Document:

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                                                                    EXHIBIT 10.3

                             DISTRIBUTION AGREEMENT

                                     between

                                Pitney Bowes Inc.

                                       and

                        Pitney Bowes Office Systems, Inc.

                           Dated as of _________, 2001
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                                TABLE OF CONTENTS
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                                                                                 PAGE
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ARTICLE 1
     DEFINITIONS

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SECTION 1.01.  Definitions..........................................................2

ARTICLE 2
     CONTRIBUTIONS TO OFFICE SYSTEMS
SECTION 2.01.  Contribution of Contributed Subsidiaries.............................7
SECTION 2.02.  Transfers of Certain Assets; Assumption of Certain
     Liabilities....................................................................7
SECTION 2.03.  Agreement Relating to Consents Necessary to Transfer
     Assets.........................................................................7

ARTICLE 3
     THE DISTRIBUTION
SECTION 3.01.  Cooperation Prior to the Distribution................................8
SECTION 3.02.  Pitney Bowes Board Action; Conditions Precedent to the
     Distribution...................................................................9
SECTION 3.03.  The Distribution....................................................10
SECTION 3.04.  Subdivision of Office Systems Common Stock to
     Accomplish the Distribution...................................................10
SECTION 3.05.  Fractional Shares...................................................10

ARTICLE 4
     INDEMNIFICATION
SECTION 4.01.  Office Systems Indemnification of the Pitney Bowes Group............11
SECTION 4.02.  Pitney Bowes Indemnification of Office Systems Group................11
SECTION 4.03.  Insurance; Third Party Obligations; Tax Benefits....................12
SECTION 4.04.  Notice and Payment of Claims........................................12
SECTION 4.05.  Notice and Defense of Third-Party Claims............................13
SECTION 4.06.  Contribution........................................................14
SECTION 4.07.  Non-Exclusivity of Remedies.........................................14

ARTICLE 5
     EMPLOYEE MATTERS AND SERVICES
SECTION 5.01.  Employee Matters Generally..........................................15
SECTION 5.02.  Restriction on Solicitation or Employment of Employees..............15
SECTION 5.03.  Notification of Termination of Employees............................15
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                                   ARTICLE 6
                             ACCESS TO INFORMATION
SECTION 6.01.  Provision of Corporate Records......................................15
SECTION 6.02.  Access to Information...............................................16
SECTION 6.03.  Litigation Cooperation..............................................16
SECTION 6.04.  Reimbursement.......................................................16
SECTION 6.05.  Retention of Records................................................16
SECTION 6.06.  Confidentiality.....................................................16
SECTION 6.07.  Inapplicability of Article to Tax Matters...........................17

                                   ARTICLE 7
                    CERTAIN OTHER AGREEMENTS AND COVENANTS
SECTION 7.01.  Amounts Payable and Intercompany Accounts...........................17
SECTION 7.02.  Covenants Not to Compete............................................17
SECTION 7.03.  Further Assurances and Consents.....................................19

                                   ARTICLE 8
                                 MISCELLANEOUS
SECTION 8.01.  Notices.............................................................20
SECTION 8.02.  Amendments; No Waivers..............................................21
SECTION 8.03.  Expenses............................................................21
SECTION 8.04.  Insurance Matters...................................................21
SECTION 8.05.  Successors and Assigns..............................................21
SECTION 8.06.  Governing Law.......................................................22
SECTION 8.07.  Counterparts; Effectiveness.........................................22
SECTION 8.08.  Entire Agreement....................................................22
SECTION 8.09.  Tax Separation Agreement............................................22
SECTION 8.10.  Jurisdiction........................................................22
SECTION 8.11.  Existing Arrangements...............................................23
SECTION 8.12.  Termination Prior to the Distribution...............................23
SECTION 8.13.  Termination After the Distribution..................................23
SECTION 8.14.  Severability........................................................24
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SECTION 8.15.  Survival............................................................24
SECTION 8.16.  Captions............................................................24
SECTION 8.17.  Specific Performance................................................24

Schedule 2.01       --       Contributed Subsidiaries
Schedule 4.04       --       Non-Income Tax Claims
Schedule 5.01       --       Employee Matters
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                                   EXHIBITS
Exhibit A                    Tax Separation Agreement
Exhibit B                    Transition Services Agreement
Exhibit C                    Intellectual Property Agreement
Exhibit D                    Pitney Bowes Management Services Reseller Agreement
Exhibit E                    Pitney Bowes of Canada Ltd. Reseller Agreement
Exhibit F                    Vendor Financing Agreement
Exhibit G-1                  Form of Assignment and Novation Agreements
Exhibit G-2                  Form of Sublease Agreements
Exhibit G-3                  Form of Sublease and License Agreements

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                             DISTRIBUTION AGREEMENT

               DISTRIBUTION AGREEMENT dated as of _________________, 2001 (the
"Agreement") between Pitney Bowes Inc., a Delaware corporation ("Pitney
Bowes"), and Pitney Bowes Office Systems, Inc., a Delaware corporation
("Office Systems").

W I T N E S S E T H:
-------------------

               WHEREAS, Pitney Bowes, acting through the Office Systems Group
(as defined herein), currently conducts a number of businesses, including
providing document imaging solutions through copiers, facsimile machines,
multi-functional products and other related products.

               WHEREAS, Pitney Bowes has determined to transfer certain assets
to Office Systems and cause Office Systems to assume certain Liabilities (as
defined herein) of Pitney Bowes;

               WHEREAS, the Board of Directors of Pitney Bowes has authorized
the distribution to the holders of the issued and outstanding shares of common
stock, par value $.01 per share, of Pitney Bowes (together with the associated
preferred share purchase rights, the "Pitney Bowes Common Stock") as of the
record date of 100% of the issued and outstanding shares of common stock, par
value $.01 per share, of Office Systems (together with the associated preferred
share purchase rights, the "Office Systems Common Stock"), on the basis of 0.08
shares of Office Systems Common Stock for each one share of Pitney Bowes Common
Stock (the "Distribution"); and

               WHEREAS, the parties hereto have determined to set forth the
principal corporate and other transactions required to effect the Distribution
and to set forth other agreements that will govern certain other matters prior
to and following the Distribution.

               NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, the parties hereby agree as follows:
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                                    ARTICLE 1
                                   DEFINITIONS

               SECTION 1.01. Definitions. The following terms, as used herein,
have the following meanings:

               "Action" means any demand, claim, suit, action, arbitration,
inquiry, investigation or other proceeding by or before or any Governmental
Authority or any arbitration or mediation tribunal.

               "Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under common control with,
such other Person; provided, however, that for purposes of this Agreement, any
Person who was a member of both Groups prior to the Distribution shall be deemed
to be an Affiliate only of the Group of which such Person is a member following
the Distribution. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. Any
contrary provision of this Agreement notwithstanding, neither Pitney Bowes nor
any of its Subsidiaries shall be deemed to be an Affiliate of Office Systems.

               "Agreement" has the meaning set forth in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.

               "Ancillary Agreement" means each of the Tax Separation Agreement,
the Transition Services Agreement, the Intellectual Property Agreement, the
Reseller Agreements, the Vendor Financing Agreement, the Assignment and Novation
Agreements, the Sublease Agreements, the Sublease and License Agreements and the
Credit Agreement.

               "Assignment and Novation Agreements" means the Assignment and
Novation Agreements entered or to be entered into among Pitney Bowes, Office
Systems and the several landlords party thereto in connection with the
Distribution.

               "Canada Reseller Agreement" means the Reseller Agreement dated as
of the date hereof between Pitney Bowes of Canada Ltd. and Office Systems.

               "Commission" means the Securities and Exchange Commission.

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               "Credit Agreement" means the Credit Agreement dated
                                                                   ------
between Office Systems and Merrill Lynch.

               "Distribution" has the meaning set forth in the recitals to this
Agreement.

               "Distribution Agent" means EquiServe Trust Company, N.A.

               "Distribution Date" means the day as of which the Distribution
shall be effected.

               "Distribution Documents" means all of the agreements and other
documents entered into in connection with the Distribution as contemplated
hereby, including, without limitation, this Agreement and the Ancillary
Agreements.

               "Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, permits, licenses and governmental
restrictions, whether now or hereafter in effect, relating to the environment,
the effect of the environment on human health or to emissions, discharges,
releases, manufacturing, storage, processing, distribution, use, treatment,
disposal, transportation or handling of pollutants, contaminants, petroleum or
petroleum products, chemicals or industrial, toxic, radioactive or hazardous
substances or wastes or the clean-up or other remediation thereof.

               "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

               "Finally Determined" means, with respect to any Action or other
matter, that the outcome or resolution of such Action or matter has been
judicially determined by judgment or order not subject to further appeal or
discretionary review.

               "Form 10" means the registration statement on Form 10 initially
filed by Office Systems with the Commission on April 18, 2001 to effect the
registration of Office Systems Common Stock pursuant to the Exchange Act in
connection with the Distribution, as such registration statement may be amended
or supplemented from time to time.

               "Group" means, as the context requires, the Office Systems Group
or the Pitney Bowes Group.

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               "Income Taxes" has the meaning set forth in the Tax Separation
Agreement.

               "Indemnified Party" has the meaning set forth in Section 4.04.

               "Indemnifying Party" has the meaning set forth in Section 4.04.

               "Information Statement" means the Final Information Statement to
be sent to each holder of Pitney Bowes Common Stock in connection with the
Distribution.

               "Intellectual Property Agreement" means the Intellectual Property
Agreement dated as of the date hereof between Pitney Bowes and Office Systems.

               "IRS" means the Internal Revenue Service.

               "Liabilities" means any and all claims, debts, liabilities and
obligations, absolute or contingent, matured or not matured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, whenever arising,
including all costs and expenses relating thereto, and including, without
limitation, those debts, liabilities and obligations arising under this
Agreement, any law, rule, regulation, any action, order, injunction or consent
decree of any governmental agency or entity, or any award of any arbitrator of
any kind, and those arising under any agreement, commitment or undertaking.

               "Losses" means, with respect to any Person, any and all damage,
loss, liability and expense incurred or suffered by such Person (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any and all Actions or
threatened Actions).

               "Management Services Reseller Agreement" means the Reseller
Agreement dated as of the date hereof between Pitney Bowes Management Services
and Office Systems.

               "Non-Income Taxes" has the meaning set forth in the Tax
Separation Agreement.

               "NYSE" has the meaning set forth in Section 3.01.

               "Office Systems" has the meaning set forth in the preamble.

               "Office Systems Balance Sheet" means the most recent balance
sheet of Office Systems as reflected in the final Information Statement of
Office Systems.

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               "Office Systems Business" means the business of Office Systems
and its Subsidiaries as conducted by the office systems division of Pitney Bowes
(except for the facsimile business conducted by Pitney Bowes of Canada Ltd.) as
of the date hereof, including document imaging solutions and related products
and maintenance.

               "Office Systems Common Stock" has the meaning set forth in the
recitals to this Agreement.

               "Office Systems Group" means Office Systems and its Subsidiaries
as of and after the Distribution Date (including all predecessors to such
Persons).

               "Office Systems Liabilities" means all (i) Liabilities of the
Office Systems Group under this Agreement, (ii) except for the liabilities
accrued as of the Distribution Date to the accounts reflected on Schedule 2.02
and as otherwise specifically provided herein or in any Ancillary Agreement,
other Liabilities, whether arising before, on or after the Distribution Date, of
or relating to the Office Systems Group or arising from or in connection with
the conduct of the Office Systems Business or the ownership or use of assets in
connection therewith, including without limitation any Liabilities for
Non-Income Taxes and any Liabilities arising under or relating to Environmental
Laws, and (iii) Liabilities of the Office Systems Group set forth in Schedule
5.01 hereto. Notwithstanding the foregoing, "Office Systems Liabilities" shall
exclude: (x) any Liabilities for Income Taxes (since such Liabilities shall be
governed by the Tax Separation Agreement), (y) any Liabilities specifically
retained or assumed by Pitney Bowes pursuant to this Agreement.

               "Person" means an individual, corporation, limited liability
company, partnership, association, trust or other entity or organization,
including a governmental or political subdivision or an agency or
instrumentality thereof.

               "Pitney Bowes" has the meaning set forth in the preamble.

               "Pitney Bowes Common Stock" has the meaning set forth in the
recitals to this Agreement.

               "Pitney Bowes Group" means Pitney Bowes and its Subsidiaries
(other than any Subsidiary or member of, or other entity in, the Office Systems
Group).

               "Pitney Bowes Liabilities" means all Liabilities of the Pitney
Bowes Group under this Agreement, including the liabilities accrued as of the
Distribution Date to the accounts reflected on Schedule 2.02, except as
otherwise specifically provided herein or in any Ancillary Agreements, other
Liabilities,

                                                                               5

                                       5
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whether arising before, on or after the Distribution Date, of or relating to the
Pitney Bowes Group or arising from or in connection with the conduct of the
businesses of the Pitney Bowes Group (other than the Office Systems Business) or
the ownership or use of assets in connection therewith, including without
limitation any Liabilities arising under or relating to Environmental Laws.
Notwithstanding the foregoing, "Pitney Bowes Liabilities" shall exclude (x) any
Liabilities for Income Taxes (since such Liabilities shall be governed by the
Tax Separation Agreement) and (y) any Liabilities specifically retained or
assumed by Office Systems pursuant to this Agreement.

               "Record Date" means the date determined by Pitney Bowes' Board of
Directors (or determined by a committee of such Board of Directors pursuant to
authority delegated to such committee by Pitney Bowes' Board of Directors) as
the record date for determining the holders of Pitney Bowes Common Stock
entitled to receive the Distribution.

               "Restated Office Systems Charter" has the meaning set forth in
Section 3.02.

               "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

               "Sublease Agreements" means each of the Sublease Agreements
entered or to be entered into between Pitney Bowes and Office Systems.

               "Sublease and License Agreements" means each of the Sublease
Agreements entered or to be entered into between Pitney Bowes and Office
Systems.

               "Subsidiary" means, with respect to any Person, any 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.

               "Tax" means Income Taxes and Non-Income Taxes, each as defined in
the Tax Separation Agreement.

               "Tax Separation Agreement" means the Tax Separation Agreement
dated as of the date hereof between Pitney Bowes and Office Systems.

               "Third-Party Claim" has the meaning set forth in Section 4.05.

               "Transfer" has the meaning set forth in Section 2.02.

                                       6
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               "Transition Services Agreement" means the Transition Services
Agreement dated as of the date hereof between Pitney Bowes and Office Systems.

               "Vendor Financing Agreement" means the Vendor Financing Agreement
dated as of the date hereof between Pitney Bowes Credit Corporation and Office
Systems.

                                    ARTICLE 2
                         CONTRIBUTIONS TO OFFICE SYSTEMS

               SECTION 2.01. Contribution of Contributed Subsidiaries. Prior to
the Distribution Date, Pitney Bowes shall contribute or transfer to Office
Systems or to one or more wholly owned Subsidiaries of Office Systems, as
specified by Office Systems, all the outstanding shares of capital stock of, or
other ownership interests in, each of the subsidiaries set forth in Schedule
2.01 hereto.

               SECTION 2.02. Transfers of Certain Assets; Assumption of Certain
Liabilities. (a) Prior to the Distribution Date, subject to receipt of any
necessary consents or approvals of third parties or of Governmental Authorities
and subject to Section 7.03, Pitney Bowes shall, or shall cause the relevant
member of the Pitney Bowes Group to, assign, contribute, convey, transfer and
deliver ("Transfer") to Office Systems or to one or more wholly-owned
Subsidiaries of Office Systems, as specified by Office Systems, all of the
right, title and interest of Pitney Bowes or such member of the Pitney Bowes
Group in and to all assets held by any member of the Pitney Bowes Group that
relate solely to the Office Systems Business (and not to the businesses of the
Pitney Bowes Group including, without limitation, all assets reflected in the
Office Systems Balance Sheet, subject to transactions in the ordinary course)
and Office Systems shall assume and take transfer of all Office Systems
Liabilities.

               SECTION 2.03. Agreement Relating to Consents Necessary to
Transfer Assets. Notwithstanding anything in this Agreement to the contrary,
this Agreement shall not constitute an agreement to transfer or assign any asset
or any claim or right or any benefit arising thereunder or resulting therefrom
if an attempted assignment thereof, without the necessary consent of a third
party, would constitute a breach or other contravention thereof or in any way
adversely affect the rights of Office Systems, or any member of the Office
Systems Group, or Pitney Bowes, or any member of the Pitney Bowes Group,
thereunder. Office Systems and Pitney Bowes will, subject to Section 7.03, use,
and cause the relevant members of the Office Systems Group or the Pitney Bowes
Group, respectively, to use, their reasonable efforts to obtain the consent of
any third

                                       7
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party or any Governmental Authority, if any, required in connection with the
transfer or assignment pursuant to Section 2.02 of any such asset or any claim
or right or any benefit arising thereunder. Until such required consent is
obtained, or if such consent cannot be obtained, or an attempted assignment
thereof would be ineffective or would adversely affect the rights of the
transferor thereunder so that the intended transferee would not in fact receive
all such rights, Office Systems and Pitney Bowes will cooperate in a mutually
agreeable arrangement under which the intended transferee would obtain the
benefits and assume the obligations thereunder in accordance with this
Agreement, including (but not limited to) sub-contracting, sub-licensing or
sub-leasing to such transferee, or under which the transferor would enforce for
the benefit of the transferee and (except as otherwise provided herein or in any
Ancillary Agreement) at the transferee's expense any and all rights of the
transferor against, with the transferee assuming the transferor's obligations
to, each third party thereto. In the case of any Transfer involving a third
party consent, the transferor shall not agree to any terms of transfer (without
prior written consent of the transferee) which have the effect of materially
altering the rights or benefits arising under any of the particular assets
subject to the Transfer.

