Document:

<PAGE>

                                                                   Exhibit 10.31

                               PC CONNECTIONS, INC.

                        AGREEMENT FOR INVENTORY FINANCING

                                Table of Contents

Section 1. DEFINITIONS; ATTACHMENTS .........................................  1
1.1. Special Definitions ....................................................  1
1.2. Other Defined Terms ....................................................  5
1.3. Attachments ............................................................  5
Section 2. CREDIT LINE; FINANCE CHARGES: OTHER CHARGES ......................  5
2.1. Credit Line ............................................................  5
2.2. Product Advances .......................................................  6
2.3. Finance and Other Charges ..............................................  7
2.4. Customer Account Statements ............................................  7
2.5. Shortfall ..............................................................  7
2.6. Application of Payments ................................................  7
2.7. Prepayment and Reborrowing By Customer .................................  7
Section 3. CREDIT LINE ADDITIONAL PROVISIONS ................................  8
3.1. Power of Attorney ......................................................  8
Section 4. SECURITY -- COLLATERAL ...........................................  8
4.1. Grant ..................................................................  8
4.2. Further Assurances .....................................................  9
Section 5. CONDITIONS PRECEDENT .............................................  9
5.1. Conditions Precedent to the Effectiveness of this Agreement ............  9
5.2. Conditions Precedent to Each Advance ...................................  9
Section 6. REPRESENTATIONS AND WARRANTIES ................................... 10
6.1. Organization and Qualifications ........................................ 10
6.2. Rights in Collateral; Priority of Liens ................................ 10
6.3. No Conflicts ........................................................... 10
6.4. Enforceability ......................................................... 10
6.5. Locations of Offices, Records and Inventory ............................ 10
6.6. Fictitious Business Names .............................................. 11
6.8. No Judgments or Litigation ............................................. 11
6.9. No Defaults ............................................................ 11
6.10. Labor Matters ......................................................... 11
6.19. Accuracy and Completeness of Information .............................. 11
6.20. Recording Taxes ....................................................... 11
Section 7. AFFIRMATIVE COVENANTS ............................................ 11
7.1. Financial and Other Information ........................................ 11
7.2  Location of Collateral ................................................. 12
7.3. Changes in Customer .................................................... 12
7.4. Corporate Existence .................................................... 12
7.5. ERISA .................................................................. 13
7.8. Insurance; Casualty Loss ............................................... 13
7.9. Taxes .................................................................. 14
7.10. Compliance With Laws .................................................. 14
7.11. Fiscal Year ........................................................... 14
7.12. Intellectual Property ................................................. 14
7.14. Collateral ............................................................ 14
7.15. Subsidiaries .......................................................... 14
7.16. Financial Covenants; Additional Covenants ............................. 14
Section 8. NEGATIVE COVENANTS ............................................... 14
8.1. Liens .................................................................. 15
8.2. Disposition of Assets .................................................. 15
8.3. Corporate Changes ...................................................... 15
8.4. Guaranties ............................................................. 15
8.10. Storage of Collateral with Bailees and Warehousemen ................... 15
Section 9. DEFAULT .......................................................... 15

                                        i
<PAGE>

9.1. Event of Default ....................................................... 15
9.2. Acceleration ........................................................... 16
9.3. Remedies ............................................................... 16
9.4. Waiver ................................................................. 17
Section 10. MISCELLANEOUS ................................................... 17
10.1. Term; Termination ..................................................... 17
10.2. Indemnification ....................................................... 17
10.3. Additional Obligations ................................................ 18
10.4. LIMITATION OF LIABILITY ............................................... 18
10.5. Alteration/Waiver ..................................................... 18
10.6. Severability .......................................................... 18
10.7. One Loan .............................................................. 18
10.8. Additional Collateral ................................................. 19
10.9. No Merger or Novations ................................................ 19
10.10. Paragraph Titles ..................................................... 19
10.11. Binding Effect; Assignment ........................................... 19
10.12. Notices .............................................................. 19
10.13. Counterparts ......................................................... 20
10.15. SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW ............. 20
10.16. JURY TRIAL WAIVER .................................................... 21

                                       ii
<PAGE>

                        AGREEMENT FOR INVENTORY FINANCING

       This AGREEMENT FOR INVENTORY FINANCING (as amended, supplemented or
otherwise modified from time to time, this "Agreement") amends and restates that
Agreement for Wholesale Financing dated June 4, 1994 (as amended from time to
time, the "AWF") and is hereby made this 17th day of August, 1999, by and
between IBM Credit Corporation, a Delaware corporation with a place of business
at 1500 RiverEdge Parkway, Atlanta, GA 30328 ("IBM Credit"), and PC Connection,
Inc., a Delaware corporation with a place of business at 101A 730 Milford Road,
Merrimack, NH 03054 ("Customer").

                                   WITNESSETH

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

       WHEREAS, in the course of Customer's operations, Customer intends to
purchase from Persons approved in writing by IBM Credit for the purposes of this
Agreement (the "Authorized Suppliers") computer hardware and software products
manufactured or distributed by or bearing any trademark or trade name of such
Authorized Suppliers (the "Products") (as of the date hereof the Authorized
Suppliers are as set forth on Attachment E hereto);

       WHEREAS, Customer has requested that IBM Credit finance its purchase of
Products from such Authorized Suppliers and IBM Credit Is willing to provide
such financing to Customer subject to the terms and conditions set forth in this
Agreement.

       NOW, THEREFORE, in consideration of the premises and far other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree that the AWF is hereby amended and
restated in its entirety as follows:

                       Section 1. DEFINITIONS; ATTACHMENTS

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

"Advance": any loan or other extension of credit by IBM Credit to, or on behalf
of, Customer pursuant to this Agreement including, without limitation, Product
Advances.

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

"Agreement": as defined in the caption.

"Auditors": Deloitte & Touche LLP or a nationally recognized firm of independent
certified public accountants selected by Customer and satisfactory to IBM
Credit.

"Available Credit": at any time, (1) the Maximum Advance Amount less (2) the
Outstanding Advances at such time.

"Average Daily Balance": for each Advance for a given period of time, the sum of
the unpaid principal of such Advance as of each day during such period of time,
divided by the number of days in such period of time.

                                  Page 1 of 21
<PAGE>

"Borrowing Base": as defined in Attachment A.

"Business Day": any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are generally closed or on which IBM
Credit is closed.

"Closing Date": the date on which the conditions precedent to the effectiveness
of this Agreement set forth in Section 5.1 hereof are satisfied or waived in
writing by IBM Credit.

"Collateral": as defined In Section 4.1.

"Collateral Management Report": a report to be delivered by Customer to IBM
Credit from time to time, as provided herein, signed by the chief executive
officer or chief financial officer of Customer, substantially in the form and
detail of Attachment F hereto, detailing and certifying, among other items: a
summary of Customer's inventory on hand financed by IBM Credit, Customer's
Inventory on hand financed by IBM Credit by quantity, type, model, Authorized
Supplier's invoice price to Customer and the total of the line item values for
all inventory listed on the report, the amounts and aging of Customers accounts
payable as of a specified date, all of the Customer's IBM Credit borrowing
activity during a specified period and the total amount of Customer's Borrowing
Base as well as Customers Outstanding Product Advances, Available Credit and any
Shortfall Amount as of a specified date.

"Common Due Date": (1) the fifth day of a calendar month if the Product
Financing Period expires on the first through tenth of such calendar month; (2)
the fifteenth day of a calendar month if the Product Financing Period expires on
the eleventh through twentieth of such calendar month; and (3) the twenty-fifth
day of a calendar month if the Product Financing Period expires on the
twenty-first through the last day of such calendar month.

"Compliance Certificate": a certificate as set forth in Attachment C.

"Credit Line": as defined in Section 2.1.

"Customer": as defined in the caption.

"Default": either (1) an Event of Default or (2) any event or condition which,
but for the requirement that notice be given or time lapse or both, would be an
Event of Default.

"Delinquency Fee Rate": as defined on Attachment A.

"Event of Default": as defined In Section 9.1.

"Financial Statements": the consolidated and consolidating balance sheets
(including, without limitation, securities such as stocks and investment bonds),
statements of operations, statements of cash flows and statements of changes in
shareholder's equity of Customer and its Subsidiaries for the period specified,
prepared in accordance with GAAP and consistent with prior practices.

"Floor Plan Lender: any Person who now or hereinafter provides inventory
financing to Customer, provided that such Person executes an Intercreditor
Agreement (as defined in Section 5.1 of this Agreement) or a subordination
agreement with IBM Credit in form and substance satisfactory to IBM Credit.

"Free Financing Period": for each Product Advance, the period, if any, in which
IBM Credit does not charge Customer a financing charge. IBM Credit shall
calculate the Customer's Free Financing Period utilizing a methodology that is
consistent with the methodologies used for similarly situated customers of IBM
Credit. The Customer understands that IBM Credit may not offer, may change or
may cease to offer a Free Financing Period for the Customer's purchases of
Products.

                                  Page 2 of 21
<PAGE>

"Free Financing Period Exclusion Fee": as defined In Attachment A.

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

"Governmental Authority": any nation or government, any state or other political
subdivision thereof, and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled (through stock or capital
ownership or otherwise) by any of the foregoing.

"IBM Credit": as defined in the caption.

"Indebtedness": with respect to any Person, (1) all obligations of such Person
for borrowed money or for the deferred purchase price of property or services
(other than trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices) or which is evidenced by a note,
bond, debenture or similar instrument, (2) all obligations of such Person under
capital leases (including obligations under any leases Customer may enter into,
now or in the future, with IBM Credit), (3) all obligations of such Person in
respect of letters of credit, banker's acceptances or similar obligations issued
or created for the account of such Person, (4) liabilities arising under any
interest rate protection, future, option swap, cap or hedge agreement or
arrangement under which such Person is a party or beneficiary, (5) all
obligations under guaranties of such Person and (6) all liabilities secured by
any lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.

"Lien(s)": any lien, claim, charge, pledge, security interest, deed of trust,
mortgage, other encumbrance or other arrangement having the practical effect of
the foregoing, including the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement.

