FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER

     This FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this  "Amendment") is
made and  entered  into as of this 3rd day of  October,  2000 by and among  EBIZ
ENTERPRISES,  INC.,  a  Nevada  corporation  ("EBIZ"),  LINUXMALL.COM,  INC.,  a
Delaware  corporation  ("LMI"),  and LINUX MALL  ACQUISITION,  INC.,  a Delaware
corporation ("MERGER SUB").

                                    RECITALS

     A. Ebiz, LMI and Merger Sub,  which is a  wholly-owned  subsidiary of Ebiz,
have  entered into an  Agreement  and Plan of Merger,  dated August 7, 2000 (the
"MERGER  AGREEMENT"),  providing  for the merger of LMI with and into Merger Sub
(the "MERGER"), with Merger Sub constituting the surviving entity.

     B. Section 6.1 (d) of the Merger Agreement  provides that it is a condition
to the  obligation  of Ebiz to  consummate  the  Merger  that  "Ebiz  shall have
received an opinion from Southwest Securities, Inc. or similarly qualified firm,
as  determined  by  Ebiz,  to  the  effect  that  the  Merger  is  fair  to  its
shareholders".

     C. Ebiz has been advised by Southwest  Securities,  Inc.,  that it will not
issue its opinion that the Merger is fair to the Ebiz shareholders if the Merger
is  consummated  at the  conversion  ratio upon  which the LMI common  stock and
preferred  stock is to be exchanged  for Ebiz common stock that is stated in the
Merger Agreement.

     D. In order to address the  concerns  expressed  by  Southwest  Securities,
Inc., the parties to the Merger  Agreement  have  negotiated a reduction of such
conversion  ratio  from 2.2  shares of Ebiz  common  stock for each share of LMI
common stock or preferred stock, as currently stated in the Merger Agreement, to
the  conversion  ratios set forth in this  Amendment.  The parties to the Merger
Agreement  have  presented  the  revised  conversion  ratios  set  forth in this
Amendment  to  Southwest  Securities,  Inc.,  and have been advised that it will
issue its fairness opinion based thereon.

                                    AMENDMENT

     NOW THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto agree as follows:

     1. Amendment of Section 1.3.  Section 1.3 of the Merger Agreement is hereby
amended to read in its entirety as follows:

          1.3 CONVERSION OF SECURITIES.  At the Effective Time, by virtue of the
     Merger and without any action on the part of Ebiz,  Merger Sub,  LMI or the
     holders of any of their respective securities:

               (a) Each share of common  stock of LMI, par value $0.01 per share
          ("LMI COMMON Stock")  outstanding  immediately  prior to the Effective
          Time (other than those  shares for which an election  for  dissenters'
          rights  has  been  made as  contemplated  by  Section  1.4)  shall  be
          converted  into and  represent  the  right to  receive,  and  shall be
          exchangeable  for, 1.8 validly issued,  fully paid and  non-assessable
<PAGE>
          shares of common  stock of Ebiz,  par value  $0.001  per share  ("EBIZ
          COMMON STOCK").

