<PAGE>   1

                                                                    EXHIBIT 2.2





               INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT

                          dated as of December 7, 1999

                                  by and among

                      DAISYTEK INTERNATIONAL CORPORATION,

                             DAISYTEK, INCORPORATED

                                      and

                                  PFSWEB, INC.




<PAGE>   2


               INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT


                  This INITIAL PUBLIC OFFERING AND DISTRIBUTION AGREEMENT (the
"Agreement") is made and entered into as of December 7, 1999, by and among
Daisytek International Corporation, a Delaware corporation ("Daisytek
International"), Daisytek, Incorporated, a Delaware corporation and a
wholly-owned subsidiary of Daisytek International ("Daisytek"), and PFSweb,
Inc., a Delaware corporation and a wholly-owned subsidiary of Daisytek
("PFSweb"). Certain capitalized terms used herein are defined in Section 1 of
this Agreement.

                                    RECITALS

                  WHEREAS, the Boards of Directors of Daisytek International
and Daisytek have determined that it would be appropriate and desirable to
completely separate the PFS Business from Daisytek;

                  WHEREAS, Daisytek has caused PFSweb to be incorporated in
order to effect such separation;

                  WHEREAS, Daisytek and PFSweb are parties to the Separation
Agreement pursuant to which Daisytek will contribute and transfer to PFSweb,
and PFSweb will receive and assume, the assets and liabilities then associated
with the PFS Business as described therein;

                  WHEREAS, Daisytek and PFSweb intend that the Contribution,
together with the Distribution, qualify as a tax-free reorganization under
Section 368(a)(1)(D) of the Code;

                  WHEREAS, Daisytek currently owns all of the issued and
outstanding PFSweb Common Stock;

                  WHEREAS, the parties currently contemplate that PFSweb shall
consummate the Initial Public Offering;

                  WHEREAS, immediately following the consummation of the
Initial Public Offering, Daisytek shall own not less than 80% of the
outstanding shares of PFSweb Common Stock;

                  WHEREAS, Daisytek plans to divest itself of its entire
ownership of PFSweb by distributing all of its shares of PFSweb Common Stock to
Daisytek International, which, in turn, will distribute in the Distribution all
of such shares of PFSweb Common Stock to the holders of Daisytek Common Stock;

                  WHEREAS, Daisytek International, Daisytek and PFSweb intend
that the Distribution will be tax-free to Daisytek, Daisytek International and
its stockholders under Sections 355 and 368(a)(1)(D) of the Code;




<PAGE>   3



                  WHEREAS, the parties intend in this Agreement to set forth
the principal arrangements between them regarding the Initial Public Offering
and the Distribution; and

                  WHEREAS, the parties hereto have determined that in order to
accomplish the objectives of the Initial Public Offering and the Distribution
and to facilitate the consummation thereof, it is necessary and desirable to
enter into the agreements and understandings set forth herein;

                  NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:

                  1.        DEFINITIONS.

                  "Active Trade or Business" means the active conduct of the
trade or business (as defined in Section 355(b)(2) of the Code) conducted by
PFSweb immediately prior to the Distribution Date.

                  "Affiliate" means a PFSweb Affiliate or a Daisytek Affiliate,
as the case may be.

                  "Ancillary Agreements" has the meaning ascribed to such term
in the Separation Agreement.

                  "Annual Financial Statements" has the meaning set forth in
Section 5.1 (a)(vi).

                  "Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions located in the State of New York are
authorized or obligated by law or executive order to close.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time, together with the rules and regulations promulgated
thereunder.

                  "Consent" means any consent of, waiver or approval from, or
notification to, any Person.

                  "Contribution" means the transfer of certain assets by
Daisytek to PFSweb (and the assumption by PFSweb of certain liabilities) as
contemplated by the Separation Agreement.

                  "Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.



                                       2
<PAGE>   4



                  "CPR Rules" means the Rules for Non-Administered Arbitration
of Business Disputes promulgated by the Center for Public Resources, as in
effect on the date hereof.

                  "D Reorganization" means a transaction qualifying as a
reorganization under Section 368(a)(1)(D) of the Code.

                  "Daisytek Affiliate" means a Person, other than PFSweb or a
PFSweb Affiliate, that, after giving effect to the Distribution, directly or
indirectly through one or more intermediaries, is Controlled by Daisytek
International.

                  "Daisytek Annual Statements" has the meaning set forth in
Section 5.1(b)(ii).

                  "Daisytek's Auditors" has the meaning set forth in Section
5.1(b)(ii).

                  "Daisytek Business" means any business or operations of
Daisytek or any Daisytek Affiliates other than the PFS Business.

                  "Daisytek Common Stock" means the Common Stock, par value
$.01 per share, of Daisytek International.

                  "Daisytek Disclosure Portions" means all material set forth
in, or incorporated by reference into, either the IPO Registration Statement or
the Distribution Registration Statement, as applicable, to the extent relating
exclusively to (i) Daisytek and the Daisytek Affiliates (excluding PFSweb and
the PFSweb Affiliates), (ii) the Daisytek Business, (iii) Daisytek's intentions
with respect to the Distribution or (iv) the terms of the Distribution,
including, without limitation, the form, structure and terms of any
transaction(s) and/or offering(s) to effect the Distribution and the timing of
and conditions to the consummation of the Distribution.

                  "Daisytek Option" means an option to purchase shares of
Daisytek Common Stock issued under any stock option plan of Daisytek
International.

                  "Daisytek Public Filings" has the meaning set forth in
Section 5.1(a)(xiii).

                  "Daisytek Transfer Agent" means ChaseMellon Shareholder
Services LLC, in its capacity as the transfer agent and registrar for the
Daisytek Common Stock.

                  "Dispute Notice" means written notice of any dispute between
Daisytek and PFSweb arising out of or relating to this Agreement, which shall
set forth, in reasonable detail, the nature of the dispute.

                  "Distribution" means the distribution of PFSweb Common Stock
by Daisytek to Daisytek International and thereafter by Daisytek International
in one or more transactions occurring after the Initial Public Offering that
collectively have the effect that all shares of PFSweb Common Stock held by
Daisytek are distributed to Daisytek International stockholders, whenever such
transaction(s) shall occur.


                                       3
<PAGE>   5



                  "Distribution Date" means any date or dates, as the case may
be, determined by Daisytek, in its sole and absolute discretion, to be a date
on which shares of PFSweb Common Stock held by Daisytek are distributed in
connection with the Distribution.

                  "Distribution Registration Statement" means any and all
registration statements, information statements or other documents, if any,
filed by any party with the SEC in connection with any transaction constituting
part of the Distribution, in each case as supplemented or amended from time to
time.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, together with the rules and regulations promulgated
thereunder.

                  "GAAP" means generally accepted accounting principles,
consistently applied.

                  "Indemnifying Party" means a Person that is obligated to
provide indemnification under this Agreement.

                  "Indemnitee" means a Person that is entitled to seek
indemnification under this Agreement.

                  "Indemnity Payment" means an amount that an Indemnifying
Party is required to pay to an Indemnitee under this Agreement.

                  "Initial Public Offering" or "IPO" means the initial public
offering by PFSweb of shares of PFSweb Common Stock as contemplated by the IPO
Registration Statement.

                  "Insurance Proceeds" means the payment received by an insured
from an insurance carrier or paid by an insurance carrier on behalf of the
insured, net of any applicable premium adjustment and tax effect.

                  "IPO Registration Statement" means the Registration Statement
on Form S-1, Registration No. 333-87657, of PFSweb, as supplemented and amended
from time to time.

                  "IRS" means Internal Revenue Service of the U.S. Department
of Treasury or any successor agency.

                  "Losses" means all losses, liabilities, claims, obligations,
demands, judgments, damages, dues, penalties, assessments, fines (civil or
criminal), costs, liens, expenses, forfeitures, settlements, or fees,
reasonable attorneys' fees and court costs, of any nature or kind, whether or
not the same would properly be reflected on a balance sheet, and "Loss" means
any of these.

                  "Negotiation Period" means the period of 20 Business Days
following the initial meeting of the representatives of Daisytek and PFSweb
following the receipt of a Dispute Notice.




                                       4
<PAGE>   6



                  "Notice" means any notice, request, claim, demand, or other
communication under this Agreement.

                  "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

                  "PFS Business" has the meaning ascribed to such term in the
Separation Agreement.

                  "PFSweb Affiliate" means a Person, other than Daisytek
International or a Daisytek Affiliate, that, after giving effect to the
Distribution, directly or indirectly through one or more intermediaries, is
Controlled by, or is under common Control with PFSweb.

                  "PFSweb Capital Stock" means all classes or series of capital
stock of PFSweb.

                  "PFSweb Common Stock" means the Common Stock of PFSweb.

                  "PFSweb Employee" means an individual employed by Daisytek or
any Daisytek Affiliate who becomes employed by PFSweb or any PFS Affiliate in
connection with the Distribution.

                  "PFSweb Option" means an option to purchase shares of PFSweb
Common Stock issued under a stock option plan of PFSweb.

                  "PFSweb Public Documents" has the meaning set forth in
Section 5.1(a)(ix).

                  "PFSweb Transfer Agent" means ChaseMellon Shareholder
Services LLC, in its capacity as the transfer agent and registrar for the
PFSweb Common Stock.

                  "PFSweb's Auditors" has the meaning set forth in Section
5.1(b)(i).

                  "Pre-Distribution Period" means the period of time from the
date hereof until the completion of the Distribution.

                  "Proposed Acquisition Transaction" means a transaction or
series of transactions as a result of which any Person or any group of related
Persons would (directly or indirectly) acquire, or have the right to acquire,
from PFSweb or one or more holders of outstanding shares of PFSweb Capital
Stock, a number of shares of PFSweb Capital Stock that would comprise 50% or
more of (i) the value of all outstanding shares of PFSweb Capital Stock as of
the date of such transaction, or in the case of a series of transactions, the
date of the last transaction of such series, or (ii) the total combined voting
power of all outstanding shares of Voting Stock of PFSweb as of the date of
such transaction, or in the case of a series of transactions, the date of the
last transaction of such series.


                                       5
<PAGE>   7


                  "Quarterly Financial Statements" has the meaning set forth in
Section 5.1(a)(v).

                  "Ratio" means the amount determined by dividing (i) the
average of the daily high and low per share prices of the Daisytek Common
Stock, as reported in The Wall Street Journal, during the three trading days
ending on the Record Date, by (ii) the average of the daily high and low per
share prices of the PFSweb Common Stock, as reported in The Wall Street
Journal, for the three trading days commencing on the first trading day
following the Record Date.

                  "Record Date" means the close of business on the date(s) to
be determined by the Board of Directors of Daisytek International as the record
date(s) for determining stockholders of Daisytek International entitled to
receive shares of PFSweb Common Stock in the Distribution.

                  "Regulation S-K" means Regulation S-K of the General Rules
and Regulations promulgated by the SEC.

                  "Regulation S-X" means Regulation S-X of the General Rules
and Regulations promulgated by the SEC.