"Material Adverse Effect": a material adverse effect (1) on the business,
operations, results of operations, assets, or financial condition of the
Customer, (2) on the aggregate value of the Collateral or the aggregate amount
which IBM Credit would be likely to receive (after giving consideration to
reasonably likely delays in payment and reasonable costs of enforcement) in the
liquidation of such Collateral to recover the Obligations in full, or (3) on the
rights and remedies of IBM Credit under this Agreement.

"Maximum Advance Amount": at any time, the lesser of (1) the Credit Line and (2)
the Borrowing Base at such time.

"Obligations": all covenants, agreements, warranties, duties, representations,
loans, advances, interest (including interest accruing on or after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to Customer, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding), fees,
reasonable expenses, indemnities, liabilities and indebtedness of any kind and
nature whatsoever now or hereafter arising, owing, due or payable from Customer
to IBM Credit.

"Other Documents": all security agreements, mortgages, leases, instruments,
documents, guarantees, schedules of assignment, contracts and similar agreements
executed by customer and delivered to IBM Credit, pursuant to this Agreement or
otherwise, and all amendments, supplements and other modifications to the
foregoing from time to time.

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

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

                                  Page 3 of 21
<PAGE>

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

"Permitted Liens": any of the following:

(1) Liens which are the subject of an Intercreditor Agreement, in effect from
time to time between IBM Credit and any other secured creditor;

(2) Purchase Money Security Interests;

(3) Liens described in Section I of Attachment B;

(4) Liens of warehousemen, mechanics, materialmen, workers, repairmen, common
carriers, landlords and other similar Liens arising by operation of law or
otherwise, not waived in connection herewith, for amounts that are not yet due
and payable or being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted if an adequate reserve or other appropriate
provisions shall have been made therefor as required to be in conformity with
GAAP and an adverse determination in such proceedings could not reasonably be
expected to have a Material Adverse Effect;

(5) attachment or judgment Liens individually or in the aggregate not in excess
of $1,000,000 (exclusive of (A) any amounts that are duly bonded to the
satisfaction Of IBM Credit or (B) any amount fully covered by insurance as to
which the insurance company has acknowledged its obligation to pay such judgment
in full);

(6) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount and which do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct of
the business of Customer;

(7) extensions and renewals of the foregoing Permitted Liens: provided that (A)
the aggregate amount of such extended or renewed Liens do not exceed the
original principal amount of the Indebtedness which it secures, (B) such Liens
do not extend to any property other than property already previously subject to
the Lien and (C) such extended or renewed Liens are on terms and conditions no
more restrictive than the terms and conditions of the Liens being extended or
renewed;

(8) Liens arising from deposits or pledges to secure bids, tenders, contracts,
leases, surety and appeal bonds and other obligations of like nature arising in
the ordinary course of the Customers business;

(9) Liens for taxes, assessments or governmental charges not delinquent or being
contested, in good faith, by appropriate proceedings promptly instituted and
diligently conducted if an adequate reserve or other appropriate provisions
shall have been made therefor as required in order to be in conformity with GAAP
and an adverse determination in such proceedings could not reasonably be
expected to have a Material Adverse Effect;

(10) Liens arising out of deposits in connection with workers' compensation,
Unemployment Insurance or other social security or similar legislation;

(11) Liens arising pursuant to this Agreement; and

(12) other Liens consented to by IBM Credit in writing prior to incurring such
Lien.

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

                                  Page 4 of 21
<PAGE>

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

"Prime Rate": as of the date of determination, the average of the rates of
interest announced by Citibank, NA. Chase Manhattan Bank and Bank of America
National Trust & Savings Association (or any other bank which IBM Credit uses in
its normal course of business of determining Prime Rate) as their prime or base
rate, as of the last Business Day of the calendar month immediately preceding
the date of determination, whether or not such announced rates are the actual
rates charged by such banking institutions to their most creditworthy borrowers.

"Product Advance": any advance of funds made or committed to be made by IBM
Credit for the account of Customer to an Authorized Supplier in respect of an
invoice delivered or to be delivered by such Authorized Supplier to IBM Credit
describing Products purchased by Customer, including any such advance made or
committed to be made as of the date hereof pursuant to the AWF.

"Product Financing Charge": as specified in a billing statement.

"Product Financing Period": for each Product Advance, equal to the Free
Financing Period for such Product Advance or if there is no Free Financing
Period, such period as IBM Credit may determine from time to time.

"Purchase Money Security Interest": any security interest securing Purchase
Money Indebtedness, which security interest applies solely to the particular
asset acquired with the Purchase Money Indebtedness.

"Requirement of Law": as to any Person, the articles of incorporation and
by-laws of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other governmental authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

"Shortfall Amount": as defined in Section 2.5.

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

"Subsidiary": with respect to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at the time directly or indirectly owned by such Person.

"Termination Date": shall mean the first anniversary of the date of this
Agreement or such other date as IBM Credit and Customer may agree to from time
to time.

"Voting Stock": securities, the holders of which are ordinarily, in the absence
of contingencies, entitled to elect the corporate directors (or persons
performing similar functions).

1.2. Other Defined Terms. Terms not otherwise defined in this Agreement which
are defined in the Uniform Commercial Code as in effect in the State of New York
(the "U.C.C.") shall have the meanings assigned to them therein.

1.3. Attachments. All attachments, exhibits, schedules and other addenda hereto,
including, but not limited to. Attachment A and Attachment B, are specifically
incorporated herein by reference and made a part of this Agreement.

             Section 2. CREDIT LINE; FINANCE CHARGES; OTHER CHARGES

2.1. Credit Line. Subject to the terms and conditions set forth in this
Agreement, on and after the Closing Date to but not including the date that is
the earlier of (i) the date on which this Agreement is

                                  Page 5 of 21
<PAGE>

terminated pursuant to Section 10.1 and (ii) the date on which IBM Credit
terminates the Credit Line pursuant to Section 9.2, IBM Credit agrees to extend
to the Customer a credit line ("Credit Line") in the amount set forth in
Attachment A pursuant to which IBM Credit will make to the Customer, from time
to time, Advances in an aggregate amount at any one time outstanding not to
exceed the Credit Line. Notwithstanding any other term or provision of this
Agreement, IBM Credit may, at any time and from time to time, in its reasonable
discretion (x) temporarily increase the amount of the Credit Line set forth in
Attachment A and decrease the amount of the Credit Line to the amount of the
Credit Line set forth in Attachment A, in each case upon written notice to the
Customer, and (y) make Advances pursuant to this Agreement upon the request of
Customer in an aggregate amount at any one time outstanding in excess of the
Credit Line.

2.2. Product Advances. (A) Subject to the terms and conditions of this
Agreement, IBM Credit shall make Product Advances in connection with Customer's
purchase of Products from Authorized Suppliers (as defined under WITNESSETH).
Customer hereby authorizes and directs IBM Credit to pay the proceeds of Product
Advances directly to the applicable Authorized Supplier in respect of invoices
delivered to IBM Credit for such Products by such Authorized Supplier and
acknowledges that each such Product Advance constitutes a loan by IBM Credit to
Customer pursuant to this Agreement as if the Customer received the proceeds of
the Product Advance directly from IBM Credit. IBM Credit may, upon written
notice to Customer, cease to include a supplier as an Authorized Supplier.

       (B) No finance charge shall accrue on any Product Advance during the Free
Financing Period, if any, applicable to such Product Advance. Each Product
Advance shall be due and payable on the Common Due Date for such Product
Advance. Each Product Advance shall accrue a finance charge on the Average Daily
Balance thereof from and including the first (1st) day following the end of the
Free Financing Period, if any, for such Product Advance, or if no such Free
Financing Period shall be in effect, from and including the date of invoice for
such Product Advance, in each case, to and including the date such Product
Advance shall become due and payable in accordance with the terms of this
Agreement. In addition, for any Product Advance with respect to which a Free
Financing Period shall not be in effect, Customer shall pay a Free Financing
Period Exclusion Fee. Such fee shall be due and payable on the Common Due Date
for such Product Advance. If it is determined that amounts received from
Customer were in excess of the highest rate permitted by law, then the amount
representing such excess shall be considered reductions to principal of
Advances.

       (C) Customer acknowledges that IBM Credit does not warrant the
Collateral. Customer shall be obligated to pay IBM Credit in full even if the
Collateral is defective or fails to conform to the warranties extended by the
Authorized Supplier. The Obligations of Customer shall not be affected by any
dispute Customer may have with any manufacturer, distributor or Authorized
Supplier. Customer will not assert any claim or defense which it may have
against any manufacturer, distributor or Authorized Supplier against IBM Credit.

       (D) Customer hereby authorizes IBM Credit to collect directly from any
Authorized Supplier any credits, rebates, bonuses or discounts owed by such
Authorized Supplier to Customer ("Supplier Credits"). Any Supplier Credits
received by IBM Credit may be applied by IBM Credit to the Outstanding Advances.
Any Supplier Credits collected by IBM Credit shall in no way reduce Customer's
debt to IBM Credit in respect of the Outstanding Advances until such Supplier
Credits are applied by IBM Credit.

       (E) IBM Credit may apply any payments and Supplier Credits received by
IBM Credit to reduce finance charges first and then to principal amounts of
Advances owed by Customer. IBM Credit may apply principal payments to the oldest
(earliest) invoices (and related Product Advances) first, but, in any case, all
principal payments will be applied in respect of the Outstanding Product
Advances made for Products which have been sold, lost, stolen, destroyed,
damaged or otherwise disposed of prior to any other application thereof.

       (F) Customer will Indemnify and hold IBM Credit harmless from and against
any claims or demands asserted by any Person relating to or arising from the
Collateral for any reason whatsoever, including, without limitation, the
condition of the Collateral, any misrepresentation made about the

                                  Page 6 of 21
<PAGE>

Collateral by any representative of Customer, or any act or failure to act by
Customer except to the extent such claims or demands are directly attributable
to IBM Credit's negligence or willful misconduct. Nothing contained in the
foregoing shall impair any rights or claims which the Customer may have against
any manufacturer, distributor or Authorized Supplier.