                                    ARTICLE 3
                                THE DISTRIBUTION

               SECTION 3.01. Cooperation Prior to the Distribution. (a) Pitney
Bowes and Office Systems shall prepare, and Office Systems shall file with the
Commission, the Form 10, which shall include the Information Statement, and
which shall set forth appropriate disclosure concerning Office Systems and the
Distribution. Pitney Bowes and Office Systems shall use reasonable efforts to
cause the Form 10 to become effective under the Exchange Act as soon as
practicable. After the Form 10 has become effective, Pitney Bowes shall mail the
Information Statement to the holders of Pitney Bowes Common Stock as of the
Record Date.

                  (b) Pitney Bowes and Office Systems shall cooperate in
preparing, filing with the Commission and causing to become effective any
registration statements or amendments thereto that are appropriate to reflect
the establishment of or amendments to any employee benefit and other plans
contemplated by this Agreement and the Ancillary Agreements.

                  (c) Pitney Bowes and Office Systems shall take all such action
as may be necessary or appropriate under the securities or blue sky laws of
states or other political subdivisions of the United States and shall take
reasonable efforts to

                                       8
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comply with all applicable foreign securities laws in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements.

               (d)     Office Systems shall prepare, file and pursue an
application to permit listing of the Office Systems Common Stock on the New York
Stock Exchange, Inc. ("NYSE").

               SECTION 3.02. Pitney Bowes Board Action; Conditions Precedent to
the Distribution. Pitney Bowes' Board of Directors shall, in its discretion,
establish (or delegate authority to establish) the Record Date and the
Distribution Date and any appropriate procedures in connection with the
Distribution. In no event shall the Distribution occur unless the following
conditions shall have been waived by Pitney Bowes or shall have been satisfied:

                    (i) the Form 10 shall have become effective under the
               Exchange Act;

                    (ii) the Office Systems Common Stock to be delivered in the
               Distribution shall have been approved for listing on the NYSE,
               subject to official notice of issuance;

                    (iii) the Board of Directors of Pitney Bowes shall be
               satisfied that the Distribution will be made out of surplus
               within the meaning of Section 170 of the General Corporation Law
               of the State of Delaware;

                    (iv) Pitney Bowes' Board of Directors shall have approved
               the Distribution and shall not have abandoned, deferred or
               modified the Distribution at any time prior to the Record Date;

                    (v) the contributions referred to in Section 2.01 of this
               Agreement shall have been effected and the parties hereto shall
               have complied with Section 2.02 of this Agreement;

                    (vi) Office Systems' Board of Directors, as named in the
               Information Statement, shall have been elected by Pitney Bowes,
               as sole stockholder of Office Systems, and Office Systems'
               certificate of incorporation (the "Restated Office Systems
               Charter") and bylaws, in substantially the forms filed as
               exhibits to the Form 10, shall be in effect;

                    (vii) each of the Ancillary Agreements shall have been duly
               executed and delivered by the parties thereto; and

                                       9
<PAGE>

                    (viii) Pitney Bowes shall have received a favorable ruling
               from the Internal Revenue Service or a legal opinion from Pitney
               Bowes' counsel, Davis Polk & Wardwell, or another nationally
               recognized law firm, stating that the Distribution qualifies as
               tax-free to Pitney Bowes and its stockholders for United States
               federal income tax purposes.

               SECTION 3.03. The Distribution. Subject to the terms and
conditions set forth in this Agreement, (i) prior to the Distribution Date,
Pitney Bowes shall deliver to the Distribution Agent for the benefit of holders
of record of Pitney Bowes Common Stock on the Record Date, a stock certificate
or certificates, endorsed by Pitney Bowes in blank, representing 100% of the
outstanding shares of Office Systems Common Stock, (ii) the Distribution shall
be effective on the Distribution Date and (iii) Pitney Bowes shall instruct the
Distribution Agent to distribute, on or as soon as practicable after the
Distribution Date, to each holder of record of Pitney Bowes Common Stock as of
the Record Date 0.08 shares of Office Systems Common Stock for each one share of
Pitney Bowes Common Stock so held. Office Systems agrees to provide all
certificates for shares of Office Systems Common Stock that Pitney Bowes shall
require (after giving effect to Sections 3.04 and 3.05) in order to effect the
Distribution.

               SECTION 3.04. Subdivision of Office Systems Common Stock to
Accomplish the Distribution. Effective upon the filing of the Restated Office
Systems Charter with the Secretary of State of the State of Delaware, each share
of Office Systems Common Stock then issued and outstanding shall, without any
action on the part of the holder thereof, be subdivided and converted into that
number of fully paid and non-assessable shares of Office Systems Common Stock
issued and outstanding equal to the number of shares of Pitney Bowes Common
Stock outstanding on the Record Date times 0.08 divided by the number of shares
of Office Systems Common Stock outstanding immediately prior to such filing.

               SECTION 3.05. Fractional Shares. No certificates representing
fractional shares of Office Systems Common Stock will be distributed in the
Distribution. The Distribution Agent will be directed to determine the number of
whole shares and fractional shares of Office Systems Common Stock allocable to
each holder of Pitney Bowes Common Stock as of the Record Date. Upon the
determination by the Distribution Agent of such number of fractional shares, as
soon as practicable after the Distribution Date, the Distribution Agent, acting
on behalf of the holders thereof, shall sell such fractional shares for cash on
the open market and shall disburse to each holder entitled thereto the
appropriate portion of the resulting cash proceeds (calculated by multiplying
the average gross selling price per share times the number of fractional shares
allocable to such holder). Pitney Bowes shall bear the cost of all commissions
incurred in connection with the sale of fractional shares pursuant to this
Section 3.05.

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                                    ARTICLE 4
                                 INDEMNIFICATION

                  SECTION 4.01. Office Systems Indemnification of the Pitney
Bowes Group. (a) Subject to Section 4.03, on and after the Distribution Date,
Office Systems shall indemnify, defend and hold harmless the Pitney Bowes Group
and the respective directors, officers and Affiliates of each Person in the
Pitney Bowes Group (the "Pitney Bowes Indemnitees") from and against any and all
Losses incurred or suffered by any of the Pitney Bowes Indemnitees arising out
of, or due to the failure of any Person in the Office Systems Group to pay,
perform or otherwise discharge, any of the Office Systems Liabilities.

                  (b) Subject to Section 4.03, on and after the Distribution
Date, Office Systems shall indemnify, defend and hold harmless each of the
Pitney Bowes Indemnitees from and against the failure of Office Systems to
reimburse Pitney Bowes for the employee benefit related costs, expenses and fees
as set forth in Schedule 5.01 hereof.

                  (c) Subject to Section 4.03, Office Systems shall indemnify,
defend and hold harmless each of the Pitney Bowes Indemnitees and each Person,
if any, who controls any Pitney Bowes Indemnitee within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all Losses caused by any untrue statement or alleged untrue
statement of a material fact contained in the Form 10 or any amendment thereof
or the Information Statement (as amended or supplemented if Office Systems shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such Losses are caused by any such
untrue statement or omission or alleged untrue statement or omission arising out
of information furnished to Office Systems in writing by Pitney Bowes expressly
for use therein.

               SECTION 4.02. Pitney Bowes Indemnification of Office Systems
Group. (a) Subject to Section 4.03, on and after the Distribution Date, Pitney
Bowes shall indemnify, defend and hold harmless the Office Systems Group and the
respective directors, officers and Affiliates of each Person in the Office
Systems Group (the "Office Systems Indemnitees") from and against any and all
Losses incurred or suffered by any of the Office Systems Indemnitees and arising
out of, or due to the failure of any Person in the Pitney Bowes Group to pay,
perform or otherwise discharge, any of the Pitney Bowes Liabilities.

                  (b) Subject to Section 4.03, Pitney Bowes shall indemnify,
defend and hold harmless each of the Office Systems Indemnitees and each Person,
if any,

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who controls any Office Systems Indemnitee within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act from and against any
and all Losses caused by any untrue statement or alleged untrue statement of a
material fact contained in the Form 10 or any amendment thereof or the
Information Statement (as amended or supplemented if Office Systems shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such Losses are caused by any such untrue statement or omission or alleged
untrue statement or omission arising out of information furnished to Office
Systems in writing by Pitney Bowes expressly for use therein.

               SECTION 4.03. Insurance; Third Party Obligations; Tax Benefits.
Any indemnification pursuant to Sections 4.01 or 4.02 shall be paid net of the
amount of any insurance or other amounts that would be payable by any third
party to the Indemnified Party (as defined below) in the absence of this
Agreement (irrespective of time of receipt of such insurance or other amounts)
and net of any tax benefit to the Indemnified Party attributable to the relevant
payment or Liability. Such indemnification shall be increased to reflect any tax
liability of the indemnified party so that the indemnified party receives 100%
of the after-tax amount of any payment or liability. It is expressly agreed that
no insurer or any other third party shall be (i) entitled to a benefit it would
not be entitled to receive in the absence of the foregoing indemnification
provisions, (ii) relieved of the responsibility to pay any claims to which it is
obligated or (iii) entitled to any subrogation rights with respect to any
obligation hereunder.

               SECTION 4.04. Notice and Payment of Claims. If any Pitney Bowes
Indemnitee or Office Systems Indemnitee (the "Indemnified Party") determines
that it is or may be entitled to indemnification by any party (the "Indemnifying
Party") under Article 4 (other than in connection with any Action subject to
Section 4.05), the Indemnified Party shall deliver to the Indemnifying Party a
written notice specifying, to the extent reasonably practicable, the basis for
its claim for indemnification and the amount for which the Indemnified Party
reasonably believes it is entitled to be indemnified. The methodology for
determining claims for indemnification related to sales, use and personal
property taxes is set forth on Schedule 4.04 hereto. Within 30 days after
receipt of such notice, the Indemnifying Party shall pay the Indemnified Party
such amount in cash or other immediately available funds unless the Indemnifying
Party objects to the claim for indemnification or the amount thereof. If the
Indemnifying Party does not give the Indemnified Party written notice objecting
to such indemnity claim and setting forth the grounds therefor within such
30-day period, the Indemnified Party shall give the Indemnifying Party an
additional notice of its

                                       12
<PAGE>

claims for indemnification and if the Indemnifying Party does not give the
Indemnified Party written notice objecting to such claims within 10 days after
receipt of such additional notice, the Indemnifying Party shall be deemed to
have acknowledged its liability for such claim and the Indemnified Party may
exercise any and all of its rights under applicable law to collect such amount.
In the event of such a timely objection by the Indemnifying Party, the amount,
if any, that is Finally Determined to be required to be paid by the Indemnifying
Party in respect of such indemnity claim shall be paid by the Indemnifying Party
to the Indemnified Party in cash within 15 days after such indemnity claim has
been so Finally Determined. Notice and payment of all Non-Income Tax Claims
shall be in accordance with the provisions of this Agreement and with a copy of
the notice to:

               Pitney Bowes Office Systems, Inc.
               100 Oakview Drive
               Trumbull, CT  06611
               Telecopy: (203) 365-2349
               Attention: Vice President-Tax

               SECTION 4.05. Notice and Defense of Third-Party Claims. Promptly
following the earlier of (i) receipt of notice of the commencement by a third
party of any Action against or otherwise involving any Indemnified Party or (ii)
receipt of information from a third party alleging the existence of a claim
against an Indemnified Party, in either case, with respect to which
indemnification may be sought pursuant to this Agreement (a "Third-Party
Claim"), the Indemnified Party shall give the Indemnifying Party written notice
thereof. The failure of the Indemnified Party to give notice as provided in this
Section 4.05 shall not relieve the Indemnifying Party of its obligations under
this Agreement, except to the extent that the Indemnifying Party is prejudiced
by such failure to give notice. Within 15 days after receipt of such notice, the
Indemnifying Party may (i) by giving written notice thereof to the Indemnified
Party, acknowledge liability for such indemnification claim and at its option
elect to assume the defense of such Third-Party Claim at its sole cost and
expense (except as provided for in Schedule 4.04) or (ii) object to the claim
for indemnification set forth in the notice delivered by the Indemnified Party
pursuant to the first sentence of this Section 4.05; provided that if the
Indemnifying Party does not within such 15-day period give the Indemnified Party
written notice objecting to such indemnification claim and setting forth the
grounds therefor, the Indemnified Party shall give the Indemnifying Party an
additional notice of its claims for indemnification and if the Indemnifying
Party does not give the Indemnified Party written notice objecting to such
claims within 10 days after receipt of such additional notice, the Indemnifying
Party shall be deemed to have acknowledged its liability for such
indemnification claim. If the Indemnifying Party has elected to assume the

                                       13
<PAGE>

defense of a Third-Party Claim, (x) the defense shall be conducted by counsel
retained by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party, provided that the Indemnified Party shall have the right to
participate in such proceedings and to be represented by counsel of its own
choosing at the Indemnified Party's sole cost and expense; and (y) the
Indemnifying Party may settle or compromise the Third Party Claim without the
prior written consent of the Indemnified Party so long as such settlement
includes an unconditional release of the Indemnified Party from all claims that
are the subject of such Third Party Claim, provided that the Indemnifying Party
may not agree to any such settlement pursuant to which any remedy or relief,
other than monetary damages for which the Indemnifying Party shall be
responsible hereunder, shall be applied to or against the Indemnified Party,
without the prior written consent of the Indemnified Party, which consent shall
not be unreasonably withheld. If the Indemnifying Party does not assume the
defense of a Third-Party Claim for which it has acknowledged liability for
indemnification hereunder, the Indemnified Party may require the Indemnifying
Party to reimburse it on a current basis for its reasonable expenses of
investigation, reasonable attorneys' fees and reasonable out-of-pocket expenses
incurred in defending against such Third-Party Claim and the Indemnifying Party
shall be bound by the result obtained with respect thereto by the Indemnified
Party; provided that the Indemnifying Party shall not be liable for any
settlement effected without its consent, which consent shall not be unreasonably
withheld. The Indemnifying Party shall pay to the Indemnified Party in cash the
amount, if any, for which the Indemnified Party is entitled to be indemnified
hereunder within 15 days after such Third Party Claim has been Finally
Determined, in the case of an indemnity claim as to which the Indemnifying Party
has acknowledged liability or, in the case of any indemnity claim as to which
the Indemnifying Party has not acknowledged liability, within 15 days after such
Indemnifying Party's objection to liability hereunder has been Finally
Determined.

               SECTION 4.06. Contribution. If for any reason the indemnification
provided for in Section 4.01 or 4.02 is unavailable to any Indemnified Party, or
insufficient to hold it harmless, then the Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Party as a result of such
Losses in such proportion as is appropriate to reflect all relevant equitable
considerations.

               SECTION 4.07. Non-Exclusivity of Remedies. The remedies provided
for in this Article 4 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any Indemnified Party at law or in
equity.

                                       14
<PAGE>

                                    ARTICLE 5
                          EMPLOYEE MATTERS AND SERVICES

               SECTION 5.01. Employee Matters Generally. With respect to
employee matters and employee benefits arrangements, the parties hereto agree as
set forth in Schedule 5.01.

               SECTION 5.02. Restriction on Solicitation or Employment of
Employees. For a period of two years following the Distribution Date, each of
the Pitney Bowes Group and the Office Systems Group agrees that (without the
prior written consent of the other) it will not, directly or indirectly, (i)
solicit or otherwise attempt to induce or influence any employee of the other
Group to terminate employment with his or her then-current employer or (ii)
employ any employee of the other Group.

               Notwithstanding the foregoing, if an employee of either Group is
terminated or terminates employment within such two year period, the terminated
employee may be hired by the other Group at any time after 180 days following
such employee's termination; provided that the Group hiring such employee has
not violated the provisions of the immediately preceding paragraph with respect
to such employee.

               SECTION 5.03. Notification of Termination of Employees. Office
Systems shall notify Pitney Bowes in writing within seven business days of the
date of termination of employment of any Transferred Employee (as defined in
Section 2 of Schedule 5.01 hereof) from the Office System Group or a related
company.

                                    ARTICLE 6
                              ACCESS TO INFORMATION

               SECTION 6.01. Provision of Corporate Records. Immediately prior
to or as soon as practicable following the Distribution Date, each Group shall
provide to the other Group all documents, contracts, books, records and data
(including but not limited to minute books, stock registers, stock certificates
and documents of title) in its possession relating to such other Group or such
other Group's business and affairs; provided that if any such documents,
contracts, books, records or data relate to both Groups or the business and
operations of both Groups, each such Group shall provide to the other Group true
and complete copies of such documents, contracts, books, records or data. Data
stored in electronic form shall be provided in the format in which it existed at
the Distribution Date and, if requested, in hard copy (at the expense of the
requesting party), except as otherwise specifically set forth in this Agreement
or any Ancillary Agreement.

                                       15
<PAGE>

               SECTION 6.02. Access to Information. From and after the
Distribution Date, each Group shall, for a reasonable period of time, afford
promptly to the other Group and its accountants, counsel and other designated
representatives reasonable access during normal business hours to all documents,
contracts, books, records, computer data and other data in such Group's
possession relating to such other Group or the business and affairs of such
other Group (other than data and information subject to an attorney/client or
other privilege), insofar as such access is reasonably required by such other
Group, including, without limitation, for audit, accounting, litigation,
regulatory compliance and disclosure and reporting purposes.