                  "Representation Date" means any date on which PFSweb makes
any representation (i) to the IRS or to counsel selected by Daisytek for the
purpose of obtaining a Subsequent Tax Opinion/Ruling, or (ii) to Daisytek for
the purpose of any determination required to be made by Daisytek pursuant to
Section 4.2.

                  "Representation Letters" means any representation letters and
any other materials (including, without limitation, the ruling request and the
related supplemental submissions to the IRS) delivered or deliverable by
Daisytek and others in connection with the rendering by Tax Advisor and/or the
issuance by the IRS of the Tax Opinions/Rulings, which to the extent related to
PFSweb shall be in form and substance reasonably satisfactory to PFSweb.

                  "Representative" means, with respect to any Person, any of
such Person's directors, officers, employees, agents, consultants, advisors,
accountants or attorneys.

                  "Request" has the meaning set forth in Section 6.7.

                  "SEC" means the United States Securities and Exchange
Commission or any successor agency.

                  "Securities Act" means the Securities Act of 1933, as amended
from time to time, together with the rules and regulations promulgated
thereunder.

                  "Separation Agreement" means the Master Separation Agreement
by and among Daisytek International, Daisytek, Priority Fulfillment Services,
Inc. and PFSweb, as amended from time to time.




                                       6
<PAGE>   8




                  "Subsequent Tax Opinion/Ruling" means either (i) any opinion
of Tax Advisor selected by Daisytek, in its sole and absolute discretion,
confirming, in form and substance reasonably satisfactory to Daisytek, that, as
a consequence of the consummation of a subsequent transaction, no income, gain
or loss for U.S. federal income tax purposes will be recognized by Daisytek,
Daisytek International, the stockholders or former stockholders of Daisytek
International, or any Daisytek Affiliate with respect to the Distribution, or
(ii) an IRS private letter ruling to the same effect.

                  "Subsidiary" means with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries Controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote with respect to the election of
members to the board of directors or similar governing body; provided, however,
that for the purposes of this Agreement, neither PFSweb nor any of the
Subsidiaries of PFSweb shall be deemed to be Subsidiaries of Daisytek or of any
of the Subsidiaries of Daisytek.

                  "Tax" means (i) any income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
capital stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on, minimum, estimated,
or other tax, assessment, or governmental charge of any kind whatsoever imposed
by any governmental authority, including any interest, penalty, or addition
thereto, whether disputed or not; (ii) any liability for the payment of any
amounts of the type described in clause (i) above arising as a result of being
(or having been) a member of any group or being (or having been) included or
required to be included in any Tax Return related thereto; and (iii) any
liability for the payment of any amounts of the type described in clause (i)
above as a result of any express or implied obligation to indemnify or
otherwise assume or succeed to the liability of any other Person.

                  "Tax Advisor" means the professional accounting or law firm
designated by Daisytek as its Tax Advisor.

                  "Tax Agreement" means the Tax Sharing Agreement between
Daisytek and PFSweb, as amended from time to time.

                  "Tax Control" means, with respect to PFSweb, ownership of
PFSweb Capital Stock which constitutes at least 80% of both (i) the total
combined voting power of all outstanding shares of Voting Stock of PFSweb and
(ii) each class and series of PFSweb Capital Stock other than Voting Stock of
PFSweb.

                  "Tax-Free Status of the Distribution" means the
nonrecognition of taxable gain or loss for U.S. federal income tax purposes to
Daisytek International, Daisytek, Daisytek Affiliates and Daisytek
International's stockholders in connection with the Distribution.

                  "Tax Opinions/Rulings" means any opinions of Tax Advisor
and/or the rulings by the IRS deliverable to Daisytek in connection with the
Contribution and the Distribution.



                                       7
<PAGE>   9



                  "Tax-Related Losses" means (i) all federal, state and local
Taxes (including interest and penalties thereon) imposed pursuant to any
settlement, final determination, judgment or otherwise; (ii) all accounting,
legal and other professional fees, and court costs incurred in connection with
such taxes; and (iii) all costs and expenses that may result from adverse tax
consequences to Daisytek, Daisytek International or its stockholders (including
all costs, expenses and damages associated with stockholder litigation or
controversies) payable by Daisytek or Daisytek Affiliates.

                  "Third-Party Claim" means any claim, suit, arbitration,
inquiry, proceeding or investigation by or before any court, governmental or
other regulatory or administrative agency or commission or any arbitration
tribunal asserted by a Person other than Daisytek or any Daisytek Affiliate or
PFSweb or any PFSweb Affiliate which gives rise to a right of indemnification
hereunder.

                  "Underwriters" means the managing underwriters for the IPO.

                  "Underwriting Agreement" means the Underwriting Agreement
between PFSweb and the Underwriters relating to the Initial Public Offering, as
amended from time to time.

                  "Value" means with respect to any trade or business (or
portion thereof), the fair market value of the assets constituting such trade
or business, less the current liabilities associated with such trade or
business, in each case determined as of the Distribution Date.

                  "Voting Stock" means with respect to any Person, all classes
and series of the capital stock of such Person entitled to vote generally in
the election of directors.

                  2.       THE INITIAL PUBLIC OFFERING AND THE DISTRIBUTION.

                  2.1.     Transactions Prior To The IPO. Subject to the
conditions hereof, Daisytek International and PFSweb shall use their reasonable
best efforts to consummate the IPO. Such actions shall include those specified
in this Section 2.1.

                           (a) PFSweb shall file the IPO Registration Statement,
and such amendments or supplements thereto, as may be necessary in order to
cause the same to become and remain effective as required by law or by the
Underwriters, including, but not limited to, filing such amendments to the IPO
Registration Statement as may be required by the Underwriting Agreement, the
SEC or federal, state or foreign securities laws. Daisytek International and
PFSweb shall also cooperate in preparing, filing with the SEC and causing to
become effective a registration statement registering the PFSweb Common Stock
under the Exchange Act, and any registration statements or amendments thereof
which are required to reflect the establishment of, or amendments to, any
employee benefit and other plans necessary or appropriate in connection with
the IPO, the Distribution or the other transactions contemplated by this
Agreement and the Ancillary Agreements.



                                       8
<PAGE>   10



                           (b) PFSweb and Daisytek International shall enter
into the Underwriting Agreement, in form and substance reasonably satisfactory
to them and each shall comply with its respective obligations thereunder.

                           (c) Daisytek International and PFSweb shall consult
with each other and the Underwriters regarding the timing, pricing and other
material matters with respect to the IPO.

                           (d) PFSweb shall use its reasonable best efforts to
take all such action as may be necessary or appropriate under state securities
and blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) in connection with the IPO.

                           (e) PFSweb shall prepare, file and use reasonable
best efforts to seek to make effective, an application for listing of the
PFSweb Common Stock issued in the IPO on the NASDAQ National Market, subject to
official notice of issuance.

                           (f) PFSweb shall participate in the preparation of
materials and presentations as the Underwriters shall deem necessary or
desirable.

                  2.2.     Proceeds of the IPO. The IPO will be a primary
offering of PFSweb Common Stock and the net proceeds of the IPO will be retained
by PFSweb, subject to the payments to be made under the Separation Agreement.

                  2.3.     Conditions Precedent to Consummation of the IPO. The
obligations of the parties to consummate the IPO shall be conditioned on such
conditions as Daisytek International shall determine in its sole and absolute
discretion, which conditions, or any of them, may be waived by Daisytek
International in its sole and absolute discretion, including without
limitation, the following conditions, which shall be for the sole benefit of
Daisytek International and shall not give rise to or create any duty on the
part of Daisytek International or any Daisytek Affiliate or their Board of
Directors to waive or not waive any such condition:

                           (a) The IPO Registration Statement shall have been
filed and declared effective by the SEC, and there shall be no stop order in
effect with respect thereto.

                           (b) The actions and filings with regard to state
securities and blue sky laws of the United States (and any comparable laws
under any foreign jurisdictions) described in Section 2.1 shall have been taken
and, where applicable, have become effective or been accepted.

                           (c) The PFSweb Common Stock to be issued in the IPO
shall have been accepted for listing on the NASDAQ National Market, on official
notice of issuance.

                           (d) PFSweb shall have entered into the Underwriting
Agreement and all conditions to the obligations of PFSweb and the Underwriters
shall have been satisfied or waived.


                                       9
<PAGE>   11



                           (e) Daisytek International shall be satisfied in its
sole discretion that Daisytek will own at least 80% of the voting rights
attached to the then outstanding PFSweb Common Stock immediately following the
IPO, and, to the extent deemed necessary or desirable by Daisytek International
in its sole discretion, all other matters regarding the Tax-Free Status of the
Distribution shall, to the extent applicable as of the time of the IPO, be
satisfied or can reasonably be anticipated to be satisfied and there shall be
no event or condition that is likely to cause any of such conditions not to be
satisfied as of the time of the Distribution or thereafter.

                           (f) No order, injunction or decree issued by any
court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the IPO or any of the other
transactions contemplated by this Agreement or any Ancillary Agreement shall be
in effect.

                           (g) Such other actions as the parties hereto may,
based upon the advice of counsel, reasonably request to be taken prior to the
IPO in order to assure the successful completion of the IPO and the other
transactions contemplated by this Agreement shall have been taken.

                  2.4.     The Distribution. Daisytek and Daisytek International
pan, as soon as practicable after the satisfaction of applicable conditions,
and not later than 12 months following the consummation of the Initial Public
Offering, to complete the Distribution. PFSweb shall cooperate with Daisytek in
all respects to accomplish the Distribution and shall, at Daisytek
International's direction, promptly take any and all actions necessary or
desirable to effect the Distribution, including, without limitation, to the
extent necessary under then applicable law, the registration under the
Securities Act of PFSweb Common Stock on an appropriate registration form or
forms to be designated by Daisytek International. Daisytek International shall
select any investment banker(s) and manager(s) in connection with the
Distribution, as well as any financial printer, solicitation and/or exchange
agent and outside counsel for Daisytek International; provided that nothing
herein shall prohibit PFSweb from engaging (at its own expense) its own
financial, legal, accounting and other advisors in connection with the
Distribution.

                  2.5.     Certain Stockholder Matters. From and after the
distribution of PFSweb Common Stock in connection with any transaction(s)
included as part of the Distribution and until such PFSweb Common Stock is duly
transferred in accordance with applicable law, PFSweb shall regard the Persons
receiving PFSweb Common Stock in such transaction(s) as record holders of
PFSweb Common Stock in accordance with the terms of such transaction(s) without
requiring any action on the part of such Persons. PFSweb agrees that, subject
to any transfers of such stock, (a) each such holder shall be entitled to
receive all dividends payable on, and exercise voting rights and all other
rights and privileges with respect to, the shares of PFSweb Common Stock then
held by such holder and (b) each such holder shall be entitled, without any
action on the part of such holder, to receive one or more certificates
representing, or other evidence of ownership of, the shares of PFSweb Common
Stock then held by such holder. Daisytek International and Daisytek shall
cooperate, and shall instruct the Daisytek Transfer Agent to cooperate, with
PFSweb and the PFSweb Transfer Agent, and PFSweb shall cooperate, and shall
instruct the PFSweb Transfer Agent to cooperate, with Daisytek International,
Daisytek and the



                                      10
<PAGE>   12



Daisytek Transfer Agent, in connection with all aspects of the Distribution and
all other matters relating to the issuance and delivery of certificates
representing, or other evidence of ownership of, the shares of PFSweb Common
Stock distributed to the holders of Daisytek Common Stock in connection with
any transaction(s) included as part of the Distribution. Following the
Distribution, Daisytek International shall instruct the Daisytek Transfer Agent
to deliver to the PFSweb Transfer Agent true, correct and complete copies of
the stock and transfer records reflecting the holders of Daisytek Common Stock
receiving shares of PFSweb Common Stock in connection with any transaction(s)
included as part of the Distribution.