2.3. Finance and Other Charges. (A) Finance charges shall be calculated by
multiplying the applicable Delinquency Fee Rate or Product Financing Charge
provided for in this Agreement by Customer's applicable Average Daily Balance.
The Delinquency Fee Rate or the Product Financing Charge provided for in this
Agreement are each computed on the basis of an actual day, 360 day year.

       (B) The Customer hereby agrees to pay to IBM Credit the charges set forth
as "Other Charges" in Attachment A. The Customer also agrees to pay IBM Credit
additional charges for any returned items of payment received by IBM Credit. The
Customer hereby acknowledges that any such charges are not interest but that
such charges, if unpaid, will constitute part of the Outstanding Product
Advances.

       (C) The finance charges and Other Charges owed under this Agreement, and
any charges hereafter agreed to in writing by the parties, are payable monthly
on receipt of IBM Credit's bill or statement therefor or IBM Credit may, in its
sole discretion, add unpaid finance charges and Other Charges to the Customer's
Outstanding Product Advances.

       (D) if any amount owed under this Agreement, including, without
limitation, any Advance, is not paid when due (whether at maturity, by
acceleration or otherwise), the unpaid amount thereof will bear a late charge
from and including the day after it was due and payable to and including the
date IBM Credit receives payment thereof, at a per annum rate equal to the
lesser of (a) the amount set forth in Attachment A to this Agreement as the
"Delinquency Fee Rate" and (b) the highest rate from time to time permitted by
applicable law. In addition, if any Shortfall Amount shall not be paid when due
pursuant to Section 2.5 hereof, Customer shall pay IBM Credit a Shortfall
Transaction Fee. If it is determined that amounts received from Customer were in
excess of such highest rate, then the amount representing such excess, shall be
considered reductions to principal of Advances.

2.4. Customer Account Statements. IBM Credit will send statements of each
transaction hereunder as well as monthly billing statements to Customer with
respect to Advances and other charges due on Customer's account with IBM Credit.
Each statement of transaction and monthly billing statement shall be deemed,
absent manifest error, to be correct and shall constitute an account stated with
respect to each transaction or amount described therein unless within fifteen
(15) Business Days after such statement of transaction or billing statement is
received by Customer, Customer provides IBM Credit written notice objecting that
such amount or transaction is incorrectly described therein and specifying the
error(s), if any, contained therein. IBM Credit may at any time adjust such
statements of transaction or billing statements to comply with applicable law
and this Agreement.

2.5. Shortfall. If on any date the Outstanding Advances owed by Customer to IBM
Credit exceeds the Maximum Advance Amount (such excess, the "Shortfall Amount"),
Customer shall immediately pay to IBM Credit an amount equal to such Shortfall
Amount.

2.6. Application of Payments. The Customer hereby agrees that all checks and
other instruments delivered to IBM Credit on account of Customer's Obligations
shall constitute conditional payment until such items are actually collected by
IBM Credit. The Customer waives the right to direct the application of any and
all payments at any time or times hereafter received by IBM Credit on account of
the Customer's Obligations. Customer agrees that IBM Credit shall have the
continuing exclusive right to apply and reapply any and all such payments to
Customer's Obligations in such manner as IBM Credit may deem advisable
notwithstanding any entry by IBM Credit upon any of its books and records.

2.7. Prepayment and Reborrowing By Customer. (A) Customer may at any time
prepay, without notice or penalty, in whole or in part amounts owed under this
Agreement. IBM Credit may apply

                                  Page 7 of 21
<PAGE>

payments made to it (whether by the Customer or otherwise) to pay finance
charges and other amounts owing under this Agreement first and then to the
principal amount owed by the Customer.

       (B) Subject to the terms and conditions of this Agreement, any amount
prepaid or repaid to IBM Credit in respect to the Outstanding Advances may be
reborrowed by Customer in accordance with the provisions of this Agreement.

                  Section 3. CREDIT LINE ADDITIONAL PROVISIONS

3.1. Power of Attorney. Customer hereby irrevocably appoints IBM Credit, with
full power of substitution, as its true and lawful attorney-in-fact with full
power, in good faith and in compliance with commercially reasonable standards,
in the discretion of IBM Credit, to:

       (A) sign the name of Customer on any document or instrument that IBM
Credit shall deem necessary or appropriate to perfect and maintain perfected the
security interest in the Collateral contemplated under this Agreement and the
Other Documents;

       (B) endorse the name of Customer upon any of the items of payment of
proceeds and deposit the same in the account of IBM Credit for application to
the Obligations; and

upon the occurrence and during the continuance of an Event of Default as defined
in Section 9.1 hereof:

       (C) sign the name of Customer on any document or instrument that IBM
Credit shall deem necessary or appropriate to enforce any and all remedies it
may have under this Agreement, at law or otherwise; and

       (D) make, settle and adjust claims under the Policies with respect to the
Collateral and endorse Customer's name on any check, draft, instrument or other
item of payment of the proceeds of the Policies with respect to the Collateral.

The power of attorney granted by this Section is for value and coupled with an
interest and is irrevocable so long as this Agreement is in effect or any
Obligations remain outstanding. Nothing done by IBM Credit pursuant to such
power of attorney will reduce any of Customer's Obligations other than
Customer's payment Obligations to the extent IBM Credit has received monies.

                        Section 4. SECURITY -- COLLATERAL

4.1. Grant. To secure Customer's full and punctual payment and performance of
the Obligations (including obligations under any leases Customer may enter into,
now or in the future, with IBM Credit) when due (whether at the stated maturity,
by acceleration or otherwise), Customer hereby grants IBM Credit a security
interest in all of Customers right, title and interest in and to the following
property, whether now owned or hereafter acquired or existing and wherever
located:

       (A) all inventory and equipment manufactured or sold by or bearing the
trademark or trade name of the International Business Machines Corporation
("IBM") or Lexmark International, Inc. (including inventory used by Customer for
demonstration and equipment in use by Customer) and all parts thereof,
attachments, accessories and accessions thereto, products thereof and documents
therefor excluding, however, Customer's equipment designated by IBM as model
"AS400" and model "RS6000";

       (B) all substitutions and replacements for all of the foregoing, all
proceeds of all of the foregoing and, to the extent not otherwise included, all
payments under insurance or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing.

All of the above assets shall be collectively defined herein as the
"Collateral".

                                  Page 8 of 21
<PAGE>

Customer covenants and agrees with IBM Credit that: (a) the security constituted
to by this Agreement is in addition to any other security from time to time held
by IBM Credit and (b) the security hereby created is a continuing security
interest and will cover and secure the payment of all Obligations both present
and future of Customer to IBM Credit.

4.2. Further Assurances. Customer shall, from time to time upon the request of
IBM Credit, execute and deliver to IBM Credit, or cause to be executed and
delivered, at such time or times as IBM Credit may request such other and
further documents, certificates and instruments that IBM Credit may deem
necessary to perfect and maintain perfected IBM Credit's security interests in
the Collateral and in order to fully consummate all of the transactions
contemplated under this Agreement and the Other Documents. Customer shall make
appropriate entries on its books and records disclosing IBM Credit's security
interests in the Collateral.

                         Section 5. CONDITIONS PRECEDENT

5.1. Conditions Precedent to the Effectiveness of this Agreement. The
effectiveness of this Agreement is subject to the receipt by IBM Credit of, or
waiver in writing by IBM Credit of compliance with, the following conditions
precedent:

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

       (B) a certificate of the secretary or an assistant secretary of Customer,
substantially in the form and substance acceptable to IBM Credit, certifying
that, among other items, (i) Customer is a corporation organized under the laws
of the State of its incorporation and has its principal place of business as
stated therein, (ii) Customer is registered to conduct business in specified
states and localities, and (iii) the names and true signatures of the officers
of Customer authorized to sign this Agreement and the Other Documents;

       (C) certificates dated as of a recent date from the Secretary of State or
other appropriate authority evidencing the good standing of Customer in the
jurisdiction of its organization and in each other jurisdiction where the
ownership or lease of its property or the conduct of its business requires it to
qualify to do business;

       (D) intercreditor agreements ("Intercreditor Agreement"), in form and
substance satisfactory to IBM Credit, executed by each other secured creditor of
Customer as set forth in Attachment A;

       (E) UCC-1 financing statements for each jurisdiction reasonably requested
by IBM Credit executed by Customer and each guarantor whose guaranty to IBM
Credit is intended to be secured by a pledge of its assets;

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

       (G) all such other statements, certificates, documents, instruments,
financing statements, agreements and other information with respect to the
matters contemplated by this Agreement as IBM Credit shall have reasonably
requested.

5.2. Conditions Precedent to Each Advance. No Advance will be required to be
made or renewed by IBM Credit under this Agreement unless, on and as of the date
of such Advance, the following statements shall be true to the satisfaction of
IBM Credit:

       (A) The representations and warranties contained in this Agreement or in
any document, instrument or agreement executed in connection herewith are true
and correct in all material respects on and as of the date of such Advance as
though made on and as of such date;

                                  Page 9 of 21
<PAGE>

       (B) No event has occurred and is continuing or after giving effect to
such Advance or the application of the proceeds thereof would result in or would
constitute a Default;

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

       (D) Both before and after giving effect to the making of such Advance, no
Shortfall Amount exists.

Except as Customer has otherwise disclosed to IBM Credit in writing prior to
each request, each request for an Advance hereunder shall be deemed to be a
representation and warranty by Customer that, as of and on the date of such
Advance, the statements set forth in (A) through (D) above are true statements.
No such disclosures by Customer to IBM Credit shall in any manner be deemed to
satisfy the conditions precedent to each Advance that are set forth in this
Section 5.2.

                           Section 6. REPRESENTATIONS

To induce IBM Credit to enter into this Agreement, Customer represents to IBM
Credit as follows:

6.1. Organization and Qualifications. Customer and each of its Subsidiaries (i)
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (ii) has the power and authority
to own its properties and assets and to transact the businesses in which it
presently is engaged and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where it presently is
engaged in business and is required to be so qualified.