               SECTION 6.03. Litigation Cooperation. Each Group shall use
reasonable efforts to make available to the other Group and its accountants,
counsel, and other designated representatives, upon written request, its
directors, officers, employees and representatives as witnesses, and shall
otherwise cooperate with the other Group, to the extent reasonably required in
connection with any Action arising out of either Group's business and operations
prior to the Distribution Date in which the requesting party may from time to
time be involved.

               SECTION 6.04. Reimbursement. Each Group providing information or
witnesses to the other Group, or otherwise incurring any expense in connection
with cooperating, under Sections 6.01, 6.02 or 6.03 shall be entitled to receive
from the recipient thereof, upon the presentation of invoices therefor, payment
for all out-of-pocket costs and expenses as may be reasonably incurred in
providing such information, witnesses or cooperation.

               SECTION 6.05. Retention of Records. Except as otherwise required
by law or agreed to in writing, each party shall, and shall cause the members of
its respective Group to, retain all information relating to the other Group's
business and operations in accordance with the past practice of such party.
Notwithstanding the foregoing, any party may destroy or otherwise dispose of any
such information at any time, provided that, prior to such destruction or
disposal, (i) such party shall provide not less than 90 days' prior written
notice to the other party, specifying the information proposed to be destroyed
or disposed of and the scheduled date for such destruction or disposal, and (ii)
if the recipient of such notice shall request in writing prior to the scheduled
date for such destruction or disposal that any of the information proposed to be
destroyed or disposed of be delivered to such requesting party, the party
proposing the destruction or disposal shall promptly arrange for the delivery of
such of the information as was requested at the expense of the requesting party.

               SECTION 6.06. Confidentiality. Each party shall hold and shall
cause its directors, officers, employees, agents, consultants and advisors

                                       16
<PAGE>

("Representatives") to hold in strict confidence all information (other than any
such information relating solely to the business or affairs of such party)
concerning the other party unless (i) such party is compelled to disclose such
information by judicial or administrative process or, in the opinion of its
counsel, by other requirements of law or (ii) such information can be shown to
have been (A) in the public domain through no fault of such party or (B)
lawfully acquired after the Distribution Date on a non-confidential basis from
other sources. Notwithstanding the foregoing, such party may disclose such
information to its Representatives so long as such Persons are informed by such
party of the confidential nature of such information and are directed by such
party to treat such information confidentially. If such party or any of its
Representatives becomes legally compelled to disclose any documents or
information subject to this Section, such party will promptly notify the other
party so that the other party may seek a protective order or other remedy or
waive such party's compliance with this Section. If no such protective order or
other remedy is obtained or waiver granted, such party will furnish only that
portion of the information which it is advised by counsel is legally required
and will exercise its reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded such information. Such party agrees to
be responsible for any breach of this Section by it and its Representatives.

               SECTION 6.07. Inapplicability of Article 6 to Tax Matters.
Notwithstanding anything to the contrary in Article 6, Article 6 shall not apply
with respect to information, records and other matters relating to Taxes, all of
which shall be governed by the Tax Separation Agreement.

                                    ARTICLE 7
                     CERTAIN OTHER AGREEMENTS AND COVENANTS

               SECTION 7.01. Amounts Payable and Intercompany Accounts. (a) On
the Distribution Date, Office Systems shall pay to Pitney Bowes an amount equal
to the sum of (i) $161,000,000 plus (ii) the aggregate amount of any additional
funds advanced to the Office Systems Business by the Pitney Bowes Group between
August 1, 2001 and the Distribution Date. The amount of such payment which
exceeds the net intercompany balance payable from Office Systems to Pitney Bowes
shall be paid as a dividend.

                  (b) All intercompany receivable, payable and loan balances in
existence as of the Distribution Date between the Pitney Bowes Group and Office
Systems Group will be settled by payment of the amount set forth in Section
7.01(a).

                                       17
<PAGE>

               SECTION 7.02. Covenants Not to Compete. (a) In consideration of
the promises and representations of Pitney Bowes under this Agreement, Office
Systems covenants and agrees that, for a period of two years following the
Distribution Date, neither Office Systems nor any member of the Office Systems
Group nor any of their respective successors or assigns will, directly or
indirectly, engage in, or have any interest (including, as agent, partner,
consultant or shareholder) in any other person, firm, corporation or other
entity engaged in, any business activities, in the United States, the United
Kingdom, Canada and Europe, competitive with or similar or related to the
business or products (current and future) of the Pitney Bowes Group, as
reflected in Pitney Bowes' most recent strategic plan dated March 2001 (the
"March 2001 Strategic Plan") which includes the facilities management business,
as more fully described in paragraph (b) below.

                  (b) The parties hereby agree that Pitney Bowes is engaged in
the facilities management business. The parties further agree that the
facilities management business consists of on site, off site, near site and
multiple client location facilities management and outsourcing services aimed at
providing total Integrated Mail and Document Management, and Document Resource
Planning solutions defined as the delegation to a supplier of the creation,
production, mailing or electronic transmission, or fulfillment of any type of
printed or electronic document. Included in this is mail center operations, mail
delivery, literature fulfillment and supplies management, shipping and
receiving, network fax, on-line image retrieval, central reprographics, color
copy, convenience copy/fleet management including asset management,
microfilming, color print, print-on-demand, network print, computer output to
microfilm (COM), CD output and electronic scanning and indexing. The facilities
management vendor may assign specific business functions to either a business
specializing in those functions or one that offers the service as a complement
to other offerings. The facilities management vendor may acquire a customer's
distributed network printers, copiers and operating personnel and could be
responsible for all maintenance, network support services, equipment upgrades,
staff training, and other activities. Notwithstanding the provisions of
paragraph (a) above, the parties acknowledge that (x) Office Systems may, within
the facilities management business, engage in the business of selling,
maintenance of and placing copier, facsimile and multi-functional products that
fax, copy, print and scan and related sales of software and supplies, even if
this business competes with Pitney Bowes' business; provided that (i) such
competing business is the only activity of Office Systems within the facilities
management business and (ii) that such business is operated in a manner and on a
scale substantially consistent with past practice and the business of Office
Systems as of the Distribution Date, (y) Office Systems may engage in such
competing business to the extent required so that Office Systems may fulfill its
obligations under its existing contracts as of

                                       18
<PAGE>

the Distribution Date and (z) to the extent that Office Systems notifies Pitney
Bowes of its desire to enter into a business, pursuant to a specific contract or
customer requirement, not otherwise permitted to be engaged in by Office Systems
pursuant to Section 7.02 (a) or (b), Pitney Bowes may consent to Office Systems'
engaging in such competing business; provided that such consent shall not be
unreasonably withheld if but only if such competing business is limited to such
specific contract or customer requirement and is determined by Pitney Bowes to
be outside the scale and scope of its facilities management business. In such
case, Pitney Bowes will use reasonable efforts to respond to Office Systems'
request in a timely manner.

                  (c) In consideration of the promises and representations of
Office Systems under this Agreement, Pitney Bowes covenants and agrees that, for
a period of two years following the Distribution Date, neither Pitney Bowes nor
any member of the Pitney Bowes Group nor any of their respective successors or
assigns will, directly or indirectly, engage in, or have any interest
(including, as agent, partner, consultant or shareholder) in any other person,
firm, corporation or other entity engaged in, any business activities, in the
United States, the United Kingdom or Europe (except the marketing and
maintenance of copiers in the United Kingdom in a manner and on a scale
substantially consistent with past practice), competitive with the business or
current products of the Office Systems Group as of the Distribution Date.

                  (d) Notwithstanding the preceding paragraphs, if either party
acquires a firm, corporation or other entity (the "Acquired Business") after the
Distribution Date, that party may operate the Acquired Business in a manner
substantially consistent with past practice, even if a portion of the Acquired
Business is in competition with the other party's business; provided that the
competing portion of the Acquired Business is incidental to the Acquired
Business, taken as a whole.

                  (e) If Pitney Bowes at any time asserts that Office Systems is
in violation of the non-compete clause set forth in Section 7.02 of this
Agreement, based on Office Systems engagement in business activities which
Pitney Bowes believes to be competitive with or similar or related to business
or products reflected in the March 2001 Strategic Plan, Office Systems shall be
entitled to an audit of the March 2001 Strategic Plan by a nationally-recognized
auditing firm. The scope of any such audit shall be limited to a determination
of Pitney Bowes' plans to enter into any such business or offer any products
that it asserts Office Systems has entered into or offered in violation of
Section 7.02. All costs of any such audit shall be borne by the party against
whom the dispute is resolved.

               SECTION 7.03. Further Assurances and Consents. In addition to the
actions specifically provided for elsewhere in this Agreement, each of the
parties

                                       19
<PAGE>

hereto shall use its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things, reasonably necessary,
proper or advisable under applicable laws, regulations and agreements or
otherwise to consummate and make effective the transactions contemplated by this
Agreement, including but not limited to using its reasonable efforts to obtain
any consents and approvals and to make any filings and applications necessary or
desirable in order to consummate the transactions contemplated by this
Agreement; provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to any
third party from whom such consents or approvals are requested or to take any
action or omit to take any action if the taking of or the omission to take such
action would be unreasonably burdensome to the party, its Group or its Group's
business.

                                    ARTICLE 8
                                  MISCELLANEOUS

     SECTION 8.01. Notices. All notices and other communications to any party
hereunder shall be in writing (including telecopy or similar writing) and,
except as noted, shall be deemed given when received addressed as follows:

If to Pitney Bowes, to:

        Pitney Bowes Inc.
        1 Elmcroft Road
        Stamford, CT 06926-0700
        Telecopy: (203) 351-7691
        Attention: Amy C. Corn
        Title: Vice President and Corporate Secretary

With a copy to:

        Davis Polk & Wardwell
        450 Lexington Avenue
        New York, New York  10017
        Telecopy: (212) 450-4800
        Attention: Sarah J. Beshar

If to Office Systems, to:

        Pitney Bowes Office Systems, Inc.
        100 Oakview Drive
        Trumbull, CT  06611
        Telecopy: (203) [   -       ]
        Attention: Chief Executive Officer

                                       20
<PAGE>

With a copy to:

        Pitney Bowes Office Systems, Inc.
        100 Oakview Drive
        Trumbull, CT  06611
        Telecopy: (203) 365-2353
        Attention: General Counsel

Any party may, by written notice so delivered to the other parties, change the
address to which delivery of any notice shall thereafter be made.

               SECTION 8.02. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Pitney Bowes and Office
Systems, or in the case of a waiver, by the party against whom the waiver is to
be effective.

               (b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

               SECTION 8.03. Expenses. Except as specifically provided otherwise
in this Agreement or any Ancillary Agreement, all costs and expenses incurred by
the Pitney Bowes Group in connection with the Distribution and related
transactions shall be paid by Pitney Bowes, and all costs and expenses incurred
by the Office Systems Group in connection with the Distribution and related
transactions shall be paid by Office Systems. Without limiting the foregoing,
the parties agree that Office Systems shall be responsible for and pay the fees,
expenses and other amounts payable to the lenders under Office Systems' credit
facilities and all other fees and expenses incurred in connection therewith.

               SECTION 8.04. Insurance Matters. (a) From and after the date of
this Agreement, Pitney Bowes shall not take or fail to take any action if such
action or inaction, as the case may be, would adversely affect the applicability
of the insurance in effect on the date of this Agreement, listed on Schedule
8.04 hereto, including renewals thereof and applicable predecessor policies,
that covers all or any part of the assets, liabilities, business or employees of
the Office Systems Group with respect to events occurring prior to the
Distribution Date ("Applicable Insurance"), it being understood that in no event
shall Pitney Bowes be obligated to pay premiums with respect to periods after
the Distribution Date in respect of Applicable Insurance.

         (b) Office Systems shall, with respect to any event pursuant to which
coverage may be available under Applicable Insurance (without regard to whether
any deductible or coverage limits would apply), provide prompt notice (which
notice shall, in any event, provide sufficient time for Pitney Bowes to provide
any required notices, make any required filings or otherwise obtain the benefit
of such Applicable Insurance) to Pitney Bowes of all applicable facts and
circumstances relating to such event.

         (c)  (i) With respect to claims under Applicable Insurance, Pitney
Bowes will assist Office Systems in the processing of any such claims as to
which notice has been timely submitted by Office Systems to Pitney Bowes, it
being understood that Office Systems shall be liable for any and all costs,
expenses, damages and liabilities associated with such claims to the extent not
covered by Applicable Insurance, including deductibles payable as further
described in this Section 8.04(c).

     (ii)  With respect to Applicable Insurance where the relevant deductible
has not been included in the accrual (referred to as "accrued insurance" on
Schedule 2.02 hereof) established by Pitney Bowes for such purpose, Office
Systems shall be liable for all of its costs and expenses in connection with
such claims, and Pitney Bowes will remit to Office Systems any insurance
proceeds paid through the Applicable Insurance policies subject to, and
subsequent to, satisfaction of the condition that applicable deductible(s) have
been satisfied by Office Systems consistent with the terms of the Applicable
Insurance policy.

     (iii)     With respect to Applicable Insurance where a deductible is not
payable either pursuant to the terms of the Applicable Insurance policy or
because the deductible is satisfied through accruals (referred to as "accrued
insurance" on Schedule 2.02 hereof), as reflected on Schedule 8.04 hereto,
established by Pitney Bowes for such purpose, Office Systems shall not bear the
liability of an insurance deductible.

     (iv)  With respect to all claims under any Applicable Insurance, in matters
where legal counsel is retained, Office Systems shall be required to use counsel
selected by Pitney Bowes and Pitney Bowes shall have the right to control any
such litigation, to the extent covered by Applicable Insurance and, provided,
however that Pitney Bowes shall not settle such litigation without the prior
consent of Office Systems which consent shall not be unreasonably withheld,
although Office Systems shall be liable for all of its costs and expenses in
connection with such claims (including the fees and expenses in connection with
such claims to the extent not covered by Applicable Insurance (including the
fees and expenses of such counsel)), provided that Office Systems shall have the
right to reject such counsel, subject to the approval of Pitney Bowes, such
approval not to be unreasonably withheld.

       (d)  The parties agree that, to the extent that the Applicable Insurance
applies directly or indirectly to any assets, liabilities, business or employees
of the Office Systems Group, such Applicable Insurance shall be limited to
insured events occurring prior to the Distribution Date.  It is further
understood that such Applicable Insurance shall also be for the benefit of
Pitney Bowes Group to the extent directly or indirectly applicable to any
assets, liabilities, business or employees of Pitney Bowes Group.  In no event
shall Pitney Bowes be liable to Office Systems for any amounts in excess of
moneys received by Pitney Bowes in respect of Applicable Insurance.

       (e)  All notices to be delivered to Pitney Bowes pursuant to this Section
8.04 shall be delivered to Deborah Fasoli, Risk Manager, Pitney Bowes Inc., 1
Elmcroft Road, Stamford, CT 06926-0700, Telecopy: 203-351-6878, with a copy to:
Amy C. Corn, Vice President and Corporate Secretary, Pitney Bowes Inc., 1
Elmcroft Road, Stamford, CT 06926-0700, Telecopy: 203-351-7691.

                                       21

<PAGE>

               SECTION 8.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that neither party may
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement without the consent of the other parties hereto. If any party or
any of its successors or assigns (i) shall consolidate with or merge into any
other Person and shall not be the continuing or surviving corporation or entity
of such consolidation or merger or (ii) shall transfer all or substantially all
of its properties and assets to any Person, then, and in each such case, proper
provisions shall be made so that the successors and assigns of such party shall
assume all of the obligations of such party under the Distribution Documents.

               SECTION 8.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, without regard
to the conflicts of laws rules thereof.

               SECTION 8.07. Counterparts; Effectiveness. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other parties hereto.

               SECTION 8.08. Entire Agreement. This Agreement and the other
Distribution Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersedes all prior
agreements, understandings and negotiations, both written and oral, between the
parties with respect to the subject matter hereof and thereof. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein or in the other Distribution Documents has been made or relied
upon by any party hereto. Neither this Agreement nor any provision hereof is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder. To the extent that the provisions of this Agreement are
inconsistent with the provisions of any other Distribution Document, the
provisions of such other Distribution Document shall prevail.

               SECTION 8.09. Tax Separation Agreement. Except as otherwise
provided herein and not inconsistent with the Tax Separation Agreement, this
Agreement shall not govern any Income Tax, and any and all Liabilities relating
to Income Taxes shall be exclusively governed by the Tax Separation Agreement.

               SECTION 8.10. Jurisdiction. Any Action seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in the United
States District

                                       22
<PAGE>

Court for the Southern District of New York or any other New York State court
sitting in New York County, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient form. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 8.01
shall be deemed effective service of process on such party.

               SECTION 8.11. Existing Arrangements. Except as otherwise
contemplated hereby or by the other Distribution Documents, all prior agreements
and arrangements, including those relating to goods, rights or services provided
or licensed, between the Office Systems Group and the Pitney Bowes Group shall
be terminated effective as of the Distribution Date, if not theretofore
terminated. No such agreements or arrangements shall be in effect after the
Distribution Date unless embodied in the Distribution Documents.

               SECTION 8.12. Termination Prior to the Distribution. The Pitney
Bowes Board of Directors may at any time prior to the Distribution abandon the
Distribution and, by notice to Office Systems, terminate this Agreement (whether
or not the Pitney Bowes Board of Directors has theretofore approved this
Agreement and/or the Distribution).

               SECTION 8.13.  Termination After the Distribution.

