Document:

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                                                                    EXHIBIT 10.6

                               OPERATING AGREEMENT

                                       OF

                  BUSINESS SUPPLIES DISTRIBUTORS HOLDINGS, LLC

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                  THIS OPERATING AGREEMENT is made as of the 2nd day of July,
2001 by and between PRIORITY FULFILLMENT SERVICES, INC., a Delaware corporation
("PFS"), and INVENTORY FINANCING PARTNERS, LLC, a Delaware limited liability
company ("IFP"). PFS and IFP are individually and collectively referred to
herein as a "Member" and "Members," respectively.

                                   WITNESSETH:

                  WHEREAS, the Members have authorized the formation of BUSINESS
SUPPLIES DISTRIBUTORS HOLDINGS, LLC (the "Company") as a limited liability
company pursuant to the provisions of the Delaware Limited Liability Company Act
(the "Act"); and

                  WHEREAS, the Members wish to set forth herein the terms and
provisions governing the operations and management of the Company.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and premises contained herein, and intending to be legally
bound hereby, the parties agree as follows:

                  ARTICLE 1. Formation; Term.

                  (a) Pursuant to Chapter 18, Title 6 of the Act, the Members
have authorized and caused to be filed in the Office of the Delaware Secretary
of State a Certificate of Formation (the "Certificate") thereby establishing the
Company as a Delaware limited liability company. A true and correct copy of the
Certificate is attached hereto as Exhibit A. The Company shall file an amendment
to the Certificate if, and to the extent, required by the Act to reflect the
provisions set forth herein.

                  (b) The Company shall be operated and shall conduct its
business in accordance with the Act, except to the extent modified by the terms
of this Agreement.

                  (c) Unless (i) the Company is sooner dissolved in accordance
with Article 14 of this Agreement or the provisions of the Act or (ii) the term
is extended pursuant to Article 14 of this Agreement, the term of existence of
the Company shall expire on December 31, 2050 (the "Term").

                  ARTICLE 2. Name; Principal Office; Registered Office and
Agent.

                  (a) The business and affairs of the Company shall be conducted
under the name of BUSINESS SUPPLIES DISTRIBUTORS HOLDINGS, LLC.

                  (b) The address of the Company's initial registered office in
the State of Delaware shall be 1013 Centre Road, Wilmington, Delaware, and the
registered agent at such office shall be Corporation Service Company. The
Company shall maintain its principal office in such location as the Manager (as
hereinafter defined) shall determine to be necessary and appropriate for the
proper conduct of the business of the Company.

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                  (c) The following documents shall be maintained at the
principal office of the Company:

                      (i) a current list of the full name and last known
business address of each Member set forth in alphabetical order and the date on
which each person or entity became a Member;

                      (ii) information regarding the amount of cash and a
description and statement of the agreed value of any other property contributed
by each Member;

                      (iii) a copy of the Certificate and all amendments
thereto;

                      (iv) a copy of this Agreement and all amendments hereto;

                      (v) copies of the Company's Federal and state income tax
returns and annual financial statements; and

                      (vi) Minutes of every annual meeting, special meeting and
court-ordered meeting and all written consents obtained from Members for actions
taken by Members without a meeting.

                  (d) Such documents shall be available for inspection and
copying by any Member or its authorized representatives during ordinary business
hours upon reasonable notice from, and at the expense of, such Member.

                  (e) The foregoing shall not restrict the power and authority
of the Manager to change the name, registered office, registered agent or
principal office of the Company from time to time.

                  ARTICLE 3. Limited Purpose; Operations; Title to Company
Property.

                  (a) The sole purpose of the Company shall be to purchase, sell
and distribute IBM products, and to engage in any and all businesses, activities
and enterprises related or incidental thereto, including without limitation, to
purchase, own, operate, manage, lease, sublease, possess, occupy, finance,
borrow, mortgage, pledge, encumber, sell, transfer, assign, grant options with
respect to, construct, expand, renovate, repair, maintain and otherwise deal
with and in respect of real or personal property, or any kind or description,
and otherwise engage in all such activities as are necessary, incidental or
appropriate in connection with the proper and lawful operation of the foregoing;
provided, however, in pursuing the foregoing, the Company shall not take any
action or step, or omit or fail to take any action or step, which shall
constitute a breach, violation or default under any law, rule, regulation,
ordinance, order, decree, license, permit, franchise, authorization, contract,
note, bond, indenture, instrument or agreement to which the Company or any of
its property may be subject or bound. For the avoidance of doubt, the Company
shall be the parent corporation of BSD Acquisition Corp., a Delaware
corporation, which shall conduct the foregoing activities.

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                  (b) The Company shall conduct its business and operations in
accordance with the following provisions and shall:

                      (i) maintain books and records and bank accounts separate
from those of any other person;

                      (ii) maintain its bank accounts and all its other assets
separate from those of any other person or entity;

                      (iii) hold regular Company meetings, as appropriate, to
conduct the business of the Company and observe all other limited liability
company formalities;

                      (iv) hold itself out to creditors and the public as a
legal entity separate and distinct from any other entity;

                      (v) prepare separate tax returns and financial statements;

                      (vi) conduct business in its own name and use separate
stationery, invoices and checks;

                      (vii) not commingle its assets or funds with those of any
other person;

                      (viii) not assume, guarantee or pay the debts or
obligations of any other person;

                      (ix) pay its own liabilities and expenses only out of its
own funds;

                      (x) pay salaries of its own employees from its own funds;

                      (xi) correct any known misunderstanding regarding its
separate identity;

                      (xii) not identify itself as a division of any other
person or entity; and

                      (xiii) maintain adequate capital in light of its
contemplated business operations.

                  (c) All property owned by the Company shall be owned by the
Company as an entity and, to the extent permitted by applicable law, no Member
shall have any ownership interest in any Company property in its individual name
or right, and each Member's interest in the Company shall be personal property
for all purposes.

                  ARTICLE 4. Members.

                  (a) As of the date hereof, the Members are PFS and IFP. Except
as provided in this Agreement, no other person, corporation, partnership,
limited liability company or other entity shall become a Member of the Company.
The Members shall have the rights, duties and

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obligations granted to and imposed upon them under the Act, except as and to the
extent modified by the terms of this Agreement.

                  (b) No Member may resign from the Company prior to the
dissolution and winding up of the Company's business and affairs. If a Member
attempts to resign in violation of the provisions of this Article 4(b), such act
shall, as to the Company and the other Members, be void and of no force and
effect, nor shall such attempted resignation entitle any Member to receive the
fair value of its interest in the Company prior to the dissolution and winding
up of the Company's business and affairs.

                  (c) Subject to the terms set forth herein, the interests of
the Members in the Company (each an "LLC Interest") are as follows: IFP - 51%;
and PFS - 49%.

                  (d) Except where specifically indicated otherwise, an LLC
Interest shall be deemed to refer to and include both an Economic Interest (as
hereinafter defined) and a Voting Interest (as hereinafter defined). As used
herein, the term "Economic Interest" means the economic rights and interests
associated with a Member's LLC Interest, including the economic rights and
interests described in the Act and in this Agreement. As used herein, the term
"Voting Interest" means all rights, interests and responsibilities, other than
the Economic Interest, associated with a Member's LLC Interest, including,
without limitation, the right to receive notice of, attend Members' meetings
regarding, and to vote on or consent to matters for which the approval or
consent of the Members is required or permitted hereunder. The Voting Interest
(rather than the Economic Interest) associated with a Member's LLC Interest
shall be counted for purposes of determining the presence of a quorum at
meetings of Members, whether Members holding the requisite percentage of LLC
Interests have voted in favor of any matter presented to the Members for their
approval and whether Members holding the requisite percentage of LLC Interests
have consented to any action taken without a meeting (collectively, the "Voting
Purposes").

                  ARTICLE 5. Capital Contributions; Capital Accounts.

                  (a) The Members agree to contribute to the capital of the
Company the cash and other property set forth on Exhibit B attached hereto and
incorporated herein (hereinafter, each Member's "Capital Contribution").

                  (b) Except as otherwise set forth herein, no Member shall,
solely by reason of being a Member, have any obligation to make any additional
capital contribution or loan to the Company or guaranty any indebtedness or
obligation of the Company.

                  (c) Contributions of capital to the Company by the Members
shall not bear interest.

                  (d) No Member shall have the right to withdraw or reduce its
capital contribution to the Company or receive the return of such capital
contribution, except as otherwise provided in this Agreement.

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                  (e) A separate capital account (each a "Capital Account")
shall be maintained for each Member in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv) of the Internal Revenue Code (the "Code"). Consistent
therewith, each Member's Capital Account shall be credited with (i) the amount
of cash and the fair market value of any other property (net of liabilities to
which the contributed property is subject) or services contributed by such
Member and (ii) the amount of any net profit or items thereof, allocated to that
Member pursuant to Article 7 hereof. Each Member's Capital Account shall be
charged with (iii) the amount of cash and the fair market value of any other
property (net of liabilities assumed by such Member and liabilities to which
such property is subject) paid or distributed to such Member, and (iv) the
Member's share of losses or items thereof, allocated to that Member pursuant to
Article 7 hereof. The Capital Accounts shall be adjusted by any other
adjustments required by Treasury Regulation Section 1.704-1(b)(2)(iv).

                  (f) The maintenance of the Capital Accounts shall in all cases
be as required by the Code, and the regulations thereunder (the "Regulations"),
and any inconsistencies between the terms of this Agreement and the Code and the
Regulations shall be resolved in favor of the Code and the Regulations. In the
event that there shall be any change to the provisions of the Code or any
Regulations and the application of such change under this Agreement shall result
in material economic harm to any Member, the Members shall use reasonable good
faith efforts to negotiate amendments to this Agreement to compensate such
Member for such harm; provided, however, that such amendments shall not
materially affect a Member's rights to distributions hereunder.

                  ARTICLE 6. Distributions.

                  (a) Subject to the restrictions, if any, of any loan
agreement, credit agreement, note, bond or other instrument or agreement to
which the Company is or may be subject or bound at any time, for each fiscal
year of the Company (or portion thereof on a pro rated basis), all Cash Flow (as
defined in Article 6(d) hereof) shall be distributed to the Members in the
following order of priority: first, to IFP until it has received a one-time
amount equal to its Capital Contribution; second, to IFP until it has received
an amount equal to a 35% cumulative annual return on its Capital Contribution;
third, to PFS until it has received a one-time amount equal to its Capital
Contribution; fourth, to PFS until it has received an amount equal to a 35%
cumulative annual return on its Capital Contribution; and fifth, to the Members,
pro rata, in accordance with their respective Capital Accounts. Notwithstanding
the foregoing, no distribution shall be made if, after giving effect thereto,
the net worth of the Company shall be less than the aggregate initial Capital
Contributions of the Members.

                  (b) The aforesaid distributions set forth in the preceding
paragraph shall be determined, annually, in accordance with the Company's annual
financial statements, and payment thereof shall be made within 30 days following
the completion of such financial statements, but, in any event, not later than
April 1 following each fiscal year.

                  (c) For purposes of this Agreement, "Cash Flow" means for each
fiscal year of the Company, gross revenues of the Company from operations, minus
all operating expenses, as determined, on an accrual basis, in accordance with
generally accepted accounting principles consistently applied, except that the
following rules shall apply:

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                      (i) Capital contributions and loans to the Company shall
not be included in Cash Flow;

                      (ii) Depreciation of any kind shall not be a deduction
from Cash Flow;

                      (iii) Reserves that the Manager may reasonably establish
from time to time shall be a deduction from Cash Flow, such reserves to include,
without limitation, (A) working capital reserves to reflect the difference
between accounts payable and accounts receivable and (B) reserves deemed
necessary or appropriate by the Manager to fund the Company's operations,
satisfy liabilities, repay indebtedness, capital expenditures, acquisitions or
other transactions;

                      (iv) Capital expenditures shall be a deduction from Cash
Flow to the extent such capital expenditures are in excess of reserves
previously established for such expenditures and are not paid with proceeds from
insurance;

                      (v) Insurance proceeds received on account of rental or
business interruption shall be included in Cash Flow;

                      (vi) Amounts released from reserves for distribution shall
be an increase in Cash Flow; and

                      (vii) Amortization of any indebtedness of the Company or
any part thereof, shall be a deduction from Cash Flow.

                  (d) No Member who is entitled to a distribution pursuant to
this Agreement shall be entitled to demand and receive such distribution in any
form other than cash.

                  (e) No Member having a negative balance in its Capital Account
shall be required to contribute funds to the Company in order to restore its
Capital Account to zero.

                  (f) Notwithstanding the foregoing, not later than April 1 of
each year, the Company shall make distributions (the "Tax Distributions") to
each Member in an amount equal to the estimated federal and state income tax
liability arising from such Member's membership interest in the Company during
the immediately prior year (based upon a tax rate reflecting the highest
applicable federal and state rates for such Member for such year).

                  ARTICLE 7. Allocation of Profits and Losses.

                  (a) All Profits as determined in accordance with Section 7(d)
herein shall be allocated among the Members as follows:

                      (i) First, Profits shall be allocated to all of the
Members in the amount of and in proportion to the excess, if any, of (A) the
aggregate distributions which have been paid, or are payable, to such Member as
of the last day of the current year; less (B) the aggregate amount of Profits
previously allocated to such Member pursuant to this Section 7(a)(i) for all
prior years; and

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                      (ii) Second, all remaining Profits shall be allocated to
all of the Members in proportion to their respective LLC Interests.

                  (b) All Losses as determined in accordance with Section 7(d)
hereof shall be allocated among the Members in proportion to their respective
Capital Accounts.

                  (c) Notwithstanding Articles 7(a) and (b) hereof:

                      (i) Profits and Losses shall be specifically allocated
(the "Regulatory Allocations") if and to the extent necessary to comply with the
Regulations under Code Section 704(b) (the "704(b) Regulations"), all as
determined by the Tax Matters Partner (as defined in Section 8(e) below).