6.2. Rights in Collateral; Priority of Liens. Customer and each of its
Subsidiaries owns the property granted by it respectively as Collateral to IBM
Credit, free and clear of any and all Liens in favor of third parties except for
the Liens otherwise permitted pursuant to Section 8.1. The Liens granted by the
Customer and each of its Subsidiaries pursuant to this Agreement, the Guaranties
and the Other Documents in the Collateral constitute the valid and enforceable
first, prior and perfected Liens on the Collateral, except to the extent any
Liens that are prior to IBM Credit's Liens are (i) the subject of an
Intercreditor Agreement or (ii) Purchase Money Security Interests in product of
a brand that is not financed by IBM Credit.

6.3. No Conflicts. The execution, delivery and performance by Customer of this
Agreement and each of the Other Documents (i) are within its corporate power;
(ii) are duly authorized by all necessary corporate action; (iii) are not in
contravention in any respect of any Requirement of Law or any indenture,
contract, lease, agreement, instrument or other commitment to which it is a
party or by which it or any of its properties are bound; (iv) do not require the
consent, registration or approval of any Governmental Authority or any other
Person (except such as have been duly obtained, made or given, and are in full
force and effect); and (v) will not, except as contemplated herein, result in
the imposition of any Liens upon any of its properties.

6.4. Enforceability. This Agreement and all of the other documents executed and
delivered by the Customer in connection herewith are the legal, valid and
binding obligations of Customer, and are enforceable in accordance with their
terms, except as such enforceability may be limited by the effect of any
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally or the general
equitable principles relating thereto.

6.5. Locations of Offices, Records and Inventory. The address of the principal
place of business and chief executive office of Customer is as set forth on
Attachment B or on any notice provided by Customer to IBM Credit pursuant to
Section 7.7(C) of this Agreement. The books and records of Customer are
maintained exclusively at such location.

                                 Page 10 of 21
<PAGE>

There is no jurisdiction in which Customer has any Collateral other than those
jurisdictions identified on Attachment B or on any notice provided by Customer
to IBM Credit pursuant to Section 7.7(C) of this Agreement. Attachment B, as
amended from time to time by any notice provided by Customer to IBM Credit in
accordance with Section 7.7(C) of this Agreement, also contains a complete list
of the legal names and addresses of each warehouse at which the Customer's
inventory is stored. None of the receipts received by Customer from any
warehouseman states that the goods covered thereby are to be delivered to bearer
or to the order of a named person or to a named person and such named person's
assigns.

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

6.7. No Judgments or Litigation. Except as set forth on Attachment B, no
judgments, orders, writs or decrees are outstanding against Customer nor is
there now pending or, to the best of Customer's knowledge after due inquiry,
threatened, any litigation, contested claim, investigation, arbitration, or
governmental proceeding by or against Customer all of which in aggregate exceed
$5,000,000.

6.8. No Defaults. The Customer is not in default under any term of any
indenture, contract, lease, agreement, instrument or other commitment (in
amounts which taken together exceed $5,000,000) to which it is a party or by
which it, or any of its properties are bound. Customer has no knowledge of any
dispute regarding any such indenture, contract, lease, agreement, instrument or
other commitment. No Default or Event of Default has occurred and is continuing.

6.9. Labor Matters. Except as set forth on any notice provided by Customer to
IBM Credit pursuant to Section 7.1(H) of this Agreement, the Customer is not a
patty to one or more labor disputes which in aggregate exceed $5,000,000. There
are no strikes or walkouts or labor controversies pending or threatened against
the Customer which could reasonably be expected to have a Material Adverse
Effect.

6.10. Accuracy and Completeness of Information. All factual information
furnished by or on behalf of the Customer to IBM Credit or the Auditors for
purposes of or in connection with this Agreement or any of the Other Documents,
or any transaction contemplated hereby or thereby is or will be true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any material fact
necessary to make such information not misleading at such time.

6.11. Recording Taxes. All recording taxes, recording fees, filing fees and
other charges payable in connection with the filing and recording of this
Agreement have either been paid in full by Customer or arrangements for the
payment of such amounts by Customer have been made to the satisfaction of IBM
Credit.

                        Section 7. AFFIRMATIVE COVENANTS

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

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

       (A) as soon as available and in any event within ninety (90) days after
the end of each fiscal year of Customer (i) audited Financial Statements
(provided that, to the extent not otherwise audited by the Auditors, the
consolidating Financial Statements may be unaudited) as of the close or the
fiscal year and for the fiscal year, together with a comparison to the Financial
Statements for the prior year, in each case accompanied by (a) either an opinion
of the Auditors without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit or, if so qualified, an
opinion which shall be in scope and substance reasonably satisfactory to IBM
Credit, (b) a written statement signed by the Auditors stating that in the
course of the regular audit of the business of Customer and its consolidated

                                 Page 11 of 21
<PAGE>

Subsidiaries, which audit was conducted by the Auditors in accordance with
generally accepted auditing standards, the Auditors have not obtained any
knowledge of the existence of any Default under any provision of this Agreement,
or, if such Auditors shall have obtained from such examination any such
knowledge, they shall disclose in such written statement the existence of the
Default and the nature thereof, it being understood that such Auditors shall
have no liability, directly or indirectly, to anyone for failure to obtain
knowledge of any such Default; and (ii) a Compliance Certificate along with a
schedule, in substantially the form of Attachment C hereto, of the calculations
used in determining, as of the end of such fiscal year, whether Customer is in
compliance with the financial covenants set forth in Attachment A;

       (B) as soon as available and in any event within forty-five (45) days
after the end of each fiscal quarter of Customer (i) Financial Statements as of
the end of such period and for the fiscal year to date, together with a
comparison to the Financial Statements for the same periods in the prior year,
all in reasonable detail and duly certified (subject to normal year-end audit
adjustments and except for the absence of footnotes) by the chief executive
officer or chief financial officer of Customer as having been prepared in
accordance with GAAP; and (ii) a Compliance Certificate along with a schedule,
in substantially the form of Attachment C hereto, of the calculations used in
determining, as of the end of such fiscal quarter, whether Customer is in
compliance with the financial covenants set forth in Attachment A;

       (C) promptly after Customer obtains knowledge of (i) any proceeding(s)
being instituted or threatened to be instituted by or against Customer in any
federal, state, local or foreign court or before any commission or other
regulatory body (federal, state, local or foreign), or (ii) any actual or
prospective change, development or event which, in any such case, has had or
could reasonably be expected to have a Material Adverse Effect, a certificate of
the chief executive officer or chief financial officer of Customer specifying
the nature thereof and the Customer's proposed response thereto, each in
reasonable detail;

       (D) by the tenth (10th) day of each month, or as otherwise agreed in
writing, a Collateral Management Report as of a date no earlier than the last
day of the immediately preceding month;

       (E) within ten (10) days after the same are sent, copies of all Financial
Statements and reports which Customer sends to its stockholders, and within ten
(10) days after the same are filed, copies of all Financial Statements and
reports which Customer may make to, or file with, the Securities and Exchange
Commission or any successor or analogous governmental authority.

Each certificate, schedule and report provided by Customer to IBM Credit shall
be signed by an authorized officer of Customer, which signature shall be deemed
a representation and warranty that the information contained in such
certificate, schedule or report is true and accurate in all material respects on
the date as of which such certificate, schedule or report is made and does not
omit to state a material fact necessary in order to make the statements
contained therein not misleading at such time. Each financial statement
delivered pursuant to this Section 7.1 shall be prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods.

7.2. Location of Collateral. The inventory, equipment and other tangible
Collateral shall be kept or sold at the addresses as set forth on Attachment B
or on any notice provided by Customer to IBM Credit in accordance with Section
7.7(C). Such locations shall be certified quarterly to IBM Credit substantially
in the form of Attachment G.

7.3. Changes in Customer. Customer shall provide thirty (30) days prior written
notice to IBM Credit of any change in Customer's name, chief executive office
and principal place of business, organization, form of ownership or corporate
structure; provided, however, that Customer's compliance with this covenant
shall not relieve it of any of its other obligations or any other provisions
under this Agreement or any of the Other Documents limiting actions of the type
described in this Section.

7.4. Corporate Existence. Customer shall (A) maintain its corporate existence,
maintain in full force and effect all licenses, bonds, franchises, leases and
qualifications to do business, and all contracts

                                 Page 12 of 21
<PAGE>

and other rights necessary to the profitable conduct of its business, (B)
continue in, and limit its operations to, the same general lines or business as
presently conducted by it unless otherwise permitted in writing by IBM Credit
and (C) comply with all Requirements of Law.

7.5. Collateral Books and Records/Collateral Audit. (A) Customer agrees to
maintain books and records pertaining to the Collateral in such detail, form and
scope as is consistent with good business practice, and agrees that such books
and records will reflect IBM Credit's interest in the Collateral.

       (B) Customer agrees that IBM Credit or its agents may enter upon the
premises of Customer at any time and from time to time, during normal business
hours and upon reasonable notice under the circumstances, and at any time at all
on and after the occurrence and during the continuance of an Event of Default
for the purposes of (i) inspecting the Collateral, (ii) inspecting and/or
copying (at Customer's expense) any and all records pertaining thereto, and
(iii) discussing the affairs, finances and business of Customer with any
officers, employees and directors of Customer or with the Auditors. Customer
also agrees to provide IBM Credit with such reasonable information and
documentation that IBM Credit deems necessary to conduct the foregoing
activities.

Upon the occurrence and during the continuance of an Event of Default which has
not been waived by IBM Credit in writing. IBM Credit may conduct any of the
foregoing activities in any manner that IBM Credit deems reasonably necessary.

       (C) Customer shall give IBM Credit thirty (30) days prior written notice
of any change in the location of any Collateral, the location of its books and
records or in the location of its chief executive office or place of business
from the locations specified in Attachment B, and will execute in advance of
such change and cause to be filed and/or delivered to IBM Credit any financing
statements, landlord or other lien waivers, or other documents reasonably
required by IBM Credit, all in form and substance reasonably satisfactory to IBM
Credit.

      (D) Customer agrees to advise IBM Credit promptly, in reasonably
sufficient detail, of any substantial change relating to the type, quantity or
quality of the Collateral, or any event which could reasonably be expected to
have a Material Adverse Effect on the value of the Collateral or on the security
interests granted to IBM Credit herein.