               (a) Termination of the Agreement. Except upon the mutual consent
of both parties hereto or an automatic termination as set forth in Section 8.13,
this Agreement shall not be terminable until the third anniversary of the
Distribution Date, and thereafter shall be terminable upon six months' prior
written notice by either party to the other party. Notwithstanding the
immediately preceding sentence, (i) Pitney Bowes may terminate this Agreement
(but not Sections 5.02 and 7.02) at any time if Office Systems shall have failed
to perform any of its material obligations under this Agreement, Pitney Bowes
has notified Office Systems in writing of such failure and such failure shall
have continued for a period of 60 days after receipt by Office Systems of
written notice of such failure and (ii) Office Systems may terminate this
Agreement (but not Sections 5.02 and 7.02) at any time if Pitney Bowes shall
have failed to perform any of its material obligations under this Agreement,
Office Systems has notified Pitney Bowes in writing of such failure and such
failure shall have continued for a period of 60

                                       23
<PAGE>

days after receipt by Pitney Bowes of written notice of such failure. In
addition, a material default by one party of its obligations under Section 7.02
will relieve the other party of its obligations under such Section 7.02, without
relieving the defaulting party of any liability or obligation under such Section
7.02.

               (b) Termination of Covenant Not to Compete. Each party may, at
its option, terminate the provisions of Section 7.02 effective upon or after the
expiration of one year from the Distribution Date; provided that such party has
given six months prior written notice of termination to the other party. Upon
such termination (i) all of the provisions of the non-compete set forth in
Section 7.02 shall cease to apply to each party; (ii) the license of the name
Pitney Bowes (and the associated trademarks) to Office Systems as set forth
under the provisions of the Intellectual Property Agreement shall terminate, (as
set forth in Section 11.04(d) of such Agreement) and (iii) the Canada Reseller
Agreement shall be automatically amended, upon notice of termination, to permit
Pitney Bowes Canada to source its equipment requirements from alternative
suppliers and to require Office Systems to continue to fulfill its obligations
to supply product, as required for an interim period not to exceed nine months
from the date of such notice, during which Pitney Bowes Canada can establish
alternative suppliers on acceptable terms.

               SECTION 8.14. Severability. If any one or more of the provisions
contained in this Agreement should be declared invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions contained in this Agreement shall not in any way be affected or
impaired thereby so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such a declaration, the parties shall modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner so that the transactions contemplated hereby are consummated
as originally contemplated to the fullest extent possible.

               SECTION 8.15. Survival. All covenants and agreements of the
parties contained in this Agreement shall survive the Distribution Date
indefinitely, unless a specific survival or other applicable period is expressly
set forth herein.

               SECTION 8.16.  Captions.  The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

               SECTION 8.17. Specific Performance. Each party to this Agreement
acknowledges and agrees that damages for a breach or threatened breach of any of
the provisions of this Agreement would be inadequate and irreparable harm would

                                       24
<PAGE>

occur. In recognition of this fact, each party agrees that, if there is a breach
or threatened breach, in addition to any damages, the other nonbreaching party
to this Agreement, without posting any bond, shall be entitled to seek and
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction, attachment, or any other
equitable remedy which may then be available to obligate the breaching party (i)
to perform its obligations under this Agreement or (ii) if the breaching party
is unable, for whatever reason, to perform those obligations, to take any other
actions as are necessary, advisable or appropriate to give the other party to
this Agreement the economic effect which comes as close as possible to the
performance of those obligations (including, but not limited to, transferring,
or granting liens on, the assets of the breaching party to secure the
performance by the breaching party of those obligations).

                                       25
<PAGE>

               IN WITNESS WHEREOF the parties hereto have caused this
Distribution Agreement to be duly executed by their respective authorized
officers as of the date first above written.

                                       PITNEY BOWES INC.

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

                                       PITNEY BOWES OFFICE SYSTEMS, INC.

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

                                       26
<PAGE>

                                                                   Schedule 2.01

                            Contributed Subsidiaries

None.
<PAGE>

                                                                   Schedule 2.02

                          Specified Accrued Liabilities

ACCOUNT             DESCRIPTION
-------             -----------

10600               PAYROLL ADVANCES
13000               PREPAID INSURANCE
13010               PREPAID POSTAGE
13050               PREPAID FIELD TRAVEL EXPENSE
13060               PREPAID RENT EXPENSE
13100               PREPAID REAL ESTATE TAXES
16590               RETIREMENT PAYROLL MISC ADJUSTS
16700               RELOCATION CLEARING ACCOUNT
16720               GRP UNIV LIFE EMP DEDUCTIONS
16730               PROP 7 CAS EMP DEDUCTIONS
16740               LONG TERM CARE-EMP DEDUCTIONS
16750               LEGAL - EMP DEDUCTIONS
16760               FIN PLANNING EMP DEDUCTIONS
16860               FICA TAXES CLEARING ACCOUNT
16880               UNEMPLOYMENT INS CLEARING ACCT
16910               DEFERRED 401K & 401A
16920               SPOUSE LIFE INSURANCE
16950               PERSONAL LIFE (PRE-TAX)
16970               CHILD LIFE INSURANCE
20140               UNCLAIMED COMPENSATION
20200               EMPLOYEE SAVINGS BOND DEDUCTION
20230               EMPLOYEE STOCK PURCH INSTALLMENT
20240               EMPLOYEE UNITED FUND DEDUCTIONS
20250               EMPLOYEES CR UND DED
20260               EMPLOYEE GARNISHMENT DEDUCTIONS
20280               RET EMPL WITH - GARNISHMENTS
20290               LTD EMPL WITH - GARNISHMENTS
21100               EMPLOYEES INCOME TAX DEDUCTIONS
21120               UNEMPLOYMENT INS TAX ACCRUED
21130               FEDERAL INS CONTRIBUTION TAX
21140               OTHER SALARY TAX ACCRUED
21200               SALES AND USE TAX ACCRUED
21190               ACCRUED M M I P
21340               ACCRUED PERFORMANCE BASED COMPEN
21380               ACCRUED KE EMPL INCEN PLAN COMP
21620               PAYROLL ACCRUAL
21640               LONG TERM DISABILITY-PRE TAX

                              Schedule 2.02-Page 1
<PAGE>

21740               LONG TERM DISABILITY-POST TAX
21300               ACCRUED COMPANY-PAID 401K CONTRIB.
21320               RESERVE FOR EARLY RETIREMENT
21630               RETIREMENT PLAN TRUST FUND
21650               EXCESS BENEFIT PLAN
21610               ACCIDENT COMPENSATION
21760               DEFERRED INCENTIVE SAVINGS PLAN
21770               PBC BONUS EXCESS PRINCIPAL
21590               RETIREMENT MEDICAL LIABILITY
21560               POST EMPLOYMENT BENEFITS LIABILITY
21580               SUPPLEMENTAL OTHER POSTEMP BENE
20170               ACCRUED INSURANCE
21290               401K PLUS
21300               401K MATCH
21900               SHARE POWER
21910               ACCRUED 401K PLUS
16930               ACCIDENTAL DEATH
16950               PERSONAL LIFE ISN.
16560               EMPLOYEE GROUP MEDICAL
16770               EMPLOYEE METROPOOL COMMUTER DEDUCTION
21230               FIELD MISCELLANEOUS TAXES

                              Schedule 2.02-Page 2
<PAGE>

                                                                   Schedule 4.04

                              Non-Income Tax Claims

Sales, Use and Personal Property Taxes

               1.   Sales and Use Taxes

               (a) Use Taxes. In the event of an audit adjustment related to any
                   ---------
use tax payable by Pitney Bowes for any period prior to August 1, 2001, Office
Systems will indemnify Pitney Bowes for the portion of such adjustment
reflecting Office Systems' actual use tax liability.

               (b) Sales Taxes. In the event of an audit adjustment related to
                   -----------
any sales tax payable by Pitney Bowes for any period prior to August 1, 2001,
Office Systems will indemnify Pitney Bowes for the same portion of such
adjustment that the total sales tax related to the Office Systems Business for
the relevant period (excluding the effect of such adjustment) bears to the total
sales tax of Pitney Bowes (including the Office Systems Business) for the same
period (excluding the effect of such adjustment). The relevant period referred
to in the previous sentence shall be the period used by the tax auditor in
determining the sales tax audit adjustment.

               2.   Personal Property Taxes

               (a) Fixed Assets Taxes. Office Systems will indemnify Pitney
                   ------------------
Bowes for any personal property taxes imposed on fixed assets that are a part of
the Office Systems Business for any period prior to August 1, 2001 based on the
District Office number, a plant code number or a cost center number of a
particular asset.

               (b) Rental Equipment. Office Systems will indemnify Pitney Bowes
                   ----------------
for any personal property taxes imposed on rental equipment for any period prior
to August 1, 2001 in an amount equal to the same portion of the total personal
property taxes imposed on rental equipment that the Office Systems rental
equipment summary ("Schedule C-2") value bears to the total Schedule C-2 value
as determined by the April, 2000 data used in preparation of the assessed value
filings.

               3.   Audit Cooperation

               In the case of any audits of taxes related to sales, use of
property or possession of personal property in any period prior to August 1,
2001, Pitney Bowes shall control such audits, provided that Pitney Bowes shall
keep Office Systems fully informed of all material developments and shall permit
Office

                              Schedule 4.04-Page 1
<PAGE>
Systems a reasonable opportunity to participate in the resolution of any audit-
related issues.

                              Schedule 4.04-Page 2
<PAGE>
                                                                   Schedule 5.01

                                Employee Matters

               SECTION 1. General. Except as otherwise set forth in this
Schedule 5.01, (a) Pitney Bowes shall retain (i) any and all liabilities
relating to or arising out of any employee benefit or compensation arrangement
sponsored, maintained or contributed to by any member of the Pitney Bowes Group
(a "Plan") in respect of any employee or former employee of any member of the
Pitney Bowes Group who is not a Transferred Employee (as hereinafter defined),
and (ii) any and all liabilities relating to or arising out of any Plan in
respect of all Transferred Employees that were incurred or are otherwise related
to any period prior to and including the Distribution Date and

               (b) Pitney Bowes shall have no liability relating to or arising
out of any Plan or otherwise in respect of Transferred Employees to the extent
that any such liability is incurred or otherwise relates to any period after the
Distribution Date.

               SECTION 2. Employees. With respect to each individual who, as of
the Distribution Date, is employed (including persons absent from active service
by reason of Short Term Disability or Long Term Disability, as hereinafter
defined, or absent for reasons not relating to disability, whether paid or
unpaid) in the Office Systems Business ("Transferred Employees"), Office Systems
shall cause the employment of each Transferred Employee to be continued on the
Distribution Date, provided that nothing stated herein shall limit the right of
Office Systems or any Subsidiary to terminate the employment of any Transferred
Employee following the Distribution Date or to reduce or otherwise modify the
position, responsibilities, compensation or benefits of any Transferred Employee
at any time. The employee benefit plans and arrangements maintained by Office
Systems shall give full service credit for purposes of eligibility and vesting
(and in connection with any vacation policy, for purposes of determining the
level of benefit) for any service on or prior to the Distribution Date of a
Transferred Employee with any member of the Pitney Bowes Group. For purposes of
this Agreement, (i) "Short Term Disability" shall mean a condition with respect
to which an employee is receiving benefits, as of the Distribution Date, under
the Pitney Bowes Short Term Disability Plan, and (ii) "Long Term Disability
Benefits" shall mean benefits under the Pitney Bowes Long Term Disability Plan.

                              Schedule 5.01-Page 1
<PAGE>

               SECTION 3.  Qualified Retirement Plans.

             (a) (i) Pitney Bowes Pension Plan. Effective as of the Distribution
                     -------------------------
Date, Transferred Employees (other than Transferred Employees whose age and
service totaled more than 50 as of September 1, 1997, referred to herein as
"Transition Credit Employees") shall cease accruals under the Pitney Bowes
Pension Plan ("Pension Plan"). Subject to Section 3(a)(ii) hereof, Transferred
Employees who have met the Pension Plan's requirements for commencement of
payment of their Pension Plan benefits may begin to receive such benefits
following the Distribution Date (it being understood that in some cases
commencement of benefit payments will be required) in accordance with Pension
Plan provisions.

                 (ii) Transition Credit Employees. Transition Credit Employees
                      ---------------------------
               shall continue to participate in the Pension Plan following the
               Distribution for up to 3 years from the Distribution Date unless
               a proper election is made to receive a distribution from the
               Plan. Transition Credit Employees shall be eligible to receive a
               distribution of their Pension Plan accruals in accordance with
               Pension Plan provisions. Any Transition Credit Employee who
               continues to participate in the Pension Plan following the
               Distribution Date shall do so on the same terms and conditions as
               other Pitney Bowes employees and shall have their service and
               pensionable compensation with the Office Systems Group taken into
               account in determining their benefit under the Pension Plan. The
               rights and benefits of Transition Credit Employees under the
               Pension Plan shall be set forth in the special amendment to the
               Pension Plan intended to specifically govern such rights and
               benefits, consistent with the provisions hereof, effective as of
               the Distribution Date.

                (iii) Transferred Employees with at Least One and Less than 5
                -------------------------------------------------------------
               Years of Service. Transferred Employees who have completed at
               ----------------
               least one and less than 5 years of service as of the Distribution
               Date ("Short Service Employees") shall have their period of
               employment with the Office Systems Group credited towards
               completion of the applicable vesting schedule under the Pension
               Plan with full vesting occurring no later than December 31, 2003,
               subject to their continued employment with Office Systems.
               Transferred Employees who have not completed one year of service
               as of the Distribution Date shall not be eligible to participate
               in the Pension Plan and shall not have their periods of
               employment at the Office Systems Group credited under the Pension
               Plan for any purpose. The accrued benefit, if any, under the
               Pension Plan of Short Service Employees shall not increase on
               account of future service and compensation with the Office
               Systems Group.

               specifically govern such rights and benefits, consistent with the
               terms hereof, effective as of October 1, 2000.

                              Schedule 5.01-Page 2
<PAGE>

                 (iv) No Transfer of Pension Plan Assets and Liabilities. No
                      --------------------------------------------------
               assets or liabilities of the Pension Plan shall be transferred to
               or assumed by any member of the Office Systems Group in
               connection with the Distribution. No member of the Office Systems
               Group shall make any contributions to Pitney Bowes with respect
               to the Pension Plan.

                 (v) No Office Systems Pension Plan. No member of the Office
                     ------------------------------
               Systems Group shall be required, or have any obligation, to
               sponsor a defined benefit plan on or after the Distribution Date.

           (b) Pitney Bowes 401(k) Plan. (i) Prior to the Distribution
               ------------------------
Date, Office Systems shall establish a defined contribution plan (the "OS 401(k)
Plan") for the benefit of Transferred Employees, shall take all necessary
action, if any, to qualify such Plan under Section 401(a) and (k) of the Code
and shall make any and all filings and submissions to the appropriate
governmental agencies required to be made by it in connection with the transfer
of assets described below.

                 (ii) As soon as practicable following the Distribution Date,
               Pitney Bowes shall cause the trustee of the Pitney Bowes 401(k)
               Plan (the "PB 401(k) Plan") to transfer in the form of cash
               (except to the extent otherwise provided below) the full account
               balances of Transferred Employees (and beneficiaries thereof)
               under the PB 401(k) Plan to the appropriate trustee as designated
               by Office Systems under the trust agreement forming a part of the
               OS 401(k) Plan; provided, however, that the portion of any such
               account to which shares of Pitney Bowes common stock or Office
               Systems common stock is credited or to which an outstanding plan
               loan exists shall be transferred in kind to the OS 401(k) Plan.
               As of the date of transfer, the account balances of the
               Transferred Employees shall be credited with appropriate earnings
               attributable to the period from the Distribution Date to the date
               of transfer described herein or shall have been reduced by any
               necessary benefit or withdrawal payments to or in respect of
               Transferred Employees occurring during the period from the
               Distribution Date to the date of transfer described herein.

                (iii) In consideration for the transfer of assets described
               herein, Office Systems, shall, effective as of the date of
               transfer described herein, assume all of the obligations of
               Pitney Bowes in respect of the account balances accumulated by
               Transferred Employees under the PB 401(k) Plan (exclusive of any
               portion of such account balances that are paid or otherwise
               withdrawn prior to the date of transfer described herein) with
               respect to the account balances transferred to the OS 401(k)
               Plan. Pitney Bowes hereby indemnifies Office Systems against and
               agrees to hold it

                              Schedule 5.01-Page 3
<PAGE>

               harmless from any liabilities or claims (including claims for
               benefits or for breach of fiduciary duties, but excluding claims
               for benefits to the extent of the assets transferred hereunder)
               relating to the PB 401(k) Plan (or the qualified status of that
               Plan) that arose prior to the transfer of assets described herein
               or that relate to the operation or administration of such Plan
               prior to the transfer of assets. Office Systems hereby
               indemnifies Pitney Bowes against and agrees to hold it harmless
               from any liabilities or claims relating to the qualified status
               of the OS 401(k) Plan or the operation or administration of such
               Plan following the transfer of assets described herein.

                 (iv) The rights and benefits of Transferred Employees under the
               PB 401(k) Plan shall be set forth in a special amendment to such
               Plan, consistent with the foregoing, effective as of the
               Distribution Date.

               SECTION 4.  Welfare Benefit Plans.