                      (ii) If Regulatory Allocations have been made, then
subsequent allocations of Profits and Losses (the "Curative Allocations") shall
be made, so that the net result of all allocations of Profits and Losses
pursuant to Sections 7(a) and (b) and this Sections 7(c) in the aggregate shall,
as quickly as possible and to the extent possible without violating the
constraints prescribed by the 704(b) Regulations, be the same as if no
allocations had been made pursuant to this Article 7(c), all as determined by
the Tax Matter Partner.

                      (iii) In furtherance of this Section 7(c), all items of
Losses attributable to a liability of the Company shall be specifically
allocated to the Member that bears the economic risk of loss for such liability
and such Member shall be allocated items of Profits to the extent that there is
a net decrease in the minimum gain attributable to such portion of such
liability, all in accordance with the 704(b) Regulations as determined by the
Tax Matters Partner.

                  (d) "Profits" and "Losses" shall mean, for each fiscal year,
an amount equal to the Company's taxable income or loss for such year,
determined in accordance with Code Section 703(a), provided that all items of
income, gain, loss or deduction required to be separately stated pursuant to
Code Section 703(a)(1) shall be included in taxable income and loss, except
that:

                      (i) any income that is exempt from federal income tax
shall be added to such taxable income or loss;

                      (ii) any expenditure of the Company described in Code
Section 705(a)(2)(B) or treated as such pursuant to the 704(b) Regulations shall
be subtracted from taxable income or loss;

                      (iii) income, gain, losses and deductions, as determined
for federal income tax purposes, with respect to any property contributed to the
capital of the Company or owned by the Company if and when the Members' Capital
Accounts are revalued in accordance with the 704(b) Regulations shall be
determined with respect to such asset's fair market value in accordance with the
704(b) Regulations (the "Gross Asset Value") as determined by the Tax Matters
Partner;

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                      (iv) in the event that any of the Company's assets is
adjusted to reflect its Gross Asset Value in accordance with the 704(b)
Regulations, the amount of such adjustment shall be taken into account as gain
or loss from the disposition of such asset for purposes of computing Profits or
Losses; and

                      (v) to the extent an adjustment to the adjusted tax basis
of any of the Company's assets pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to the 704(b) Regulations to be taken into account
in determining Capital Accounts as a result of a distribution other than in
liquidation of a Member's LLC Interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing Profits or Losses.

                  (e) Income, gain, losses and deductions, as determined for
federal income tax purposes, shall be allocated in accordance with the
allocation of the corresponding items of Profits and Losses except that income,
gain, losses and deductions as determined for federal income tax purposes with
respect to any property with a Gross Asset Value that differs from its adjusted
basis for federal income tax purposes shall be allocated so as to reconcile the
difference between such adjusted basis and such Gross Asset Value, in any manner
permitted under Code Section 704(c) and the Regulations thereunder as determined
by the Tax Matters Partner. Tax credits shall be allocated to the Members in
proportion to their respective LLC Interests. Allocations pursuant to this
Section 7(e) are solely for purposes of federal, state and local taxes and shall
not affect, or in any way be taken into account in computing, any Member's
Capital Account or share of Profits, Losses, or distributions pursuant to any
provision of this Agreement.

                  (f) In the event that any Member's LLC Interest changes during
the year, then allocations of Profit and Losses shall be made in any manner
permitted under Code Section 706 and the Regulations thereunder as determined by
the Tax Matters Partner to take into account such varying interests.

                  ARTICLE 8. Management.

                  (a) The management and control of the business and affairs of
the Company shall be vested in its manager (the "Manager"). The sole Manager
shall be an individual who shall not then be a current officer, director or
employee of PFS or any subsidiary thereof. The initial Manager shall be Joe
Farrell. The Manager shall prepare, and submit to the Members for approval, an
annual budget (as the same may be modified or revised from time to time, the
"Budget") setting forth projected revenue and expenses of the Company and its
subsidiaries for each upcoming fiscal year, together with such additional
information as any Member may reasonably request. The Manager shall have the
complete power and authority to manage and control the operations of the Company
and is authorized to take any and all actions and steps, and execute and deliver
on behalf of the Company, any and all documents, instruments and agreements, as
the Manager may deem necessary or appropriate from time to time; provided,
however, without the prior approval of the Members, the Manager shall not incur
any liability or obligation on behalf of the Company or any subsidiary thereof
or take any other action binding upon the Company or any subsidiary thereof in
an amount which exceeds the corresponding amount therefor set forth in the
applicable approved

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Budget by more than 15%. Subject to the prior written consent of the Members,
the Manager may appoint one or more officers or representatives of the Company
and may authorize such officers or representatives to act on behalf of, and to
enter into contracts, understandings and agreements in the name of, the Company.

                  (b) The Manager is hereby designated to serve as and exercise
all rights, powers and duties as "Tax Matters Partner," as such term is defined
and used in Section 6231(a)(7) of the Code and the Regulations. In its capacity
as Tax Matters Partner, the Manager shall cause the preparation and filing of
all Company tax returns and shall, on behalf of the Company, make such tax
elections as he shall determine to be in the best interests of the Members. The
Tax Matters Partner may consent to extensions relating to such returns and
revoke such tax elections as it believes may be in the best interests of the
Members. In addition, the Tax Matters Partner shall file all other tax forms,
documents or other writings with respect to the business and operations of the
Company as shall be required by any governmental agency or authority having
jurisdiction to require such forms, documents or other writings. The Tax Matters
Partner shall provide the Members with prompt notice of any communications
received from the Internal Revenue Service, together with copies of such
communications.

                  (c) The Manager shall be entitled to reasonable compensation
and benefits as shall be mutually agreed, from time to time, by the Manager and
the Members. The Manager and any officers or representatives of the Company
appointed by the Manager shall perform their respective duties hereunder in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and with such care as an ordinarily prudent person in a like position
would use under similar circumstances. The Manager and such officers and
representatives (in performing their obligations hereunder) shall be fully
protected, and shall not be liable to the Company or to any Member, for acts
performed or omitted by them or their agents or representatives for and on
behalf of the Company in furtherance of its interests, including, without
limitation, acts or omissions made in good faith based upon the records of the
Company or the opinions of professionals employed by the Company.

                  (d) Upon not less than 30 days' prior written notice to all
Members, the Members, or any of them, shall have the right to remove the Manager
for Cause. As used herein "Cause" shall mean (i) the willful failure of the
Manager to substantially perform his duties to the Company and its subsidiaries
(after reasonable prior notice); (ii) misappropriation by the Manager of funds
or property of the Company or any attempt by the Manager to secure any personal
profit related to the business of the Company and not fairly disclosed to and
approved by all of the Members; (iii) fraud, dishonesty, disloyalty, gross
negligence or willful misconduct on the part of the Manager in the performance
of his duties for the Company and its subsidiaries; (iv) the Manager's engaging
in activities which are prohibited by state and/or federal laws prohibiting
discrimination based on age, sex, race, religion or national origin or engaging
in conduct constituting sexual harassment; or (v) a felony conviction of the
Manager.

                  (e) In the event of the death, disability or voluntary
resignation or retirement of the Manager or in the event the Manager is removed
for Cause, the Members shall appoint a new Manager, provided, however, such new
Manager shall not be a then current officer, director or employee of PFS.

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                  (f) Except as otherwise set forth herein, any action to be
taken by the Members, or any approval or consent required hereunder, shall be
deemed taken, granted or given hereunder (i) without any requirement of notice
or meeting, upon the unanimous action, approval or consent of the Members or
(ii) upon the affirmative vote of Members holding a majority of the outstanding
LLC Interests at a meeting of Members duly called by any Member upon not less
than 30 days prior written notice (specifying the action to be taken or approval
or consent to be granted or given) to all Members.

                  ARTICLE 9. Activities of Members. The Members may have and
engage in any other activities, business, enterprises or investments without any
liability to the Company arising therefrom, except that IFP covenants and agrees
that for so long as it is a Member herein and for a two year period thereafter,
IFP will not (i) directly or indirectly, own (except for minor holdings in
publicly listed or traded companies), manage, operate, join, control or
otherwise participate in, whether as a partner, director, shareholder or
otherwise, any business competitive with the business of the Company, PFS or any
of their respective subsidiaries; (ii) attempt in any manner to persuade any of
the suppliers or customers of the Company, PFS or any of their respective
subsidiaries to cease doing business or reduce the amount of business which any
of such suppliers or customers has done or may contemplate doing with the
Company, PFS or any of their respective subsidiaries; and (iii) whether directly
or indirectly, and whether on its own behalf or as a consultant, advisor, agent,
representative, shareholder, partner, independent contractor or in any capacity
on behalf of any sole proprietorship, corporation, partnership, joint venture,
person or other entity, employ any person who at any time during such period is
or was an employee of the Company, PFS or any of their subsidiaries. IFP
acknowledges that (i) the restrictive covenants set forth herein are necessary
in order to protect and maintain the legitimate business interests of the
Company and PFS and it is reasonable that the restrictive covenants set forth
above are not limited by any specific geographic area; (ii) the remedy at law
for any breach of this covenant by it will be inadequate and that, accordingly,
the Company and PFS shall, in addition to all other available remedies
(including without limitation seeking damages and an accounting for lost
profits), be entitled to injunctive relief; (iii) if any of the covenants
contained in this Section, or any part hereof, is hereinafter construed to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to the
invalid portions; (iv) if any of the covenants contained in this Section, or any
part hereof, is held to be unenforceable because of the duration of such
provision or the area covered thereby, the court making such determination shall
have the power to reduce the duration and/or geographic area of such provision
and, in its reduced form, said provision shall then be enforceable; and (v) in
the event that the courts of any one or more of any state having jurisdiction
shall hold the above covenants wholly unenforceable by reason of the breadth of
scope or otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the right of the Company or PFS to
the relief provided above in the courts of any other states within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they relate to each state
being, for this purpose, severable into diverse and independent covenants.

                  ARTICLE 10. Limitation of Liability. Except as otherwise
provided by the Act, the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the Company; and no Member, Manager,

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employee, agent or representative of the Company shall be obligated personally
for any such debt, obligation or liability of the Company, or for any debt,
obligation or liability of any other Member, Manager, employee, agent or
representative of the Company, by reason of being a Member, or acting as a
Manager, employee, agent or representative of the Company.

                  ARTICLE 11. Transfer of Interests in the Company.

                  (a) Except as otherwise provided in this Article 11, a Member
may not sell, assign, transfer, make gifts of or otherwise dispose of, or
pledge, hypothecate or otherwise encumber, its LLC Interest or any part thereof
in any manner whatsoever (such events being hereinafter sometimes collectively
referred to as a "Transfer"), without the prior written consent of all of the
Members (which consent shall not be unreasonably withheld), and any act in
violation hereof shall be null and void as against the Company and the other
Members.

                  (b) If an Insolvency Event (as herein defined) should occur
with respect to a Member, or if a Member is subject to a court order which
provides for the transfer of such Member's interest in the Company, the trustee
in bankruptcy or other person succeeding to such Member's interest in the
Company shall succeed only to such Member's economic rights and interests as
described in the Act and in this Agreement and shall not be admitted as a Member
of the Company or have the right to exercise any Voting Interests or consent
rights of such Member unless (i) the other Members grant their unanimous written
approval, which may be withheld in their sole and absolute discretion and (ii)
such successor agrees in writing to be bound by and comply with all of the
terms, provisions and conditions of this Agreement. As used herein, an
"Insolvency Event" shall mean any of the events set forth in Section 18-304 of
the Act with respect to a person or the occurrence of any of the events set
forth (and upon the dates specified) in such Section with respect to a person.

                  ARTICLE 12. Additional Members.

                  (a) Any person or entity may become a Member of the Company
upon (i) the written consent of all of the then Members and (ii) such person or
entity agreeing in writing to be bound by and comply with all of the terms,
provisions and conditions of this Agreement applicable to Members.

                  (b) A new Member may be entitled to any retroactive allocation
of losses, income or expense deductions incurred by the Company as the Manager
shall determine. The Manager may, in its sole discretion, at the time a new
Member is admitted, close the Company's books (as though the Company's tax year
had ended) or make pro rata allocations of losses, income and expense deductions
to a new Member for that portion of the Company's tax year in which a new Member
was admitted in accordance with the provisions of Section 706(d) of the Code and
the Regulations promulgated thereunder.

                  (c) Each Member agrees to execute and deliver such amendments
to, and modifications of, this Agreement as the Manager may deem necessary or
appropriate in connection with or in respect of the admission of any additional
Member as herein provided.

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                  ARTICLE 13. Additional Capital. In the event the Members shall
unanimously determine in good faith that, in addition to the Capital
Contributions of the Members hereunder, further funds are required for the
proper operations of the Company (including without limitation, any funds needed
for working capital, any operating deficit or the purchase, lease, acquisition,
expansion or construction of additional Company property), such additional
capital shall be obtained from the Members in proportion to their LLC Interests
or in such other proportion, and upon such terms and conditions, as they shall
otherwise agree.

                  ARTICLE 14. Property Sale Events; Dissolution and Liquidation.

                  (a) As used herein, a "Property Sale" shall mean (i) the
merger or consolidation of any entity owned by the Company with or into any
other entity (other than a transaction in which the Company continues to own a
controlling interest in the surviving entity of such transaction), (ii) the sale
or transfer by the Company of all or substantially all of its assets and
properties to an unrelated third party in a bona fide transaction or (iii) the
sale or transfer by the Company of all or substantially all of its interest in
any entity owned by it to an unrelated third party in a bona fide transaction.

                  (b) All of the terms and provisions of any and each Property
Sale, including the consideration thereof and all matters relating thereto
(including the form, terms and provisions of all Property Sale documents,
agreements and instruments (the "Property Sale Documents")), shall be made by
the Manager, subject to the unanimous prior written consent of the Members
(which shall not be unreasonably withheld). Each Member agrees to execute and
deliver any and all Property Sale Documents, and, to the extent required
thereunder, to be jointly and severally liable with the other Members
thereunder, as shall be requested by the Manager, provided that such request
shall be made of all Members and provided further, however, that,
notwithstanding the terms of any Property Sale Document (or the failure of any
Member to execute and deliver the same), as among the Members, any liability or
obligation arising under or in respect of such Property Sale Document shall be
allocated among the Members in the proportion of their respective LLC Interests.