7.6. Insurance; Casualty Loss. (A) Customer agrees to maintain with financially
sound and reputable insurance companies: (i) insurance on its properties, (ii)
public liability insurance against claims for personal injury or death as a
result of the use of any products sold by it and (iii) insurance coverage
against other business risks, in each case, in at least such amounts and against
at least such risks as are usually and prudently insured against in the same
general geographical area by companies of established repute engaged in the same
or a similar business. Customer will furnish to IBM Credit, upon its written
request, the insurance certificates with respect to such insurance. In addition,
all Policies so maintained are to name IBM Credit as an additional insured as
its interest may appear.

       (B) Without limiting the generality of the foregoing, Customer shall keep
and maintain, at its sole expense, the Collateral insured for an amount not less
than the amount set forth on Attachment A from time to time opposite the caption
"Collateral Insurance Amount" against all loss or damage under an "all risk"
Policy with companies mutually acceptable to IBM Credit and Customer, with a
lender's loss payable endorsement or mortgagee clause in form and substance
reasonably satisfactory to IBM Credit designating that any loss payable
thereunder with respect to such Collateral shall be payable to IBM Credit. Upon
receipt of proceeds by IBM Credit the same shall be applied on account of the
Customer's Outstanding Advances. Customer agrees to instruct each insurer to
give IBM Credit, by endorsement upon the Policy issued by it or by independent
instruments furnished to IBM Credit, at least ten (10) days written notice
before any Policy shall be altered or cancelled and that no act or default of
Customer or any other person shall affect the right of IBM Credit to recover
under the Policies. Customer hereby agrees to direct all insurers under the
Policies to pay all proceeds with respect to the Collateral directly to IBM
Credit. If Customer fails to pay any cost, charges or premiums, or if Customer
fails to insure the

                                 Page 13 of 21
<PAGE>

Collateral, IBM Credit may pay such costs, charges or premiums. Any amounts paid
by IBM Credit hereunder shall be considered an additional debt owed by Customer
to IBM Credit and are due and payable immediately upon receipt of an invoice by
IBM Credit.

7.7. Taxes. Customer agrees to pay, when due, all taxes lawfully levied or
assessed against Customer or any of the Collateral before any penalty or
interest accrues thereon unless such taxes are being contested, in good faith,
by appropriate proceedings promptly instituted and diligently conducted and an
adequate reserve or other appropriate provisions have been made therefor as
required in order to be in conformity with GAAP and an adverse determination in
such proceedings could not reasonably be expected to have a Material Adverse
Effect.

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

7.9. Fiscal Year. Customer agrees to maintain its fiscal year as a year ending
December 31 unless Customer provides IBM Credit at least thirty (30) days prior
written notice of any change thereof.

7.12. Maintenance of Property. Customer shall maintain all of its material
properties (business and otherwise) in good condition and repair (ordinary wear
and tear excepted) and pay and discharge all costs of repair and maintenance
thereof and all rental and mortgage payments and related charges pertaining
thereto and not commit or permit any waste with respect to any of its material
properties.

7.13. Collateral. Customer shall:

       (A) promptly notify IBM Credit of any loss, theft or destruction of or
damage to any of the Collateral. Customer shall diligently file and prosecute
its claim for any award or payment in connection with any such loss, theft,
destruction of or damage to Collateral. Customer shall, upon demand of IBM
Credit, make, execute and deliver any assignments and other instruments
sufficient for the purpose of assigning any such award or payment to IBM Credit,
free of encumbrances of any kind whatsoever;

       (B) consistent with reasonable commercial practice, observe and perform
all matters and things necessary or expedient to be observed or performed under
or by virtue of any lease, license, concession or franchise forming part of the
Collateral in order to preserve, protect and maintain all the rights of IBM
Credit thereunder;

       (C) consistent with reasonable commercial practice, maintain, use and
operate the Collateral and carry on and conduct its business in a proper and
efficient manner so as to preserve and protect the Collateral and the earnings,
incomes, rents, issues and profits thereof; and

       (D) at any time and from time to time, upon the request of IBM Credit,
and at the sole expense of Customer, Customer will promptly and duly execute and
deliver such further instruments and documents and take such further action as
IBM Credit may reasonably request for the purpose of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any jurisdiction with
respect to the security interests granted herein and the payment of any and all
recording taxes and filing fees in connection therewith.

7.14. Subsidiaries. IBM Credit may require that any Subsidiaries of Customer
become parties to this Agreement or any other agreement executed in connection
with this Agreement as guarantors or sureties. Customer will comply, and cause
all Subsidiaries of Customer to comply with Sections 7 and 8 of this Agreement,
as if such sections applied directly to such Subsidiaries.

7.15. Financial Covenants; Additional Covenants. Customer acknowledges and
agrees that Customer shall comply with the financial covenants and other
covenants set forth in the attachments, exhibits and other addenda incorporated
herein and made a part of this Agreement.

                                 Page 14 of 21
<PAGE>

                          Section 8. NEGATIVE COVENANTS

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

8.1. Liens. The Customer will not, directly or indirectly mortgage, assign,
pledge, transfer, create, incur, assume, permit to exist or otherwise permit any
Lien or judgment to exist on any of its Collateral, whether now owned or
hereafter acquired, except for Permitted Liens.

8.2. Disposition of Collateral. The Customer will not, directly or indirectly,
sell, lease, assign, transfer or otherwise dispose of any Collateral other than
(i) sales of inventory in the ordinary course of business and short term rental
of inventory as demonstrations in amounts not material to Customer; and (ii)
voluntary dispositions of Collateral in the ordinary course of business,
provided, that the aggregate book value of all such Collateral so sold or
disposed of under this section 8.2 (ii) in any fiscal year shall not exceed 5%
of the consolidated assets of the Customer as of the beginning of such fiscal
year.

8.3. Corporate Changes. The Customer will not, without the prior written notice
to IBM Credit, directly or indirectly, merge, consolidate, liquidate, dissolve
or enter into or engage in any operation or activity materially different from
that presently being conducted by Customer.

8.4. Additional Negative Pledges. Customer will not, directly or indirectly,
create or otherwise cause or permit to exist or become effective any contractual
obligation which may restrict or inhibit IBM Credit's rights or ability to sell
or otherwise dispose of the Collateral or any part thereof after the occurrence
and during the continuance of an Event of Default.

8.5. Storage of Collateral with Bailees and Warehousemen. Collateral shall not
be stored with a bailee, warehouseman or similar party without the prior written
consent of IBM Credit unless Customer will, concurrently with the delivery of
such Collateral to such party, cause such party to issue and deliver to IBM
Credit, warehouse receipts in the name of IBM Credit evidencing the storage of
such Collateral.

                               Section 9. DEFAULT

9.1. Event of Default. Any one or more of the following events shall constitute
an Event of Default by the Customer under this Agreement and the Other
Documents:

       (A) The failure to make timely payment of the Obligations or any part
thereof when due and payable;

       (B) Customer fails to comply with or observe any term, covenant or
agreement contained in this Agreement or any of the Other Documents;

       (C) Any representation, warranty, statement, report or certificate made
or delivered by or on behalf of Customer or any of its officers, employees or
agents or by or on behalf of any guarantor to IBM Credit was false in any
material respect at the time when made or deemed made;

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

       (E) Customer, any Subsidiary or any guarantor shall generally not pay its
debts as such debts become due, become or otherwise declare itself insolvent,
file a voluntary petition for bankruptcy protection, have filed against it any
involuntary bankruptcy petition, cease to do business as a going concern, make
any assignment for the benefit of creditors, or a custodian, receiver, trustee,
liquidator, administrator or person with similar powers shall be appointed for
Customer, any Subsidiary or any

                                 Page 15 of 21
<PAGE>

guarantor or any of its respective properties or have any of its respective
properties seized or attached, or take any action to authorize, or for the
purpose of effectuating, the foregoing, provided, however, that Customer, any
Subsidiary or any guarantor shall have a period of forty-five (45) days within
which to discharge any involuntary petition for bankruptcy or similar
proceeding;

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

       (G) The entry of any judgment against Customer or any guarantor in an
amount in excess of $5,000,000 and such judgment is not satisfied, dismissed,
stayed or superseded by bond within thirty (30) days after the day of entry
thereof (and in the event of a stay or supersedeas bond, such judgment is not
discharged within thirty (30) days after termination of any such stay or bond)
or such judgment is not fully covered by insurance as to which the insurance
company has acknowledged its obligation to pay such judgment in full;

       (H) The dissolution or liquidation of Customer, any Subsidiary or any
guarantor, or Customer or any guarantor or its directors or stockholders shall
take any action to dissolve or liquidate Customer or any guarantor;

       (I) Any "going" concern or like qualification or exception, or
qualification arising out of the scope of an audit by an Auditor of its opinion
relative to any Financial Statement delivered to IBM Credit under this
Agreement;

       (J) There issues a warrant of distress for any rent or taxes with respect
to any premises occupied by Customer in or upon which the Collateral, or any
part thereof, may at any time be situated and such warrant shall continue for a
period of ten (10) Business Days from the date such warrant is issued;

       (K)  Customer suspends business;

       (L) The occurrence of any event or condition that permits the holder of
any Indebtedness arising in one or more related or unrelated transactions to
accelerate the maturity thereof or the failure of Customer to pay when due any
such indebtedness;

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

       (N) Any "persons" (as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended) acquires a beneficial interest in 50% or more
of the Voting Stock of Customer.

9.2. Acceleration. Upon the occurrence and during the continuance of an Event of
Default which has not been waived in writing by IBM Credit, IBM Credit may, in
its sole discretion, take any or all of the following actions, without prejudice
to any other rights it may have at law or under this Agreement to enforce its
claims against the Customer: (a) declare all Obligations to be immediately due
and payable (except with respect to any Event of Default set forth in Section
9.1(E) hereof, in which case all Obligations shall automatically become
immediately due and payable without the necessity of any notice or other demand)
without presentment, demand, protest or any other action or obligation of IBM
Credit; and (b) immediately terminate the Credit Line hereunder.