                  2.6.     Means of Distribution. (a) Subject to Section 2.4
hereof, on or prior to the Distribution Date, Daisytek will distribute and
deliver to Daisytek International who, in turn, will deliver to the Daisytek
Transfer Agent for the benefit of holders of record of Daisytek Common Stock on
the Record Date, a single stock certificate, endorsed in blank, representing
all of the outstanding shares of PFSweb Common Stock then owned by it, which
certificate shall be reissued in sufficient manner so that the Daisytek
Transfer Agent may, and shall be instructed to, distribute on the Distribution
Date the appropriate number of such shares of PFSweb Common Stock to each such
holder of record of Daisytek Common Stock on the Record Date or designated
transferee or transferees of such holder.

                           (b) Subject to Section 2.4, each holder of Daisytek
Common Stock on the Record Date (or such holder's designated transferee or
transferees) will be entitled to receive in the Distribution a number of shares
of PFSweb Common Stock equal to the number of shares of Daisytek Common Stock
held by such holder on the Record Date multiplied by a fraction, the numerator
of which is the number of shares of PFSweb Common Stock beneficially owned by
Daisytek International on the Record Date and the denominator of which is the
number of shares of Daisytek Common Stock issued and outstanding on the Record
Date.

                  2.7.     Actions Prior to the Distribution. (a) Daisytek
International and PFSweb shall prepare and mail, prior to the Distribution
Date, to the holders of Daisytek Common Stock, such information concerning
PFSweb, its business, operations and management, the Distribution and such
other matters as Daisytek International shall reasonably determine and as may
be required by law. Daisytek International and PFSweb will prepare, and PFSweb
will, to the extent required under applicable law, file with the SEC any such
documentation which Daisytek International determines are necessary or
desirable to effectuate the Distribution, and Daisytek International and PFSweb
shall each use its reasonable best efforts to obtain all necessary approvals
from the SEC with respect thereto as soon as practicable.

                           (b) Daisytek International and PFSweb shall take all
such action as may be necessary or appropriate under the securities or blue sky
laws of the United States (and any comparable laws under any foreign
jurisdiction) in connection with the Distribution.

                           (c) PFSweb shall prepare and file, and shall use its
reasonable best efforts to have approved, an application for the listing on the
NASDAQ National Market, subject to official notice of distribution of the
PFSweb Common Stock to be distributed in the



                                      11
<PAGE>   13



Distribution, and the shares of PFSweb Common Stock covered by PFSweb Options to
be granted under Section 3.6 below.

                  2.8.     Conditions To Distribution. The consummation of the
Distribution is subject to the following conditions, which conditions, or any
of them, may be waived by Daisytek in its sole and absolute discretion:

                           (a) The receipt by Daisytek International of either,
at its option and in its sole and absolute discretion (i) a ruling by the IRS
that, among certain other Tax consequences of the transaction, the Contribution
and Distribution will qualify as tax-free for federal income tax purposes and
will not result in the recognition of taxable gain or loss for federal income
tax purposes to Daisytek, Daisytek International or the holders of Daisytek
Common Stock or (ii) an opinion from its Tax Advisor regarding the Tax-Free
Status of the Distribution and such other matters, in form and substance
satisfactory to it, as it shall determine to be necessary or advisable in its
sole and absolute discretion;

                           (b) The receipt of any material Consents necessary to
consummate the Distribution, which Consents shall be in full force and effect;

                           (c) No order, injunction, decree or regulation issued
by any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution shall be in effect;
and

                           (d) No events or developments shall have occurred
subsequent to the IPO Closing Date that, in the sole judgment of Daisytek, would
result in the Distribution having a material adverse effect on Daisytek, any
Daisytek Affiliate any holder of Daisytek Common Stock, PFSweb, any PFSweb
Affiliate or any holder of PFSweb Common Stock.

                  The foregoing conditions are for the sole benefit of Daisytek
International and shall not give rise to or create any duty on the part of
Daisytek International or any Daisytek Affiliate or their Board of Directors to
waive or not waive any such condition.

                  2.9.     Fractional Shares. As soon as practicable after the
Distribution Date, Daisytek International shall direct the Daisytek Transfer
Agent to determine the number of whole shares and fractional shares of PFSweb
Common Stock allocable to each holder of record or beneficial owner of Daisytek
Common Stock as of the Record Date, to aggregate all such fractional shares and
sell the whole shares obtained thereby, at the direction of Daisytek
International, to Daisytek International, PFSweb, in open market transactions
or otherwise, in each case at then prevailing trading prices, and to cause to
be distributed to each such holder or for the benefit of each such beneficial
owner to which a fractional share shall be allocable such holder's or owner's
ratable share of the proceeds of such sale, after making appropriate deductions
of the amount required to be withheld for federal income tax purposes and after
deducting an amount equal to all brokerage charges, commissions and transfer
taxes attributed to such sale. Daisytek International and the Daisytek Transfer
Agent may aggregate the shares of Daisytek


                                       12
<PAGE>   14



Common Stock that may be held by any beneficial owner thereof through more than
one account in determining the fractional share allocable to such beneficial
owner.

                  2.10.    Replacement of Daisytek Options. As of the
Distribution Date, each outstanding Daisytek Option held by a PFSweb Employee
shall be replaced with a PFSweb Option having substantially the same terms and
conditions as the Daisytek Option to be replaced thereby, including any and all
vesting requirements and conditions of exercise; provided, however, that (i) the
PFS Employee shall be credited, for vesting purposes, with the period of
employment in which the PFS Employee was employed by Daisytek or a Daisytek
Affiliate, (ii) the number of shares of PFSweb Common Stock subject to such
PFSweb Options shall be equal to the number of shares of Daisytek Common Stock
subject to the Daisytek Option multiplied by the Ratio and (iii) the per share
exercise price of the PFSweb Common Stock subject to such PFSweb Option shall be
equal to the per share exercise price of the Daisytek Common Stock subject to
the Daisytek Option divided by the Ratio. PFSweb shall take all corporate action
and make all required filings under applicable state Blue Sky laws and the
Securities Act to register or qualify the PFSweb Options and/or the underlying
shares of PFSweb Common Stock so that the shares of PFSweb Common Stock acquired
upon exercise of each PFSweb Option are freely tradable under the Securities Act
(except for shares acquired by affiliates (as defined in the Securities Act) of
PFSweb) and each applicable state's Blue Sky laws.

                  2.11.    Further Assurances Regarding the Distribution. In
addition to the actions specifically provided for elsewhere in this Agreement,
PFSweb shall, at Daisytek International's direction, use all commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things commercially reasonably necessary, proper or
expeditious under applicable laws, regulations and agreements in order to
consummate and make effective the Distribution as promptly as reasonably
practicable. Without limiting the generality of the foregoing, PFSweb shall, at
Daisytek International's direction, cooperate with Daisytek International, and
execute and deliver, or use all commercially reasonable efforts to cause to
have executed and delivered, all instruments, including instruments of
conveyance, assignment and transfer, and to make all filings with, and to
obtain all consents, approvals or authorizations of, any domestic or foreign
governmental or regulatory authority requested by Daisytek International in
order to consummate and make effective the Distribution.

                  2.12.    Abandonment of the Distribution. In the event that
Daisytek International so determines that one or more of the aforesaid
conditions precedent has not been satisfied and that it no longer intends to
proceed with or complete the Distribution, Daisytek International shall provide
to PFSweb a written notification of such determination (an "Abandonment
Notice"). Effective as of the date of the Abandonment Notice, (a) provided that
no Distribution Date has yet occurred, Sections 4.2 and 4.3 of this Agreement
shall terminate, become null and void and have no further force and effect and
(b) Daisytek International's rights, and PFSweb's obligations, set forth in the
Registration Rights Agreement shall immediately become effective.


                                       13
<PAGE>   15



                  3.       EXPENSES.

                  3.1.     General. Except as otherwise provided in this
Agreement, the Separation Agreement, any of the other Ancillary Agreements or
any other agreement between the parties relating to the Contribution, the
Initial Public Offering or the Distribution, all costs and expenses of either
party hereto in connection with the Contribution, the Initial Public Offering
and the Distribution shall be paid by the party that incurs such costs and
expenses.

                  3.2.     Expenses Relating to the Initial Public Offering.
PFSweb shall be responsible for the payment of all costs, fees and expenses
relating to the Initial Public Offering.

                  3.3.     Expenses Relating To The Distribution. Daisytek shall
be responsible for the payment of all costs, fees and expenses relating to the
Distribution.

                  4.       COVENANTS TO PRESERVE TAX-FREE STATUS OF THE
DISTRIBUTION AND THE QUALIFICATION OF THE CONTRIBUTION AS A D REORGANIZATION.

                  PFSweb and Daisytek International hereby represent and
warrant to, and covenant and agree with, each other as follows:

                  4.1.     Representations and Warranties.

                           (a) PFSweb hereby represents and warrants that (i) it
has examined the Tax Opinions/Rulings and the Representation Letters, and (ii)
the facts presented and the representations made therein, to the extent
descriptive of PFSweb or the PFS Business (including, without limitation, the
business purposes for the Distribution, the representations in the
Representation Letters and Tax Opinions/Rulings to the extent that they relate
to PFSweb or the PFS Business, and the plans, proposals, intentions and policies
of PFSweb), are true, correct and complete in all material respects.

                           (b) Daisytek International hereby represents and
warrants that (i) it has examined the Tax Opinions/Rulings and the
Representation Letters, and (ii) the facts presented and the representations
made therein, to the extent descriptive of Daisytek or the Daisytek Business
(including, without limitation, the business purposes for the Distribution, the
representations in the Representation Letters and Tax Opinions/Rulings to the
extent that they relate to Daisytek or the Daisytek Business, and the plans,
proposals, intentions and policies of Daisytek), are true, correct and complete
in all material respects.