                  (c) All amounts paid or payable to the Company in connection
with any Property Sale (the "Sale Proceeds") shall be applied and allocated as
follows:

                      (i) first, to the payment of all costs and expenses
incurred by the Company in connection with the Property Sale;

                      (ii) second, to the payment of all indebtedness and
liabilities of the Company (including the establishment of such reserves as the
Manager shall deem necessary or appropriate in respect of any anticipated or
contingent liabilities arising from or relating to the Property Sale);

                      (iii) third, to the Members in proportion to their
respective Capital Accounts; and

                                       12
<PAGE>

                      (iv) fourth, the remaining balance shall be paid to the
Members in proportion to their respective LLC Interests.

                  (d) In the event the Sale Proceeds shall be payable over time
or shall be payable in securities, notes or property other than cash ("Non-cash
Proceeds"), then, to the extent practicable, the provisions of the preceding
paragraph (c) above shall apply to such Non-cash Proceeds, as and when received,
with the same force and effect as if paid in cash as of the effective date of
the Property Sale.

                  (e) The Company shall be dissolved and its assets liquidated
upon the earliest of (i) as promptly as practicable following the effective date
of a Property Sale, if following such Property Sale, the Company has no material
assets other than the Non-cash Proceeds arising therefrom, (ii) December 31,
2050, unless Members holding a majority of the LLC Interests held by the Members
agree in writing, within one year prior to the expiration of the Term, to extend
the Term; (iii) the unanimous determination of the Members to dissolve and
liquidate the Company and terminate this Agreement; or (iv) the entry of a court
order or judgment of dissolution.

                  (f) In the event of a dissolution of the Company for any
reason, the Manager shall immediately commence to wind up the Company's affairs
and shall liquidate the assets of the Company as promptly as possible, but in an
orderly and businesslike manner.

                  (g) In the event of any liquidation and dissolution of the
Company, after all indebtedness, liabilities and obligations of the Company,
including all expenses of liquidation (and including the establishment of such
reserves as the Manager shall deem necessary or appropriate in respect of any
anticipated or contingent liabilities of the Company), shall have been paid or
provided for, and all items of profit, loss, income, gain, loss, deduction and
credit shall have been allocated in accordance with Article 7 hereof, any
proceeds from the liquidation shall be applied and distributed in the order of
priority set forth in paragraph (c) above.

                  ARTICLE 15. Books, Records and Reports. The Manager shall
select the accountants for the Company. The Company shall keep proper and
complete books of account in accordance with generally accepted accounting
principles, consistently applied, at all times during its continuance, which
books and records shall be maintained at the principal office of the Company and
shall be available for inspection and copying upon reasonable notice. Except as
otherwise provided herein, the Tax Matters Partner shall select the cash or
accrual basis of accounting, as required by the Code, and shall make such
decisions as required and as are necessary with respect to capitalization or
expensing of items and the method of depreciation for both the books of account
and for Federal income tax purposes. The Company shall provide to the Members an
annual financial report, a copy of the Company tax return for each year by April
1st of the following calendar year and Form K-l or such other form necessary for
filing with the Members' income tax returns. The financial reports shall include
a copy of the balance sheet, the statement covering the profits and losses of
the Company, and with respect to the annual report, a statement showing the
distribution made to such Member pursuant to Article 6 hereof and the amounts
allocated to such Member pursuant to Article 7 hereof during or in respect of
such year and the amount thereof reportable for state and Federal income tax
purposes. Accountant's fees incurred by the Company

                                       13
<PAGE>

for accounting services necessary to comply with the terms of this Article are
deemed to be a Company expense, payable out of Cash Flow.

                  ARTICLE 16. Fiscal Year. The fiscal year and the federal
income tax year of the Company shall end on December 31 of each year.

                  ARTICLE 17. Modifications; Waivers. No amendment or
modification of this Agreement shall be valid or effective unless in writing and
signed by the Members holding not less than 66-2/3% of the LLC Interests held by
the Members; provided that no modification or waiver of any breach or condition
of this Agreement shall be effective against any party unless in writing and
signed by the party or parties sought to be charged therewith. A waiver in one
instance shall not be deemed to be a waiver of any other or subsequent breach or
condition, whether of like or different nature.

                  ARTICLE 18. Notices and Addresses. All notices or other
communications given or made under this Agreement shall be in writing and shall
be (a) personally delivered, (b) sent by certified mail, return receipt
requested, postage prepaid or by reputable overnight courier providing a receipt
against delivery or (c) sent by telecopy or facsimile transmission, provided
that a copy thereof is concurrently delivered or sent in accordance with clause
(a) or (b) above. Such notices or other communications shall be delivered or
sent to the Members at their respective addresses set forth in the Company's
records or such other address as any Member may specify in a notice to the other
Members, and to the Company at its principal office specified in Article 2 of
this Agreement. All notices shall be effective upon receipt.

                  ARTICLE 19. Applicable Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware.

                  ARTICLE 20. Gender. As used herein, each of the masculine,
feminine or neuter genders shall include the other genders, the singular shall
include the plural and the plural shall include the singular, whenever
appropriate to the context.

                  ARTICLE 21. Captions. Article titles or captions contained in
this Agreement are inserted only as a matter of convenience and as reference and
in no way define, limit, extend or describe the scope of this Agreement or the
intent of any of the provisions hereof.

                  ARTICLE 22. Counterparts. This Agreement may be executed in
one or more counterparts and each of such counterparts shall, for all purposes,
be deemed to be an original, but all of the counterparts shall constitute one
and the same instrument, and this Agreement shall be deemed effective on the
date it is executed by the parties hereto.

                  ARTICLE 23. Covenant to Sign Documents. Each Member shall
execute, with acknowledgment or affidavit if required, all documents and
writings reasonably necessary or expedient in order to effectuate the terms and
provisions hereof and the achievement of its purpose and as otherwise
contemplated herein.

                                       14
<PAGE>

                  ARTICLE 24. No Waiver. The failure of a Member to insist on
the strict performance of any covenant or duty required by this Agreement, or to
pursue any remedy under the Agreement, shall not constitute a waiver of the
breach or the remedy.

                  ARTICLE 25. Successors and Assigns. Subject to the
restrictions on transferability contained in this Agreement, this Agreement and
all of its provisions shall be binding on and inure to the benefit of the
successors and assigns of the Members.

                  ARTICLE 26. Entire Agreement. This Agreement constitutes the
entire understanding of the parties, and supersedes all prior or contemporaneous
agreements among them, with respect to the subject matter hereof.

                  ARTICLE 27. Right of Partition. Each of the Members, for
itself, its successors and assigns, hereby waives any and all rights of
partition it may have under any and all applicable laws.

                  ARTICLE 28. Power of Attorney. Each Member hereby appoints the
Manager as its true and lawful representative and attorney-in-fact in his name,
place and stead to make, execute, sign and file any amendments to the
Certificate now or hereafter required by law and any amendments necessary to
reflect the admission of one or more new Members or any other amendment or
modification hereof provided for herein and such instruments, documents and
certificates which, from time to time, may be required by the laws of the United
States of America, the State of Delaware or any other state in which the Company
shall determine to do business, or any political subdivision or agency thereof,
to execute, implement and continue the valid and subsisting existence of the
Company. Such power of attorney is coupled with an interest and shall continue
in full force and effect notwithstanding the subsequent death or incapacity of
such party.

                  ARTICLE 29. Counsel. Each Member acknowledges that it has
reviewed, or has had the opportunity to review, this Agreement with its own
separate and independent counsel, and each Member has participated in the
negotiation and drafting of this Agreement. Each Member further acknowledges
that counsel to the Company may also serve as counsel to any or all of the
Members, and counsel to any or all of the Members may also serve as counsel to
the Company, in each case, in any related or unrelated matter and any and all
conflicts of interest arising therefrom are hereby waived.

                                       15
<PAGE>

                  IN WITNESS WHEREOF, the undersigned have hereunto executed
this Agreement as of the day and year first aforesaid.

                                      PRIORITY FULFILLMENT SERVICES, INC.

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

                                      INVENTORY FINANCING PARTNERS, LLC

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

                                       16
<PAGE>

                                    EXHIBIT A

                            CERTIFICATE OF FORMATION

                                       OF

                  BUSINESS SUPPLIES DISTRIBUTORS HOLDINGS, LLC

         The undersigned, an authorized natural person, in order to form a
limited liability company pursuant to the provisions and subject to the
requirements of the State of Delaware (particularly Chapter 18, Title 6 of the
Delaware Code and the acts amendatory thereof and supplemental thereto, and
known, identified and referred to as the "Delaware Limited Liability Company
Act"), does hereby certify:

         FIRST: The name of the limited liability company is BUSINESS SUPPLIES
DISTRIBUTORS HOLDINGS, LLC.

         SECOND: The address of the limited liability company's initial
registered office and the name of the limited liability company's initial
registered agent as required to be maintained by Section 18-104 of the Delaware
Limited Liability Company Act are Corporation Service Company, 1013 Centre Road,
Wilmington, Delaware 19805.

         IN WITNESS WHEREOF, the undersigned has set his hand this 2nd day of
July, 2001.

                                             /s/ Morris Bienenfeld
                                             -----------------------------------
                                             Morris Bienenfeld
                                             Authorized Representative

                                       17
<PAGE>

                                    EXHIBIT B

                              CAPITAL CONTRIBUTIONS

<Table>
<Caption>
Name                                                Capital Contribution
----                                                --------------------
<S>                                                 <C>
Priority Fulfillment Services, Inc.                 $750,000
Inventory Financing Partners LLC                    $250,000
</Table>

                                       18<PAGE>

                                                                    EXHIBIT 10.7

                              IBM GLOBAL FINANCING

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

                      PLATINUM PLAN AGREEMENT (WITH INVOICE
                                  DISCOUNTING)

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

                       IBM BELGIUM FINANCIAL SERVICES S.A.
                                       and

                           SUPPLIES DISTRIBUTORS S.A.

                   BUSINESS SUPPLIES DISTRIBUTORS EUROPE B.V.

                                   PFSWEB B.V.

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

<PAGE>

                                    CONTENTS

<Table>
<S>                                                                        <C>
1.  DEFINITIONS............................................................. 1

2.  CREDIT LIMIT............................................................ 7

3.  SUPPLIER PURCHASE FACILITY.............................................. 7

4.  RECEIVABLES, ACQUIRED RECEIVABLES AND VAT RECEIVABLES DISCOUNTING
    FACILITY................................................................ 8

5.  PREPAYMENTS.............................................................11

6.  RECEIVABLES AND RECEIVABLES RIGHTS......................................11

7.  CREDIT CHARGES AND PAYMENTS.............................................13

8.  REPRESENTATIONS, WARRANTIES AND COVENANTS...............................15

9.  DEFAULTS AND REMEDIES...................................................19

10. TERMINATION.............................................................20

11. GENERAL.................................................................20
</Table>

------------------------------------------------------------------------------
<PAGE>

                              IBM GLOBAL FINANCING

             PLATINUM PLAN AGREEMENT (WITH RECEIVABLES DISCOUNTING)

THIS AGREEMENT is made on the date specified against the signature of IBM GF
below among Suppliers Distributors S.A. with a registered number of RC Liege
208795 with an address of Rue Louis Bleriot 5, B-4460 Grace-Hollogne, Belgium
("SDSA"), and Business Supplies Distributors Europe BV a Netherlands company
registered in Maastricht with a with a Belgian trade registration number of HR
Maastricht 14062763 with an address of Markt 28, 6211 CJ Maastricht, The
Netherlands ("BSDE") (SDSA and BSDE collectively, "YOU"), PFS Web B.V a
Netherlands company registered IN Maastricht under the number 17109541 with a
Belgian trade registration number of R.C. Liege 204162 ("PFS Web B.V.") (SDSA,
BSDE and PFS Web B.V. collectively, the "Loan Parties) and IBM Belgium Financial
Services N.V. with a registered number of R.C. Brussels451.673 with an address
of Square Victoria Regina 1,BE-1210 Brussels VAT BE 424300467 ("IBM GF" or
"US").

WHEREAS we agree to provide you with a Credit Limit in respect of our purchase
of Supplier Invoices and/or Receivables, Acquired Receivables and VAT
Receivables under the terms and conditions of this Agreement.

AGREEMENT

1.       DEFINITIONS

         1.1      In this Agreement the following terms shall (unless the
                  context otherwise requires) have the following meanings:-

                  "ACQUIRED RECEIVABLES": means the BSDE Receivables that you
                  acquired from BSDE in connection with the Daisytek Stock
                  Purchase Agreement.

                  "ADDITIONAL COLLATERAL": means that as specified in the
                  Schedule, it being understood that Additional Collateral is
                  not used when calculating the Shortfall Amount, if any, as
                  described in Clause 7.4;

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

                  "AGREEMENT": means this Agreement and all its Schedules and
                  any supplements to this Agreement as the same may be amended,
                  supplemented or modified from time to time;

                  "APPROVED CURRENCY" means any currency other than euro agreed
                  from time to time by you and us to be an approved currency for
                  the purposes of this Agreement;

                  "AUDITORS": means a nationally recognised firm of independent
                  accountants acceptable to us;

                  "AUTHORISED OFFICER": means those individuals occupying the
                  positions listed in Attachment A to this Agreement and who are
                  authorised by you to provide the instructions, authorisations,
                  agreements, etc. as specified in such Attachment A;

--------------------------------------------------------------------------------
<PAGE>

                  "AUTHORISED SUPPLIER": means any supplier, for the purposes of
                  this Agreement, from whom we have agreed to purchase the
                  Supplier Invoices generated by their sales of Products to you;

                  "AVAILABLE CREDIT": means from time to time the Credit Limit
                  less the aggregate of:
                  (i)      the principal amount of Supplier Obligations due and
                           outstanding by you to us; and
                  (ii)     the aggregate amount of Prepayments made to you by us
                           on account of the purchase price of Receivables,
                           Acquired Receivables, and VAT Receivables which are
                           outstanding; and
                  (iii)    any other sum due and payable by you to us under the
                           terms of this Agreement, including interest due and
                           payable and outstanding Credit Charges;

                  "BASE RATE": means the rate so referred to in the Schedule;

                  "BSD": means Business Supplies Distributors, Inc.