9.3. Remedies. (A) Upon the occurrence and during the continuance of any Event
of Default which has not been waived in writing by IBM Credit, IBM Credit may
exercise all rights and remedies of a secured party under the U.C.C. Without
limiting the generality of the foregoing, IBM Credit may foreclose the security
interests created pursuant to this Agreement by any available judicial
procedure, or to take possession of any or all of the Collateral without
judicial process and to enter any premises where any Collateral may be located
for the purpose of taking possession of or removing the same.

                                 Page 16 of 21
<PAGE>

       (B) Upon the occurrence and during the continuance of an Event of Default
which has not been waived in writing by IBM Credit, IBM Credit shall have the
right to sell, lease, or otherwise dispose of all or any part of the Collateral,
whether in its then condition or after further preparation or processing, in the
name of Customer or IBM Credit, or in the name of such other party as IBM Credit
may designate, either at public or private sale or at any broker's board, in
lots or in bulk, for cash or for credit, with or without warranties or
representations, and upon such other terms and conditions as IBM Credit in its
sole discretion may deem advisable, and IBM Credit shall have the right to
purchase at any such sale. If IBM Credit, in its sole discretion determines that
any of the Collateral requires rebuilding, repairing, maintenance or
preparation, IBM Credit shall have the right, at its option, to do such of the
aforesaid as it deems necessary for the purpose of putting such Collateral in
such saleable form as IBM Credit shall deem appropriate. The Customer hereby
agrees that any disposition by IBM Credit of any Collateral pursuant to and in
accordance with the terms of a repurchase agreement between IBM Credit and the
manufacturer or any supplier (including any Authorized Supplier) of such
Collateral constitutes a commercially reasonable sale. The Customer agrees, at
the request of IBM Credit, to assemble the Collateral and to make it available
to IBM Credit at places which IBM Credit shall select, whether at the premises
of the Customer or elsewhere, and to make available to IBM Credit the premises
and facilities of the Customer for the purpose of IBM Credit's taking possession
of, removing or putting such Collateral in saleable form. If notice of Intended
disposition of any Collateral is required by law, it is agreed that ten (10)
Business Days notice shall constitute reasonable notification.

       (C) The net cash proceeds resulting from IBM Credit's exercise of any of
the foregoing rights (after deducting all charges, costs and expenses, including
reasonable attorneys' fees) shall be applied by IBM Credit to the payment of
Customer's Obligations, whether due or to become due, in such order as IBM
Credit may in it sole discretion elect. Customer shall remain liable to IBM
Credit for any deficiencies, and IBM Credit in turn agrees to remit to Customer
or its successors or assigns, any surplus resulting therefrom.

       (D) The enumeration of the foregoing rights is not intended to be
exhaustive and the exercise of any right shall not preclude the exercise of any
other rights, all of which shall be cumulative.

9.4. Waiver. If IBM Credit seeks to take possession of any of the Collateral by
any court process Customer hereby irrevocably waives to the extent permitted by
applicable law any bonds, surety and security relating thereto required by any
statute, court rule or otherwise as an incident to such possession and any
demand for possession of the Collateral prior to the commencement of any suit or
action to recover possession thereof. In addition, Customer waives to the extent
permitted by applicable law all rights of set-off it may have against IBM
Credit. Customer further waives to the extent permitted by applicable law
presentment, demand and protest, and notices of non-payment, non-performance,
any right of contribution, dishonor, and any other demands, and notices required
by law.

                            Section 10. MISCELLANEOUS

10.1. Term; Termination. (A) This Agreement shall remain in force until the
earlier of (i) the Termination Date, (ii) the date specified in a written notice
by the Customer that they intend to terminate this Agreement which date shall be
no less than ninety (90) days following the receipt by IBM Credit of such
written notice, and (iii) termination by IBM Credit after the occurrence and
during the continuance of an Event of Default. Upon the date that this Agreement
is terminated, all of Customer's Obligations shall be immediately due and
payable in their entirety, even if they are not yet due under their terms.

       (B) Until the indefeasible payment in full of all of Customer's
Obligations, no termination of this Agreement or any of the Other Documents
shall in any way affect or impair (i) Customer's Obligations to IBM Credit
including, without limitation, any transaction or event occurring prior to and
after such termination, or (ii) IBM Credit's rights hereunder, including,
without limitation, IBM Credit's security interest in the Collateral. On and
after a Termination Date IBM Credit may, but shall not be obligated to, upon the
request of Customer, continue to provide Advances hereunder.

                                 Page 17 of 21
<PAGE>

10.2. Indemnification. The Customer hereby agrees to indemnify and hold harmless
IBM Credit and each of its officers, directors, agents and assigns
(collectively, the "Indemnified Persons") against all losses, claims, damages,
liabilities or other expenses (including reasonable attorneys' fees and court
costs now or hereinafter arising from the enforcement of this Agreement, the
"Losses") to which any of them may become subject insofar as such Losses arise
out of or are based upon any event, circumstance or condition (a) occurring or
existing on or before the date of this Agreement relating to any financing
arrangements IBM Credit may from time to time have with (i) Customer, (ii) any
Person that shall be acquired by Customer or (iii) any Person that Customer may
acquire all or substantially all of the assets of, or (b) directly or
indirectly, relating to the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby or thereby or to any
of the Collateral or to any act or omission of the Customer in connection
therewith. Notwithstanding the foregoing, the Customer shall not be obligated to
indemnify IBM Credit for any Losses incurred by IBM Credit which are a result of
IBM Credit's gross negligence or willful misconduct. The indemnity provided
herein shall survive the termination of this Agreement.

10.3. Additional Obligations. IBM Credit, without waiving or releasing any
Obligation or Default of the Customer, may perform any Obligations of the
Customer that the Customer shall fail or refuse to perform and IBM Credit may,
at any time or times hereafter, but shall be under no obligation to do so, pay,
acquire or accept any assignment of any security interest, lien, encumbrance or
claim against the Collateral asserted by any person. All sums paid by IBM Credit
in performing in satisfaction or on account of the foregoing and any expenses,
including reasonable attorney's fees, court costs, and other charges relating
thereto, shall be a part of the Obligations, payable on demand and secured by
the Collateral.

10.4. LIMITATION OF LIABILITY. NEITHER IBM CREDIT NOR ANY OTHER INDEMNIFIED
PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES SUFFERED BY CUSTOMER IN CONNECTION WITH THIS AGREEMENT,
ANY OTHER AGREEMENT OR ANY CLAIMS IN ANY MANNER RELATED THERETO. NOR SHALL IBM
CREDIT OR ANY OTHER INDEMNIFIED PERSON HAVE ANY LIABILITY TO CUSTOMER OR ANY
OTHER PERSON FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT OR THEM
HEREUNDER, EXCEPT FOR ITS OR THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

10.5. Alteration/Waiver. This Agreement and the Other Documents may not be
altered or amended except by an agreement in writing signed by the Customer and
by IBM Credit. No delay or omission of IBM Credit to exercise any right or
remedy hereunder, whether before or after the occurrence of any Event of
Default, shall impair any such right or remedy or shall operate as a waiver
thereof or as a waiver of any such Event of Default. In the event that IBM
Credit at any time or from time to time dispenses with any one or more of the
requirements specified in this Agreement or any of the Other Documents, such
dispensation may be revoked by IBM Credit at any time and shall not be deemed to
constitute a waiver of any such requirement subsequent thereto. IBM Credit's
failure at any time or times to require strict compliance and performance by the
Customer of any undertakings, agreements, covenants, warranties and
representations of this Agreement or any of the Other Documents shall not waive,
affect or diminish any right of IBM Credit thereafter to demand strict
compliance and performance thereof. Any waiver by IBM Credit of any Default by
the Customer under this Agreement or any of the Other Documents shall not waive
or affect any other Default by the Customer under this Agreement or any of the
Other Documents, whether such Default is prior or subsequent to such other
Default and whether of the same or a different type. None of the undertakings,
agreements, warranties, covenants, and representations of the Customer contained
in this Agreement or the Other Documents and no Default by the Customer shall be
deemed waived by IBM Credit unless such waiver is in writing signed by an
authorized representative of IBM Credit.

10.6. Severability. If any provision of this Agreement or the Other Documents or
the application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the Other Documents and the
application of such provision to other Persons or circumstances will

                                 Page 18 of 21
<PAGE>

not be affected thereby, the provisions of this Agreement and the Other
Documents being severable in any such instance.

10.7. One Loan. All Advances heretofore, now or at any time or times hereafter
made by IBM Credit to the Customer under this Agreement or the Other Documents
shall constitute one loan secured by IBM Credit's security interests in the
Collateral and by all other security interests, liens and encumbrances
heretofore, now or from time to time hereafter granted by the Customer to IBM
Credit or any assignor of IBM Credit.

10.8. Additional Collateral. All monies, reserves and proceeds received or
collected by IBM Credit with respect to other property of the Customer in
possession of IBM Credit at any time or times hereafter are hereby pledged by
Customer to IBM Credit as security for the payment of Customer's Obligations and
shall be applied promptly by IBM Credit on account of the Customer's
Obligations; provided, however, IBM Credit may release to the Customer such
portions of such monies, reserves and proceeds as IBM Credit may from time to
time determine, in its sole discretion.

10.9. No Merger or Novations. (A) Notwithstanding anything contained in any
document to the contrary, it is understood and agreed by the Customer and IBM
Credit that the claims of IBM Credit arising hereunder and existing as of the
date hereof constitute continuing claims arising out of the Obligations of
Customer under the AWF. Customer acknowledges and agrees that such Obligations
outstanding as of the date hereof have not been satisfied or discharged and that
this Agreement is not intended to effect a novation of the Customer's
Obligations under the AWF.

       (B) Neither the obtaining of any judgment nor the exercise of any power
of seizure or sale shall operate to extinguish the Obligations of the Customer
to IBM Credit secured by this Agreement and shall not operate as a merger of any
covenant in this Agreement, and the acceptance of any payment or alternate
security shall not constitute or create a novation and the obtaining of a
judgment or judgments under a covenant herein contained shall not operate as a
merger of that covenant or affect IBM Credit's rights under this Agreement.

10.10. Paragraph Titles. The Section titles used in this Agreement and the Other
Documents are for convenience only and do not define or limit the contents of
any Section.