                  4.2.     Restrictions on PFSweb.

                           (a) PFSweb shall not take any action (such action to
include, if relevant, the issuance of PFSweb Capital Stock upon the exercise by
the holders thereof of all options or convertible securities issued by PFSweb)
during the Pre-Distribution Period if, as a



                                       14
<PAGE>   16



result of taking such action, PFSweb would issue a number of shares of PFSweb
Capital Stock (including by way of the exercise of stock options or the issuance
of restricted stock) that would cause Daisytek to cease to have Tax Control of
PFSweb, unless prior to the consummation of such transaction Daisytek has
determined, in its sole and absolute discretion, which discretion shall be
exercised in good faith solely to preserve the Tax-Free Status of the
Distribution, that such transaction would not jeopardize the Tax-Free Status of
the Distribution. Notwithstanding the foregoing provisions of this Section
4.2(a), PFSweb shall be permitted to issue stock options and restricted stock
awards to its employees so long as such options or restricted stock awards will
not be exercisable or vest, by their terms, prior to the Distribution Date. All
of the restrictions on PFSweb contained in this Section 4.2 shall apply to
PFSweb during the Pre-Distribution Period as well as the other periods specified
in this Section 4.2.

                           (b) Until the first day after the two-year
anniversary of the latest Distribution Date, PFSweb shall not enter into any
Proposed Acquisition Transaction or, to the extent PFSweb has the right to
prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition
Transaction to occur unless prior to the consummation of such Proposed
Acquisition Transaction Daisytek has determined, in its sole and absolute
discretion, which discretion shall be exercised in good faith solely to preserve
the Tax-Free Status of the Distribution, that such Proposed Acquisition
Transaction would not jeopardize the Tax-Free Status of the Distribution. The
foregoing shall not prohibit PFSweb from entering into a contract or agreement
to consummate any Proposed Acquisition Transaction if such contract or agreement
requires satisfaction of the above-described requirement prior to the
consummation of such Proposed Acquisition Transaction, such requirement to be
satisfied through the cooperation of the parties as described in Section
4.3(b)(ii).

                           (c) Until the first day after the two-year
anniversary of the latest Distribution Date, (i) PFSweb shall continue to
conduct the Active Trade or Business, (ii) subject to clause (iii) below, PFSweb
shall not (A) liquidate, dispose of, or otherwise discontinue the conduct of any
substantial portion of the Active Trade or Business or (B) dispose of any
business or assets that would cause PFSweb to be operated in a manner
inconsistent in any material respect with the business purposes for the
Distribution as set forth in the Representation Letters and Tax
Opinions/Rulings, in each case unless Daisytek has determined, in its sole and
absolute discretion, which discretion shall be exercised in good faith solely to
preserve the Tax-Free Status of the Distribution, that such liquidation,
disposition, or discontinuance would not jeopardize the Tax-Free Status of the
Distribution, (iii) PFSweb shall not under any circumstances liquidate, dispose
of, or otherwise discontinue the conduct of any portion of the Active Trade or
Business if such liquidation, disposition or discontinuance would breach Section
4.2(d). PFSweb shall continue the active conduct of the Active Trade or Business
primarily through officers and employees of PFSweb or its Subsidiaries (and not
primarily through independent contractors). Notwithstanding the foregoing, (A)
except with respect to any corporation or other entity the status of which as
the direct owner of an active trade or business is material to the Tax-Free
Status of the Distribution, liquidations of any of PFSweb's Subsidiaries
(including PFS - Texas LLC) into PFSweb or one or more Subsidiaries directly or
indirectly controlled by PFSweb shall not be deemed to breach this Section
4.2(c) and (B) PFSweb shall not be prohibited from liquidating, disposing of or
otherwise discontinuing the conduct of one or more trades or businesses that



                                       15
<PAGE>   17




constituted an immaterial part of the Active Trade or Business, or any portion
thereof. For purposes of the preceding sentence and clause (c)(ii) above, asset
retirements, sale-leaseback arrangements and discontinuances of product lines
within a trade or business the active conduct of which is continued shall not be
deemed a liquidation, disposition or discontinuance of a trade or business or
portion thereof, and (iv) solely for purposes of this Section 4.2(c), PFSweb
shall not be treated as directly or indirectly controlling a Subsidiary unless
PFSweb owns, directly or indirectly, shares of capital stock of such Subsidiary
constituting (A) 80% or more of the total combined voting power of all
outstanding shares of Voting Stock of such Subsidiary and (B) 80% or more of the
total number of outstanding shares of each class or series of capital stock of
such Subsidiary other than Voting Stock.

                           (d) Until the first day after the two-year
anniversary of the latest Distribution Date, (A) PFSweb shall not voluntarily
dissolve or liquidate, and (B) except in the ordinary course of business,
neither PFSweb nor any Subsidiaries directly or indirectly controlled by PFSweb
shall sell, transfer, or otherwise dispose of or agree to dispose of assets
(including, for such purpose, any shares of capital stock of such Subsidiaries)
that, in the aggregate, constitute more than (x) 60% of the gross assets of
PFSweb or (y) 60% of the consolidated gross assets of PFSweb (including PFS -
Texas LLC) and such Subsidiaries, unless prior to the consummation of such
transaction Daisytek has determined, in its sole and absolute discretion, which
discretion shall be exercised in good faith solely to preserve the Tax-Free
Status of the Distribution, that such transaction would not jeopardize the
Tax-Free Status of the Distribution. The amount of gross assets of PFSweb and
such Subsidiaries shall be based on the fair market value of each such asset as
of the applicable Distribution Date. Sales, transfers or other dispositions by
PFSweb or any of its Subsidiaries to PFSweb or one or more Subsidiaries directly
or indirectly controlled by PFSweb shall not be included in any determinations
under this Section 4.2(d) of whether such 60% or more of the gross assets of
PFSweb or 60% of the consolidated gross assets of PFSweb and such Subsidiaries
have been sold, transferred or otherwise disposed of. Solely for purposes of
this Section 4.2(d), PFSweb shall not be treated as directly or indirectly
controlling a Subsidiary unless PFSweb owns, directly or indirectly, shares of
capital stock of such Subsidiary constituting (A) 80% or more of the total
combined voting power of all outstanding shares of Voting Stock of such
Subsidiary and (B) 80% or more of the total number of outstanding shares of each
class or series of capital stock of such Subsidiary other than Voting Stock.

                           (e) Prior to the first Distribution Date, PFSweb
shall fully discharge and satisfy all of the then existing indebtedness owed by
it or its Subsidiaries to Daisytek or any Daisytek Affiliate (other than
payables incurred in the ordinary course of the business). From such date until
the first day after the two-year anniversary of the latest Distribution Date,
PFSweb shall not, and shall not permit any of its Subsidiaries to, create,
incur, assume or allow to exist any such indebtedness (other than payables
incurred in the ordinary course of the business) with Daisytek or any Daisytek
Affiliate.

                           (f) Until the first day after the two-year
anniversary of the latest Distribution Date, PFSweb shall not take, or permit
any of its Subsidiaries to take, any other actions or enter into any transaction
or series of transactions or agree to enter into any other transactions that
would be reasonably likely to jeopardize the Tax-Free Status of the Distribution



                                       16
<PAGE>   18



or the qualification of the Contribution as a D Reorganization, including any
action or transaction that would be reasonably likely to be inconsistent with
any representation made in the Representation Letters, unless prior to the
consummation of such action or transaction Daisytek has determined, in its sole
and absolute discretion, which discretion shall be exercised in good faith
solely to preserve the Tax-Free Status of the Distribution and the qualification
of the Contribution as a D Reorganization, that such action or transaction would
not jeopardize the Tax-Free Status of the Distribution or the qualification of
the Contribution as a D Reorganization. Notwithstanding the foregoing, if and to
the extent that any action or transaction is described in and permitted pursuant
to Sections 4.2(a), (b), (c), (d) or (e), such action or transaction shall not
be prohibited by this Section 4.2(f).

                           (g) Notwithstanding the foregoing, the provisions of
Section 4.2 shall not prohibit PFSweb from implementing any transaction upon
which the IRS has granted a favorable ruling in, or which is described in
reasonable detail in, any Tax Opinions/Rulings.

                  4.3.     Cooperation and Other Covenants.

                           (a) Each of PFSweb and Daisytek International shall
furnish the other with a copy of any ruling requests or other documents
delivered to the IRS that relates to the Distribution or that could otherwise be
reasonably expected to have an impact on the Tax-Free Status of the Contribution
and Distribution or the qualification of the Contribution as a D Reorganization.

                           (b) (i) Each of PFSweb and Daisytek International
shall cooperate with the other and shall take (or refrain from taking) all such
actions as the other may reasonably request in connection with obtaining any
Daisytek determination referred to in Section 4.2. Such cooperation shall
include, without limitation, providing any information and/or representations
reasonably requested by the other to enable either party (or counsel for such
party) to obtain and maintain any Subsequent Tax Opinion/Ruling that would
permit any action described in Section 4.2 to be taken by PFSweb or a PFSweb
Affiliate. From and after any Representation Date in connection with obtaining
any such determination or the receipt of a Subsequent Tax Opinion/Ruling and
until the first day after the two-year anniversary of the date of such
determination or receipt, neither party shall take (nor shall it refrain from
taking) any action that would have caused such representation to be untrue
unless the other party has determined, in its sole and absolute discretion,
which discretion shall be exercised in good faith solely to preserve the
Tax-Free Status of the Distribution and the qualification of the Contribution as
a D Reorganization, that such action would not jeopardize the Tax-Free Status of
the Contribution and Distribution or the qualification of the Contribution as a
D Reorganization.

                               (ii) In the event that PFSweb notifies Daisytek
that it desires to take one of the actions described in Section 4.2 and Daisytek
concludes that such action might jeopardize the Tax-Free Status of the
Contribution and Distribution or the qualification of the Contribution as a D
Reorganization, Daisytek shall, at the request of PFSweb, elect either to (A)
use all commercially reasonable efforts to obtain a Subsequent Tax
Opinion/Ruling that would permit PFSweb to take the specified action, and PFSweb
shall cooperate in connection with such



                                       17
<PAGE>   19



efforts, or (B) provide all reasonable cooperation to PFSweb in connection with
PFSweb obtaining such a Subsequent Tax Opinion/Ruling in form and substance
reasonably satisfactory to Daisytek; provided, however, that the reasonable
costs and expenses of obtaining any such Subsequent Tax Opinion/Ruling shall be
borne by Daisytek, unless such Subsequent Tax Opinion/Ruling shall not be
obtained as the result of a determination that the proposed action shall
jeopardize the Tax-Free Status of the Contribution and Distribution or the
qualification of the Contribution as a D Reorganization, in which case the costs
and expenses of attempting to obtain such Subsequent Tax Opinion/Ruling shall be
borne by PFSweb.

                           (c) (i) Until all restrictions set forth in Section
4.2 have expired, PFSweb shall give Daisytek written notice of any intention to
effect or permit an action or transaction described in Section 4.2 and which is
prohibited thereunder at such time within a period of time reasonably sufficient
to enable Daisytek (A) to make the determination referred to in Section 4.2 or
(B) to prepare and seek any Subsequent Tax Opinion/ Ruling in connection with
such proposed action or transaction. Each such notice by PFSweb shall set forth
the terms and conditions of the proposed action or transaction, including,
without limitation, as applicable, the nature of any related action proposed to
be taken by the Board of Directors of PFSweb, the approximate number of shares
of PFSweb Capital Stock proposed to be transferred or issued, the approximate
Value of PFSweb's assets (or assets of any of PFSweb's Subsidiaries) proposed to
be transferred, the proposed timetable for such action or transaction, and the
number of shares of PFSweb Capital Stock otherwise then owned by the other party
to the proposed action or transaction, all with sufficient particularity to
enable Daisytek to make any such required determination, including information
required to prepare and seek a Subsequent Tax Opinion/Ruling in connection with
such proposed action or transaction. All information provided by PFSweb to
Daisytek pursuant to this Section 4.3 shall be deemed subject to the
confidentiality obligations of the Separation Agreement.