                  "BSD A": means BSD Acquisition Corp., Inc., a corporation duly
                  organized under the laws of the state of Delaware, with its
                  principal place of business at 500 North Central Expressway,
                  Plano, TX 75074;

                  "BSD COMPANIES": means BSD, BSDE. and BSD (Canada) Inc.;

                  "BSDE" means as defined in the caption;

                  "BSDE DEBTORS": means any Debtor required to make payment in
                  respect to the Acquired Receivables;

                  "BSDE RECEIVABLES": means the any payment obligation (present,
                  future or contingent) of a Debtor pursuant to a sales contract
                  with BSDE (including the future right to recover sums due
                  following the determination, assessment or agreement of the
                  amount of such obligation), including any applicable value
                  added taxes, duties, charges and interest (whether arising by
                  contract or by law) together with its Receivables Rights;

                  "BSDE SUPPLIER INVOICES" means undisputed Supplier Invoices
                  which were issued to BSDE prior to the Merger and which we
                  will pay the applicable Authorised Supplier on your behalf;

                  "BUSINESS DAY": means (a) in relation to any payment or to a
                  rate fixing, any day (other than a Saturday or Sunday) which
                  is a TARGET DAY; (b) in relation to any other matter (e.g.
                  notices) any day (other than a Saturday or Sunday) on which
                  banks are open in Brussels;

                  "CLOSING DATE": MEANS 25 SEPTEMBER 2001;

                  "COLLATERAL" means the aggregate value minus ?500,000, in our
                  assessment, of outstanding Receivables, Acquired Receivables
                  and VAT Receivables we have purchased from you together with
                  any Receivables Rights and any other assets, including
                  stock-in-trade which are charged to us by way of a Lien and
                  which is not subject to retention of title by any party other
                  than us.

                  "COMMENCEMENT DATE": means the commencement date of this
                  Agreement as specified in the Schedule;

                  "CONCENTRATION RECEIVABLE": means an Eligible Receivable that,
                  individually, or when aggregated with all other outstanding
                  Accounts of the same Debtor and such Debtor's Affiliates,
                  constitute more than five percent (5%) of the net outstanding
                  balance of all your Eligible Receivables then outstanding for
                  all your Debtors.

                  "CONCENTRATION DEBTOR": means at any time, any Debtor
                  obligated to you with respect to, or on account of, a
                  Concentration Receivable.

--------------------------------------------------------------------------------
                                                                               2
<PAGE>

                  "CREDIT CHARGES": means our charges to you (as set out in the
                  Schedule) for purchasing Supplier Invoices from an Authorised
                  Supplier as set out in Section 3 of this Agreement and
                  purchasing Receivables, Acquired Receivables and VAT
                  Receivables from you pursuant to Section 4 of this Agreement;

                  "CREDIT LIMIT": means the sum specified in the Schedule which
                  is subject to change by us;

                  "DAISYTEK": means Daisytek, Inc.

                  "DAISYTEK STOCK PURCHASE AGREEMENT": means the Stock Purchase
                  Agreement dated September 26, 2001 among Daisytek, BSD A, and
                  PFS.

                  "DEBTOR": means a customer of yours pursuant to a Sales
                  Contract who is indebted to you in respect of a Receivable or
                  who is indebted to you in respect of an Acquired Receivable;

                  "DEFAULT RATE" means the percentage as detailed as such in the
                  Schedule;

                  "DISCOUNT CHARGE" means the charge to be calculated as
                  described in Clause 5.3 at a rate specified in the Schedule or
                  such other percentage as we may from time to time agree;

                  "DUE DATE" means the date that payment is due to us which is,
                  unless otherwise agreed by us in writing (1) for Supplier
                  Obligations, the last day of the No Charge Period or the
                  Extended Credit Period as applicable (2) for Credit Charges,
                  the date as specified on the billing statement (3) for
                  Shortfall Amounts, as specified in Clause 7.4 and (4) for
                  Discount Charges, the date specified on the billing statement
                  if there is insufficient Available Credit at the time such
                  Discount Charges are normally credited by us against your
                  account;

                  "ELIGIBLE RECEIVABLE": means a Receivable or an Acquired
                  Receivable or a VAT Receivable which is not (or does not
                  become) an Ineligible Receivable;

                  "EVENT OF DEFAULT": means any of the events set out in Clause
                  9.1 of this Agreement;

                  "EXTENDED CREDIT CHARGE" means the charge (if any) as
                  specified in the Schedule incurred for outstanding Supplier
                  Obligations during an Extended Credit Period or such other
                  charge as we may from time to time agree;

                  "EXTENDED CREDIT PERIOD" means (if agreed by us) the period
                  specified in the Schedule following immediately after the No
                  Charge Period and extending the time for payment by you of
                  Supplier Obligations;

                  "FINANCIAL STATEMENTS": means your balance sheets, statements
                  of account including profit and loss accounts, and statements
                  of cash flows prepared in accordance with generally accepted
                  accounting principles;

                  "GAAP" means the generally accepted accounting principles in
                  the United States as in effect from time to time

                  "GUARANTOR": means Holdings, PFS and BSD A and any other party
                  that delivers a guaranty in favour of us;

                  "HOLDINGS": means Business Supplies Distributors Holdings,
                  LLC, a limited liability company duly organized under the laws
                  of the state of Delaware, with its principal place of business
                  at 500 North Central Expressway, Plano, TX 75074

                  "IBM": means International Business Machines Corporation;

                  "IBM CREDIT": means IBM Credit Corporation, a Delaware
                  corporation with a place of business at 4000 Executive
                  Parkway, Third Floor, San Ramon, CA 94583;

                  "IBM SINGAPORE": means IBM Singapore, Global Procurement
                  Services Group - Singapore Trading Center

--------------------------------------------------------------------------------
                                                                               3
<PAGE>

                  "IFP" means Inventory Financing partners, LLC, a US limited
                  liability corporation;

                  "INELIGIBLE RECEIVABLE": means any of the following: (i) any
                  Receivable or Acquired Receivable or VAT Receivable which
                  remains unpaid for more than 120 days after the date of the
                  relevant Sales Invoice; (ii) all Receivables or Acquired
                  Receivables or VAT Receivables of an individual Debtor where
                  50% or more of the relevant Debtor's aggregate outstanding
                  balance remains unpaid for more than 120 days after the date
                  of their respective Sales Invoices; (iii) any Receivable or
                  Acquired Receivable where the Debtor is an affiliate of yours
                  by means of common shareholders or officers, or where the
                  Debtor is an officer, employee, agent, or shareholder of your
                  company or Acquired Receivables payable by a BSDE Debtor that
                  is an Affiliate of any Loan Party or BSDE, or an officer,
                  employee, agent, guarantor, stockholder of Loan Party or an
                  Affiliate of any Loan Party or BSDE, or is related to or has
                  common shareholders, officers or directors with any Loan
                  Party; (iv) any Receivable or Acquired Receivable arising from
                  a consignment sale; (v) any Receivable or Acquired Receivable
                  where the Debtor or BSDE Debtor is not a commercial entity, or
                  is not resident in the countries of Austria, Belgium, Denmark,
                  Finland, France, Germany, Italy, the Netherlands, Norway,
                  Portugal, Republic of Ireland, Spain, Sweden, Switzerland and
                  the United Kingdom, or where the Debtor or BSDE Debtor is
                  subject to legal proceedings, or any steps under Insolvency
                  law or bankruptcy law or other law for the relief of debtors;
                  (vi) any Receivable or Acquired Receivable which arises from
                  incentive payments, rebates, discounts, credits and refunds
                  from a Supplier; (vii) any Receivable, Acquired Receivable or
                  VAT Receivable in respect of which there is a breach of any
                  undertaking or warranty given to us , or any other obligation
                  of yours relating to it; (viii) any Receivable or Acquired
                  Receivable or VAT Receivable expressed in a currency other
                  than the EURO or another currency approved by us; (ix) any
                  Receivable or Acquired Receivable in respect of the sale of
                  Products that have not yet been delivered by you, or in
                  respect of services invoiced by you in advance of your full
                  performance of such services; (x) those receivables listed in
                  the Schedule as Ineligible Receivables; and (xi) any other
                  Receivable or Acquired Receivable or VAT Receivable which we
                  deem, in our discretion, to be ineligible except that, In the
                  event we determine in our sole discretion to deem certain
                  Receivables, Acquired Receivables or VAT Receivables to be
                  ineligible pursuant to (xi) above, we will provide written
                  notification to you of our determination of ineligibility of
                  such Receivables, Acquired Receivables or VAT Receivables and
                  such ineligibility shall be applied to such Receivables,
                  Acquired Receivables or VAT Receivables arising from invoices
                  dated one Business Day after the date of such notification.;

                  "INSOLVENCY": in relation to a company means the convening of
                  a meeting to pass a resolution for voluntary winding up by
                  reason of insolvency, or the making of a winding up order, or
                  the issue of an application for the appointment of an
                  administrator, or the appointment of a receiver (whether in or
                  out of court) or an administrative receiver of any of the
                  assets or income of the company; or entry by that company into
                  a voluntary arrangement, or any informal arrangement generally
                  for the benefit of creditors or that company consulting with
                  creditors generally; or any material part of income or assets
                  being subject to seizure, distress or lien; or enforcement of
                  security rights; or compounding with creditors; or ceasing to
                  carry on business (and "INSOLVENT" shall be construed
                  accordingly);

                  "IWCF": means that certain Inventory and Working Capital
                  Financing Agreement among IBM Credit Corporation and Holdings,
                  IFP, BSD A, PFS and PFSweb

                  "LIEN(S)": means any mortgage, pledge, lien, charge,
                  assignment by way of security, hypothecation, security
                  interest and floating charge or any other security agreement
                  or arrangement relating to existing or future assets
                  (including, without limitation, the deposit of monies or
                  property with a person with the primary intention of affording
                  such person a right of set-off or lien) but excluding any lien
                  arising out of rights of consolidation, combination, netting
                  or set-off over any current and/or deposit accounts with a
                  bank or financial institution, where it is necessary to agree
                  to

--------------------------------------------------------------------------------
                                                                               4
<PAGE>

                  those rights in connection with the opening or operation of
                  any bank accounts or in connection with a treasury management
                  arrangement operated by you, in each case, in the ordinary
                  course of your business or risk management provided the
                  existence of such lien has been notified to us;

                  "LOAN PARTIES": means as defined in the caption.

                  "MATERIAL ADVERSE EFFECT": means a significant adverse effect
                  on (1) any Loan Party, or your parent company's or any of its
                  subsidiaries' or any guarantor's business operations, results
                  of operations, assets, or financial condition; or (2) the
                  value of the Collateral or (3) our rights and remedies under
                  this Agreement or the Security Documents or any Liens in our
                  favour;

                  "MERGER" means the event documented in, and achieved as a
                  result of the execution of, the Merger Documents;

                  "MERGER DOCUMENTS": means the (i) Agreement and Plan of Merger
                  and Reorganization among BSD A and BSD dated September 26,
                  2001 and (ii) the Certificate of Merger of BSD with and into
                  BSD A dated September 26, 2001;

                  "NO CHARGE PERIOD": means the period, if any, so described in
                  the Schedule, during which we will not charge you Credit
                  Charges in relation to each Supplier Obligation, which period
                  shall commence on the date of the Supplier Invoice
                  corresponding to each such Supplier Obligation;

                  "NOTIFICATION": means your confirmation to us, in such way and
                  with such evidence as we specify, of all Receivables and VAT
                  Receivables which have come into existence after the
                  Commencement Date, but which have not previously been Notified
                  to us;

                  "NOTIFY"/"NOTIFIED"/"NOTIFYING": means inclusion of a
                  Receivable, Acquired Receivable or VAT Receivable or a credit
                  in an Offer or Notification delivered to us;

                  "OFFER": means an unconditional offer to sell a Receivable,
                  Acquired Receivable or VAT Receivable to us with full title
                  guarantee to be made in such way and with such evidence of the
                  performance of the Sales Contract as we may specify, and where
                  more than one Receivable, Acquired Receivable or VAT
                  Receivable is at the same time subject to an Offer it shall be
                  treated as an independent offer to sell us each Receivable,
                  Acquired Receivable or VAT Receivable so offered which may be
                  accepted or rejected by us entirely at our discretion;

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

                  "PFS": means Priority Fulfillment Services, Inc., a US
                  corporation;

                  "PFSWEB": means PFSweb, Inc., a corporation duly organized
                  under the laws of the state of Delaware, with its principal
                  place of business at 500 North Central Expressway, Plano, TX
                  75074

                  "PFS WEB B.V." means as defined in the caption;

                  "PREPAYMENT": means any payment by us to you or made available
                  to you under this Agreement on account of the purchase price
                  of a Receivable, Acquired Receivable and/or VAT Receivable;

                  "PREPAYMENT PERCENTAGE": means the amount specified as such in
                  the Schedule or such other percentage as we may from time to
                  time agree;

                  "PRODUCT RIGHTS" includes in relation to the Products supplied
                  to you by an Authorised Supplier any of the following:

                  (i)      all the Authorised Supplier's rights as unpaid vendor
                           and all other rights of the Authorised Supplier under
                           or in relation to the relevant Supplier Invoice
                           (whether such rights arise from or are created by
                           statute, common law, contract or otherwise
                           howsoever);

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                  (ii)     documentary evidence of the Supplier Invoice or its
                           performance or of any disputes arising;

                  (iii)    documents of title, warehouse keepers receipts, bills
                           of lading, shipping documents, airway bills or
                           similar documents;

                  (iv)     the benefit of all insurances;

                  (v)      all remittances, instruments, securities, bonds,
                           guarantees and indemnities and accounting records;

                  "PRODUCTS": as the context permits means either: (i) hardware
                  and software and associated products and services agreed by us
                  and acquired by you from an Authorised Supplier; or (ii)
                  hardware and software and associated products and services
                  supplied by you to Debtors;