10.11. Binding Effect; Assignment. This Agreement and the Other Documents shall
be binding upon and inure to the benefit of IBM Credit and the Customer and
their respective successors and assigns; provided, that the Customer shall have
no right to assign this Agreement or any of the Other Documents without the
prior written consent of IBM Credit.

10.12. Notices; E-Business Acknowledgment. (A) Except as otherwise expressly
provided in this Agreement, any notice required or desired to be served, given
or delivered hereunder shall be in writing, and shall be deemed to have been
validly served, given or delivered (i) upon receipt if deposited in the United
States mails, first class mail, with proper postage prepaid, (ii) upon receipt
of confirmation or answerback if sent by telecopy or other similar facsimile
transmission, (iii) one Business Day after deposit with a reputable overnight
courier with all charges prepaid, or (iv) when delivered, if hand-delivered by
messenger, all of which shall be properly addressed to the party to be notified
and sent to the address or number indicated as follows:

  (i) If to IBM Credit at:                 (ii) If to Customer at:

      IBM Credit Corporation                    PC Connection, Inc.
      1500 RiverEdge Parkway                    Rt 101A 730 Milford Road
      Atlanta, GA 30328                         Merrimack, NH 03054
      Attention: Region Manager, North          Attention: Mr. Jack Ferguson
      Facsimile: 770 / 644 - 4825               Facsimile: 603 / 423 - 2283

                                 Page 19 of 21
<PAGE>

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

(B) (i) Each party may electronically transmit to or receive from the other
party certain documents set forth in Attachment H ("E-Documents") via the
Internet or electronic data Interchange ("EDI"). Any transmission of data which
is not an E-Document shall have no force or effect between the parties. EDI
transmissions may be sent directly or through any third party service provider
("Provider") with which either party may contract. Each party shall be liable
for the acts or omissions of its Provider while handling E-Documents for such
party, provided, that if both parties use the same Provider, the originating
party shall be liable for the acts or omissions of such Provider as to such
E-Document. Some information to be made available to Customer will be specific
to Customer and will require Customer's registration with IBM Credit before
access is provided. After IBM Credit has approved the registration submitted by
Customer, IBM Credit shall provide an ID and password(s) to an individual
designated by Customer ("Customer Recipient"). Customer accepts responsibility
for the designated individual's distribution of the ID and password(s) within
its organization and Customer will take reasonable measures to ensure that
passwords are not shared or disclosed to unauthorized individuals. Customer will
conduct an annual review of all IDs and passwords to ensure they are accurate
and properly authorized. IBM CREDIT MAY CHANGE OR DISCONTINUE USE OF AN ID OR
PASSWORD AT ITS DISCRETION AT ANY TIME. E-Documents shall not be deemed to have
been properly received and no E-Document shall give rise to any obligation,
until accessible to the receiving party at such party's receipt computer at the
address specified herein. Upon proper receipt of an E-Document, the receiving
party shall promptly transmit a functional acknowledgment in return. A
functional acknowledgment shall constitute conclusive evidence that an
E-Document has been properly received. If any transmitted E-Document is received
in an unintelligible or garbled form, the receiving party shall promptly notify
the originating party in a reasonable manner. In the absence of such a notice,
the originating party's records of the contents of such E-Document shall
control.

(ii) Each party shall use those security procedures which are reasonably
sufficient to ensure that all transmissions of E-Documents are authorized and to
protect its business records and data from improper access. Any E-Document
received pursuant to this Section 10.12 shall have the same effect as if the
contents of the E-Document had been sent in paper rather than electronic form.
The conduct of the parties pursuant to this Section 10.12 shall, for all legal
purposes, evidence a course of dealing and a course of performance accepted by
the parties. The parties agree not to contest the validity or enforceability of
E-Documents under the provisions of any applicable law relating to whether
certain agreements are to be in writing or signed by the party to be bound
thereby. The parties agree, as to any E-Document accompanied by the Customer's
ID, that IBM Credit can reasonably rely on the fact that such E-Document is
properly authorized by Customer. E-Documents, if introduced as evidence on paper
in any judicial, arbitration, mediation or administrative proceedings, will be
admissible as between the parties to the same extent and under the same
conditions as other business records originated and maintained in documentary
form. Neither party shall contest the admissibility of copies of E-Documents
under either the business records exception to the hearsay rule or the best
evidence rule on the basis that the E-Documents were not originated or
maintained in documentary form.

CUSTOMER RECIPIENT INFORMATION for Internet transmissions:

(PLEASE PRINT)

Name of Customer's Designated Central Contact Authorized to Receive IDs and
Passwords:

--------------------------------------------------------------------------------
e-mail Address:
               -----------------------------------------------------------------
Phone Number
            --------------------------------------------------------------------

10.13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.

                                 Page 20 of 21
<PAGE>

10.14. ATTACHMENT A MODIFICATIONS. IBM Credit may modify the Collateral
Insurance Amount set forth in Attachment A from time to time by providing
Customer with a new Attachment A. Any such new Attachment A shall be effective
as of the date specified In the new Attachment A.

10.15. SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW, TO INDUCE IBM
CREDIT TO ACCEPT THIS AGREEMENT AND THE OTHER DOCUMENTS, THE CUSTOMER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

       (A) SUBMITS ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AND ANY OTHER AGREEMENT, OR FOR THE RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND ANY FEDERAL
DISTRICT COURT IN MASSACHUSETTS.

       (B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREINAFTER HAVE TO THE VENUE
OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME.

       (C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY
BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO CUSTOMER AT ITS ADDRESS
SET FORTH IN SECTION 10.12 OR AT SUCH OTHER ADDRESS OF WHICH IBM CREDIT SHALL
HAVE BEEN NOTIFIED PURSUANT THERETO.

       (D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE
OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE
IN ANY OTHER JURISDICTION.

       (E) AGREES THAT THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE OTHER DOCUMENTS SHALL BE GOVERNED BY THE LAWS (WITHOUT GIVING
EFFECT TO CONFLICT OF LAW PROVISIONS) OF THE COMMONWEALTH OF MASSACHUSETTS.

10.16. JURY TRIAL WAIVER. EACH OF IBM CREDIT AND THE CUSTOMER HEREBY IRREVOCABLY
WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY
COUNTERCLAIM) OF ANY TYPE IN WHICH IBM CREDIT AND THE CUSTOMER ARE PARTIES AS TO
ALL MATTERS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY
DOCUMENT, INSTRUMENT OR AGREEMENT EXECUTED IN CONNECTION HEREWITH.

       IN WITNESS WHEREOF, the Customer has read this entire Agreement, and has
caused its authorized representatives to execute this Agreement and has caused
its corporate seal to be affixed hereto as of the date first written above.

IBM CREDIT CORPORATION                   PC CONNECTION, INC.

By: /s/ Stephen A. Nichols               By: /s/ Jack L. Ferguson
   -----------------------------------      -----------------------------------

Print Name: STEPHEN A. NICHOLS           Print Name: Jack L. Ferguson
           ---------------------------              ---------------------------

Title: REGION CREDIT MANAGER             Title: Treasurer, Director of Finance
      --------------------------------         --------------------------------

                                 Page 21 of 21
<PAGE>

         ATTACHMENT A, EFFECTIVE DATE August, 1999 ("AIF ATTACHMENT A")
             TO AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")
                               DATED August, 1999

Customer: PC Connection, Inc.

I.    Fees, Rates and Repayment Terms:

      (A)   Credit Line: Fifteen Million Dollars ($15,000,000.00);

      (B)   Borrowing Base;

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

      (C)   Collateral Insurance Amount: Fifty Million Dollars ($50,000,000.00)

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

      (E)   Free Financing Period Exclusion Fee: For each Product Advance made
            by IBM Credit pursuant to Customer's financing plan where there is
            no Free Financing Period associated with such Product Advance there
            will be a fee equal to the Free Financing Period Exclusion Fee. For
            a 30 day payment plan when Prime Rate is 8% the Free Financing
            Period Exclusion Fee is 1.08% of the invoice amount. This fee will
            vary by .0125% with each .25% change in Prime Rate (e.g. Prime Rate
            of 7.25%, the charge is 1.0425% of the invoice amount). The fee
            accrues as of the Date of the Note and is payable as stated in the
            billing Statement.

      (F)   Shortfall Transaction Fee: Shortfall Amount multiplied by 0.30%

II.   Financial Covenants:

            Customer must be in compliance with the Minimum Net Income and
            Minimum Net Worth covenants as set forth and defined in that certain
            Credit Agreement dated May 29, 1999 by and between Customer and
            State Street Bank and Trust Company.

                                 Page 1 of 10
<PAGE>

                               AIF ATTACHMENT A TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

III.  Additional Conditions Precedent Pursuant to Section 5.1 (I) of the
      Agreement (continued):

      o     A Compliance Certificate as to Customer's compliance with the
            financial covenants set forth in Attachment A as of the last fiscal
            month of Customer for which financial statements have been
            published;

      o     A Corporate Secretary's Certificate substantially in the form and
            substance of Attachment I certifying to, among other items, the
            resolutions of Customer's Board of Directors authorizing borrowing
            by Customer.

      o     Termination or release of Uniform Commercial Code filing by another
            creditor as required by IBM Credit;

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

                                 Page 2 of 10
<PAGE>

                               AIF ATTACHMENT B TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: PC Connections, Inc.

I.    Liens.

II.   Locations of Offices, Records and Inventory.

(A)   Principal Place of Business and Chief Executive Office

(B)   Locations of Assets, Inventory and Equipment (including warehouses)

Location                                  Leased (Y/N)

III.  Fictitious Names.

IV.   Organization.

(A)   Subsidiaries

Name                     Jurisdiction            Owner            Percent
                                                                  Owned

                                 Page 3 of 10
<PAGE>

                               AIF ATTACHMENT B TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

(B)   Affiliates

Name                                    Capacity

V.    Judgments or Litigation.

VI.   Environmental Matters.

VII.  Indebtedness.

                                 Page 4 of 10
<PAGE>

                               AIF ATTACHMENT C TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

                             COMPLIANCE CERTIFICATE
                                 (SEE ATTACHED)

Customer must submit to IBM Credit, Compliance Certificates, as required
pursuant to that certain Credit Agreement dated May 29, 1999 by and between
Customer and State Street Bank and Trust Company.