               (a) Welfare Plans. (i) For the period from the Distribution Date
                   -------------
through December 31, 2001 ("Benefit Transition Period"), Pitney Bowes shall
continue to provide benefits for Transferred Employees (and their eligible
spouses and dependants) to the extent provided to such individuals immediately
prior to the Distribution Date under its medical plan, dental plan, long-term
disability plan, short-term disability policy, life insurance plan and
accidental death and dismemberment plan ("Pitney Bowes Welfare Plans"). Office
Systems shall promptly reimburse Pitney Bowes for the costs of such benefits
incurred during the Benefit Transition Period as follows:

                                        (A) Office Systems shall transfer to an
                             account designated by Pitney Bowes a cash amount,
                             based on historical claim levels, on the first day
                             of October 2001, November 2001, December 2001,
                             January 2002 and February 2002 as stipulated in
                             writing by Pitney Bowes to cover the payment of
                             claims by Transferred Employees and their eligible
                             spouses and dependants incurred under the Pitney
                             Bowes Medical Plan and Pitney Bowes Dental Plan
                             during the Benefit Transition Period. No later than
                             December 31, 2002, if the actual claims incurred
                             for these individuals during the Benefit Transition
                             Period are less than the aggregate estimated
                             payments described above, Pitney Bowes shall
                             transfer to Office Systems an amount equal to the
                             excess, and if the actual claims incurred for such
                             period are greater than the aggregate estimated
                             payments, Office Systems shall transfer in cash an
                             amount equal to the underpayment.

               SECTION 8. Severance. The continued employment by the Office
Systems Group of Transferred Employees after the Distribution Date shall not be
deemed a

                              Schedule 5.01-Page 4
<PAGE>

                                        (B) As soon as practicable following the
                             Distribution Date, Pitney Bowes shall cause any
                             Transferred Employee who was receiving benefits
                             under the Pitney Bowes Long Term Disability Plan
                             to be covered by UNUM, or other replacement
                             carrier, such that following such transfer of
                             coverage, neither Pitney Bowes nor Office
                             Systems will be responsible or liable for the
                             income replacement benefits which would
                             otherwise be provided by the Pitney Bowes Long
                             Term Disability Plan. In addition, as soon as
                             practicable following December 31, 2001, Pitney
                             Bowes shall cause any Transferred Employee who
                             becomes entitled to benefits under the Pitney
                             Bowes Long Term Disability Plan during the
                             Benefit Transition Period to be covered by UNUM,
                             or other replacement carrier, such that
                             following such transfer of coverage, neither
                             Pitney Bowes nor Offices Systems will be
                             responsible or liable for the income replacement
                             benefits which would otherwise be provided by
                             the Pitney Bowes Long Term Disability Plan.
                             Office Systems shall reimburse Pitney Bowes in
                             cash on the last day of September 2001, October
                             2001, November 2001 and December 2001, an amount
                             equal to the income replacement benefits
                             provided to Transferred Employees who become
                             eligible for such benefits under the Pitney
                             Bowes Long Term Disability Plan.

                                        (C) Office Systems shall provide to
                             Transferred Employees who are receiving income
                             replacement benefits under the Pitney Bowes Long
                             Term Disability Plan as of the Distribution Date
                             medical benefits which are comparable, in terms of
                             coverage and cost sharing arrangements, to the
                             medical benefits provided to active Transferred
                             Employees for a period of three years following the
                             Distribution Date.

                             (ii) As of December 31, 2001, Office Systems will
               cease participation in the foregoing Pitney Bowes Welfare Plans
               and will establish or designate welfare plans within the meaning
               of Section 3(2) of the Employee Retirement Income Security Act of
               1974, as amended, for the benefit of Transferred Employees (the
               "Replacement Welfare Plans"). Claims incurred by Transferred
               Employees on and after January 1, 2002 shall be the
               responsibility of the Replacement Welfare Plans.

                             (iii) During the Benefit Transition Period, Pitney
               Bowes shall provide coverage and benefits for Transferred
               Employees and their beneficiaries under Title X of the
               Consolidated Omnibus Budget Reconciliation Act of 1985 and
               Section 4980B of the Code and Office

                              Schedule 5.01-Page 5

<PAGE>

               Systems shall reimburse to Pitney Bowes the cost of providing
               such benefits. For periods beginning after the Benefit Transition
               Period, Office Systems shall assume full responsibility for the
               provision of such benefits and Pitney Bowes shall have no
               liability therefor.

               (b) Retiree Medical Plan. As of the Distribution Date,
                   --------------------
Transferred Employees shall not be eligible, or become eligible, to participate
in or receive benefits under the Pitney Bowes Retiree Medical Plan (the "Retiree
Medical Plan") except as set forth below:

                  (i) 55/10 on the Distribution Date: Any Transferred Employee
                      ------------------------------
               who has completed at least 10 years of service with Pitney Bowes
               on or after attainment of age 45 and has attained at least age 55
               as of the Distribution Date (each such Transferred Employee is
               referred to as an "Eligible Transferred Employee" and is listed
               on Schedule 5.4(b)(i) hereto) shall be entitled to participate in
               the Retiree Medical Plan following termination of employment from
               Office Systems. Each Eligible Transferred Employee's
               participation in the Retiree Medical Plan shall be subject to the
               terms and conditions of such Plan as in effect at the time such
               Employee claims benefits thereunder (other than the requirements
               relating to eligibility to participate in such Plan), including
               provisions of such Plan regarding the ability of Pitney Bowes to
               amend, modify and terminate such Plan.

                 (ii) 55/10 within 3 years of the Distribution Date: Any
                      ---------------------------------------------
               Transferred Employee who has (x) completed at least 10 years of
               service with Pitney Bowes and Office Systems on or after
               attainment of age 45 within 3 years of the Distribution Date and
               (y) has attained age 55 within 3 years of the Distribution Date
               ("Qualified Transferred Employee") shall be entitled to
               participate in the Retiree Medical Plan following termination of
               employment from Office Systems. Each Qualified Transferred
               Employee's participation in the Retiree Medical Plan shall be
               subject to the terms and conditions of such Plan as in effect at
               the time such Employee claims benefits thereunder including any
               requirements relating to eligibility to participate in such Plan
               and Pitney Bowes' right to amend, modify or terminate such Plan.
               For example, if the eligibility requirements at the time such
               Employee terminates employment from Office Systems and seeks
               benefits under such Plan are age 60 with 15 years if service,
               such Qualified Transferred Employee must satisfy such 60/15
               requirements.

                (iii)     At least age 45:  Any Transferred Employee who is at
                          ---------------

               least age 45 on the Distribution Date and (x) attains age 55 and
               (y) completes at

                              Schedule 5.01-Page 6

<PAGE>

               least 10 years of service with Pitney Bowes and Office Systems on
               or after attainment of age 45 and who is not covered in the above
               eligibility groups shall be entitled to participate in the
               Retiree Medical Plan as provided hereinafter. Such Transferred
               Employee shall pay the entire cost of such coverage as determined
               by Pitney Bowes. Such Transferred Employee's participation in the
               Retiree Medical Plan shall be subject to the terms and conditions
               of such Plan as in effect at the time such Transferred Employee
               claims benefits thereunder, including any requirements relating
               to eligibility to participate in such Plan and Pitney Bowes'
               right to amend, modify or terminate such Plan.

               SECTION 5. Workers Compensation. Office Systems shall be
responsible for all workers compensation obligations related to claim events
occurring on or after the Distribution Date, with respect to any employee or
former employee of the Office Systems Business, including, but not limited to,
any Transferred Employee. Pitney Bowes shall be responsible for all workers
compensation obligations related to claim events occurring prior to the
Distribution Date with respect to any employee or former employee of the Office
Systems Business, including, but not limited to, any Transferred Employee.

               SECTION 6.  Stock-Based Plans.

               (a) Pitney Bowes Stock Plan. Pitney Bowes and Office Systems
                   -----------------------
shall use their reasonable best efforts to take all actions necessary or
appropriate so that each Transferred Employee who has been granted options on
the common stock of Pitney Bowes pursuant to the Pitney Bowes Stock Plan and who
has outstanding options as of the Distribution Date shall have such options
equitably adjusted to reflect a change in the fair market value of Pitney Bowes
following the Distribution Date. In addition, such Transferred Employees shall
be granted options on the common stock of Office Systems under the Office
Systems Stock Plan following the Distribution Date with an intrinsic value
intended to make up for the reduced intrinsic value occurring by reason of their
Pitney Bowes options being adjusted. Transferred Employees shall not receive any
further grants of Pitney Bowes stock options following the Distribution Date.
For purposes of Pitney Bowes stock options granted to Transferred Employees
described herein, service with Office Systems will be recognized to satisfy any
vesting schedule with respect to such options that has not been satisfied as of
the Distribution Date. The Distribution will not result in a termination of
employment or otherwise be considered an exercise or forfeiture event under such
Plan or option award agreement. However, termination of employment from Office
Systems will be treated as a termination event under such Plan or option award
agreement. In any event, the rights and benefits of Transferred Employees under
the Pitney Bowes Stock Plan shall be set forth in the special amendment to such
Plan intended to specifically govern such rights and benefits, consistent with
the terms hereof, effective as of October 1, 2000.

                             Schedule 5.01-Page 7

<PAGE>

               (b) Employee Stock Purchase Plan. Transferred Employees shall
                   ----------------------------
cease participation in the Pitney Bowes Employee Stock Purchase Plan as of the
Distribution Date and shall have their payroll deductions as of such date paid
to them in accordance with the terms of such Plan. Transferred Employees shall
not participate in such Plan following the Distribution Date.

               SECTION 7. Bonus and Profit Incentive Plans.

               (a) PBC and Annual Incentive Awards. Any Transferred Employee who
                   -------------------------------
is eligible for incentive compensation pursuant to the Pitney Bowes Performance
Based Compensation Program or who is eligible for incentive compensation under
the Pitney Bowes Key Employees' Incentive Plan shall have any such incentive
compensation paid to him or her as soon as practicable following the
Distribution Date. Any payments referred to in the preceding sentence shall be
paid by Pitney Bowes and based on the period of employment with Pitney Bowes
during calendar year 2001 through the Distribution Date and shall be further
based on the evaluation criteria customarily applied pursuant to the respective
incentive pay Program or Plan in which the Transferred Employee participates.
Transferred Employees shall not participate in any such Pitney Bowes Program or
Plan following the Distribution Date.

               (b) CIUs. Any Transferred Employee who is eligible for cash
                   ----
incentive units ("CIUs") under the Pitney Bowes Long Term Incentive Program
shall have the value of his or her CIUs paid in cash in accordance with the
terms and conditions of such Program based on the number of completed months of
service with Pitney Bowes during each 36 month CIU cycle and on the extent that
performance-based targets associated with the CIUs are achieved. Any such CIU
shall be paid to each eligible Transferred Employee at the time other
participants in the CIU program receive their payments based on the completion
of a 36 month cycle. For purposes of this prorated calculation, the targeted
payout shall be multiplied by a fraction, the numerator of which is the
Transferred Employee's total number of completed months of active service with
the relevant Group during the particular CIU cycle through the Distribution Date
and the denominator of which is 36. Transferred Employees shall not participate
in such Program following the Distribution Date.

               (c) Excluded Arrangements. Mr. Marc C. Breslawsky entered into a
                   ---------------------
Separation Agreement with Pitney Bowes effective as of October 27, 2000 and a
related letter agreement of the same date (collectively, the "MB Agreements") in
which his rights and obligations under certain plans and arrangements of Pitney
Bowes, identified therein, are separately described. Pitney Bowes and Offices
Systems agree that, in the case of Mr. Breslawsky, the MB Agreements shall not
be affected by, and shall supersede any contrary provisions of, this
Distribution Agreement.

                             Schedule 5.01 -Page 8
<PAGE>

               SECTION 8. Severance. The continued employment by the Office
Systems Group of Transferred Employees after the Distribution Date shall not be
deemed a severance of employment of such Transferred Employees from Pitney Bowes
for purposes of any policy, Plan, program or agreement of Pitney Bowes or any of
its Subsidiaries that provides for the payment of severance, salary continuation
or similar benefits.

               SECTION 9. Deferred Compensation. Pitney Bowes shall retain as of
the Distribution Date all of the obligations and liabilities of Pitney Bowes and
any of its Affiliates (including, without limitation, office systems as a
division thereof) for any Transferred Employee under all non-qualified deferred
compensation and retirement plans of Pitney Bowes and its Affiliates and any
reserve or accrual in respect of such Transferred Employees shall be retained by
Pitney Bowes.

               SECTION 10. No Third Party Beneficiaries. Neither Transferred
Employees nor any current, former or retired employee of the Pitney Bowes Group
shall be entitled to enforce the provisions of this Schedule 5.01 against the
respective parties as third party beneficiaries thereof.

                             Schedule 5.01 -Page 9
<PAGE>

                                 SCHEDULE 8.04
                                   INSURANCE
Occurrence Policies
Comprehensive Automobile Liability*
Commercial General/Products Liability*
Workers' Compensation and Employers Liability*
Aircraft Liability (Non-Owned)
Financial Services Excess Umbrella
International Excess and Difference-In-Conditions
HealthCare Purchases Professional Liability
Property (Global) including Ocean Cargo
Travel Accident
Umbrella (Excess) Liability

*Accruals have been established to cover deductibles

Claims Made Policies
Specialty Errors & Ommissions Liability
Employment Practices Liability
Executive Risk Policies
        Directors & Officers Liability
        Fiduciary Liability
        Kidnap/Ransom and Extortion
        Outside Directorship
Excess Directors & Officers Liability
Excess Fiduciary Liability
Pollution and Remediation Legal Liability (3rd Party Dispositions)

                             Schedule 8.04 -Page 1<PAGE>

                                                                    EXHIBIT 10.4

                         INTELLECTUAL PROPERTY AGREEMENT

                                     between

                                Pitney Bowes Inc.

                                       and

                        Pitney Bowes Office Systems, Inc.

                         Dated as of ____________, 2001
<PAGE>

                                TABLE OF CONTENTS

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

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----

ARTICLE 1
---------
     DEFINITIONS
     -----------

ARTICLE 2
---------
     ASSIGNMENT
     ----------
<S>     <C>                                                                                    <C>
     SECTION 2.01.  Grant of Assignment..............................................................6
     SECTION 2.02.  Prior Grants and Assumption of Liability.........................................7
     SECTION 2.03.  Assignment Disclaimer............................................................7

ARTICLE 3
---------
     LICENSES AND TRANSFERS
     ----------------------
     SECTION 3.01.  License Grant....................................................................7
     SECTION 3.02.  License Restrictions.............................................................8
     SECTION 3.03.  Licensee Undertakings............................................................9
     SECTION 3.04.  Non-Trademark Use................................................................9
     SECTION 3.05.  Reservation of Rights............................................................9
     SECTION 3.06.  Title to Patents................................................................10

ARTICLE 4
---------
     PERMITTED SUBLICENSES
     ---------------------
     SECTION 4.01.  Sublicenses to Subsidiaries and to Authorized Manufacturers.....................10
     SECTION 4.02.  Authorized Dealers' Use of Marks................................................11
     SECTION 4.03.  Enforcement of Agreements.......................................................12

ARTICLE 5
---------
     TRADEMARK USAGE GUIDELINES
     --------------------------
     SECTION 5.01.  Trademark Usage Guidelines......................................................12
     SECTION 5.02.  Trademark Reviews...............................................................12

ARTICLE 6
---------
     TRADEMARK USAGE GUIDELINE ENFORCEMENT
     -------------------------------------
     SECTION 6.01.  Initial Guideline Cure Period...................................................13
     SECTION 6.02.  Second Guideline Cure Period....................................................13
     SECTION 6.03.  Final Guideline Cure Period.....................................................13

ARTICLE 7
---------
     QUALITY STANDARDS
     -----------------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----

<S>       <C>                                                                                   <C>
     SECTION 7.01.  General.........................................................................14
     SECTION 7.02.  Quality Standards...............................................................14
     SECTION 7.03.  Quality Control Reviews.........................................................14
     SECTION 7.04.  Product Discontinuation.........................................................15

ARTICLE 8
---------
     QUALITY STANDARD ENFORCEMENT
     ----------------------------
     SECTION 8.01. Initial Quality Standard Cure Period.............................................15
     SECTION 8.02.  Second Quality Standard Cure Period.............................................15
     SECTION 8.03.  Final Quality Standard Cure Period..............................................16

ARTICLE 9
---------
     PROTECTION OF LICENSED MARKS, LICENSED COPYRIGHTS, LICENSED PATENTS
     -------------------------------------------------------------------
     AND LICENSED TECHNOLOGY
     -----------------------
     SECTION 9.01.  Ownership and Rights............................................................16
     SECTION 9.02.  Protection of Licensed Marks, Licensed Copyrights, Licensed
              Patents and the Licensed Technology...................................................17
     SECTION 9.03.  Similar Marks, Copyrights and Patents...........................................17
     SECTION 9.04.  Infringement Proceedings........................................................18

ARTICLE 10
----------
     CONFIDENTIALITY
     ---------------
     SECTION 10.01.  General........................................................................18

ARTICLE 11
----------
     INDEMNIFICATION
     ---------------
     SECTION 11.01.  Office Systems Indemnification of Pitney Bowes.................................19
     SECTION 11.02.  Insurance; Third Party Obligations; Tax Benefits...............................19
     SECTION 11.03.  Notice and Payment of Claims...................................................19
     SECTION 11.04.  Notice and Defense of Third-Party Claims.......................................20
     SECTION 11.05.  Contribution...................................................................21
     SECTION 11.06.  Non-Exclusivity of Remedies....................................................21

ARTICLE 12
----------
     TERM AND TERMINATION
     --------------------
     SECTION 12.01.  Term...........................................................................22
     SECTION 12.02.  Voluntary Termination..........................................................22
     SECTION 12.03.  Survival.......................................................................22
     SECTION 12.04.  Other Termination..............................................................22
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----

ARTICLE 13
----------
     LIMITATION OF LIABILITY
     -----------------------

ARTICLE 14
----------
     MISCELLANEOUS PROVISIONS
     ------------------------
<S>     <C>                                                                                  <C>
     SECTION 14.01.  Disclaimer.....................................................................23
     SECTION 14.02.  Other Agreements...............................................................23
     SECTION 14.03.  No Implied Licenses............................................................23
     SECTION 14.04.  Further Assurances and Consents................................................24
     SECTION 14.05.  Infringement Suits.............................................................24
     SECTION 14.06.  No Other Obligations...........................................................24
     SECTION 14.07.  Force Majeure..................................................................24
     SECTION 14.08.  Entire Agreement...............................................................25
     SECTION 14.09.  Governing Law..................................................................25
     SECTION 14.10.  Waiver of Jury Trial...........................................................25
     SECTION 14.11.  Notices........................................................................26
     SECTION 14.12.  Nonassignability...............................................................27
     SECTION 14.13.  Severability...................................................................27
     SECTION 14.14.  Failure or Indulgence Not Waiver; Remedies Cumulative..........................27
     SECTION 14.15.  Amendment......................................................................27
     SECTION 14.16.  Counterparts...................................................................28

</TABLE>

                                      iii
<PAGE>

Schedule A-1 - Assigned Marks
Schedule A-2 - Licensed Marks
Schedule B - Licensed Patents
Schedule C - Exceptions to License Restrictions
Schedule D - Quality Standards and Trademark Usage Guidelines

                                       iv
<PAGE>

         This Intellectual Property Agreement (the "Agreement") is between
Pitney Bowes Inc., a Delaware corporation ("Pitney Bowes"), and Pitney Bowes
Office Systems, Inc., a Delaware corporation ("Office Systems").