                  "PURCHASE PRICE": means the amount payable by us to you in
                  respect of the purchase of a Receivable or an Acquired
                  Receivable being the Sales Invoice Price in relation to such
                  Receivable or Acquired Receivable, or in the case of a VAT
                  Receivable, the amount stated in your invoice to the Country
                  of the Netherlands, less the Credit Charges and any other sums
                  due to us in respect of the purchase of such Receivable,
                  Acquired Receivable or VAT Receivable;

                  "RECEIVABLE": means any payment obligation (present, future or
                  contingent) of a Debtor pursuant to a Sales Contract
                  (including the future right to recover sums due following the
                  determination, assessment or agreement of the amount of such
                  obligation), including any applicable value added taxes,
                  duties, charges and interest (whether arising by contract or
                  by law) together with its Receivables Rights;

                  "RECEIVABLES RIGHTS": includes in relation to any Receivable
                  and any Acquired Receivable, any of your following rights (i)
                  all your rights by law or under the Sales Contract as an
                  unpaid vendor including reservation of title rights; (ii)
                  documentary evidence of the Sales Contract, or its
                  performance, or of any disputes arising; (iii) documents of
                  title, warehouse keepers receipts, bills of lading, shipping
                  documents, airway bills or similar documents; (iv) the benefit
                  of all insurances; (v) all remittances, instruments,
                  securities, bonds, guarantees and indemnities and accounting
                  records; any assets (other than Receivables and Acquired
                  Receivables purchased by us pursuant to the terms of this
                  Agreement) and any guarantee(s) which constitute security in
                  respect of your obligations to us with respect to the purchase
                  of Receivables, Acquired Receivables and VAT Receivables by us
                  pursuant to this Agreement as set out in the Schedule);

                  "REPURCHASE": means the repurchase by you of a Receivable, an
                  Acquired Receivable or a VAT Receivable at its Repurchase
                  Price;

                  "REPURCHASE PRICE": means a sum equivalent to the Purchase
                  Price of a Receivable, Acquired Receivable or VAT Receivable
                  plus all sums (if any) then outstanding and due to us in
                  respect of any relevant Credit Charges relating to that
                  Receivable, Acquired Receivable or VAT Receivable;

                  "SALES CONTRACT": means a contract under which you sell
                  Products to Debtors;

                  "SALES INVOICE": means a valid invoice issued by you to a
                  Debtor under a Sales Contract;

                  "SALES INVOICE PRICE": means the amount payable by the
                  relevant Debtor as evidenced by a Sales Invoice in respect of
                  the supply of Products (including Value Added Tax) less all
                  and any credit notes, discounts and other deductions to which
                  the relevant Debtor is entitled and of which he avails
                  himself;

                  "SCHEDULE": means the Schedule to this Agreement as amended
                  from time to time by written agreement between the parties;

                  "SDSA" means as defined in the caption;

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                  "SHORTFALL AMOUNT": means the amount set out in Clause 7.4;

                  "SHORTFALL FEE" means the fee calculated as detailed in the
                  Schedule;

                  "SUBSIDIARY" means an entity of which a person has direct or
                  indirect control or owns directly or indirectly more than 50%
                  of the share capital or similar right of ownership and
                  "control" for this purpose means the power to direct the
                  management and the policies of the entity whether through the
                  ownership of share capital, contract or otherwise;

                  "SUPPLIER INVOICE": means a valid invoice issued by an
                  Authorised Supplier in respect of your acquisition of Products
                  from such Authorised Supplier;

                  "SUPPLIER OBLIGATIONS": means the amount owing by you in
                  respect of a Supplier Invoice that we have purchased from an
                  Authorised Supplier and a BSDE Supplier Invoice (including the
                  future right to recover sums due following the determination,
                  assessment or agreement of the amount of such obligation),
                  including any applicable value added taxes, duties, charges
                  and interest (whether arising by contract or by law).

                  "VAT" means value added tax levied by the appropriate
                  authorities in a country;

                  "VAT RECEIVABLES" means a payment obligation of the Country of
                  the Netherlands or Belgium pursuant to an invoice raised to
                  the respective country for valid reimbursement of VAT paid by
                  BSDE or SDSA to the Country of the Netherlands or Belgium (1)
                  for products purchased from IBM or one of its subsidiaries and
                  which products were sold by BSDE to customers outside the
                  Country of the Netherlands or (2) by SDSA to customers outside
                  the Belgium, (3) for products sold by BSDE to SDSA and (4) for
                  products supplied by IBM Singapore to SDSA, subject to the
                  limitation specified in the Schedule;

         1.2      INTERPRETATION

                  In this Agreement:

                  1.2.1    "YOU" and "US" shall where the context admits,
                           include our respective personal representatives,
                           successors in title or permitted assigns (whether
                           immediate or derivative);

                  1.2.2    any reference herein to any document, including to
                           this Agreement includes such document as amended,
                           novated, supplemented, substituted, extended,
                           assigned or replaced from time to time and includes
                           any document which is supplemental hereto or thereto;

                  1.2.3    where a word or phrase has to be considered in
                           relation to a jurisdiction outside Belgium and there
                           is no exact equivalent or such work or phrase then it
                           shall have the meaning of the closest equivalent in
                           such jurisdiction; and

                  1.2.4    "INDEBTEDNESS" includes any obligation (whether
                           incurred as principal guarantor or surety) for the
                           payment or repayment of money, whether present or
                           future, actual or contingent.

                  The headings in this Agreement are inserted for convenience
                  only and shall not affect its construction or interpretation.

2.       CREDIT LIMIT

         2.1      We will establish a Credit Limit for you up to the amount
                  specified in the Schedule which we may, at our discretion,
                  purchase Supplier Invoices from Authorised Suppliers and/or
                  Receivables, Acquired Receivables and VAT Receivables from
                  you.

3.       SUPPLIER PURCHASE FACILITY

         3.1      SETTLEMENT OF SUPPLIER INVOICES

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                                                                               7
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                  3.1.1    By entering into this Agreement you agree that you
                           will pay us, and not the Authorised Supplier, in
                           order to settle (i) Supplier Invoices which we have
                           purchased and (ii) BSDE Supplier Invoices.

                  3.1.2    We may, in our discretion and upon written notice to
                           you, cease to include a supplier as an Authorised
                           Supplier for the purposes of this Agreement. Any such
                           cessation will not affect our purchase of Supplier
                           Invoices then in existence or our obligation to pay
                           BSDE Supplier Invoices.

                  3.1.3    You authorise us to collect directly from any
                           Authorised Supplier any monies due for credits,
                           rebates, bonuses or discounts owed by such Authorised
                           Supplier to you. Once received we shall either (in
                           our discretion) apply such monies against amounts you
                           owe us or credit the relevant amount to your ledger
                           account with us and pay such monies into the bank
                           account referred to in Clause 6.7.1.

                  3.1.4    You shall pay us for a Supplier Obligation no later
                           than the Due Date. You agree to pay us the full
                           amount of such Supplier Obligation.

                  3.1.5    If an Extended Credit Period is provided (as
                           specified in the Schedule) payment of the relevant
                           Supplier Obligation may be deferred for such further
                           period as is specified in the Schedule after the end
                           of the No Charge Period but such Supplier Obligation
                           shall bear interest at the rate specified in the
                           Schedule during such period.

                  3.1.6    If you do not pay the Supplier Obligations before the
                           last day of the No Charge Period (or, if clause 3.1.5
                           applies, at the end of the Extended Credit Period),
                           such sum shall bear interest at the Default Rate from
                           the expiry of the No Charge Period (unless the
                           Extended Credit Period is applicable) until actual
                           receipt of such payment by us in cleared funds.

         3.2      TITLE TO PRODUCTS

                  3.2.1    You hereby acknowledge that by virtue of our purchase
                           from the relevant Authorised Supplier of the Supplier
                           Invoices or, as applicable, our agreement to pay the
                           BSDE Supplier Invoices on your behalf, all Product
                           Rights, including any reservation of title rights,
                           belong to us until all amounts owing to us in
                           connection with payment of the relevant Supplier
                           Obligations and any outstanding Credit Charges are
                           paid in full by you.

                  3.2.2    You will not cause or permit any Debtor or other
                           third party to encumber our Product Rights in any
                           way. You agree to take such action as may be required
                           to implement this provision, including your
                           acknowledgement of, and agreement to the insertion of
                           written notice in Sales Invoices or, as applicable,
                           separate notices to BSDE Debtors, to the intent that
                           IBM GF is the owner of the relevant Product Rights.

4.       RECEIVABLES, ACQUIRED RECEIVABLES AND VAT RECEIVABLES DISCOUNTING
         FACILITY

         Under the terms of this Agreement, we may from time to time purchase
         Receivables, Acquired Receivables and VAT Receivables from you.

         4.1      PURCHASE AND PAYMENT OF RECEIVABLES, ACQUIRED RECEIVABLES AND
                  VAT RECEIVABLES

                  4.1.1    As soon as possible on or after the Commencement Date
                           and upon the terms and conditions of this Agreement
                           you will deliver an Offer to sell to us with full
                           title guarantee each and all Receivables, Acquired
                           Receivables and VAT Receivables (together with all
                           Receivable Rights in existence as at the Commencement
                           Date). We will only accept each such Offer by
                           crediting to your ledger account with us the Purchase
                           Price of all such Receivables, Acquired Receivables
                           and VAT Receivables upon such date. Upon doing so,
                           our ownership of the Receivables, Acquired
                           Receivables and VAT Receivables that we have accepted
                           shall be complete.

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                                                                               8
<PAGE>

                  4.1.2    You hereby agree to transfer ownership to us of all
                           Receivables and VAT Receivables (together with all
                           Receivables Rights) created after the Commencement
                           Date until this Agreement ends, or we give you notice
                           under Clause 4.1.12 that no more Receivables and/or
                           VAT Receivables will be accepted from a date
                           designated by us. Such Receivables and VAT
                           Receivables shall vest in us the moment the
                           Receivables are created and transfer of ownership of
                           any such Receivables and VAT Receivables to us shall
                           take place automatically and with immediate effect.
                           On that day our receipt of the relevant Notifications
                           and our ownership of such Receivables and VAT
                           Receivables shall then be complete. We will credit to
                           your ledger account with us the Purchase Price of all
                           such Receivables and VAT Receivables upon such date.

                  4.1.3    You will pay any duties or similar charges including
                           any Stamp Duty arising in connection with this
                           Agreement and the transfer of the Receivables,
                           Acquired Receivables and VAT Receivables to us.

                  4.1.4    After the Commencement Date, you will notify us in
                           the manner agreed with us, and at the frequency
                           stated in the Schedule of the invoice value of
                           Receivables and Acquired Receivables, less any
                           rebates or deductions or other credits given by you,
                           or to which a Debtor may be entitled. You will
                           provide on request copies of the relevant Sales
                           Contracts, Sales Invoices, credit notes, delivery
                           notes, and other evidence of the fulfilment of the
                           Sales Contracts as we may reasonably require and PFS
                           Web B.V. will provide similar information in relation
                           to VAT Receivables. There will be either be a service
                           fee for each Notification subject to a minimum
                           service fee payable in accordance with Clause 7.2.1,
                           or a monthly service fee, as set out in the Schedule
                           which you agree to pay to us. The Loan Parties will
                           promptly when required by us complete any forms of
                           assignment, documents or other instruments necessary
                           to ensure the transfer of full ownership of the
                           Receivables, Acquired Receivables and VAT Receivables
                           to us or to enable us to collect the Receivables,
                           Acquired Receivables and VAT Receivables.

                  4.1.5    If, for any reason, the sale or transfer of
                           Receivables, Acquired Receivables and/or VAT
                           Receivables, pursuant to the above provisions of this
                           Agreement, does not vest ownership of the
                           Receivables, Acquired Receivables and/or VAT
                           Receivables in us, the Loan Parties will hold any
                           such Receivables, Acquired Receivables and/or VAT
                           Receivables and any monies collected by them in
                           respect of such Receivables, Acquired Receivables
                           and/or VAT Receivables in trust for us, and pay any
                           such monies to us.

                  4.1.6    We may use the monies we receive from or on behalf of
                           Debtors in respect of each Receivable, Acquired
                           Receivable and VAT Receivable to satisfy any monies
                           then owing to us by you. We will transfer any
                           remaining amount to your designated bank account
                           (provided there is no Event of Default) at the
                           frequency agreed with you subject to the banking
                           charge specified in the Schedule.

                  4.1.7    As the absolute owner we have the sole and unfettered
                           right to enforce payment of and collect any
                           Receivable, Acquired Receivable and VAT Receivable
                           purchased by us under this Agreement. However until
                           further notice from us the Loan Parties will act
                           diligently and promptly as our undisclosed agent in
                           administering the accounts of customers and in
                           collecting and enforcing payment of Receivables,
                           Acquired Receivables and VAT Receivables at the Loan
                           Parties expense. However if (a) we consider that your
                           continued collection of any Receivables, Acquired
                           Receivables and VAT Receivables would be prejudicial
                           to us, and that such collection would

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<PAGE>

                           be better conducted by us or a third party, rather
                           than by the Loan Parties; or (b) an Event of Default
                           has occurred; or (c) this Agreement has terminated
                           for whatever reason; or (d) there has occurred (in
                           our reasonable opinion) a Material Adverse Effect, we
                           reserve the right to, or designate a third party to,
                           collect payment directly including issuing demands or
                           legal proceedings either in our own name or in your
                           name if required. The Loan Parties agree to
                           co-operate in such collection or proceedings,
                           including the provision of witnesses or the
                           production of documents. We can defend or compromise
                           such legal proceedings in such manner and on such
                           terms as we may see fit and the Loan Parties will be
                           bound by the result. Any reasonable expenses incurred
                           by us in such proceedings, including the payment of
                           legal and other professional fees, costs and
                           expenses, will be paid by you, or charged to you by
                           debiting the relevant accounts. Whilst the Loan
                           Parties may ask us to cease collection activities
                           against any Debtor and we will do so upon receiving
                           payment of the relevant Receivables, Acquired
                           Receivables and VAT Receivables or upon such terms as
                           we shall agree with the applicable Loan Party we have
                           the right to refuse or to accept such Loan Party's
                           request.