                                 Page 5 of 10
<PAGE>

                               AIF ATTACHMENT D TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: PC Connections, Inc.

            (This page intentionally left blank)

                                 Page 6 of 10
<PAGE>

                               AIF ATTACHMENT E TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: PC Connections, Inc.

                              AUTHORIZED SUPPLIERS

                                 Page 7 of 10
<PAGE>

                               AIF ATTACHMENT F TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: PC Connections, Inc.

            (This page intentionally left blank)

                                 Page 8 of 10
<PAGE>

                               AIF ATTACHMENT G TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

                      CERTIFICATE OF LOCATION OF COLLATERAL

      The undersigned, the (insert title of office held) of (insert Customer's
Name) ("insert abbreviated name"), hereby certifies with reference to the
Agreement for Inventory Financing, dated (insert date Agreement signed), between
(insert Customer's abbreviated name) and IBM Credit Corporation as follows:

(a) The following are all the locations where (insert abbreviated name)
presently keeps or sells inventory, equipment or other tangible Collateral:

       LOCATION                              LEASE (YES/NO)

      IN WITNESS WHEREOF, I have hereunto set my hand this day of_________
______________, 19__.

                                         _________________________
                                              (Customer Name)

                                         By:______________________

                                         Title:___________________

                                 Page 9 of 10
<PAGE>

                               AIF ATTACMENT H TO
               AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

                      E-BUSINESS SCHEDULE A ("SCHEDULE A")

CUSTOMER NAME: PC Connections, Inc.

EFFECTIVE DATE OF THIS SCHEDULE A: __________________________

E-DOCUMENTS AVAILABLE TO SUPPLIERS:

Invoices

Payment Report/Remittance Advisor

E-DOCUMENTS AVAILABLE TO CUSTOMER:

Invoices

Remittance Advisor

Transaction Approval

Billing Statement

Payment Planner

Auto Cash

Statements of Transaction

Common Dispute Form

                                 Page 10 of 10<PAGE>

                                                                   Exhibit 10.32

                 AMENDMENT TO AGREEMENT FOR INVENTORY FINANCING
              (PC Connection Sales Corp. fka PC Connection, Inc.)

      This Amendment to Agreement for Inventory Financing is entered into as of
February 25, 2000 by and between PC Connection Sales Corp. fka PC Connection,
Inc., a Delaware corporation ("Customer") and IBM Credit Corporation ("IBM
Credit").

      WHEREAS, the Customer and IBM Credit are parties to a certain Agreement
for Inventory Financing dated August 17, 1999. as amended from time to time (the
"Agreement"); and

      WHEREAS, the Customer has engaged in a corporate reorganization which was
consummated on or about December 31, 1999, in which, among other things, (i) the
Customer formed PC Holdco, Inc. ("Holdco") as its subsidiary, (ii) Holdco formed
a transitory subsidiary into which the Customer was merged, which resulted in
the Customer being a wholly-owned subsidiary of Holdco, (iii) the Customer
formed two new subsidiaries, PC Connection Sales of Massachusetts, Inc.
("Sales-MA") and Merrimack Services Corp. ("Merrimack"), each a Delaware
corporation and contributed certain assets to such entities, (iv) the Customer
then distributed its stock in Merrimack and its other subsidiary, Comteq
Federal, Inc. ("Comteq") to Holdco, and (v) the Customer changed its name to "PC
Connection Sales Corp" and Holdco changed its name to "PC Connection, Inc." (the
"Restructuring"); and

      WHEREAS, the Customer and IBM Credit desire to amend the Agreement on the
terms and conditions set forth herein;

       NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Customer and IBM Credit hereby
agree as follows:

      1. (a) The definitions of "Obligations" and "Purchase Money Security
Interest" in Section 1.1 of the Agreement are hereby deleted in their entirety
and replaced in their entirety with the following:

      "'Obligations': all covenants, agreements, warranties, duties,
representations. loans, advances, interest (including interest accruing on or
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to Customer, whether or
not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, reasonable expenses, indemnities, liabilities and
Indebtedness of any kind and nature whatsoever now or hereafter arising, owing,
due or payable from Customer to IBM Credit; provided however, that
notwithstanding the foregoing, the term Obligations shall not include and shall
specifically exclude any and all debts to IBM Credit under any and all
guarantees by Customer of any obligations of any of Customer's affiliates or
subsidiaries to IBM Credit, including, without limitation, those arising under
or pursuant to a certain [Guaranty of even date herewith by Customer, PC
Connection Sales or Massachusetts. Inc. Merrimack Services Corp. and PC

                                       1
<PAGE>

Connection. Inc. (fka PC Holdco, Inc.)] in favor of you with respect to
obligations of Comteq Federal, Inc.

      "'Purchase Money Security Interest': any security interest securing
Purchase Money Indebtedness, which security interest applies solely to the
particular asset acquired with the Purchase Money indebtedness and the proceeds
thereof."

            (b) Section 1.1 of the Agreement is hereby amended by inserting the
following in alphabetical order:

      "'Purchase Money Indebtedness': Indebtedness in respect of equipment
financing pursuant to purchase money obligations or capitalized leases"

            (c) Section 4.1 of the Agreement is hereby deleted in its entirety
and replaced in its entirety with the following:

      "4.1. Grant To secure Customer's full and punctual payment and performance
of the Obligations (including obligations under any leases Customer may enter
into, now or in the future, with IBM Credit) when due (whether at the stated
maturity, by acceleration or otherwise), Customer hereby grants IBM Credit a
security interest in all of Customer's right, title and interest in and to the
following property, whether now owned or hereafter acquired or existing and
wherever located:

      (i) All of Debtor's inventory, which is manufactured or sold by or bearing
any trademark or tradename of International Business Machines Corporation or
Lexmark International, Inc. or any of their subsidiaries or affiliated
companies, whether now owned or hereafter acquired;

      (ii) All parts, attachments, accessories, accessions, repossessions,
exchanges, substitutions and replacements thereto or thereof;

      (iii) All rebates, discounts, credits, refunds and incentive payments, now
or hereafter due Debtor, relating and limited to any of the items described in
clauses (i) or (ii) above; and

      (iv) All cash proceeds of and insurance payable by loss of or damage to
any of the items described in clauses (i), (ii) or (iii) above.

The foregoing clauses (i), (ii), (iii) and (iv) shall not include, and
specifically exclude, any and all accounts, promissory notes, installment
contracts, contract rights, chattel paper, instruments or other rights to
payment, except for claims arising specifically from clauses (iii) or (iv)
above. "Proceeds" as defined in the Uniform Commercial Code arc specifically
excluded, except to the extent specifically included in clauses (i) through (iv)
above.

                                       2
<PAGE>

All of the above assets shall be collectively defined herein as the
"Collateral". Customer covenants and agrees with IBM Credit that: (a) the
security constituted to by this Agreement is in addition to any other security
from time to time held by IBM Credit and (b) the security hereby created is a
continuing security interest and will cover and secure the payment of the
Obligations both present and future of Customer to IBM Credit."

            (d) Section 6.2 of the Agreement is hereby amended by deleting the
second sentence thereof.

            (e) Section 7.5 of the Agreement is hereby amended by deleting
clauses (C) and (D) thereof in their entirety.

            (f) Section 7.6 of the Agreement hereby amended by deleting clause
(B) thereof in its entirety.

            (g) Section 7.13 of the Agreement is hereby deleted in its entirety.

            (h) Clause (B) of Section 9.1 of the Agreement is hereby amended by
inserting the word "material" after the word "any" and before the word "term".

            (i) Clause (L) of Section 9.1 of the Agreement is hereby amended
by inserting the phrase "in excess of $ 1,000,000" after the word "indebtedness"
in the first line thereof.

            (j) Section 9.3 of the Agreement is hereby deleted in its entirety
and replaced with the following: "9.3 Remedies. Upon the occurrence and during
the continuance of any Event of Default which has not been waived in writing by
IBM Credit, IBM Credit may exercise any and all rights and remedies to which it
is entitled hereunder or under applicable law."

            (k) Section 10.8 of the Agreement is hereby deleted in its entirety.

      2. Effective as of the date of the Restructuring, IBM Credit hereby
consents to the Restructuring and waives any notice thereof which may be
required under the Agreement. IBM Credit further consents to (a) the issuance by
Customer or any of its affiliates of any indebtedness to or guarantees to (i)
IBM Credit, (ii) lenders under any working capital facility of Customer or any
of its affiliates, or (iii) Deutsche Financial Services Corporation, or (b) the
granting of any liens to IBM Credit or Deutsche Financial Services Corporation.

      3. Except as specifically amended hereby, all of the provisions of the
Agreement shall remain unamended and in full force and effect. Customer hereby
ratifies and confirms the Agreement as amended hereby and agrees that the
Agreement as amended hereby represents a valid and enforceable obligation of
Customer.

                                       3
<PAGE>

      4. This Amendment shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.

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

                                       4
<PAGE>

      IN WITNESS WHEREOF, Customer and IBM Credit have executed this Amendment
to Agreement for Wholesale Financing as of the date first set forth above.

                                             PC CONNECTION SALES CORP.
                                             fka PC Connection, Inc.

                                             By:   /s/ Jensen McDougal
                                                   ---------------------------

                                             Name:     Jensen McDougal
                                                   ---------------------------
                                             Its:      Vice President
                                                   ---------------------------

                                             IBM CREDIT CORPORATION

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

                                       5
<PAGE>

      IN WITNESS WHEREOF, Customer and IBM Credit have executed this Amendment
to Agreement for Wholesale Financing as of the date first set forth above.

                                             PC CONNECTION SALES CORP.
                                             fka PC Connection, Inc.

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

                                             IBM CREDIT CORPORATION

                                             By:    /s/  Stephen A. Nichou
                                                   ---------------------------
                                             Name:       STEPHEN A. NICHOU
                                                   ---------------------------
                                             Its:        REGION CREDIT MGR
                                                   ---------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00007-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00007-of-00352.parquet"}]]