                               (ii) Promptly, but in any event within 15
Business Days, after Daisytek receives such written notice from PFSweb, Daisytek
shall evaluate such information and notify PFSweb in writing of (A) such
determination or (B) Daisytek's intent to seek a Subsequent Tax Opinion/Ruling
and the proposed date for submission of the request therefor, which date shall
not be more than 45 days after the date Daisytek so notifies PFSweb of
Daisytek's intent to seek a Subsequent Tax Opinion/Ruling, provided that such
45-day period shall be appropriately extended for any period of noncompliance by
PFSweb with Section 4.3(b). If Daisytek makes a determination that an action or
transaction described in Section 4.2 would jeopardize the Tax-Free Status of the
Contribution and Distribution or the qualification of the Contribution as a D
Reorganization, such notice to PFSweb shall set forth, in reasonable detail, the
reasons therefor. Daisytek shall notify PFSweb promptly, but in any event within
two Business Days, after the receipt of a Subsequent Tax Opinion/Ruling.

                  4.4.     Indemnification For Tax Liabilities.

                           (a) Notwithstanding any other provision of this
Agreement to the contrary, (i) subject to Section 4.4(b), PFSweb shall
indemnify, defend and hold harmless Daisytek International and each Daisytek
Affiliate (or any successor to any of them) against any


                                       18
<PAGE>   20



and all Tax-Related Losses incurred by Daisytek International or any of them in
connection with any proposed tax assessment or tax controversy with respect to
the Distribution or the Contribution to the extent caused by any breach by
PFSweb of any of its representations, warranties or covenants made pursuant to
this Agreement and (ii) Daisytek International shall indemnify, defend and hold
harmless PFSweb and each PFSweb Affiliate (or any successor to any of them)
against any and all Tax-Related Losses incurred by PFSweb or any of them in
connection with any proposed tax assessment or tax controversy with respect to
the Distribution or the Contribution to the extent caused by any breach by
Daisytek International or Daisytek of any of its representations, warranties or
covenants made pursuant to this Agreement. All interest or penalties incurred in
connection with such Tax-Related Losses shall be computed for the time period up
to and including the date that the Indemnifying Party pays its indemnification
obligation in full.

                           (b) If Daisytek (i) makes a determination pursuant to
any clause of Section 4.2, on the basis of a Subsequent Tax Opinion/Ruling or
otherwise, and (ii) delivers to PFSweb written notice of such determination
pursuant to Section 4.3(c), PFSweb shall have no obligation pursuant to Section
4.4(a), except to the extent that any Tax-Related Losses so incurred resulted
from the inaccuracy, incorrectness or incompleteness of any representation
provided by PFSweb upon which such Subsequent Tax Opinion/Ruling and/or
determination was based.

                           (c) The Indemnifying Party shall pay any amount due
and payable to the Indemnitee pursuant to this Section 4.4 on or before the 90th
day following the earlier of agreement or determination that such amount is due
and payable to he Indemnitee. All payments pursuant to this Section 4.4 shall be
made by wire transfer to the bank account designated by the Indemnitee for such
purpose, and on the date of such wire transfer the Indemnifying Party shall give
the Indemnitee notice of the transfer.

                  4.5.     Procedure For Indemnification For Tax Liabilities.

                           (a) If an Indemnitee receives notice of the assertion
of any Third-Party Claim with respect to which an Indemnifying Party may be
obligated under Section 4.4 to provide indemnification, the Indemnitee shall
give the Indemnifying Party notice thereof (together with a copy of such Third-
Party Claim, process or other legal pleading) promptly after becoming aware of
such Third-Party Claim; provided, however, that the failure of the Indemnitee to
give notice as provided in this Section shall not relieve the Indemnifying Party
of its obligations under Section 4.4, except to the extent that the Indemnifying
Party is actually prejudiced by such failure to give notice. Such notice shall
describe such Third-Party Claim in reasonable detail.

                           (b) (i) Daisytek and PFSweb shall jointly control the
defense of, and cooperate with each other with respect to defending, any
Third-Party Claim with respect to which either party is obligated under Section
4.4 to provide indemnification, provided that either party shall forfeit such
joint control right with respect to a particular Third-Party Claim if such party
or any Affiliate of such party makes any public statement or filing, or takes
any action (including, but not limited to, the filing of any submission or
pleading, or the giving of a



                                       19
<PAGE>   21




deposition or production of documents, in any administrative or court
proceeding) in connection with such Third-Party Claim that is inconsistent in a
material respect with any representation or warranty made by such party in this
Agreement, the Tax Opinions/Rulings, or the Representation Letters.

                               (ii) PFSweb and Daisytek shall exercise their
rights to jointly control the defense of any such Third-Party Claim solely for
the purpose of defeating such Third-Party Claim and, unless required by
applicable law, neither PFSweb nor Daisytek shall make any statements or take
any actions that could reasonably result in the shifting of liability for any
Losses arising out of such Third-Party Claim from the party making such
statement or taking such action (or any of its Affiliates) to the other party
(or any of its Affiliates).

                               (iii) Statements made or actions taken by either
PFSweb or Daisytek in connection with the defense of any such Third-Party Claim
shall not prejudice the rights of such party in any subsequent action or
proceeding between the parties.

                               (iv) If either Daisytek or PFSweb fails to
jointly defend any such Third-Party Claim, the other party shall solely defend
such Third-Party Claim and the party failing to jointly defend shall use
commercially reasonable efforts to cooperate with the other party in its defense
of such Third-Party Claim; provided, however, that an Indemnitee may not
compromise or settle any such Third-Party Claim without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. All costs and expenses of either party in connection with,
and during the course of, the joint control of the defense of any such
Third-Party Claim shall be initially paid by the party that incurs such costs
and expenses. Such costs and expenses shall be reallocated and reimbursed in
accordance with the respective indemnification obligations of the parties at the
conclusion of the defense of such Third-Party Claim.

                  4.6.     Arbitration. Any dispute between the parties arising
out of or relating to this Section 4, including the interpretation of this
Section 4, or any actual or purported breach of this Section 4, shall be
resolved only in accordance with the following provisions:

                           (a) Daisytek and PFSweb shall attempt in good faith
to resolve any such dispute promptly through negotiations of the parties. In the
event of any such dispute, either party may deliver a Dispute Notice to the
other party, and within 20 Business Days after the receipt of such Dispute
Notice, the appropriate representatives of Daisytek and PFSweb shall meet to
attempt to resolve such dispute. If such dispute has not been resolved within
the Negotiation Period, or if one of the parties fails or refuses to negotiate
such dispute, the issue shall be settled by arbitration pursuant to Section
4.6(b). The results of such arbitration shall be final and binding on the
parties.

                           (b) Either party may initiate arbitration with regard
to such dispute by giving the other party written notice either (i) at any time
following the end of the Negotiation Period, or (ii) if the parties do not meet
within 20 Business Days of the receipt of the Dispute Notice, at any time
thereafter. The arbitration shall be conducted by three arbitrators in



                                       20
<PAGE>   22




accordance with the CPR Rules, except as otherwise provided in this Section 4.6.
Within 20 days following receipt of the written notice of arbitration, Daisytek
and PFSweb shall each appoint one arbitrator. The two arbitrators so appointed
shall appoint the third arbitrator. If either Daisytek or PFSweb shall fail to
appoint an arbitrator within such 20-day period, the arbitration shall be by the
sole arbitrator appointed by the other party. Whether selected by Daisytek and
PFSweb or otherwise, each arbitrator selected to resolve such dispute shall be a
tax attorney or tax accountant who is generally recognized in the tax community
as a qualified and competent tax practitioner with experience in the tax area
involved in the issue or issues to be resolved. Such arbitrators shall be
empowered to determine whether one party is required to indemnify the other
pursuant to Section 4.4 and to determine the amount of the related
indemnification payment. Each of Daisytek and PFSweb shall bear 50% of the
aggregate expenses of the arbitrators, unless the arbitrators otherwise
determine that a different allocation of responsibility for expenses is
appropriate under the circumstances. The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. Sections 1-14. The place of arbitration
shall be Dallas, Texas. The final decision of the arbitrators shall be rendered
no later than one year from the date of the written notice of arbitration.

                  4.7.     Exclusive Remedies. Except for the right to pursue
equitable remedies or as otherwise set forth in an Ancillary Agreement, the
remedies provided in this Section 4 shall be deemed the sole and exclusive
remedies of the parties with respect to the subject matters of the
indemnification provisions of Section 4.4.

                  5.       CERTAIN OTHER COVENANTS.

                  5.1.     Financial And Other Information.

                           (a) PFSweb agrees that, for so long as Daisytek
International is required to consolidate PFSweb's results of operations and
financial position or to account for its investment in PFSweb under the equity
method of accounting (determined in accordance with generally accepted
accounting principles consistently applied):

                               (i) PFSweb shall, and shall cause each of its
Subsidiaries to, maintain a system of internal accounting controls that will
provide reasonable assurance that: (A) PFSweb's and such Subsidiaries' books,
records and accounts fairly reflect all transactions and dispositions of assets
and (B) the specific objectives of accounting control are achieved.

                               (ii) PFSweb shall, and shall cause each of its
Subsidiaries to, maintain a fiscal year which commences on April 1 and ends on
March 31 of each calendar year.

                               (iii) PFSweb shall deliver to Daisytek
International a trial balance submission, which shall include amounts relating
to each of its Subsidiaries, in such format and detail as Daisytek International
may request, as promptly as practicable following the last day of each month.


                                       21
<PAGE>   23



                               (iv) As soon as practicable, after the end of
each of the first three fiscal quarters in each fiscal year of PFSweb and after
the end of each such fiscal year, PFSweb shall deliver to Daisytek International
a consolidated income statement and balance sheet for PFSweb and its
Subsidiaries for such fiscal quarter or year, as the case may be.