                  4.1.8    The Loan Parties agree that without our prior written
                           consent they will not sell, pledge or grant any Lien
                           over any Receivables, Acquired Receivables and VAT
                           Receivables to any third party, or agree to do so, or
                           enter into any other arrangement which might
                           adversely affect our interest in any Receivables,
                           Acquired Receivables and VAT Receivables.

                  4.1.9    After the you Notify a Receivable, Acquired
                           Receivable and VAT Receivable to us you agree (save
                           where Clause 4.1.10 applies) not to cancel or vary
                           any relevant Sales Contract, Sales Invoice or VAT
                           invoice or its relevant payment terms or settlement
                           discounts without our prior written consent except
                           where the change is due to a manifest error in your
                           invoice, in which case you will notify us of the
                           resulting change in the Receivable but our written
                           consent will not be required.

                  4.1.10   You undertake that if Products are returned to you
                           and you provide a credit in any form which has the
                           effect of reducing the amount of the relevant
                           Receivable or Acquired Receivable, you will promptly
                           notify us.

                  4.1.11   For each Notified Receivable, Acquired Receivable and
                           VAT Receivable the you represent and warrant to us
                           that: (a) all particulars notified to us are correct
                           and complete; (b) the Receivable, Acquired Receivable
                           and VAT Receivable has not been previously Notified
                           to us; (c) any covenants or undertakings given to us
                           relating to such Receivable, Acquired Receivable and
                           VAT Receivable will be complied with; (d) the Sales
                           Invoice to the Debtor has been issued within seven
                           days of the delivery of the Products; (e) each
                           Receivable or Acquired Receivable relates to an
                           actual and bona fide sale and delivery of Products to
                           the Debtor, is fully enforceable and is free from any
                           other charge, pledge, or Lien in favour of a third
                           party; (f) each VAT Receivable is fully enforceable
                           and is free from any other charge, pledge, or Lien in
                           favour of a third party; and (g) such Receivable,
                           Acquired Receivable and VAT Receivable will be paid
                           without any claim for set off, counterclaims,
                           retention or abatement.

                  4.1.12   The sale or transfer of Receivables and VAT
                           Receivables will continue until we notify You in
                           writing that we will accept no more Receivables
                           and/or VAT Receivables for purchase or until the
                           termination of this Agreement whichever is the
                           sooner.

         4.2      CREDIT AND COLLECTION POLICY

                  The Loan Parties will comply in all material respects with the
                  Loan Parties' credit and collection practices agreed with us
                  in regard to each Receivable, Acquired Receivable, VAT
                  Receivable, any Receivables Rights and the related Sales
                  Contracts and VAT invoice.

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5.       PREPAYMENTS

         5.1      We may, following your written or electronic request, make a
                  Prepayment available to you in a bank account maintained by
                  you, subject to any banking charge as set out in the Schedule,
                  in the amount you select up to the Available Credit. We will
                  endeavour to effect such Prepayment on the day you make such
                  request provided we receive such request before 10.00 am on
                  any Business Day.

         5.2      If we make a Prepayment on a day upon which any settlement of
                  a Supplier Obligation or Credit Charge is due or overdue for
                  payment, or you owe us any monies for the Repurchase Price of
                  Receivables, Acquired Receivables and/or VAT Receivables then
                  we may apply the proceeds of the Prepayment to such payment in
                  or towards the discharge of the monies so due to us and only
                  an amount equal to the difference, if any, between the amount
                  of the Prepayment and the amount being paid or so discharged
                  shall be made available to you.

         5.3      A Discount Charge will accrue from day to day during this
                  Agreement and be calculated on the outstanding daily balance
                  of all Prepayments.

         5.4      You may at any time pay us for Supplier Obligations and any
                  outstanding Credit Charges, by requesting us to apply all or
                  part of any Prepayment for that purpose. Prepayments may not
                  be used for the repayment of principal owing to us pursuant to
                  any agreement between yourself as borrower and ourselves as
                  lender unless expressly agreed by us in writing. In addition
                  to payment for Supplier Obligations, Prepayments shall only be
                  used for working capital purposes

6.       RECEIVABLES AND RECEIVABLES RIGHTS

         6.1      You will provide us with your Receivables Rights and take any
                  necessary steps to make such Receivables Rights effective and
                  enforceable. If a Lien is to be provided to us in relation to
                  any Receivable, Acquired Receivable, VAT Receivable and/or
                  Receivable Right not effectively purchased hereunder it shall
                  be a valid first priority interest.

         6.2      The Loan Parties agree:-

                  6.2.1    to promptly execute and deliver such further
                           instruments and documents, and to take such further
                           action including any filing or payment of
                           registration fees at the Loan Parties' expense as we
                           may reasonably request for the purpose of preserving
                           or protecting all our rights and interests in the
                           Receivables, Acquired Receivables and VAT Receivables
                           (and the Receivables Rights) and our ownership of the
                           former and our rights in the latter;

                  6.2.2    report to us with the reports and accounts referred
                           to in the Schedule at the intervals specified therein
                           and to provide us with such other reports as may be
                           agreed; and

                  6.2.3    to advise us promptly, in reasonably sufficient
                           detail, of any substantial change relating to the
                           value, quantity or quality of the Receivables,
                           Acquired Receivables and VAT Receivables and the
                           Receivables Rights, including any movement in
                           location of the Receivables, Acquired Receivables and
                           VAT Receivables and the Receivables Rights, or any
                           event which could reasonably be expected to have a
                           significant adverse effect on the value, quantity or
                           quality of the Receivables, Acquired Receivables and
                           VAT Receivables and the Receivables Rights; and

                  6.2.4    promptly advise us of any loss, destruction of or
                           damage to the Receivables, Acquired Receivables and
                           VAT Receivables or the Receivables Rights and to pay
                           us such amount (if any) as will reduce the Credit
                           Limit as specified by us in our absolute discretion,
                           or provide such additional Collateral as we may
                           require; and

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                  6.2.5    to maintain books and records relating to the
                           Collateral in such detail, form and scope as is
                           consistent with good business practice and ensure,
                           where applicable, such books and records will reflect
                           our ownership of the Receivables, Acquired
                           Receivables and VAT Receivables and our interest in
                           the Receivables Rights.

         6.3      NOTICE OF TRANSFER OF OWNERSHIP OF RECEIVABLES

                  If required by us, for each Receivable, Acquired Receivable
                  and VAT Receivable, the Loan Parties will give written notice
                  to the Debtor concerned that we are the owner of the
                  Receivable, Acquired Receivable or VAT Receivable, as
                  applicable, and that payment of Receivables, Acquired
                  Receivables and VAT Receivables, as applicable, must be made
                  to us directly. The wording of the notice and the manner in
                  which it is given will be as directed or approved by us. We
                  may give such written notice to the Debtor directly.

         6.4      RECEIVABLES RIGHTS

                  6.4.1    The Loan Parties hereby acknowledge that all
                           Receivables Rights belong to us until all amounts
                           owing to us in connection with such Receivable,
                           Acquired Receivable or VAT Receivable and any
                           outstanding Credit Charges are paid in full.

                  6.4.2    You will not cause and you will use your best
                           endeavours not to permit any Debtor or other third
                           party to acquire title in any Products the subject of
                           Receivables or Acquired Receivables or to encumber
                           such title in any way before you have delivered the
                           relevant Products and payment in full of the relevant
                           Receivable or Acquired Receivable has been made by
                           such Debtor. You agree to take such action as may be
                           required to implement this provision, including the
                           insertion of appropriate clauses in Sales Contracts.

         6.5      REPURCHASE

                  6.5.1    We may require you to buy back any Receivable,
                           Acquired Receivable or VAT Receivable and pay us the
                           Repurchase Price of such Receivable, Acquired
                           Receivable or VAT Receivable as follows in any of the
                           following situations: (i) if such Receivable,
                           Acquired Receivable or VAT Receivable is or becomes
                           an Ineligible Receivable; (ii) if it is the subject
                           of a dispute; (iii) if payment is withheld for any
                           reason including a dispute under the Sales Contract
                           or, if applicable, VAT invoice or any claim to
                           set-off or counterclaim; (iv) if it is payable by an
                           Insolvent Debtor; (v) at any time on or after any
                           Event of Default; or (vi) at any time after
                           termination of this Agreement. We will either debit
                           your account with the Repurchase Price if the account
                           is sufficiently in credit, or if not then we will
                           require the applicable Loan Party to make a cash
                           payment of the Repurchase Price in which case such
                           Loan Party will promptly make such payment to us. On
                           receipt of payment in full of the Repurchase Price of
                           each Receivable, Acquired Receivable or VAT
                           Receivable which we require a Loan Party buy back
                           together with all other sums due from it to us, we
                           will upon request assign or transfer that Receivable,
                           Acquired Receivable or VAT Receivable to you and it
                           will pay the reasonable costs incurred by us
                           including any duly documented and properly incurred
                           legal costs or other professional expenses, stamp
                           duties, VAT, and similar charges. Any amounts such
                           Loan Party collects before we receive payment in full
                           will be held in trust for us and promptly delivered
                           to us and set against the amounts owed to us and any
                           amounts we collect after payment in full to us will
                           be credited to your account.

                  6.5.2    You will not cancel any notices of assignment given
                           to Debtors owing Receivables, Acquired Receivables
                           and VAT Receivables which we have

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                           required you to buy back or attempt to collect such
                           Receivables, Acquired Receivables and VAT Receivables
                           for your own account until you have paid us, in
                           cleared funds, the Repurchase Price and all other
                           amounts due to us in respect of it.

         6.6      CREDITS AND CLAIMS

                  6.6.1    If any query or claim shall arise concerning or
                           affecting a Receivable, Acquired Receivable or VAT
                           Receivable or concerning a credit or set-off by the
                           Debtor against the Sales Invoice amount or, if
                           applicable, VAT invoice, including any late delivery
                           or return of Products or allegation of inadequate
                           performance of the Sales Contract(s), the applicable
                           Loan Party will, after complying with Clause 4.1.10,
                           (i) immediately give full details in the form we
                           require; (ii) use all reasonable efforts to resolve
                           the query or claim; and (iii) notify us of any
                           resulting credit note or other settlement.

                  6.6.2    If the query or claim affects the value to us of the
                           Receivable, Acquired Receivable or VAT Receivable it
                           may be treated by us as being an Ineligible
                           Receivable.

         6.7      BANK ACCOUNT

                  6.7.1    We will tell you the form of assignment to be
                           included on the Sales Invoice, the separate notice
                           for Acquired Receivables and the VAT Receivable. You
                           will instruct relevant Debtors to pay the amounts of
                           the Sales Invoices or, if applicable, the VAT invoice
                           to a bank account in our name or to a bank account
                           controlled by us and the Loan Parties must do nothing
                           to prevent payment to us.

                  6.7.2    If payments are to be made to a bank account in your
                           name but controlled by us you will enter into
                           agreements satisfactory to us, enabling the bank
                           account to be administered so that we have control
                           over all withdrawals from the bank account. Any
                           payments collected by the Loan Parties in relation to
                           Receivables, Acquired Receivables and VAT Receivables
                           shall be held in trust for us and promptly deposited
                           in the bank account without being mixed with the Loan
                           Parties' own funds or negotiated except in our
                           favour. You will pay all costs and expenses of
                           setting up and operating bank accounts for this
                           purpose, including all charges relating to the
                           collection or attempted collection of cheques or
                           other instruments of payment.

7.       CREDIT CHARGES AND PAYMENTS

         7.1      INFORMATION ABOUT YOUR ACCOUNT

                  We will provide you with information concerning Supplier
                  Obligations and Prepayments, including amounts due to us and
                  on request the then amount of the Available Credit. Such
                  information shall be treated as being correct and binding upon
                  you in the absence of manifest error provided that such
                  manifest error is notified to us within a period of 15 days
                  from the date of the provision of such information to you. We
                  will keep such accounts as may be required to show the amounts
                  due to us and the amounts received from you and/or your
                  Debtors. In any proceedings or disputes a certificate issued
                  by our Company Secretary, or by one of our Directors or
                  authorised officers as to the correctness of any financial
                  statement or any amounts due to us shall be prima facie
                  evidence of the same.

         7.2      CREDIT CHARGES

                  7.2.1    The Credit Charges payable by you are set out in the
                           Schedule. They are set out exclusive of VAT and any
                           other taxes and duties which (if applicable) will be
                           additionally payable by you. You will receive an
                           invoice or relevant statement for all Credit Charges
                           including any applicable VAT stamp or other duties
                           and will either be debited to your account on a
                           monthly basis or paid to us on demand. Any minimum
                           amounts payable by you will be debited to your
                           account periodically as set out in the Schedule. Some
                           Credit Charges will fluctuate up or down depending on
                           changes to the Base Rate as described in Clause
                           7.2.3.

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                  7.2.2    If we purchase a Supplier Invoice that does not
                           include a "No Charge Period", any Supplier
                           Obligations thereunder will be subject to a set up
                           fee as specified in the Schedule (or as agreed with
                           you) and Credit Charges will be levied on you from
                           and including the date of issue of the relevant
                           Supplier Invoice. You agree to pay such Credit
                           Charges or set up fee on their due date together with
                           payment of the relevant Supplier Obligations.

                  7.2.3    Where a Credit Charge is related to Base Rate and the
                           outside reference rate upon which Base Rate is based
                           at any time changes then, on the first business day
                           of the next following calendar month, the Base Rate
                           will be changed to the outside reference rate
                           existing on the last business day of the previous
                           calendar month. However, if the outside reference
                           rate changes by 25 basis points or more at any time
                           then the Base Rate will be changed by the same amount
                           on the day of such change or the next following
                           business day. When the applicable Base Rate is
                           determined by reference to another published rate and
                           that rate ceases to be published for any reason, we
                           will use another appropriate rate as the reference
                           rate so that you and we remain in an equivalent
                           financial position.