         WHEREAS, the Board of Directors of Pitney Bowes has determined that it
is in the best interests of Pitney Bowes and its stockholders to spin-off the
Office Systems Business (as defined below);

         WHEREAS, as part of the foregoing, Pitney Bowes and Office Systems have
entered into a Distribution Agreement (as defined below) which provides, among
other things, for the transfer of certain Office Systems assets and Office
Systems liabilities, the distribution to the holders of the issued and
outstanding shares of common stock, par value $1.00 per share, of Pitney Bowes
of 100% of the issued and outstanding shares of common stock, par value $.01 per
share, of Office Systems (the "Distribution") and the execution and delivery of
certain other agreements that will govern certain other matters following the
Distribution;

         WHEREAS, the parties desire to enter into an agreement that provides
for Pitney Bowes to assign to Office Systems the Assigned Marks and the Assigned
Copyrights (each as defined below) and to license to Office Systems the Licensed
Marks, the Licensed Copyrights, the Licensed Patents and the Licensed Technology
(each as defined below) from and after the Distribution Date (as defined below);
and

         NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement; the parties hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

         For the purpose of this Agreement, the following capitalized terms are
defined in this Article 1 and shall have the meaning specified herein:

         "Action" means any demand, claim, suit, action, arbitration, inquiry,
investigation or other proceeding by or before or any regulatory or governmental
agency or authority or any arbitration or mediation tribunal.

         "Affiliate" has the meaning set forth in the Distribution Agreement.
<PAGE>

         "Agreement" has the meaning set forth in the preamble hereto, as such
agreement may be amended and supplemented from time to time in accordance with
its terms.

         "Ancillary Agreement" means each of the Distribution Agreement, the Tax
Separation Agreement, the Transition Services Agreement, the Canada Reseller
Agreement, the Management Services Reseller Agreement, the Vendor Financing
Agreement, the Assignment and Novation Agreements, the Sublease Agreements, and
the Sublease and License Agreements.

         "Assigned Copyrights" means the Copyrights as owned by Pitney Bowes and
used solely within the Office Systems business to be transferred to Office
Systems on a quitclaim basis pursuant to the terms of this Agreement.

         "Assigned Marks" means the Marks set forth on Schedule A-1 hereto.

         "Assignment and Novation Agreements" has the meaning set forth in the
Distribution Agreement.

         "Authorized Dealer" means any distributor, dealer, OEM customer,
systems integrator or other agent that on or after the Distribution Date is
authorized to market, advertise, sell, lease, rent, service or otherwise offer
Office Systems Business Products. Office Systems will periodically provide
Pitney Bowes with a list of the then current Authorized Dealers within a
reasonable period after Pitney Bowes' request.

         "Authorized Manufacturer" means any original equipment manufacturer,
producer, dealer or other agent that on or after the Distribution Date is
authorized to build, create, design, compile or otherwise build for Sale Office
Systems Business Products. Office Systems will periodically provide Pitney Bowes
with a list of the then current Authorized Manufacturers within a reasonable
period after Pitney Bowes' request.

         "Canada Reseller Agreement" has the meaning set forth in the
Distribution Agreement.

         "Change of Control" means (i) the direct or indirect acquisition (by
merger, consolidation, business combination or otherwise) by any Person or group
of Persons of beneficial ownership (as defined in Rule 13d-1 and Rule 13d-5
under the Securities Exchange Act of 1934) of 40% or more of the Total Voting
Power of Office Systems, (ii) any merger, consolidation or other business
combination of Office Systems or a Subsidiary of Office Systems with any Person
after giving effect to which (x) the shareholders of Office Systems immediately

                                       2
<PAGE>

prior to such transaction do not own at least 60% of the Total Voting Power of
the ultimate parent entity of the parties to such transaction or (y) individuals
who were directors of Office Systems immediately prior to such transaction (or
their designees) do not constitute a majority of the board of directors of such
ultimate parent entity and (iii) the direct or indirect acquisition by any
Person or group of Persons of all or substantially all of the assets of Office
Systems.

         "Collateral Materials" means all packaging, tags, labels, advertising,
promotions, display fixtures, instructions, warranties and other materials of
any and all types associated with the Office Systems Business Products that are
marked with at least one of the Licensed Marks.

         "Confidential Information" means any non-public, confidential or
proprietary information relating to a disclosing party, whether or not technical
in nature, including any information that is designated by the disclosing party
as Confidential Information at the time of its disclosure, either by a written
or visual confidentiality designation, or orally, provided that (i) written
confirmation of such confidential status is provided to the receiving party
within ten (10) days thereafter or (ii) such information would, under the
circumstances, appear to a reasonable person to be confidential or proprietary.
Notwithstanding the foregoing, "Confidential Information" does not include
information, technical data or know-how which: (i) is in the public domain at
the time of disclosure or becomes available thereafter to the public without
restriction, and in either case not as a result of the act or omission of the
receiving party; (ii) is rightfully obtained by the receiving party from a third
party without restriction as to disclosure; (iii) is lawfully in the possession
of the receiving party at the time of disclosure by the disclosing party and not
otherwise subject to restriction on disclosure; (iv) is approved for disclosure
by prior written authorization of the disclosing party; or (v) is developed
independently and separately by either party without use of the disclosing
party's Confidential Information.

         "Copyright" means (i) any copyright in any original works of authorship
fixed in any tangible medium of expression as set forth in 17 U.S.C. Section 101
et seq., whether registered or unregistered, including any applications for
registration thereof and (ii) any corresponding foreign copyrights under the
laws of any jurisdiction, in each case, whether registered or unregistered, and
any applications for registration thereof.

         "Credit Agreement" has the meaning set forth in the Distribution
Agreement.

         "Distribution" has the meaning set forth in the preamble.

                                       3
<PAGE>

         "Distribution Agreement" means the Distribution Agreement between
Pitney Bowes and Office Systems dated the date hereof.

         "Distribution Date" has the meaning set forth in the Distribution
Agreement.

         "Finally Determined" means, with respect to any Action or other matter,
that the outcome or resolution of such Action or matter has been judicially
determined by judgment or order not subject to further appeal or discretionary
review.

         "Group" means, as the context requires, the Office Systems Group or the
Pitney Bowes Group.

         "Licensed Copyrights" means the Copyrights owned by Pitney Bowes at the
time of the Distribution and used by both Pitney Bowes and Office Systems and
licensed to Office Systems pursuant to the terms of this Agreement.

         "Licensed Marks" means the Marks set forth on Schedule A-2 hereto.

         "Licensed Patents" means the Patents set forth on Schedule B hereto.

         "Licensed Technology" means Pitney Bowes' Technology and related
technical know-how as used in Office Systems Business prior to the Distribution
Date and licensed to Office Systems pursuant to the terms of this Agreement.

         "Losses" means, with respect to any Person, any and all damage, loss,
liability and expense incurred or suffered by such Person (including, without
limitation, reasonable expenses of investigation and reasonable attorneys' fees
and expenses in connection with any and all Actions or threatened Actions).

         "Management Services Reseller Agreement" has the meaning set forth in
the Distribution Agreement.

         "Mark" means any trademark, service mark, trade name, domain name, and
the like, or other word, name, symbol or device, or any combination thereof,
used or intended to be used by a Person to identify and distinguish the products
or services of that Person from the products or services of others and to
indicate the source of such goods or services, including without limitation all
registrations and applications therefor throughout the world and all common law
and other rights therein throughout the world.

         "Office Systems" has the meaning set forth in the preamble.

                                       4
<PAGE>

         "Office Systems Business" means the business of Office Systems.

         "Office Systems Business Products" means any and all products and
related services of the Office Systems Business commercially released or
practiced prior to the Distribution Date and similar products and services
commercially released or practiced after the Distribution Date.

         "Office Systems Group" has the meaning set forth in the Distribution
Agreement.

         "Patent" means any patent, utility model, design patent, design
registration, certificate of invention or other governmental grant for the
protection of inventions or industrial designs and all reissues, renewals,
re-examinations and extensions of any of the foregoing, any applications of the
foregoing and any continuations-in-part, foreign equivalents (if any) and any
issued patents arising out of the foregoing during the term of this Agreement.

         "Permitted Geographic Areas" means the United States of America, its
possessions and territories and the United Kingdom.

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

         "Pitney Bowes" has the meaning set forth in the preamble.

         "Pitney Bowes Business" means the business of Pitney Bowes.

         "Pitney Bowes Group" has the meaning set forth in the Distribution
Agreement.

         "Quality Standards" means standards of quality applicable to the Office
Systems Business Products, as in use immediately prior to the Distribution Date
and attached hereto as Schedule D.

         To "Sell" a product means to sell, rent, transfer, lease, license or
otherwise dispose of a product. "Sale" and "Sold" have the corollary meanings
ascribed thereto.

         "Sublease Agreements" has the meaning set forth in the Distribution
Agreement.

                                       5
<PAGE>

         "Sublease and License Agreements" has the meaning set forth in the
Distribution Agreement.

         "Subsidiary" of any Person means a corporation or other organization
whether incorporated or unincorporated of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; provided,
however, that no Person that is not directly or indirectly wholly- owned by any
other Person shall be a Subsidiary of such other Person unless such other Person
controls, or has the right, power or ability to control, that Person. For
purposes of this Agreement, Office Systems shall be deemed not to be a
subsidiary of Pitney Bowes.

         "Tax Separation Agreement" has the meaning set forth in the
Distribution Agreement.

         "Technology" means technological models, algorithms, manufacturing
processes, design processes, behavioral models, logic diagrams, schematics, test
vectors, computer and electronic data processing and other apparatus programs
and software (object code and source code), databases and documentation thereof,
trade secrets, technical information, specifications, websites, ideas,
knowledge, data or the like. The term Technology includes Copyrights, trade
secrets and any other intellectual property right, but expressly does not
include (i) any Mark thereof or (ii) any Patents therefor.

         "Third Party" means a Person other than Pitney Bowes and its
Subsidiaries and Office Systems and its Subsidiaries.

         "Trademark Usage Guidelines" means the guidelines for proper usage of
the Licensed Marks, as in use immediately prior to the Distribution Date and
attached hereto as Schedule D, as such guidelines may be revised and updated in
writing by Pitney Bowes from time to time.

         "Transition Services Agreement" has the meaning set forth in the
Distribution Agreement.

         "Vendor Financing Agreement" has the meaning set forth in the
Distribution Agreement.

                                       6
<PAGE>

                                    ARTICLE 2
                                   ASSIGNMENT

         SECTION 2.01. Grant of Assignment. Subject to Sections 2.02 and 2.03
below, Pitney Bowes hereby grants, conveys and assigns (and agrees to cause its
appropriate Subsidiaries to grant, convey and assign) to Office Systems all
right, title and interest in and to the Assigned Marks and the goodwill
associated therewith, and the Assigned Copyrights to be owned and enjoyed by
Office Systems, its successors and assigns.

         SECTION 2.02. Prior Grants and Assumption of Liability. Office Systems
acknowledges and agrees that the foregoing assignment is subject to any and all
licenses or other rights that may have been granted by or to Pitney Bowes or any
of its Subsidiaries with respect to the Assigned Marks and Assigned Copyrights
prior to the Distribution Date. Pitney Bowes shall respond to reasonable
inquiries from Office Systems regarding any such prior grants. In order to
assist Office Systems in its administration of the Assigned Marks, but without
making any representation or warranty as to its completeness, and without
assuming any liability for any failure to disclose any such prior grants, Pitney
Bowes has listed on Schedule A-1 certain information relating to prior grants.

         SECTION 2.03. Assignment Disclaimer. The parties acknowledge and agree
that the foregoing assignments are made on an "as is," quitclaim basis and that
neither Pitney Bowes nor any of its Subsidiaries has made or will make any
warranty whatsoever, express, implied or statutory, including without limitation
any implied warranties of merchantability, fitness for a particular purpose,
title enforceability or non-infringement.

                                    ARTICLE 3
                             LICENSES AND TRANSFERS

         SECTION 3.01. License Grant. (a) Pitney Bowes grants (and agrees to
cause its appropriate Subsidiaries to grant) to the extent that it has a right
to do so and then only if such grant will not cause any member of the Pitney
Bowes Group to incur any financial expense, obligations or liabilities, to
Office Systems a personal, nonexclusive, fully-paid and non-transferable (except
as set forth in Section 14.12) a license to use (i) the Licensed Marks on the
Office Systems Business Products for the term set forth in Section 12.01, unless
earlier terminated, (ii) the Licensed Copyrights, the Licensed Patents and the
Licensed Technology in connection with the Sale and offer for Sale of Office
Systems Business Products in the Permitted Geographic Areas (or, in the case of
Office Systems Business Products in the form of software, in connection with
licensing of Office Systems

                                       7
<PAGE>

Business Products) and (iii) the Licensed Marks in the Permitted Geographic
Areas in the advertisement and promotion of such Office Systems Business
Products. The use of such licenses shall be subject to the confidentiality
provisions outlined in Article 10 in all respects. Any copyrighted material used
by Office Systems shall be revised to remove (x) all Marks owned by Pitney Bowes
that are not licensed to Office Systems by Pitney Bowes hereunder; (y) all
Licensed Marks when use of such copyrighted materials will be outside the
Permitted Geographic Areas, and (z) all Licensed Marks in the event the license
granted to Office Systems hereunder expires or terminates for any reason.

         (b) All license grants made pursuant to this Agreement are subject to
any pre-existing obligation of Pitney Bowes. The license grants made pursuant to
this Agreement shall cover only Marks, Copyrights, Patents and Technology owned
or otherwise held by Pitney Bowes immediately prior to the Distribution Date and
used in connection with the Office Systems Business for the Sale and offer for
Sale of Office Systems Business Products immediately prior to the Distribution
Date and shall not cover any future Marks, Copyrights, Patents and Technology
owned or otherwise held by Pitney Bowes.

         SECTION 3.02. License Restrictions.

         (a) Office Systems may not use any Licensed Mark (either alone or in
connection with other Marks), outside of the Permitted Geographic Areas. Office
Systems may, from time to time, request Pitney Bowes' permission, which
permission shall not be unreasonably withheld, to use the Licensed Marks in
additional geographic areas. Office Systems shall provide to Pitney Bowes a
written request indicating (i) the specific geographic region contemplated and
(ii) the specific products or services contemplated to be used in connection
with any such Licensed Mark. Pitney Bowes shall provide a written response to
Office Systems not later than ninety (90) days after receipt of such request,
indicating whether such request has been granted.

         (b) Office Systems may not use any Licensed Mark in direct association
with another Mark such that the two Marks appear to be a single Mark or in any
other composite manner with any Marks of Office Systems or any Third Party
(other than the Licensed Marks as permitted herein and in association with the
Marks in combined format set forth on Schedule A-2 hereto).

         (c) Office Systems may not use any Licensed Mark (either alone or in
connection with other Marks), Licensed Patent or Licensed Technology in

                                       8
<PAGE>

connection with the marketing, Sale, offer for Sale or provision of any product
or service in violation of the Distribution Agreement.

          (d) Office Systems may only use the Licensed Marks, Licensed Patents,
Licensed Copyrights or Licensed Technology in connection with the Sale and offer
for Sale of Office Systems Business Products.

          (e) In all respects, Office Systems' usage of the Licensed Marks
pursuant to the license granted hereunder shall be in a manner consistent with
the high standards, reputation and prestige represented by the Licensed Marks,
and any usage by Office Systems that is inconsistent with the foregoing shall be
deemed to be outside the scope of the license granted hereunder. As a condition
to the license granted hereunder, Office Systems shall at all times present,
position and promote the Office Systems Business Products marked with one or
more of the Licensed Marks in a manner consistent with the high standards and
prestige represented by the Licensed Marks.

          SECTION 3.03. Licensee Undertakings. As a condition to the license
granted hereunder, Office Systems undertakes to Pitney Bowes that:

          (a) Office Systems shall not use the Licensed Marks in any manner
which is deceptive or misleading, which ridicules or is derogatory to the
Licensed Marks, or which compromises or reflects unfavorably upon the goodwill,
good name, reputation or image of Pitney Bowes or the Licensed Marks, or which
might jeopardize or limit Pitney Bowes' proprietary interest therein.