                               (v) As soon as practicable, and in any event no
later than three days before PFSweb intends to file its Quarterly Financial
Statements (as defined below) with the SEC, PFSweb shall deliver to Daisytek
International as final as possible drafts of (A) the consolidated financial
statements of PFSweb and its Subsidiaries (and notes thereto) for such periods
and for the period from the beginning of the current fiscal year to the end of
such quarter, setting forth in each case in comparative form for each such
fiscal quarter of PFSweb the consolidated figures (and notes thereto) for the
corresponding quarter and periods of the previous fiscal year and all in
reasonable detail and prepared in accordance with Article 10 of Regulation S-X,
and (B) a discussion and analysis by management of PFSweb's and its
Subsidiaries' financial condition and results of operations for such fiscal
period, including, without limitation, an explanation of any material adverse
change, all in reasonable detail and prepared in accordance with Item 303(b) of
Regulation S-K. The information set forth in (A) and (B) above is herein
referred to as the "Quarterly Financial Statements." If requested by Daisytek
International, together with the delivery of the Quarterly Financial Statements,
PFSweb shall deliver to Daisytek International a certificate of the chief
financial officer of PFSweb to the effect that the Quarterly Financial
Statements present fairly, in all material respects, the financial condition and
results of operations of PFSweb and its Subsidiaries as of and for the periods
presented therein; provided that PFSweb may continue to revise such Quarterly
Financial Statements prior to the filing thereof in order to make corrections
and changes which corrections and changes shall be delivered by PFSweb to
Daisytek International as soon as practicable thereafter; and, provided,
further, that Daisytek International and PFSweb financial representatives shall
actively consult with each other regarding any changes (whether or not
substantive) which PFSweb may consider making to its Quarterly Financial
Statements and related disclosures during the period prior to any anticipated
filing with the SEC, and PFSweb shall obtain Daisytek International's consent
prior to making any change to PFSweb's Quarterly Financial Statements or related
disclosures which would have an effect upon Daisytek International's financial
statements or related disclosures. In addition to the foregoing, no Quarterly
Financial Statement or any other document which refers, or contains information
with respect, to the ownership of PFSweb by Daisytek, the separation of PFSweb
from Daisytek International or the Distribution shall be filed with the SEC or
otherwise made public by PFSweb or any of its Subsidiaries without the prior
written consent of Daisytek International.

                               (vi) As soon as practicable, and in any event no
later than five days before PFSweb intends to file its Annual Financial
Statements (as defined below) with the SEC, PFSweb shall deliver to Daisytek
International as final as possible drafts of (A) the consolidated financial
statements of PFSweb and its Subsidiaries (and notes thereto) for such periods
and for the period from the beginning of the current fiscal year to the end of
such fiscal year, setting forth in each case in comparative form for each such
fiscal year of PFSweb the consolidated figures (and notes thereto) for the
corresponding period of the previous fiscal year and all in reasonable detail
and prepared in accordance with Article 10 of Regulation S-X, and (B)




                                       22
<PAGE>   24





a discussion and analysis by management of PFSweb's and its Subsidiaries'
financial condition and results of operations for such fiscal year, including,
without limitation, an explanation of any material adverse change, all in
reasonable detail and prepared in accordance with Item 303(b) of Regulation S-K.
The information set forth in (A) and (B) above is herein referred to as the
"Annual Financial Statements." If requested by Daisytek International, together
with the delivery of the Annual Financial Statements, PFSweb shall deliver to
Daisytek International a certificate of the chief financial officer of PFSweb to
the effect that the Annual Financial Statements present fairly, in all material
respects, the financial condition and results of operations of PFSweb and its
Subsidiaries as of and for the periods presented therein; provided that PFSweb
may continue to revise such Annual Financial Statements prior to the filing
thereof in order to make corrections and changes which corrections and changes
shall be delivered by PFSweb to Daisytek International as soon as practicable
thereafter; and, provided, further, that Daisytek International and PFSweb
financial representatives shall actively consult with each other regarding any
changes (whether or not substantive) which PFSweb may consider making to its
Annual Financial Statements and related disclosures during the period prior to
any anticipated filing with the SEC, and PFSweb shall obtain Daisytek
International's consent prior to making any change to PFSweb's Annual Financial
Statements or related disclosures which would have an effect upon Daisytek
International's financial statements or related disclosures. In addition to the
foregoing, no Annual Financial Statement or any other document which refers, or
contains information with respect, to the ownership of PFSweb by Daisytek, the
separation of PFSweb from Daisytek International or the Distribution shall be
filed with the SEC or otherwise made public by PFSweb or any of its Subsidiaries
without the prior written consent of Daisytek International. In any event,
PFSweb shall deliver to Daisytek International, no later than 80 days after the
end of each fiscal year of PFSweb, the final form of the Annual Financial
Statements accompanied by an opinion thereon by PFSweb's independent certified
public accountants.

                               (vii)  PFSweb shall deliver to Daisytek
International all Quarterly and Annual Financial Statements of each Subsidiary
of PFSweb which is itself required to file financial statements with the SEC or
otherwise make such financial statements publicly available, with such financial
statements to be provided in the same manner and detail and on the same time
schedule as those financial statements of PFSweb required to be delivered to
Daisytek International pursuant to this Section 5.1.

                               (viii) PFSweb and each of its Subsidiaries which
files information with the SEC shall deliver to Daisytek International: (A) as
soon as the same are prepared, substantially final drafts of: (x) all reports,
notices and proxy and information statements to be sent or made available by
PFSweb or any of its Subsidiaries to their security holders, (y) all regular,
periodic and other reports to be filed under Sections 13, 14 and 15 of the
Exchange Act (including Reports on Forms 10-K, 10-Q and 8-K and Annual Reports
to Shareholders), and (z) all registration statements and prospectuses to be
filed by PFSweb or any of its Subsidiaries with the SEC or any securities
exchange pursuant to the listed company manual (or similar requirements) of such
exchange (collectively, the documents identified in clauses (x), (y) and (z) are
referred to herein as "PFSweb Public Documents"), and (B) as soon as
practicable, but in no event later than four Business Days prior to the date the
same are printed, sent or filed, whichever is earliest, final copies of all such
PFSweb Public Documents; provided that PFSweb may



                                       23
<PAGE>   25



continue to revise such PFSweb Public Documents prior to the filing thereof in
order to make corrections and changes which corrections and changes shall be
delivered by PFSweb to Daisytek International as soon as practicable thereafter;
and, provided, further, that Daisytek International and PFSweb financial
representatives shall actively consult with each other regarding any changes
(whether or not substantive) which PFSweb may consider making to any of its
PFSweb Public Documents and related disclosures prior to any anticipated filing
with the SEC, and PFSweb shall obtain Daisytek International's consent prior to
making any change to its PFSweb Public Documents or related disclosures which
would have an effect upon Daisytek International's financial statements or
related disclosures. In addition to the foregoing, no PFSweb Public Document or
any other document which refers, or contains information with respect, to the
ownership of PFSweb by Daisytek, the separation of PFSweb from Daisytek
International or the Distribution shall be filed with the SEC or otherwise made
public by PFSweb or any of its Subsidiaries without the prior written consent of
Daisytek International.

                               (ix) PFSweb shall, as promptly as practicable,
deliver to Daisytek International copies of all annual and other budgets and
financial projections relating to PFSweb or any of its Subsidiaries and shall
provide Daisytek International an opportunity to meet with management of PFSweb
to discuss such budgets and projections.

                               (x) With reasonable promptness, PFSweb shall
deliver to Daisytek International such additional financial and other
information and data with respect to PFSweb and its Subsidiaries and their
business, properties, financial positions, results of operations and prospects
as from time to time may be reasonably requested by Daisytek International.

                               (xi) Prior to issuance, PFSweb shall deliver to
Daisytek International copies of substantially final drafts of all press
releases and other statements to be made available by PFSweb or any of its
Subsidiaries to the public concerning material developments in the business,
properties, earnings, results of operations, financial condition or prospects of
PFSweb or any of its Subsidiaries or the relationship between (A) PFSweb or any
of its Subsidiaries and (B) Daisytek International or any of its Affiliates. In
addition, prior to the issuance of any such press release or public statement,
PFSweb shall consult with Daisytek International regarding any changes (other
than typographical or other similar minor changes) to such substantially final
drafts. Immediately following the issuance thereof, PFSweb shall deliver to
Daisytek International copies of final drafts of all press releases and other
public statements. PFSweb and Daisytek will consult with each other as to the
timing of their annual and quarterly earnings releases and will give each other
an opportunity to review the information therein relating to PFSweb and its
Subsidiaries and to comment thereon.

                               (xii) PFSweb shall cooperate fully, and cause its
accountants to cooperate fully, with Daisytek International to the extent
requested by Daisytek in the preparation of Daisytek International's public
earnings releases, quarterly reports on Form 10-Q, Annual Reports to
Shareholders, Annual Reports on Form 10-K, any Current Reports on Form 8-K and
any other proxy, information and registration statements, reports, notices,
prospectuses and any other filings made by Daisytek International with the SEC,
any national securities exchange or


                                       24
<PAGE>   26


otherwise made publicly available (collectively, "Daisytek Public Filings").
PFSweb agrees to provide to Daisytek International all information that it
reasonably requests in connection with any Daisytek Public Filings or that, in
the judgment of Daisytek International's legal counsel, is required to be
disclosed or incorporated by reference therein under any law, rule or
regulation. Such information shall be provided by PFSweb in a timely manner on
the dates requested by Daisytek International (which may be earlier than the
dates on which PFSweb otherwise would be required hereunder to have such
information available) to enable Daisytek International to prepare, print and
release all Daisytek Public Filings on such dates as Daisytek International
shall determine. PFSweb shall use commercially reasonable efforts to cause its
accountants to consent to any reference to them as experts in any Daisytek
Public Filings required under any law, rule or regulation. If and to the extent
requested by Daisytek International, PFSweb shall diligently and promptly review
all drafts of such Daisytek Public Filings and prepare in a diligent and timely
fashion any portion of such Daisytek Public Filing pertaining to PFSweb. Prior
to any printing or public release of any Daisytek Public Filing, an appropriate
executive officer of PFSweb shall, if requested by Daisytek international,
certify that the information relating to PFSweb, any PFSweb Affiliate or the
PFSweb Business in such Daisytek Public Filing is accurate, true and correct in
all material respects. Unless required by law, rule or regulation, PFSweb shall
not publicly release any financial or other information which conflicts with the
information with respect to PFSweb, any PFSweb Affiliate or the PFSweb Business
that is included in any Daisytek Public Filing without Daisytek International's
prior written consent. Prior to the release or filing thereof, Daisytek
International shall provide PFSweb with a draft of any portion of a Daisytek
Public Filing containing information relating to PFSweb and its Subsidiaries and
shall give PFSweb an opportunity to review such information and comment thereon;
provided that Daisytek International shall determine in its sole discretion the
final form and content of all Daisytek Public Filings.

                           (b) PFSweb agrees that, for so long as Daisytek
International is required to consolidate PFSweb's results of operations and
financial position or to account for its investment in PFSweb under the equity
method of accounting (in accordance with generally accepted accounting
principles):

                               (i) PFSweb shall not select a different
accounting firm to serve as its (and its Subsidiaries') independent certified
public accountants ("PFSweb's Auditors") without Daisytek International's prior
written consent (which shall not be unreasonably withheld).

                               (ii) PFSweb shall use its best efforts to enable
the PFSweb Auditors to complete their audit such that they will date their
opinion on PFSweb's audited annual financial statements on the same date that
Daisytek International's independent certified public accountants ("Daisytek's
Auditors") date their opinion on Daisytek International's audited annual
financial statements (the "Daisytek Annual Statements"), and to enable Daisytek
International to meet its timetable for the printing, filing and public
dissemination of the Daisytek Annual Statements.