         7.3      PAYMENT

                  7.3.1    The Loan parties agree to pay, or cause you to pay,
                           all sums due to us arising from the settlement of
                           Supplier Obligations and the Repurchase Price of
                           Receivables, Acquired Receivables and VAT Receivables
                           and all Credit Charges owed to us and applicable VAT,
                           stamp or other duties by direct debit, wire transfer,
                           or such other method of payment that we agree, in
                           full, without any set off whatsoever. Payment shall
                           be deemed to be made when such payment is received in
                           cleared funds in the designated bank account in our
                           name or controlled by us. The Loan Parties may at any
                           time prepay, without notice or penalty, in whole or
                           in part, amounts owed to us under this Agreement. We
                           may apply payments made to us (whether by you or
                           otherwise) firstly to pay any Credit Charges owing
                           under this Agreement and then the amount owing in
                           respect of each Supplier Obligation, and or the
                           Repurchase of Receivables, Acquired Receivables and
                           VAT Receivables. Late payment will be subject to a
                           late payment charge on the sums unpaid at the Default
                           Rate from the date following the Due Date until and
                           including the date payment is received by us in
                           cleared funds in our account

                  7.3.2    Your obligations to pay sums due in respect of
                           Supplier Obligations to us or any Repurchase Price of
                           Receivables, Acquired Receivables and VAT Receivables
                           will not be affected by any dispute you may have with
                           any Authorised Supplier, including defective,
                           insufficient, late or partly delivered Products. You
                           waive all rights of set-off or counterclaim against
                           your liability to pay Supplier Obligations. However,
                           this does not affect any claim or right or remedy you
                           may have against the Authorised Supplier. You will
                           not assert against us any claim or defence you may
                           have against the Authorised Supplier or any third
                           party. We have no obligation to you under the
                           Supplier Invoice. The Loan Parties will indemnify and
                           hold us harmless against any claims or liabilities
                           arising from the Products in any way whatsoever.

                  7.3.3    When Products are returned by you to an Authorised
                           Supplier it will not affect the amounts due to us
                           unless and until we receive the amount of a credit
                           note from the applicable Authorised Supplier relative
                           to the returned Products and which we shall promptly
                           upon receipt apply it to your account. Such credit
                           note amount will be deducted from the amounts due by
                           you to us.

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         7.4      SHORTFALL AMOUNT

                  If, on any day, the aggregate of the amounts outstanding from
                  the Loan Parties to us in respect of Supplier Obligations and
                  the outstanding and unpaid Prepayments we have made in respect
                  of Receivables, Acquired Receivables and VAT Receivables by
                  the relevant Debtor exceed the lesser of either the value of
                  the Collateral or the Credit Limit, then, unless otherwise
                  agreed, the Loan Parties will pay such "SHORTFALL AMOUNTS" on
                  the day this becomes known to you either by our advising you
                  or from your own enquiries. Until this is done, we shall be
                  under no obligation to purchase Supplier Invoices from
                  Authorised Suppliers or Receivables or VAT Receivables from
                  you (whether or not previously agreed) and you will pay a late
                  payment charge at the Default Rate set out in the Schedule on
                  the shortfall amounts accruing from day to day. In addition we
                  may charge the Shortfall Fee if the Shortfall Amounts are not
                  paid when due.

         7.5      POWER OF ATTORNEY

                  As security for your obligation hereunder the Loan Parties
                  grant us, our directors and officers an irrevocable power of
                  attorney:-

                  (i)      to endorse or negotiate cheques, or bankers drafts
                           and negotiable instruments;

                  (ii)     to initiate and settle any claims (including the
                           conduct of legal proceedings); and

                  (iii)    to sign or execute any deeds, papers, forms or
                           documents and file the same as may be necessary to
                           perfect or preserve any of our rights or to secure
                           performance of your obligations to us or any Debtor
                           with respect to the Collateral and ownership of the
                           Receivables, Acquired Receivables and VAT
                           Receivables.

8.       REPRESENTATIONS, WARRANTIES AND COVENANTS

         8.1      REPRESENTATIONS AND WARRANTIES

                  By signing the Agreement and (in relation to Clauses 3 and 4)
                  before each Supplier Invoice or Receivable, Acquired
                  Receivable or VAT Receivable is purchased or Prepayment is
                  made you represent and warrant (or are deemed to represent and
                  warrant) to us as follows:

                  8.1.1    VALIDITY

                           Each of the Loan Parties, your parent company, and
                           each of its subsidiaries is duly organised, is
                           validly existing and has the full power, authority
                           and legal right, including compliance with any
                           governmental and other consents, licenses and
                           authorisations, to conduct its business and to enter
                           into this Agreement. This Agreement and any Liens or
                           other documents provided in relation to the
                           Receivables, Acquired Receivables and VAT Receivables
                           and the Receivables Rights and the Products and the
                           Product Rights are legal, valid and binding
                           obligations upon you and do not contravene any other
                           agreement or obligation.

                  8.1.2    ACTIONS, PROCEEDINGS

                           No significant or material judgements, orders, writs
                           or decrees are outstanding against any Loan Party nor
                           is there pending nor, to the best of the Loan
                           Parties' knowledge after due inquiry, threatened, any
                           material litigation, contested claim, investigation,
                           arbitration, or taxation or governmental proceeding
                           by or against a Loan Party, nor is any Loan Party in
                           default of, nor engaged in, any significant or
                           material dispute under any agreement or document. If
                           any dispute does arise such Loan Party undertakes to
                           inform us and promptly resolve it.

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                  8.1.3    INFORMATION

                           Each Loan Party has disclosed to us every fact or
                           matter known or which should reasonably have been
                           known to it that might influence us whether or not to
                           enter into this Agreement, or purchase any Supplier
                           Invoice or Receivable, Acquired Receivable or VAT
                           Receivable or make any Prepayment, or to accept any
                           Product Rights and/or Receivables Rights, or to
                           accept any guarantee or indemnity, and that all
                           information furnished by each Loan Party or on its
                           behalf to us or by its Auditors in connection with
                           this Agreement and the Products and Product Rights,
                           Receivables, Acquired Receivables and VAT Receivables
                           and the Receivables Rights is true and accurate in
                           all material respects and is neither misleading nor
                           incomplete by the omission of any material fact and
                           has not changed since being provided to us.

         8.2      COVENANTS AND UNDERTAKINGS

                  Until termination of this Agreement and the complete payment
                  and satisfaction of all obligations under this Agreement, each
                  Loan Party agrees as follows:

                  8.2.1    MERGER, CONSOLIDATION AND SALES

                           (a)      If any Loan Party plans to merge or
                                    consolidate with any other entity, or engage
                                    in any operation or activity materially
                                    different from that presently being
                                    conducted by it, or otherwise intend to
                                    dispose of any substantial part of its
                                    business, or the Receivables, Acquired
                                    Receivables and VAT Receivables or the
                                    Receivables Rights or the Products or the
                                    Product Rights or engage in a significant
                                    corporate restructuring in ownership, then
                                    such Loan Party will:

                                    (i)      disclose these facts to us as early
                                             as possible (and if subject to a
                                             confidentiality undertaking in
                                             relation to these matters, will use
                                             best endeavours to obtain the
                                             consent of the counterparty
                                             thereto), and

                                    (ii)     reach agreement with us concerning
                                             all remaining payment obligations
                                             under this Agreement or, failing
                                             such agreement, and if so required
                                             by us, immediately discharge such
                                             payment obligations (whether or not
                                             accrued due and payable). For this
                                             purpose all Supplier Obligations
                                             shall forthwith become payable and
                                             all Receivables, Acquired
                                             Receivables and VAT Receivables
                                             shall be treated as Ineligible
                                             Receivables to be re-purchased by
                                             such Loan Party. No Loan Party will
                                             be required to make such disclosure
                                             if, and for so long as, to do so
                                             would be a breach of applicable
                                             laws or regulatory requirements.
                                             Any disclosure under this
                                             sub-clause shall be treated in
                                             confidence by us.

                  8.2.2    FINANCIAL STATEMENTS AND OTHER INFORMATION

                           SDSA will give us a copy of its audited Financial
                           Statements and management accounts prepared in
                           accordance with generally accepted accounting
                           principles, whether audited or not, as provided in
                           the Schedule. SDSA and BSDE will also provide such
                           other information as we may reasonably request
                           concerning Sales Contracts and their completion. Each
                           Loan Party will promptly advise us if any material
                           action or proceeding is outstanding or pending
                           against or if, to the best of its knowledge after due
                           enquiry, any such action or proceeding becomes
                           threatened.

                  8.2.3    AUTHORISATION

                           We can rely upon the signature or the act or
                           communication from Authorised Officers and Directors
                           in accordance with Attachment A to this Agreement.

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                  8.2.4    INSPECTION

                           Each of the Loan Parties will allow us or our agents
                           to enter upon its premises during normal business
                           hours on reasonable notice, and at any time during
                           the continuance of an Event of Default, for the
                           purposes of inspecting, taking copies of and/or
                           verifying the Supplier Invoices and any Product
                           Rights, the Receivables, Acquired Receivables and VAT
                           Receivables, any Receivables Rights, Financial
                           Statements, and its financial status; each Loan Party
                           will agree to provide us with such information and
                           documentation that we consider reasonably necessary
                           to conduct the foregoing activities, including
                           samplings of purchase orders, invoices and evidences
                           of delivery or other performance, and that we may
                           contact such Loan Party's customers directly or
                           through our agents to verify Receivables, Acquired
                           Receivables and VAT Receivables.

                  8.2.5    INSURANCE

                           8.2.5.1  Each Loan Party will maintain, or cause to
                                    be maintained, with financially sound and
                                    reputable insurance companies, insurance on
                                    its respective properties and assets
                                    (without being required to effect credit
                                    insurance on the Receivables, Acquired
                                    Receivables and VAT Receivables unless such
                                    obligation is specified in the Schedule) to
                                    their full insurable value; you will be
                                    required to maintain insurance against
                                    claims for personal injury or death as a
                                    result of the use of any Products sold by
                                    you; each Loan Party will be required to
                                    maintain insurance coverage against other
                                    business risks; each Loan Party will give us
                                    at least ten days written notice before any
                                    policy is altered or cancelled.

                           8.2.5.2  Each Loan Party will instruct each insurer
                                    to endorse and to assign the benefit of each
                                    insurance policy covering its properties and
                                    assets in respect of Supplier's Invoices or
                                    Receivables, Acquired Receivables and VAT
                                    Receivables which have been purchased by us
                                    hereunder so that (a) payment of proceeds
                                    with respect to claims thereon will be made
                                    directly to us and (b) no act or default of
                                    such Loan Party or any other person shall
                                    affect our right to recover under the
                                    policies.

                           8.2.5.3  If such Loan Party fails to pay any costs,
                                    charges or premiums, or if it fails to
                                    insure its properties and assets, we may pay
                                    such costs, charges or premiums on such Loan
                                    Party's behalf. Any such amounts paid by us
                                    shall be considered as an additional debt
                                    owed by such Loan Party's due and payable by
                                    it or you immediately upon receipt of our
                                    invoice.

                  8.2.6    RIGHT OF SET-OFF

                           At all times we can set-off amounts due from you to
                           us (including those prospectively due where they are
                           likely to become payable) and whether due under this
                           or any other agreement with us or otherwise due
                           against whatever we owe you. Where the amount due by
                           you cannot immediately be ascertained we may make a
                           reasonable estimate of the amounts concerned.

                  8.2.7    FINANCIAL COVENANTS

                           You agree to comply with the Financial Covenants, if
                           any, set out in the relevant supplements or the
                           Schedule. You also agree that you will not, without
                           our consent, make any of the following payments
                           ("Restricted Payments") if you and Holdings are not
                           in compliance with the Financial Covenants contained
                           in this Agreement and after giving effect to such
                           payment, the aggregate amount of such Restricted
                           Payments under this Agreement and the IWCF does not
                           cause you or Holdings to violate such Financial
                           Covenants or exceed Six Hundred Thousand Dollars
                           ($600,00),

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                           without duplication, during any fiscal year (i)
                           declare or pay any dividend; (ii) issue any warrants,
                           options or rights to purchase any capital stock;
                           (iii) make any payment to an Affiliate other than in
                           the course of normal trading business and interest on
                           intercompany debt; or (iv) make any other
                           distribution, whether in cash, shares or property.

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9.       DEFAULTS AND REMEDIES

         9.1      DEFAULTS

                  Any one of the following events shall constitute an "EVENT OF
                  DEFAULT" under the this Agreement:

                  9.1.1    A Loan Party's failure to make payment to us when due
                           of any amount, including without limitation Credit
                           Charges or the Shortfall Amount or part thereof,
                           under this Agreement or its failure to comply with
                           any other provision of this Agreement including its
                           failure to meet the dates by which information or
                           reports are due under this Agreement;

                  9.1.2    Any representation, warranty, statement, report or
                           certificate made or delivered by a Loan Party or on
                           its behalf is false in any material respect at the
                           time when made or deemed made;

                  9.1.3    The occurrence of any event or circumstance,
                           including adverse comment in Auditors' reports for
                           any Loan Party, which, in our opinion, could
                           reasonably be expected by us to have a Material
                           Adverse Effect;

                  9.1.4    A Loan Party, your parent company, any subsidiary of
                           a Loan Party or your parent company, or any of your
                           guarantors becomes subject to Insolvency, or to a
                           change of control due to change in shareholders
                           unless previously agreed to by us in writing;

                  9.1.5    The use of any Prepayments or the incurring of any
                           Supplier Obligations for any purpose other than your
                           normal business operations or as permitted by this
                           Agreement unless disclosed to us and agreed in
                           writing before the Prepayment or Supplier Obligation
                           is made;

                  9.1.6    Any default by any Loan Party in complying with any
                           judgement or any demand under a guarantee or
                           indemnity;

                  9.1.7    Any breach by any Loan Party, your parent company or
                           any of your guarantors of any other agreement with us
                           or with any other lender, including IBM Credit
                           Corporation, or credit providers or suppliers
                           (including Authorised Suppliers); or

                  9.1.8    Any other actions materially adversely affecting our
                           ownership of Receivables, Acquired Receivables or VAT
                           Receivables or of Supplier Obligations or reducing
                           our rights relating to Receivables Rights and/or
                           Product Rights.

                  9.1.9    Any failure by Holdings to meet the financial
                           covenant specified for it in the Schedule.