          (b) Office Systems shall not use the Licensed Marks, the Licensed
Copyrights, the Licensed Patents or the Licensed Technology in connection with
any products or services other than the Office Systems Business Products.

          (c) Office Systems shall not (i) misrepresent to any Person the scope
of its authority under this Agreement, (ii) incur or authorize any expenses or
liabilities chargeable to Pitney Bowes, or (iii) take any actions that would
impose upon Pitney Bowes any obligation or liability to a Third Party other than
obligations under this Agreement, or other obligations which Pitney Bowes
expressly approves in writing for Office Systems to incur on its behalf.

          (d) All press releases and corporate advertising and promotions that
embody the Licensed Marks and messages conveyed thereby shall be consistent with
the high standards and prestige represented by the Licensed Marks.

                                       9
<PAGE>

          (e) Office Systems shall comply in all material respects with all
laws, regulations and governmental orders with respect to the manufacture, Sale,
marketing and distribution of the Office Systems Business Products.

          SECTION 3.04. Non-Trademark Use. Each party may make appropriate and
truthful references to the other party and the other party's products and
Technology.

          SECTION 3.05. Reservation of Rights. Except as otherwise expressly
provided in this Agreement, the Pitney Bowes Group shall retain all right and
title in and to the Licensed Marks, the Licensed Copyrights, the Licensed
Patents and the Licensed Technology, including without limitation:

          (a) All rights of ownership in and to the Licensed Marks, the Licensed
Copyrights, the Licensed Patents and the Licensed Technology;

          (b) The right to use (including the right of the Pitney Bowes Group's
Affiliates to use) the Licensed Marks, either alone or in combination with other
Marks, in connection with the marketing, offer or provision of any product or
service, including any product or service which competes with Office Systems
Business Products, subject to the restrictions set forth in the Distribution
Agreement;

          (c) The right to license Third Parties to use the Licensed Marks, the
Licensed Copyrights, the Licensed Patents and the Licensed Technology or to
assign the Licensed Marks, the Licensed Copyrights, Licensed Patents or the
Licensed Technology; provided that Pitney Bowes shall not license the Licensed
Marks to any Third Party engaging in the commercial copier or facsimile business
in the Permitted Geographic Areas for so long as such license to Office Systems
has not expired or terminated but in no event to exceed a period greater than
two years following the Distribution Date; and

          (d) Notwithstanding any other provision of this Agreement, nothing in
this Agreement shall be construed as obligating Pitney Bowes to obtain or
maintain in force or protect any Licensed Mark, Licensed Copyright, Licensed
Patent or Licensed Technology. Furthermore, Pitney Bowes shall have sole
authority and responsibility to prosecute, amend, abandon and otherwise conduct
all affairs concerning the Licensed Marks, the Licensed Copyrights, the Licensed
Patents and the Licensed Technology in its sole and absolute discretion.

          SECTION 3.06. Title to Patents. In the event that Pitney Bowes shall,
for any reason, determine that it no longer wishes to maintain any issued patent
of the Licensed Patents in the Permitted Geographic Areas, Pitney Bowes shall
notify

                                       10
<PAGE>

Office Systems of its intent and shall provide Office Systems the option to
obtain title to such underlying issued patent, subject to an unrestricted,
worldwide, irrevocable, royalty-free license (including the right to sublicense)
which shall be retained by Pitney Bowes. In the event that Office Systems wishes
to obtain title to the underlying Patent, Pitney Bowes shall assign such Patent
to Office Systems at no cost to Office Systems; provided that Office Systems
shall pay all fees and expenses associated with such assignment.

                                    ARTICLE 4
                              PERMITTED SUBLICENSES

         SECTION 4.01. Sublicenses to Subsidiaries and to Authorized
Manufacturers. (a) Subject to the terms and conditions of this Agreement,
including all applicable Quality Standards and Trademark Usage Guidelines and
other restrictions (including the limitation on the term of the Licensed Marks
as set forth in Section 12.01) in this Agreement, Office Systems may grant
sublicenses to its Subsidiaries to use the Licensed Marks, the Licensed
Copyrights, the Licensed Patents or the Licensed Technology in connection with
the Sale or offer for Sale of Office Systems Business Products in the Permitted
Geographic Areas in accordance with the terms and conditions of this Agreement;
provided, that (i) Office Systems enters into a written sublicense agreement
with each such Subsidiary sublicensee, and (ii) such agreement does not include
the right to grant further sublicenses other than, in the case of a sublicensed
Subsidiary of Office Systems, to another Subsidiary of Office Systems. Office
Systems shall provide copies of such written sublicense agreements to Pitney
Bowes upon request. If Office Systems grants any sublicense rights pursuant to
this Section 4.01(a) and any such sublicensed Subsidiary ceases to be a
Subsidiary, then the sublicense granted to such Subsidiary pursuant to this
Section 4.01(a) shall terminate one hundred eighty (180) days from the date of
such cessation.

          (b) Subject to the terms and conditions of this Agreement, Office
Systems may grant sublicenses to any Authorized Manufacturer to use the Licensed
Patents or the Licensed Technology in accordance with the terms and conditions
of this Agreement; provided, that (i) Office Systems enters into a written
sublicense agreement with each such Authorized Manufacturer sublicensee, (ii)
such agreement does not include the right to grant any further sublicenses and
(iii) the purpose of such agreement shall be solely to facilitate the
manufacture and supply of products to be built for Sale by Office Systems and to
be marketed under the Licensed Marks in the Permitted Geographic Areas. Office
Systems shall provide copies of such written sublicense agreements to Pitney

                                      11
<PAGE>

Bowes upon request. If Office Systems grants any sublicense rights pursuant to
this Section 4.01(b) and any such sublicensed Authorized Manufacturer ceases to
be an Authorized Manufacturer, then the sublicense granted to such Authorized
Manufacturer pursuant to this Section 4.01(b) shall terminate no later than one
hundred eighty (180) days from the date of such cessation.

          (c) All sublicenses granted herein with respect to each Licensed Mark,
Licensed Copyright, Licensed Patent or the Licensed Technology shall expire upon
the expiration or invalidity of such Licensed Mark, Licensed Copyright, Licensed
Patent or the Licensed Technology.

          (d) All sublicenses granted pursuant to this Agreement to a particular
Subsidiary of Office Systems shall terminate one hundred eighty (180) days from
the date that the Subsidiary ceases to be a Subsidiary of Office Systems.

          (e) All sublicenses granted pursuant to this Agreement other than
those granted to Subsidiaries of Office Systems hereunder shall terminate upon
the expiration or termination of this Agreement or upon the expiration or other
termination of the underlying license or rights granted herein.

         SECTION 4.02. Authorized Dealers' Use of Marks. Subject to the terms
and conditions of this Agreement, including all applicable Quality Standards and
Trademark Usage Guidelines and other restrictions in this Agreement, Office
Systems (and those Subsidiaries sublicensed to use the Licensed Marks pursuant
to Section 4.01) may allow Authorized Dealers to, and may allow such Authorized
Dealers to allow other Authorized Dealers to, use the Licensed Marks in the
advertisement and promotion of Office Systems Business Products Sold by such
Authorized Dealers.

         SECTION 4.03. Enforcement of Agreements. Office Systems shall take all
appropriate measures at Office Systems' expense promptly and diligently to
enforce the terms of any sublicense agreement or other agreement with any
Subsidiary, Authorized Manufacturer or Authorized Dealer, or of any existing
agreement with any Authorized Manufacturer or Authorized Dealer, and shall
restrain any such Subsidiary, Authorized Manufacturer or Authorized Dealer from
violating such terms, including without limitation (i) monitoring the
Subsidiaries', Authorized Manufacturers' and Authorized Dealers' compliance with
the relevant Trademark Usage Guidelines and Quality Standards and causing any
noncomplying Subsidiary or Authorized Dealer promptly to remedy any failure,
(ii) terminating such agreement and/or (iii) commencing legal action, in each
case, using a standard of care consistent with Pitney Bowes' practices as of the
Distribution Date. In the event that Pitney Bowes determines that Office Systems
has failed promptly and diligently to enforce the terms of any such agreement

                                       12
<PAGE>

using such standard of care, Pitney Bowes reserves the right to enforce such
terms, and Office Systems shall reimburse Pitney Bowes for its fully allocated
direct costs and expenses incurred in enforcing such agreement, plus all
out-of-pocket costs and expenses.

                                    ARTICLE 5
                           TRADEMARK USAGE GUIDELINES

         SECTION 5.01. Trademark Usage Guidelines. The Office Systems Group,
Authorized Dealers and Authorized Manufacturers shall use the Licensed Marks
only in a manner that is consistent with the Trademark Usage Guidelines.

         SECTION 5.02. Trademark Reviews. At Pitney Bowes' request, Office
Systems agrees to furnish or make available for inspection to Pitney Bowes
samples of all Office Systems Business Products and Collateral Materials of
Office Systems, its Subsidiaries, Authorized Dealers, and Authorized
Manufacturers that are marked with one or more of the Licensed Marks (to the
extent that Office Systems has the right to obtain such samples). If Office
Systems is notified or determines that it or any of its Subsidiaries, Authorized
Dealers or Authorized Manufacturers is not complying with any Trademark Usage
Guidelines, it shall notify Pitney Bowes and the provisions of Article 6 and
Section 4.03 shall apply to such noncompliance.

                                    ARTICLE 6
                      TRADEMARK USAGE GUIDELINE ENFORCEMENT

         SECTION 6.01. Initial Guideline Cure Period. If Pitney Bowes becomes
aware that Office Systems or any Subsidiary, Authorized Dealer or Authorized
Manufacturer is not complying with any Trademark Usage Guidelines, Pitney Bowes
shall notify Office Systems in writing, setting forth in reasonable detail a
written description of the noncompliance and any requested action for curing
such noncompliance. Office Systems shall then have sixty (60) days with regard
to noncompliance by Authorized Dealers or Authorized Manufacturers and thirty
(30) days with regard to noncompliance by Office Systems or any Subsidiary after
receipt of such notice ("Initial Guideline Cure Period") to correct such
noncompliance or submit to Pitney Bowes a written plan to correct such
noncompliance which written plan is reasonably acceptable to Pitney Bowes.

                                       13
<PAGE>

         SECTION 6.02. Second Guideline Cure Period. If noncompliance with the
Trademark Usage Guidelines continues beyond the Initial Guideline Cure Period,
Office Systems and Pitney Bowes shall each promptly appoint a representative to
negotiate in good faith actions that may be necessary to correct such
noncompliance. The parties shall have thirty (30) days following the expiration
of the Initial Guideline Cure Period to agree on corrective actions, and Office
Systems shall have thirty (30) days from the date of an agreement of corrective
actions, but not more than sixty (60) days following expiration of the Initial
Guideline Cure Period, to implement such corrective actions and cure or cause
the cure of such noncompliance ("Second Guideline Cure Period"). In the event
that the parties fail to agree on corrective actions within thirty (30) days
following the expiration of the Initial Guideline Cure Period, the appointed
representatives of Pitney Bowes and Office Systems shall submit to the Operating
Committee (as defined in the Transition Services Agreement) a description of the
noncompliance. The Operating Committee shall attempt to determine and implement
corrective actions. The Operating Committee, in accordance with the procedures
set forth in the Transition Services Agreement, shall attempt to determine and
implement the necessary corrective actions (as determined by it).

         SECTION 6.03. Final Guideline Cure Period. If the noncompliance with
the Trademark Usage Guideline remains uncured, including for failure to agree on
corrective actions after the expiration of the Second Guideline Cure Period,
then at Pitney Bowes' election, Office Systems, or the noncomplying Subsidiary
or Authorized Dealer or Authorized Manufacturer, whichever is applicable,
promptly shall cease using the noncomplying Collateral Materials until Pitney
Bowes determines that Office Systems, or the noncomplying Subsidiary, Authorized
Dealer or Authorized Manufacturer, whichever is applicable, has demonstrated its
ability and commitment to comply with the Trademark Usage Guidelines. If, within
thirty (30) days following the expiration of the Second Guideline Cure Period,
the noncompliance with the Trademark Usage Guidelines remains uncured for any
reason, Pitney Bowes may elect to terminate license of the Licensed Mark giving
rise to such noncompliance. Nothing in this Article 6 shall be deemed to limit
Office Systems' obligations under Section 4.03 above or to preclude Pitney Bowes
from exercising any rights or remedies under Section 4.03 above.

                                       14
<PAGE>

                                    ARTICLE 7
                                QUALITY STANDARDS

         SECTION 7.01. General. Office Systems acknowledges that as a condition
to the rights and the license granted by this Agreement, the Office Systems
Business Products permitted by this Agreement to be marked with one or more of
the Licensed Marks must be offered for Sale and marketed in a manner
substantially similar to that established prior to the Distribution Date and the
Office Systems Business must be operated in a manner at least consistent with
the level of quality and service established prior to the Distribution Date as
to provide protection of the Licensed Marks and the goodwill they symbolize, and
Office Systems further acknowledges that the maintenance of the high quality
standards associated with such products is of the essence of this Agreement.

         SECTION 7.02. Quality Standards. The Office Systems Group and its
Authorized Dealers shall use the Licensed Marks only on and in connection with
Office Systems Business Products that meet or exceed in all respects the Quality
Standards.

         SECTION 7.03. Quality Control Reviews. At Pitney Bowes' request, Office
Systems agrees to furnish or make available to Pitney Bowes for inspection
sample Office Systems Business Products marked with one or more of the Licensed
Marks. Pitney Bowes may also independently conduct customer satisfaction surveys
to determine if the Office Systems Group and its Authorized Dealers and
Authorized Manufacturers are meeting the Quality Standards. Such surveys shall
be conducted no more than three (3) times during the term of this Agreement and
no more than one (1) time in any six (6)-month period; provided that if Office
Systems is not meeting the Quality Standards with respect to the Office Systems
Business Products, or if any survey conducted pursuant to this Agreement
discloses any Quality Standards problem for any reason, then Pitney Bowes shall
have the option to conduct any additional surveys or take investigative and/or
corrective action as in its judgment shall be necessary or appropriate to
resolve the problem, consistent with the terms of this Agreement, including but
not limited to Article 8. Any such surveys shall be provided to Office Systems
by Pitney Bowes for Office Systems' review and comment at least thirty (30) days
prior to Pitney Bowes' distribution of the surveys to any customer. Office
Systems shall not have any approval or other rights in connection with any
survey. Office Systems shall cooperate with Pitney Bowes fully in the
distribution of such surveys. Pitney Bowes shall, at the request of Office
Systems, provide Office Systems with copies of customer surveys used by Pitney
Bowes to determine if Office Systems is meeting the Quality Standards. If Office
Systems is notified or determines that it or any of its Subsidiaries Authorized
Dealers or Authorized Manufacturers is not complying with any

                                       15
<PAGE>

Quality Standards, it shall notify Pitney Bowes and the provisions of Article 8
and Section 4.03 shall apply to such noncompliance.
            ----

         SECTION 7.04. Product Discontinuation. If, at any time during or after
the term of this Agreement, Office Systems discontinues the Sale of an Office
Systems Business Product that has been marked with one or more of the Licensed
Marks, Office Systems shall immediately notify Pitney Bowes in writing of the
discontinuation, and, if Office Systems uses any such Licensed Mark solely in
connection with such discontinued Office Systems Business Product, then Office
Systems shall immediately cease using such Licensed Mark and shall immediately
notify Pitney Bowes in writing of such cessation.

                                    ARTICLE 8
                          QUALITY STANDARD ENFORCEMENT

         SECTION 8.01. Initial Quality Standard Cure Period. If Pitney Bowes
becomes aware that Office Systems or any Subsidiary or Authorized Dealer
sublicensee is not complying with any Quality Standards, Pitney Bowes shall
notify Office Systems in writing, setting forth in reasonable detail a written
description of the noncompliance and any requested action for curing such
noncompliance. Office Systems shall then have thirty (30) days after receipt of
such notice ("Initial Quality Standard Cure Period") to correct such
noncompliance or submit to Pitney Bowes a written plan to correct such
noncompliance which written plan is reasonably acceptable to Pitney Bowes.

         SECTION 8.02. Second Quality Standard Cure Period. If noncompliance
with the Quality Standards continues beyond the Initial Quality Standard Cure
Period, Office Systems and Pitney Bowes shall each promptly appoint a
representative to negotiate in good faith actions that may be necessary to
correct such noncompliance. The parties shall have thirty (30) days following
the expiration of the Initial Quality Standard Cure Period to agree on
corrective actions, and Office Systems shall have thirty (30) days from the date
of an agreement of corrective actions, but not more than sixty (60) days
following expiration of the Initial Quality Standard Cure Period, to implement
such corrective actions and cure or cause the cure of such noncompliance
("Second Quality Standard Cure Period"). In the event that the parties fail to
agree on corrective actions within thirty (30) days following the expiration of
the Initial Quality Standard Cure Period, the appointed representatives of
Pitney Bowes and Office Systems shall submit to the Operating Committee (as
defined in the Transition Services Agreement) a description of the
noncompliance. The Operating Committee, in accordance with the procedures set
forth in the

                                       16
<PAGE>

Transition Services Agreement, shall attempt to determine and implement the
necessary corrective actions (as determined by it).