                               (iii) PFSweb shall provide to Daisytek
International on a timely basis all information that Daisytek International
reasonably requires to meet its schedule for the



                                       25
<PAGE>   27



preparation, printing, filing, and public dissemination of the Daisytek Annual
Statements. Without limiting the generality of the foregoing, PFSweb will
provide all required financial information with respect to PFSweb and its
Subsidiaries to PFSweb's Auditors in a sufficient and reasonable time and in
sufficient detail to permit PFSweb's Auditors to take all steps and perform all
reviews necessary to provide sufficient assistance to Daisytek's Auditors with
respect to information to be included or contained in the Daisytek Annual
Statements.

                               (iv) PFSweb shall authorize PFSweb's Auditors to
make available to Daisytek's Auditors both the personnel who performed or are
performing the annual audit of PFSweb and work papers related to the annual
audit of PFSweb, in all cases within a reasonable time prior to PFSweb's
Auditors' opinion date, so that Daisytek's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of
PFSweb's Auditors as it relates to Daisytek's Auditors' report on Daisytek
International's statements, all within sufficient time to enable Daisytek
International to meet its timetable for the printing, filing and public
dissemination of the Daisytek Annual Statements.

                               (v) PFSweb shall provide Daisytek International's
internal auditors access to PFSweb's and its Subsidiaries, books and records so
that Daisytek International may conduct reasonable audits relating to the
financial statements provided by PFSweb pursuant hereto as well as to the
internal accounting controls and operations of PFSweb and its Subsidiaries.

                               (vi) PFSweb shall give Daisytek International as
much prior notice as reasonably practical of any proposed determination of, or
any significant changes in, its accounting estimates or accounting principles
from those in effect on the date hereof. PFSweb will consult with Daisytek
International and, if requested, PFSweb will consult with Daisytek
International's independent public accountants with respect thereto. PFSweb will
not make any such determination or changes without Daisytek International's
prior written consent if such a determination or a change would be sufficiently
material to be required to be disclosed in PFSweb's financial statements as
filed with the SEC or otherwise publicly disclosed therein.

                               (vii) Notwithstanding clause (vi) above, PFSweb
shall make any changes in its accounting estimates or accounting principles that
are requested by Daisytek International in order for PFSweb's accounting
estimates and principles to be consistent with those of Daisytek International.

                  Nothing in this Section 5.1 shall require PFSweb to violate
any agreement with any of its customers regarding the confidentiality of
commercially sensitive information relating to that customer or its business;
provided that in the event that PFSweb is required under this Section 5.1 to
disclose any such information, PFSweb shall use all commercially reasonable
efforts to seek to obtain such customer's consent to the disclosure of such
information.

                  5.2.     Other Covenants. PFSweb hereby covenants and agrees
that, for so long as Daisytek beneficially owns at least 50% of the outstanding
shares of PFSweb Common Stock:




                                       26
<PAGE>   28

                           (a) PFSweb shall not, without the prior written
consent of Daisytek International (which it may withhold in its sole and
absolute discretion), take, or cause to be taken, directly or indirectly, any
action, including making or failing to make any election under the law of any
state, which has the effect, directly or indirectly, of restricting or limiting
the ability of Daisytek to freely sell, transfer, assign, pledge or otherwise
dispose of shares of PFSweb Common Stock or would restrict or limit the rights
of any transferee of Daisytek as a holder of PFSweb Common Stock. Without
limiting the generality of the foregoing, PFSweb shall not, without the prior
written consent of Daisytek International (which it may withhold in its sole and
absolute discretion), take any action, or recommend to its stockholders any
action, which would among other things, limit the legal rights of, or deny any
benefit to, Daisytek as a PFSweb stockholder in a manner not applicable to
PFSweb stockholders generally.

                           (b) PFSweb shall not, without the prior written
consent of Daisytek International (which it may withhold in its sole and
absolute discretion), issue any shares of PFSweb Capital Stock or any rights,
warrants or options to acquire PFSweb Capital Stock (including, without
limitation, securities convertible or exchangeable for PFSweb Capital Stock), if
after giving effect to such issuances and considering all of the shares of
PFSweb Capital Stock acquirable pursuant to such rights, warrants and options to
be outstanding on the date of such issuance (whether or not then exercisable),
Daisytek would own less than 50% of the then outstanding shares of PFSweb Common
Stock; provided, however, the foregoing shall not restrict the issuance of any
rights, warrants or options to acquire PFSweb Capital Stock which, by its terms,
will not vest or be exercisable prior to the final Distribution Date and the
completion of the Distribution.

                           (c) To the extent that Daisytek or Daisytek
International is a party to any contracts or agreements that provide that
certain actions of its Subsidiaries may result in Daisytek or Daisytek
International being in breach of or in default under such agreements and
Daisytek or Daisytek International has advised PFSweb of the existence, and has
furnished PFSweb with copies, of such contracts or agreements (or the relevant
portions thereof), PFSweb shall not take any actions that reasonably could
result in Daisytek or Daisytek International being in breach of or in default
under any such contract or agreement. The parties acknowledge and agree that,
after the date hereof, Daisytek and Daisytek International may in good faith
(and not solely with the intention of imposing restrictions on PFSweb pursuant
to this covenant) enter into additional contracts or agreements that provide
that certain actions of its Subsidiaries may result in Daisytek or Daisytek
International being in breach of or in default under such agreements. PFSweb
agrees to keep confidential and not to disclose any information provided to it
pursuant to this Section 5.2(c).

                  6.       INDEMNIFICATION.

                  6.1.     Indemnification by PFSweb. Subject to Section 6.3,
PFSweb shall indemnify, defend and hold harmless Daisytek International, all
Daisytek Affiliates and each of their respective directors, officers and
employees (in their capacities as such), from and against:


                                       27
<PAGE>   29


                           (a) all Losses relating to, arising out of, or due
to, directly or indirectly, any breach by PFSweb or any PFSweb Affiliate of any
of the provisions of this Agreement;

                           (b) all Losses relating to, arising out of, or due
to, directly or indirectly, any incorrect, inaccurate or incomplete financial
and other information provided by PFSweb or any PFSweb Affiliate to Daisytek
International pursuant to Section 5.1 of this Agreement;

                           (c) all Losses relating to, arising out of, or due to
any untrue statement or alleged untrue statement of a material fact contained
in, or incorporated by reference into, the IPO Registration Statement or the
omission or alleged omission to state (whether pursuant to direct statement or
incorporation by reference) in the IPO Registration Statement a material fact
required to be stated therein or necessary to make the statements therein not
misleading other than with respect to the Daisytek Disclosure Portions; and

                           (d) all Losses relating to, arising out of, or due to
any untrue statement or alleged untrue statement of a material fact contained
in, or incorporated by reference into, the Distribution Registration Statement
or the omission or alleged omission to state (whether pursuant to direct
statement or incorporation by reference) in the Distribution Registration
Statement a material fact required to be stated therein or necessary to make the
statements therein not misleading other than with respect to the Daisytek
Disclosure Portions.

                  6.2.     Indemnification by Daisytek International. Subject to
Section 6.3, Daisytek International shall indemnify, defend, and hold harmless
PFSweb, all PFSweb Affiliates, and each of their respective directors, officers
and employees (in their capacities as such), from and against:

                           (a) all Losses relating to, arising out of, or due
to, directly or indirectly, any breach by Daisytek International or any Daisytek
Affiliate of any of the provisions of this Agreement;

                           (b) all Losses relating to, arising out of, or due to
any untrue statement or alleged untrue statement of a material fact contained
in, or incorporated by reference into, the Daisytek Disclosure Portions of the
IPO Registration Statement or the omission or alleged omission to state (whether
pursuant to direct statement or incorporation by reference) in the Daisytek
Disclosure Portions of the IPO Registration Statement a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and

                           (c) all Losses relating to, arising out of, or due to
any untrue statement or alleged untrue statement of a material fact contained
in, or incorporated by reference into, the Daisytek Disclosure Portions of the
Distribution Registration Statement or the omission or alleged omission to state
(whether pursuant to direct statement or incorporation by reference) in the
Daisytek Disclosure Portions of the Distribution Registration Statement a
material fact required to be stated therein or necessary to make the statements
therein not misleading.




                                       28
<PAGE>   30



                  6.3.     Other Liabilities.

                           (a) Except as provided in Section 6.4, this Section 6
shall not be applicable to any Tax-Related Losses, which shall be governed by
Section 4 of this Agreement.

                           (b) This Section 6 shall not be applicable to any
Losses relating to, arising out of, or due to any breach of the provisions of
any other contract, agreement or understanding between Daisytek International or
any Daisytek Affiliate and PFSweb or any PFSweb Affiliate, including, without
limitation, the Separation Agreement and any of the other Ancillary Agreements,
which Losses shall be governed by the terms of such contract, agreement or
understanding.

                  6.4.     Tax Effects of Indemnification.

                           (a) Any indemnification payment made under this
Agreement shall be characterized for tax purposes as if such payment were made
immediately prior to the latest Distribution Date, and shall therefore be
treated, to the extent permitted by law, as either (i) a distribution from
PFSweb to Daisytek or (ii) a capital contribution from Daisytek to PFSweb.

                           (b) The amount of any Loss or Tax-Related Losses for
which indemnification is provided under this Agreement shall be (i) increased to
take account of net Tax cost, if any, incurred by the Indemnitee arising from
the receipt or accrual of an Indemnity Payment hereunder (grossed up for such
increase) and (ii) reduced to take account of net Tax benefit, if any, realized
by the Indemnitee arising from incurring or paying such Loss or Tax-Related
Losses. In computing the amount of any such Tax cost or Tax benefit, the
Indemnitee shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the receipt or
accrual of any Indemnity Payment hereunder or incurring or paying any
indemnified Loss or Tax-Related Losses. Any Indemnity Payment hereunder shall
initially be made without regard to this Section 6.4 and shall be increased or
reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit
only after the Indemnitee has actually realized such cost or benefit. For
purposes of this Agreement, an Indemnitee shall be deemed to have "actually
realized" a net Tax cost or a net Tax benefit to the extent that, and at such
time as, the amount of Taxes payable by such Indemnitee is increased above or
reduced below, as the case may be, the amount of Taxes that such Indemnitee
would be required to pay but for the receipt or accrual of the Indemnity Payment
or the incurrence or payment of such Loss or Tax-Related Losses, as the case may
be. The amount of any increase or reduction hereunder shall be adjusted to
reflect any final determination (which shall include the execution of Form
870-AD or successor form) with respect to the Indemnitee's liability for Taxes,
and payments between Daisytek and PFSweb to reflect such adjustment shall be
made if necessary.