                  9.1.10   The dissolution or liquidation of any Loan Party,
                           your parent company, any of any Loan Party's or your
                           parent's subsidiaries or any of your guarantors or
                           the directors or stockholders of such entities taking
                           action to dissolve or liquidate any such entity.

                  9.1.11   Any Loan Party, your parent company or any guarantor
                           suspends business.

                  9.1.12   a) PFSweb ceases to directly own one hundred percent
                           (100%) of the capital stock of PFS, and (b) PFS and
                           IFP cease to directly own One Hundred Percent (100%)
                           of the interest in members of Holdings or (b)
                           Holdings ceases to directly own One Hundred Percent
                           (100%) of the capital stock of BSD A;

                  9.1.13   BSD A ceases to maintain the extent of its current
                           ownership of you.

         9.2      REMEDIES

                  9.2.1    In addition to any rights or remedies available at
                           law or under this Agreement, on or at any time after
                           an Event of Default that we have not

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                           waived in writing, we may do any or all of the
                           following: (a) immediately terminate this Agreement;
                           (b) immediately reduce the Credit Limit to nil (c)
                           require you forthwith to buy back from us all
                           outstanding Receivables, Acquired Receivables and VAT
                           Receivables but so that no such Receivable, Acquired
                           Receivable or VAT Receivable shall revest in you
                           until the Repurchase Price of all such Receivables,
                           Acquired Receivables and VAT Receivables has been
                           paid to us together with all other sums then due to
                           us; (d) declare all payments of Supplier Obligations
                           and the Repurchase Price of Receivables, Acquired
                           Receivables and VAT Receivables together with any
                           Credit Charges to be immediately due and payable; and
                           (e) to take any action we deem necessary to take
                           possession of, realise or sell in a commercially
                           reasonable manner any Receivables, Acquired
                           Receivables, VAT Receivables or Receivables Rights,
                           and/or Products and/or Product Rights and/or assets
                           purchased with money provided by us.

                  9.2.2    Except as otherwise required by law or provided in
                           any Lien which encumbers the relevant assets, all
                           amounts obtained from any actions above will be
                           applied promptly to reduce or settle the amounts due
                           from you under this Agreement or any other deed or
                           agreement between any of and all of the Loan Parties
                           and IBM GF after deducting all charges, costs and
                           expenses including reasonable legal costs,
                           disbursements and other fees incurred in the
                           collection of such amounts, and any excess amounts
                           will, to the extent permitted by law and subject to
                           the rights of any person having priority, be paid to
                           you.

                  9.2.3    With respect to any Event of Default which we waive
                           we reserve the right to make a default charge as
                           compensation for such waiver.

10.      TERMINATION

         10.1     This Agreement will remain in force until the earlier of (i)
                  120 days from the date of this Agreement or such other date as
                  the Loan Parties and we may agree to in writing from time to
                  time and (ii) upon not less than 60 days written notice by any
                  party to the other. However following the occurrence of an
                  Event of Default that we have not waived in writing we may by
                  notice with immediate effect terminate this Agreement. Upon
                  any termination of this Agreement we shall have all the rights
                  and remedies set out in Clause 9.2 until the complete
                  discharge of all the Loan Parties' obligations to us. Any such
                  termination shall not affect any right we have in relation to
                  the Receivables, Acquired Receivables and VAT Receivables or
                  the Receivables Rights and the Supplier Obligations and the
                  Product Rights.

         10.2     Following the termination of this Agreement and the discharge
                  of all the Loan Parties' obligations to us and subject to the
                  exercise of any rights under this Agreement then any amounts
                  we hold for you will be paid to you after deduction of all or
                  any sums then owed to us under this or any other agreement
                  between any of and all of the Loan Parties and IBM GF.

         10.3     Notwithstanding the termination of this Agreement, the
                  provision of Clauses which should by their nature survive
                  termination (including without limitation payment obligations
                  and rights to Receivables, Acquired Receivables and VAT
                  Receivables and the Supplier Obligations and the Product
                  Rights and/or Receivables Rights) shall so survive and shall
                  remain in full force and effect until such time as all rights
                  and liabilities between the parties have been satisfied.

11.      GENERAL

         11.1     ASSIGNMENT

                  We may assign the benefit of this Agreement in whole or in
                  part. The Loan Parties consent to us novating to any other
                  person all or any of our obligations, rights, benefits and
                  remedies under this Agreement. Following such novation this
                  Agreement (or the novated part) shall bind and enure to the
                  benefit of our successors and assigns. The Loan Parties may
                  not assign or change their rights and benefits under this
                  Agreement or sub-contract any of their obligations without our
                  prior written consent.

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         11.2     LIMITATION OF LIABILITY

                  No party shall have any liability to any other party with
                  respect to any special, indirect or consequential damages
                  suffered in connection with this Agreement.

         11.3     GUARANTEE AND INDEMNIFICATION.

                  Each of BSDE, SDSA and the Guarantors irrevocably and
                  unconditionally, jointly and severally:

                  11.3.1   guarantees to each of BSDE and SDSA the due and
                           punctual observance and performance of all the terms,
                           conditions and covenants on the part of each of them
                           contained in this Agreement and agrees to pay from
                           time to time on demand any and every sum or sums of
                           money which each of BSDE and SDSA is at any time
                           liable to pay to us under or pursuant to the
                           Agreement and which has become due and payable but
                           has not been paid at the time such demand is made;
                           and

                  11.3.2   agrees to indemnify and hold harmless IBM GF and each
                           of its officers, directors, agents and assigns
                           (collectively, the "Indemnified Persons") against all
                           losses, claims, damages, liabilities or other
                           expenses (including reasonable attorneys' fees and
                           court costs now or hereinafter arising from the
                           enforcement of this Agreement, the "Losses") to which
                           any of them may become subject insofar as such Losses
                           arise out of or are based upon any event,
                           circumstance or condition (a) occurring or existing
                           on or before the date of this Agreement relating to
                           any financing arrangements IBM GF may from time to
                           time have with (i) each Loan Party, (ii) any Person
                           that shall be acquired by any Loan Party or (iii) any
                           Person that any Loan Party may acquire all or
                           substantially all of the assets of, or (b) directly
                           or indirectly, relating to the execution, delivery or
                           performance of this Agreement or the consummation of
                           the transactions contemplated hereby or thereby or to
                           any of the Collateral or to any act or omission of
                           any Loan Party in connection therewith.
                           Notwithstanding the foregoing, none of the Borrower
                           or any of the Guarantors shall be obligated to
                           indemnify IBM GF for any Losses incurred by IBM GF
                           which are a result of IBM GF's gross negligence or
                           wilful misconduct. The indemnity provided herein
                           shall survive the termination of this Agreement.

         11.4     WAIVER

                  No delay or omission of ours to exercise any right or remedy
                  whether before or after the occurrence of any Event of
                  Default, shall impair any such right or remedy or shall
                  operate as a waiver thereof.

         11.5     CHANGE OF TERMS

                  11.4.1   We may change the terms and conditions of this
                           Agreement upon sixty days written notice to you, but
                           no such change shall apply to purchases of Supplier
                           Invoices or Receivables, Acquired Receivables and VAT
                           Receivables made before the effective date of such
                           change of terms.

                  11.4.2   We reserve the right to serve sixty days written
                           notice on you designating some or all Receivables,
                           Acquired Receivables or VAT Receivables as Ineligible
                           Receivables and on the expiry of such notice you will
                           promptly buy back the relevant Ineligible Receivables
                           together with payment of any Credit Charges that
                           apply.

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                                                                              21
<PAGE>

                  11.4.3   In the case mentioned in paragraph 11.4.1 the Loan
                           Parties shall be entitled to terminate this Agreement
                           effective on the effective date of the change of
                           terms by written notice delivered to us within thirty
                           days of receipt of our notice of change of terms.

         11.6     CURRENCY INDEMNITY

                  11.6.1   Unless otherwise agreed by us where a Receivable,
                           Acquired Receivable or VAT Receivable is payable
                           otherwise than in EURO in Belgium, the charges for
                           both the collection and/or in the case of
                           Receivables, Acquired Receivables and VAT Receivables
                           not denominated in EURO, conversion into EURO or into
                           such other currency as we shall from time to time
                           determine, shall be deducted in calculating the
                           Purchase Price and such price shall be computed by
                           reference to the spot rate of exchange ruling in
                           London the date of collection but at IBM GF's
                           discretion, we may provisionally apply the rate
                           ruling on the date we receive Notification of such
                           Receivable, Acquired Receivable or VAT Receivable
                           making such adjustments as shall thereafter be
                           necessary

                  11.6.2   We hereby agree prior to the occurrence of an event
                           referred to in Clause 11.6.1 that we will not convert
                           any monies received hereunder in a currency other
                           than EURO into any other currency without your prior
                           agreement.

                  11.6.3   If at any time more than one currency or currency
                           unit are recognised by the central bank of Belgium,
                           or having jurisdiction in any country as the lawful
                           currency of that country.

                           11.6.3.1 for so long as the currency or currency unit
                                    in which the provisions of and obligations
                                    under this Agreement are expressed (the
                                    "EXPRESS CURRENCY") shall remain so
                                    recognised, those provisions and obligations
                                    shall remain denominated and paid or
                                    satisfied in that currency or currency unit;

                           11.6.3.2 if the express currency ceases to be so
                                    recognised, any reference in this Agreement
                                    to that currency or currency unit shall be
                                    translated into and become payable in the
                                    currency or currency unit of that country
                                    designated by us; and

                           11.6.3.3 any translation from one currency or
                                    currency unit to another shall be at the
                                    official rate of exchange recognised by the
                                    central bank for the conversion of that
                                    currency or currency unit into the other,
                                    rounded up or down by us in the manner
                                    officially prescribed in relation to such
                                    official rate or, if to the extent not so
                                    recognised or prescribed, in such manner as
                                    we may reasonably determine.

                           11.6.3.4 If any change in any currency of a country
                                    occurs, this Agreement will be amended to
                                    the extent we after consultation with the
                                    Loan Parties, specify to be necessary in the
                                    light of the change in currency and to put
                                    the parties hereto as far as possible in the
                                    same position as they would have been but
                                    for such change in currency.

         11.7     VAT

                  11.7.1   All charges specified in this Agreement are quoted
                           exclusive of VAT

                  11.7.2   The Loan Parties shall comply with any directions
                           which we may give to them in relation to the relief
                           or refund on behalf of us of VAT included in any
                           Receivable or Acquired Receivable purchased by us
                           pursuant to this Agreement where such relief or
                           refund may be available to us in respect of the
                           Insolvency of the Debtor.

         11.8     ELECTRONIC COMMUNICATIONS

                  Any party may communicate with any other party, other than
                  notices referred to in Clause 11.9, by electronic means and
                  such communication is acceptable as a signed

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                                                                              22
<PAGE>

                  writing. An identification code (called a "USER ID") contained
                  in an electronic document is sufficient to verify the sender's
                  identity and the document's authenticity.

         11.9     NOTICES

                  Any notice required or desired to be given under this
                  Agreement shall be in writing and shall be delivered by
                  facsimile transmission or registered mail, postage prepaid,
                  and addressed to the address of the respective party to this
                  Agreement listed in the Schedule or following the expiry of a
                  period of 30 Business Days from the delivery of written notice
                  to the other party, such other address or facsimile number
                  notified by that party to the other in accordance with this
                  clause:

         11.10    PARTIAL INVALIDITY

                  If any provision of this Agreement shall be held to be
                  invalid, illegal or unenforceable under any applicable statute
                  or rule of law, the validity, legality and enforceability of
                  the remaining provisions shall not in any way be affected.

         11.11    COMPLETE AGREEMENT

                  This Agreement including the Schedule embodies the entire
                  agreement between the Loan Parties and us with respect to the
                  subject matter hereof, and any prior written or oral
                  statements relating thereto are not to be considered part of
                  this Agreement.

         11.12    MISCELLANEOUS

                  11.12.1  IBM GF's rights and benefits under this Agreement
                           shall not be affected by the granting of any time or
                           indulgence to any Loan Party or to any surety or
                           guarantor of your obligations to us hereunder or to
                           any Debtor or by any failure to exercise or delay in
                           exercising any right or option against such person.

                  11.12.2  We shall be entitled to rely on any act done and on
                           any document signed and on any oral or written
                           communication (including any such communication sent
                           by facsimile) by any reason purportedly doing or
                           signing or communicating on behalf of you
                           notwithstanding any defect in or absence of any
                           authority in such person except as provided for in
                           Clause 8.2.3.

                  11.12.3  Without prejudice to the provisions of Clause 11.5
                           and except as otherwise provided in this Agreement no
                           variation of this Agreement shall be binding upon the
                           parties unless it is evidenced in writing and signed
                           by or on behalf of IBM GF by an authorised signatory
                           of IBM GF and on behalf of each Loan Party by a
                           director or the secretary or officer thereof.

         11.13    APPLICABLE LAW AND JURISDICTION

                  This Agreement shall be construed in accordance with and
                  governed by the laws of Belgium. The parties hereby submit to
                  the jurisdiction of the Belgian courts.

BY SIGNING BELOW BOTH PARTIES ACCEPT THE TERMS OF THE AGREEMENT

SIGNED ON BEHALF OF                       SIGNED ON BEHALF OF

SUPPLIERS DISTRIBUTORS S.A.               IBM BELGIUM FINANCIAL SERVICES S.A.

Signed:                                   Signed:
       ------------------------------            ------------------------------

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

Title:                                    Title:
      -------------------------------           -------------------------------

Signature:                                Signature:
          ---------------------------               ---------------------------

Date:                                     Date:
     --------------------------------          --------------------------------

--------------------------------------------------------------------------------
                                                                              23
<PAGE>

BUSINESS SUPPLIES DISTRIBUTORS            PFS WEB B.V.
EUROPE BV

Signed:                                   Signed:
       ------------------------------            ------------------------------

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

Title:                                    Title:
      -------------------------------           -------------------------------

Signature:                                Signature:
          ---------------------------               ---------------------------

Date:                                     Date:
     --------------------------------          --------------------------------

--------------------------------------------------------------------------------
                                                                              24

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