local taxes.

     Fixed Charge  Coverage Ratio shall mean the ratio as of the last day of any
     fiscal  period of (i)  EBITDA as of the last day of such  fiscal  period to
     (ii) Fixed Charges.


<PAGE>
                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")


III. Financial Covenants (continued):

     Interest  Expense shall mean,  for any period,  the aggregate  consolidated
     interest  expense of Customer during such period in respect of Indebtedness
     determined  on a  consolidated  basis in accordance  with GAAP,  including,
     without  limitation,   amortization  or  original  issue  discount  on  any
     Indebtedness  and of all fees payable in connection  with the incurrence of
     such  Indebtedness  (to the  extent  included  in  interest  expense),  the
     interest  portion  of any  deferred  payment  obligation  and the  interest
     component of any capital lease obligations.

     Long Term shall mean beyond the ongoing twelve-month period.

     Long Term  Assets  shall mean  assets  that take  longer  than a year to be
     converted  into  cash.  They are  divided  into four  categories:  tangible
     assets, investments, intangibles and other.

     Long Term Debt shall mean payment  obligations of indebtedness which mature
     more than twelve  months from the date of  determination,  or mature within
     twelve  months from such date but are renewable or extendible at the option
     of  the  debtor  to a date  more  than  twelve  months  from  the  date  of
     determination.

     Net Profit after Tax shall mean Revenue  plus all other  income,  minus all
     costs, including applicable taxes.

     Revenue shall mean the monetary  expression of the aggregate of products or
     services  transferred  by an  enterprise  to its  customers  for which said
     customers have paid or are obligated to pay, plus other income as allowed.

     Subordinated  Debt shall mean  Customer's  indebtedness to third parties as
     evidenced by an executed Notes Payable Subordination  Agreement in favor of
     IBM Credit.


<PAGE>

                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")

III. Financial Covenants (continued):

          Tangible Net Worth shall mean:

               Total Net Worth minus:

                    (a)  goodwill,  organizational expenses,  pre-paid expenses,
                         deferred  charges,  research and development  expenses,
                         software   development   costs,   leasehold   expenses,
                         trademarks,  trade names,  copyrights,  patents, patent
                         applications,   privileges,  franchises,  licenses  and
                         rights in any thereof,  and other  similar  intangibles
                         (but not including  contract  rights) and other current
                         and   non-current   assets  as  defined  in  Customer's
                         financial statements; and

                    (b)  all  accounts  receivable  from  employees,   officers,
                         directors, stockholders and affiliates; and

                    (c)  all callable/redeemable preferred stock.

          Total  Assets  shall  mean the total of  current  Assets and Long Term
          Assets.

          Total  Liabilities  shall mean the Current  Liabilities  and Long Term
          Debt  less   Subordinated   Debt,   resulting  from  past  or  current
          transactions, that require settlement in the future.

          Total Net Worth (the amount of owner's or  stockholder's  ownership in
          an enterprise) is equal to Total Assets minus Total Liabilities.

          Working Capital shall mean Current Assets minus Current Liabilities.


<PAGE>
                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")


III. Financial Covenants (continued):

Customer  will  be  required  to  maintain  the  following   financial   ratios,
percentages  and amounts as of the last day of the fiscal period under review by
IBM Credit:

     (a)  Revenue on an annual  basis  (i.e.,  the current  fiscal  year-to-date
          Revenue  annualized)  to Working  Capital  ratio greater than zero and
          equal to or less than 15.0:1.0;

     (b)  Net Profit after Tax equal to or greater than:

          -    Negative Five Hundred  Thousand  Dollars  (-$500,000.00)  for the
               quarterly period ending June 30, 2000;

          -    Negative Five Hundred  Thousand  Dollars  (-$500,000.00)  for the
               quarterly period ending September 30, 2000;

          -    Zero for each quarter thereafter;

     (c)  Total  Liabilities  to Tangible Net Worth ratio  greater than zero and
          equal to or less than 3.0:1.0.


<PAGE>



                              IWCF ATTACHMENT A TO
      INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT ("IWCF AGREEMENT")

IV.  Additional   Conditions   Precedent  Pursuant  to  Section  5.1(K)  of  the
     Agreement:

THIS  STATEMENT  AND ANY OF THE  FOLLOWING  DOCUMENTS  THAT DO NOT APPLY MUST BE
DELETED.

     -    Executed Contingent Blocked Account Amendment;

     -    Executed Corporate Guaranty of Syscomm International, Inc.;

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

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

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