                  6.5.     Effect Of Insurance upon Indemnification. The amount
which an Indemnifying Party is required to pay to any Indemnitee pursuant to
this Section 6 shall be reduced (including retroactively) by any Insurance
Proceeds and other amounts actually recovered by such Indemnitee in reduction
of the related Loss, it being understood and agreed that each of PFSweb and
Daisytek International shall use commercially reasonable efforts to collect any
such proceeds or other amounts to which it or any of its Affiliates is
entitled, without regard to



                                       29
<PAGE>   31



whether it is the Indemnifying Party hereunder. No Indemnitee shall be required,
however, to collect any such proceeds or other amounts prior to being entitled
to indemnification from an Indemnifying Party hereunder. If an Indemnitee
receives an Indemnity Payment in respect of a Loss and subsequently receives
Insurance Proceeds or other amounts in respect of such Loss, then such
Indemnitee shall pay to such Indemnifying Party an amount equal to the
difference between (a) the sum of the amount of such Indemnity Payment and the
amount of such Insurance Proceeds or other amounts actually received and (b) the
amount of such Loss, in each case adjusted (at such time as appropriate
adjustment can be determined) to reflect any premium adjustment attributable to
such claim.

                  6.6.     Procedure for Indemnification Involving Third-Party
Claims.

                           (a) If any Indemnitee receives notice of the
assertion of any Third-Party Claim with respect to which an Indemnifying Party
is obligated under this Agreement to provide indemnification (other than
pursuant to Section 4), such Indemnitee shall give such Indemnifying Party
notice thereof (together with a copy of such Third-Party Claim, process or other
legal pleading) promptly after becoming aware of such Third-Party Claim;
provided, however, that the failure of any Indemnitee to give notice as provided
in this Section shall not relieve any Indemnifying Party of its obligations
under this Section 6, except to the extent that such Indemnifying Party is
actually prejudiced by such failure to give notice. Such notice shall describe
such Third-Party Claim in reasonable detail.

                           (b) An Indemnifying Party, at such Indemnifying
Party's own expense and through counsel chosen by such Indemnifying Party (which
counsel shall be reasonably acceptable to the Indemnitee), may elect to defend
any Third-Party Claim. If an Indemnifying Party elects to defend a Third-Party
Claim, then, within ten Business Days after receiving notice of such Third-Party
Claim (or sooner, if the nature of such Third-Party Claim so requires), such
Indemnifying Party shall notify the Indemnitee of its intent to do so, and such
Indemnitee shall cooperate in the defense of such Third-Party Claim. Such
Indemnifying Party shall pay such Indemnitee's reasonable out-of-pocket expenses
incurred in connection with such cooperation. Such Indemnifying Party shall keep
the Indemnitee reasonably informed as to the status of the defense of such
Third-Party Claim. After notice from an Indemnifying Party to an Indemnitee of
its election to assume the defense of a Third-Party Claim, such Indemnifying
Party shall not be liable to such Indemnitee under this Section 6 for any legal
or other expenses subsequently incurred by such Indemnitee in connection with
the defense thereof other than those expenses referred to in the preceding
sentence; provided, however, that such Indemnitee shall have the right to employ
one law firm as counsel ("Separate Counsel"), to represent such Indemnitee in
any action or group of related actions (which firm or firms shall be reasonably
acceptable to the Indemnifying Party) if, in such Indemnitee's reasonable
judgment at any time, either a conflict of interest between such Indemnitee and
such Indemnifying Party exists in respect of such claim, or there may be
defenses available to such Indemnitee which are different from or in addition to
those available to such Indemnifying Party and the representation of both
parties by the same counsel would be inappropriate, and in that event (i) the
reasonable fees and expenses of such Separate Counsel shall be paid by such
Indemnifying Party (it being understood, however, that the Indemnifying Party
shall not be liable for the expenses of more than one Separate Counsel


                                       30
<PAGE>   32


(excluding local counsel) with respect to any Third-Party Claim (even if against
multiple Indemnitees)) and (ii) each of such Indemnifying Party and such
Indemnitee shall have the right to conduct its own defense in respect of such
claim. If an Indemnifying Party elects not to defend against a Third-Party
Claim, or fails to notify an Indemnitee of its election as provided in this
Section 6 within the period of ten Business Days described above, the Indemnitee
may defend, compromise, and settle such Third-Party Claim and shall be entitled
to indemnification hereunder (to the extent permitted hereunder); provided,
however, that no such Indemnitee may compromise or settle any such Third-Party
Claim without the prior written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing,
the Indemnifying Party shall not, without the prior written consent of the
Indemnitee, (i) settle or compromise any Third-Party Claim or consent to the
entry of any judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnitee of a written release
from all liability in respect of such Third-Party Claim or (ii) settle or
compromise any Third-Party Claim in any manner that would be reasonably likely
to have a material adverse effect on the Indemnitee.

                           (c) Notwithstanding the provisions of Section 6.6(b),
Daisytek International and PFSweb shall jointly control the defense of, and
cooperate with each other with respect to defending, any Third-Party Claim with
respect to which each party is claiming that it is entitled to indemnification
under Section 6.1 or 6.2. If either Daisytek International or PFSweb fails to
defend jointly any such Third-Party Claim, the other party shall solely defend
such Third-Party Claim and the party failing to defend jointly shall use all
commercially reasonable efforts to cooperate with the other party in its defense
of such Third-Party Claim; provided, however, that neither party may compromise
or settle any such Third-Party Claim without the prior written consent of the
other party, which consent shall not be unreasonably withheld or delayed. All
costs and expenses of either party in connection with, and during the course of,
the joint control of the defense of any such Third-Party Claim shall be
initially paid by the party that incurs such costs and expenses. Such costs and
expenses shall be reallocated and reimbursed in accordance with the respective
indemnification obligations of the parties at the conclusion of the defense of
such Third-Party Claim.

                  6.7.     Procedure For Indemnification Not Involving
Third-Party Claims. If any Indemnitee desires to assert against an Indemnifying
Party any claim for indemnification under this Section 6 other than a
Third-Party Claim (a "Claim"), the Indemnitee shall deliver to the Indemnifying
Party notice of its demand for satisfaction of such Claim (a "Request"),
specifying in reasonable detail the amount of such Claim and the basis for
asserting such Claim. Within 30 days after the Indemnifying Party has been given
a Request, the Indemnifying Party shall either (i) satisfy the Claim requested
to be satisfied in such Request by delivering to the Indemnitee payment by wire
transfer or a certified or bank cashier's check payable to the Indemnified Party
in immediately available funds in an amount equal to the amount of such Claim,
or (ii) notify the Indemnitee that the Indemnifying Party contests such Claim by
delivering to the Indemnitee a Dispute Notice, stating that the Indemnifying
Party objects to such Claim and specifying in reasonable detail the basis for
contesting such Claim. Any dispute described in clause (ii) of this Section 6.7
shall be subject to the provisions of Section 7.1.


                                       31
<PAGE>   33


                  6.8.     Exclusive Remedies. Except for the right to pursue
equitable remedies, the remedies provided in this Section 6 shall be deemed the
sole and exclusive remedies of the parties with respect to the subject matters
of the indemnification provisions of this Section 6.

                  7.       MISCELLANEOUS

                  7.1.     Dispute Resolution. The parties shall attempt in good
faith to resolve any dispute between the parties arising out of or relating to
this Agreement promptly through negotiations of the parties prior to seeking any
other legal or equitable remedy.

                  7.2.     Survival. The representations and warranties
contained in this Agreement shall survive the execution and delivery hereof and
the Distribution Date until the expiration of all applicable statutes of
limitations.

                  7.3.     Complete Agreement. Except as otherwise set forth in
this Agreement, this Agreement and the exhibits hereto shall constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof and shall supersede all prior agreements and understandings, whether
written or oral, between the parties with respect to such subject matter.

                  7.4.     Authority. Each of the parties hereto represents to
the other that (a) it has the corporate power and authority to execute, deliver
and perform this Agreement, (b) the execution, delivery and performance of this
Agreement by it has been duly authorized by all necessary corporate action, (c)
it has duly and validly executed and delivered this Agreement, and (d) this
Agreement is a legal, valid and binding obligation, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equity principles.

                  7.5.     Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware (other than
the laws regarding conflicts of laws) as to all matters, including matters of
validity, construction, effect, performance and remedies.

                  7.6.     Notices. All Notices shall be in writing and shall be
given and deemed received in accordance with the provisions of the Separation
Agreement.

                  7.7.     Amendment and Modification. This Agreement may not be
amended or modified in any respect except by a written agreement signed by both
of the parties hereto.

                  7.8.     Binding Effect; Assignment. This Agreement and all of
the provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of either party with another Person,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party hereto without the prior written consent of
the other party, which consent shall not be unreasonably withheld or delayed.


                                       32
<PAGE>   34




                  7.9.     Third Party Beneficiaries. The Indemnitees and their
respective successors shall be third party beneficiaries of the indemnification
provisions of Sections 4 and 6, as applicable, and shall be entitled to enforce
those provisions and in connection with such enforcement shall be subject to
Section 7.6, in each such case as fully and to the same extent as if they were
parties to this Agreement. Except as provided in the previous sentence, nothing
in this Agreement, express or implied, is intended to or shall confer upon any
Person any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement, and no Person (other than as provided in
the previous sentence) shall be deemed a third party beneficiary under or by
reason of this Agreement.

                  7.10.    Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. The Agreement may
be executed by facsimile signature.

                  7.11.    Waiver. The observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce such term, but
such waiver shall be effective only if it is in writing signed by the party
against which such waiver is to be asserted. Unless otherwise expressly provided
in this Agreement, no delay or omission on the part of any party in exercising
any right or privilege under this Agreement shall operate as a waiver thereof,
nor shall any waiver on the part of any party of any right or privilege under
this Agreement operate as a waiver of any other right or privilege under this
Agreement nor shall any single or partial exercise of any right or privilege
preclude any other or further exercise thereof or the exercise of any other
right or privilege under this Agreement. No failure by either party to take any
action or assert any right or privilege hereunder shall be deemed to be a waiver
of such right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.

                  7.12.    Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                  7.13.    Remedies. Each party shall be entitled to enforce its
rights under this Agreement specifically, to recover damages and costs
(including reasonable attorneys' fees) caused by any breach of any provision of
this Agreement and to exercise all other rights existing in its favor. Each
party acknowledges and agrees that under certain circumstances the breach by
Daisytek or any of its Affiliates or PFSweb or any of its Affiliates of a term
or provision of this Agreement will materially and irreparably harm the other
party, that money damages will accordingly not be an adequate remedy for such
breach and that the non-defaulting party, in its sole discretion and in addition
to its rights under this Agreement and any other remedies it may have at law or
in equity, may apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any breach of the provisions of
this Agreement.


                                       33
<PAGE>   35



                          [remainder of page is blank]



                                       34
<PAGE>   36


                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date and year first
written above.

                                DAISYTEK INTERNATIONAL CORPORATION



                                By:
                                    --------------------------------------------
                                    Name:
                                    Title:

                                DAISYTEK, INCORPORATED


                                By:
                                    --------------------------------------------
                                    Name:
                                    Title:


                                PFSWEB, INC.



                                By:
                                    --------------------------------------------
                                    Name:
                                    Title:



                                       35