               (b) Each  share  of  Series A  Preferred  Stock of LMI (the  "LMI
          SERIES A  PREFERRED  STOCK") or Series B  Preferred  Stock of LMI (the
          "LMI  SERIES B  PREFERRED  STOCK"),  each par  value  $0.01  per share
          (collectively,  "LMI PREFERRED STOCK"),  outstanding immediately prior
          to the  Effective  Time (other than those shares for which an election
          for  dissenters'  rights has been made as contemplated by Section 1.4)
          shall be converted into the number of validly  issued,  fully paid and
          non-assessable  shares of Ebiz Common  Stock equal to (i) with respect
          to the LMI Series A Preferred Stock, the product of (A) 2.0 multiplied
          by (B) the number of shares of LMI Common  Stock into which each share
          of LMI Series A Preferred  Stock is convertible  immediately  prior to
          the Effective Time and (ii) with respect to the LMI Series B Preferred
          Stock,  the product of (A) 2.0  multiplied by (B) the number of shares
          of LMI Common  Stock  into which each share of LMI Series B  Preferred
          Stock  is  convertible   immediately  prior  to  the  Effective  Time.
          Immediately prior to the Effective Time, all outstanding debentures of
          LMI  issued  before  March  1,  2000  and  a  Designated  Portion  (as
          hereinafter defined) of the outstanding principal and interest of each
          debenture  of LMI  issued  after  March 1,  2000  shall  be  converted
          automatically into LMI Preferred Stock in accordance with the terms of
          such  debentures.  "DESIGNATED  PORTION" shall mean 30.5%,  unless the
          liquidation  provisions  contained  in  Article  IV.B.2(b)(i)  of  the
          Certificate  of  Incorporation  of  LMI  and  Section  3(b)(i)  of the
          Certificate  of  Designations  of Series B Preferred  Stock of LMI are
          waived, amended or otherwise rendered inapplicable to the Merger on or
          before the Closing Date, in which case  Designated  Portion shall mean
          20%.  All LMI  Preferred  Stock issued upon such  conversion  shall be
          converted  into Ebiz Common  Stock as provided  above.  The portion of
          outstanding  principal  and  interest of each  debenture of LMI issued
          after March 1, 2000 that  remains  unconverted  immediately  after the
          Effective Time,  which portion shall be 69.5%,  unless the liquidation
          provisions  contained in Article  IV.B.2(b)(i)  of the  Certificate of
          Incorporation  of  LMI  and  Section  3(b)(i)  of the  Certificate  of
          Designations of Series B Preferred Stock of LMI are waived, amended or
          otherwise rendered inapplicable to the Merger on or before the Closing
          Date,  in which case such  portion  shall be 80%,  shall be assumed by
          Ebiz at the Effective Time (the "ASSUMED LMI DEBENTURES") on the terms
          and conditions set forth in each such  debenture;  provided,  however,
          that ninety days after the Effective  Time, the Assumed LMI Debentures
          shall convert automatically into shares of Ebiz Common Stock on such a
          basis that there is issued  with  respect to each of the  Assumed  LMI
          Debentures  the same  number of shares of Ebiz  Common  Stock as would
          have been issued with  respect to such  Assumed LMI  Debenture  had it
          been  converted  into LMI  Preferred  Stock  immediately  prior to the
          Effective  Time.  Prior to the Closing,  all  outstanding  convertible
          notes (the "CANOPY NOTES") issued to The Canopy Group, Inc. ("CANOPY")
          shall,  at the election of Canopy and in accordance  with the terms of
          the Canopy  Notes,  either be repaid by LMI or be  converted  into LMI
          Common Stock.

               (c) For purposes of this Agreement,  "MERGER CONSIDERATION" shall
          mean (i) with respect to each share of LMI Common Stock, the number of
          shares of Ebiz Common  Stock into which each share of LMI Common Stock
          is converted  pursuant to Section 1.3(a) of this Agreement,  (ii) with
          respect to each share of LMI Preferred  Stock, the number of shares of
          Ebiz  Common  Stock into which  each share of LMI  Preferred  Stock is
          converted  pursuant to Section 1.3(b) of this Agreement and (iii) with
          respect to the  Assumed LMI  Debentures,  the number of shares of Ebiz

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<PAGE>
          Common Stock into which the Assumed LMI Debentures are to be converted
          pursuant to Section 1.3(b) of this Agreement.

     2. Status of Agreement.  This Amendment  shall be effective as of August 7,
2000.  Ebiz,  Merger Sub and LMI hereby  ratify,  confirm  and  acknowledge  the
Agreement, as amended and modified by this Amendment.

     3.  Governing  Law.  This  Agreement  shall be governed by and construed in
accordance  with the laws of the State of Arizona  without regard to conflict of
law principles.

     4.   Counterparts.   This   Amendment  may  be  executed  in  one  or  more
counterparts,  and shall become  effective  when a  counterpart  hereof has been
executed by each party hereto.

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<PAGE>
     IN WITNESS WHEREOF,  the parties have executed this Amendment by their duly
authorized officers or representatives.


                                        EBIZ:

                                        EBIZ ENTERPRISES, INC.


                                        By: /s/ Jeffrey I. Rassas
                                           -------------------------------------
                                            Jeffrey I. Rassas
                                            Chief Executive Officer



                                        MERGER SUB:

                                        By: /s/ Jeffrey I. Rassas
                                           -------------------------------------
                                           President


                                        LMI:

                                        LINUXMALL.COM, INC.


                                        By: /s/ David Shaw
                                           -------------------------------------
                                           David Shaw
                                           Chief Executive Officer

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