         SECTION 8.03. Final Quality Standard Cure Period. If the noncompliance
with the Quality Standards remains uncured, including for failure to agree on
corrective actions, after the expiration of the Second Quality Standard Cure
Period, then at Pitney Bowes' election, Office Systems, or the noncomplying
Subsidiary or Authorized Dealer, whichever is applicable, promptly shall cease
offering the noncomplying Office Systems Business Products under the Licensed
Marks until Pitney Bowes determines that Office Systems, or the noncomplying
Subsidiary or Authorized Dealer, whichever is applicable, has demonstrated its
ability and commitment to comply with the Quality Standards. If, within thirty
(30) days following the expiration of the Second Quality Standard Cure Period,
the noncompliance with the Quality Standards remains uncured for any reason,
Pitney Bowes may elect to terminate license of the Licensed Mark giving rise to
such noncompliance ("Final Quality Standard Cure Period"). Nothing in this
Article 8 shall be deemed to limit Office Systems' obligations under Section
4.03 above or to preclude Pitney Bowes from exercising any rights or remedies
under Section 4.03 above.

                                    ARTICLE 9
       PROTECTION OF LICENSED MARKS, LICENSED COPYRIGHTS, LICENSED PATENTS
                             AND LICENSED TECHNOLOGY

         SECTION 9.01. Ownership and Rights. To the extent not contrary to
applicable law, Office Systems agrees not to challenge the ownership or validity
of the Licensed Marks, the Licensed Copyrights, the Licensed Patents or the
Licensed Technology or contest the fact that Office Systems' rights are only
those of a licensee of the Licensed Marks, Licensed Copyrights, Licensed Patents
and Licensed Technology. Office Systems shall not disparage, dilute or, to the
extent not contrary to applicable law, adversely affect the validity of the
Licensed Marks, the Licensed Copyrights, the Licensed Patents or the Licensed
Technology. Office Systems' use of the Licensed Marks and the goodwill
associated therewith shall inure exclusively to the benefit of Pitney Bowes, and
Office Systems shall not acquire or assert any rights in the Licensed Marks, the
Licensed Copyrights, the Licensed Patents or the Licensed Technology. Office
Systems recognizes the value of the goodwill associated with the Licensed Marks,
and that the Licensed Marks may have acquired secondary meaning in the minds of
the public.

         SECTION 9.02. Protection of Licensed Marks, Licensed Copyrights,
Licensed Patents and the Licensed Technology. Office Systems shall assist Pitney
Bowes, at Pitney

                                       17
<PAGE>

Bowes' request and expense, in the procurement and maintenance of Pitney Bowes'
intellectual property rights in the Licensed Marks, the Licensed Copyrights,
Licensed Patents and the Licensed Technology. Office Systems will not grant or
attempt to grant a security interest in the Licensed Marks, the Licensed
Copyrights, the Licensed Patents or the Licensed Technology, or to record any
such security interest in the United States Patent and Trademark Office or
elsewhere, against any trademark application or registration belonging to Pitney
Bowes. Office Systems agrees to, and to cause its Subsidiaries to, execute all
documents reasonably requested by Pitney Bowes to effect further registration
of, maintenance and renewal of the Licensed Marks, the Licensed Copyrights, the
Licensed Patents and the Licensed Technology, recordation of the license
relationship between Pitney Bowes and Office Systems, and recordation of Office
Systems as a registered user. Pitney Bowes makes no warranty or representation
that trademark or patent registrations have been or will be applied for, secured
or maintained in the Licensed Marks, the Licensed Copyrights, the Licensed
Patents or the Licensed Technology throughout, or anywhere within, the world.
Office Systems shall cause to appear on all Office Systems Business Products,
and all Collateral Materials, such legends, markings and notices as may be
required by applicable law or reasonably requested by Pitney Bowes.

         SECTION 9.03. Similar Marks, Copyrights and Patents. Office Systems
agrees not to use, register or attempt to register in any country any Mark,
Copyright or Patent that infringes upon or violates Pitney Bowes' rights in the
Licensed Marks, the Licensed Copyrights, the Licensed Patents or the Licensed
Technology, or any element thereof. If any application for registration is, or
has been, filed in any country by Office Systems which relates to any Mark,
Copyright or Patent that infringes upon or violates Pitney Bowes' rights in the
Licensed Marks, the Licensed Copyrights, the Licensed Patents or the Licensed
Technology, Office Systems shall immediately abandon any such application or
registration or assign it to Pitney Bowes. To the extent not contrary to
applicable law, Office Systems shall not challenge Pitney Bowes' ownership of or
the validity of the Licensed Marks, the Licensed Copyrights, the Licensed
Patents and the Licensed Technology or any application for registration thereof
throughout the world. Office Systems shall not use, register or attempt to
register in any country any copyright, domain name or any other intellectual
property right, whether recognized currently or in the future, or other
designation which would affect the ownership or rights of Pitney Bowes in and to
the Licensed Marks, the Licensed Copyrights, the Licensed Patents and the
Licensed Technology, or otherwise to take any action which would adversely
affect any of such ownership rights, or assist anyone else in doing so. Office
Systems shall cause its Subsidiaries, Authorized Dealers and Authorized
Manufacturers to comply with the provisions of this Section 9.03.

                                       18
<PAGE>

         SECTION 9.04. Infringement Proceedings. In the event that the Office
Systems General Counsel learns of any infringement or violation or threatened
infringement or violation of the Licensed Marks, the Licensed Copyrights, the
Licensed Patents or the Licensed Technology, or any unfair competition, passing-
off or dilution with respect to the Licensed Marks, the Licensed Copyrights, the
Licensed Patents or the Licensed Technology, Office Systems shall notify Pitney
Bowes or its authorized representative giving particulars thereof, and Office
Systems shall provide necessary information and assistance to Pitney Bowes or
its authorized representatives at Pitney Bowes' expense in the event that Pitney
Bowes decides that proceedings should be commenced. Notwithstanding the
foregoing, Office Systems is not obligated to monitor or police use of the
Licensed Marks, the Licensed Copyrights, the Licensed Patents and the Licensed
Technology by Third Parties other than as specifically set forth in Section
4.03. Pitney Bowes shall have exclusive control of any litigation, opposition,
cancellation or related legal proceedings, relating to the use of the Licensed
Marks by Third Parties. The decision whether to bring, maintain or settle any
such proceedings shall be at the exclusive option and expense of Pitney Bowes,
and all recoveries shall belong exclusively to Pitney Bowes. Office Systems
shall not and shall have no right to initiate any such litigation, opposition,
cancellation or related legal proceedings in its own name, but, at Pitney Bowes'
request, agrees to be joined as a party in any action taken by Pitney Bowes to
enforce its rights in the Licensed Marks, the Licensed Copyrights, the Licensed
Patents or the Licensed Technology. Pitney Bowes shall incur no liability to
Office Systems or any other Person under any legal theory by reason of Pitney
Bowes' failure or refusal to prosecute or by Pitney Bowes' refusal to permit
Office Systems to prosecute, any alleged infringement or violation by Third
Parties, nor by reason of any settlement to which Pitney Bowes may agree. In the
event that Pitney Bowes requests that Office Systems be joined as a party in any
action taken by Pitney Bowes to enforce its rights in the Licensed Marks, the
Licensed Copyrights, the Licensed Patents or the Licensed Technology, Pitney
Bowes shall provide outside counsel and pay Office Systems' expenses related to
any such action; provided that Office Systems shall be responsible for the fees
of any separate outside legal counsel or other attorneys' fees or other
expenses.

                                   ARTICLE 10
                                 CONFIDENTIALITY

         SECTION 10.01. General. For the term of this Agreement and for five
years after the termination or expiration of this Agreement, each party shall
retain the other party's Confidential Information in the strictest confidence
(on a need to know basis) and shall not disclose such Confidential Information
to any Person

                                       19
<PAGE>

without the other party's express written consent, other than on a need-to-know
basis to an employee, agent or professional advisor of the receiving party or an
Affiliate thereof. Notwithstanding anything to the contrary in this Agreement,
the obligation to maintain the confidentiality of Confidential Information shall
not apply to the extent that the receiving party is required to disclose such
Confidential Information pursuant to Law or legally enforceable order of a court
or judicial body; provided that the receiving party provides notice to the
disclosing party to enable the disclosing party to seek a protective order or an
injunction.

                                   ARTICLE 11
                                 INDEMNIFICATION

         SECTION 11.01. Office Systems Indemnification of Pitney Bowes. Office
Systems shall indemnify, defend and hold harmless Pitney Bowes and the
respective directors, officers and Affiliates of Pitney Bowes and its
Subsidiaries (the "Pitney Bowes Indemnitees") from and against any and all
Losses incurred or suffered by any of the Pitney Bowes Indemnities arising out
of the use of any Licensed Mark, Licensed Copyright, Licensed Patent or Licensed
Technology by Office Systems or any of its Subsidiaries, Authorized Dealers or
its customers or Authorized Manufacturers or its customers.

         SECTION 11.02. Insurance; Third Party Obligations; Tax Benefits. Any
indemnification pursuant to Section 11.01 shall be paid net of the amount of any
insurance or other amounts that would be payable by any Third Party to the
Indemnified Party (as defined below) in the absence of this Agreement
(irrespective of time of receipt of such insurance or other amounts) and net of
any tax benefit to the Indemnified Party attributable to the relevant payment or
Liability. Such indemnification shall be increased to reflect any tax liability
of the Indemnified Party so that the Indemnified Party receives 100% of the
after-tax amount of any payment or liability. It is expressly agreed that no
insurer or any other Third Party shall be (i) entitled to a benefit it would not
be entitled to receive in the absence of the foregoing indemnification
provisions, (ii) relieved of the responsibility to pay any claims to which it is
obligated or (iii) entitled to any subrogation rights with respect to any
obligation hereunder.

         SECTION 11.03. Notice and Payment of Claims. If any Pitney Bowes
Indemnitee (the "Indemnified Party") determines that it is or may be entitled to
indemnification by any party (the "Indemnifying Party") under Article 11 (other
than in connection with any Action subject to Section 11.04), the Indemnified
Party shall deliver to the Indemnifying Party a written notice specifying, to
the

                                       20
<PAGE>

extent reasonably practicable, the basis for its claim for indemnification and
the amount for which the Indemnified Party reasonably believes it is entitled to
be indemnified. If the Indemnifying Party has not responded within thirty (30)
days after receipt of such notice, the Indemnified Party shall deliver a second
notice to the within ten (10) days of the expiration of the original thirty
(30)-day period. Within thirty (30) days after receipt of any second notice, the
Indemnifying Party shall pay the Indemnified Party such amount in cash or other
immediately available funds unless the Indemnifying Party objects to the claim
for indemnification or the amount thereof. If the Indemnifying Party does not
give the Indemnified Party written notice objecting to such indemnity claim and
setting forth the grounds therefor within such thirty (30)-day period, the
Indemnified Party shall give the Indemnifying Party an additional notice of its
claim for indemnification and if the Indemnifying Party does not give the
Indemnified Party written notice objecting to such claim within ten (10) days
after receipt of such notice the Indemnifying Party shall be deemed to have
acknowledged its liability for such claim and the Indemnified Party may exercise
any and all of its rights under applicable law to collect such amount. In the
event of such a timely objection by the Indemnifying Party, the amount, if any,
that is Finally Determined to be required to be paid by the Indemnifying Party
in respect of such indemnity claim shall be paid by the Indemnifying Party to
the Indemnified Party in cash within fifteen (15) days after such indemnity
claim has been so Finally Determined.

         SECTION 11.04. Notice and Defense of Third-Party Claims. Promptly
following the earlier of (i) receipt of notice of the commencement by a third
party of any Action against or otherwise involving any Indemnified Party or (ii)
receipt of information from a third party alleging the existence of a claim
against an Indemnified Party, in either case, with respect to which
indemnification may be sought pursuant to this Agreement (a "Third-Party
Claim"), the Indemnified Party shall give the Indemnifying Party written notice
thereof. The failure of the Indemnified Party to give notice as provided in this
Article 11 shall not relieve the Indemnifying Party of its obligations under
this Agreement, except to the extent that the Indemnifying Party is prejudiced
by such failure to give notice. Within thirty (30) days after receipt of such
notice, the Indemnifying Party may (i) by giving written notice thereof to the
Indemnified Party, acknowledge liability for such indemnification claim and at
its option elect to assume the defense of such Third-Party Claim at its sole
cost and expense or (ii) object to the claim for indemnification set forth in
the notice delivered by the Indemnified Party pursuant to the first sentence of
this Section 11.04; provided that if the Indemnifying Party does not within such
thirty (30)-day period give the Indemnified Party written notice objecting to
such indemnification claim and setting forth the grounds therefor, the
Indemnified Party shall give the Indemnifying Party an additional notice of its
claim for indemnification and if the Indemnifying Party does not give the
Indemnified Party written notice objecting to such claim within ten (10) days

                                       21
<PAGE>

after receipt of such notice the Indemnifying Party shall be deemed to have
acknowledged its liability for such indemnification claim. If the Indemnifying
Party has elected to assume the defense of a Third-Party Claim, (x) the defense
shall be conducted by counsel retained by the Indemnifying Party and reasonably
satisfactory to the Indemnified Party, provided that the Indemnified Party shall
have the right to participate in such proceedings and to be represented by
counsel of its own choosing at the Indemnified Party's sole cost and expense;
and (y) the Indemnifying Party may settle or compromise the Third Party Claim
without the prior written consent of the Indemnified Party so long as such
settlement includes an unconditional release of the Indemnified Party from all
claims that are the subject of such Third Party Claim, provided that the
Indemnifying Party may not agree to any such settlement pursuant to which any
remedy or relief, other than monetary damages for which the Indemnifying Party
shall be responsible hereunder, shall be applied to or against the Indemnified
Party, without the prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld. If the Indemnifying Party does not assume
the defense of a Third-Party Claim for which it has acknowledged liability for
indemnification hereunder, the Indemnified Party may require the Indemnifying
Party to reimburse it on a current basis for its reasonable expenses of
investigation, reasonable attorneys' fees and reasonable out-of-pocket expenses
incurred in defending against such Third-Party Claim and the Indemnifying Party
shall be bound by the result obtained with respect thereto by the Indemnified
Party; provided that the Indemnifying Party shall not be liable for any
settlement effected without its consent, which consent shall not be unreasonably
withheld. The Indemnifying Party shall pay to the Indemnified Party in cash the
amount, if any, for which the Indemnified Party is entitled to be indemnified
hereunder within fifteen (15) days after such Third Party Claim has been Finally
Determined, in the case of an indemnity claim as to which the Indemnifying Party
has acknowledged liability or, in the case of any indemnity claim as to which
the Indemnifying Party has not acknowledged liability, within fifteen (15) days
after such Indemnifying Party's objection to liability hereunder has been
Finally Determined.

         SECTION 11.05. Contribution. If for any reason the indemnification
provided for in Section 11.01 is unavailable to any Indemnified Party, or
insufficient to hold it harmless, then the Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Party as a result of such
Losses in such proportion as is appropriate to reflect all relevant equitable
considerations.

         SECTION 11.06. Non-Exclusivity of Remedies. The remedies provided for
in this Article 11 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Indemnified Party at law or in equity.

                                       22
<PAGE>

                                   ARTICLE 12
                              TERM AND TERMINATION

         SECTION 12.01. Term. Office Systems' right to use the Licensed Marks
shall remain in effect for a period of two (2) years from the Distribution Date
unless earlier terminated as provided below. Office Systems' rights in the
Licensed Patents and Licensed Copyrights shall remain in effect for the term of
the associated Patent or Copyright. Office Systems' rights in the Licensed
Technology shall remain in effect indefinitely, subject to the terms and
conditions of this Agreement.

         SECTION 12.02. Voluntary Termination. By written notice to Pitney
Bowes, Office Systems may voluntarily terminate all or a specified portion of
the licenses and rights granted to it hereunder by Pitney Bowes. Such notice
shall specify the effective date of such termination and shall clearly specify
any affected Licensed Marks, Licensed Patents or Licensed Technology or Office
Systems Business Products.

         SECTION 12.03. Survival. Any termination of licenses and rights of
Office Systems under Section 12.02 shall not affect Office Systems' licenses and
                             -----
rights with respect to any Office Systems Business Products made or sold prior
to such termination.

         SECTION 12.04. Other Termination. (a) Pitney Bowes shall have the
option to terminate Office Systems' use of the Licensed Marks in the event that
Office Systems materially defaults on its obligations under any of the Ancillary
Agreements and, following written notice from Pitney Bowes, does not cure such
default within sixty (60) days of receipt of such notice.

         (b) Pitney Bowes shall have the option to terminate Office Systems' use
of the Licensed Marks in the event that Office Systems becomes bankrupt or
insolvent, or experiences a Change of Control.

         (c) Office Systems' right to use the Licensed Marks shall automatically
terminate in the event that either party terminates, in accordance with the
provisions of Section 8.12 of the Distribution Agreement, the provision of the
non-compete covenant set forth in Section 7.02 therein. Pitney Bowes shall have
                                          ----
the option to terminate Office Systems' right to use the Licensed Marks if the
Distribution Agreement is terminated for any reason.

                                       23
<PAGE>

                                   ARTICLE 13
                             LIMITATION OF LIABILITY

         IN NO EVENT SHALL EITHER PARTY OR ITS SUBSIDIARIES BE LIABLE TO THE
OTHER PARTY OR ITS SUBSIDIARIES FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT,
INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS OR ANY OTHER DAMAGES, HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY
OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

                                   ARTICLE 14
                            MISCELLANEOUS PROVISIONS

         SECTION 14.01. Disclaimer. Each party acknowledges and agrees that all
Licensed Marks, Licensed Copyrights, Licensed Patents and the Licensed
Technology and any other information or materials licensed or provided hereunder
are licensed or provided on an "as is" basis and that neither party nor any of
its Subsidiaries makes any representations or extends any warranties whatsoever,
express, implied or statutory, with respect thereto including without limitation
any implied warranties of title, enforceability or non-infringement. Without
limiting the generality of the foregoing, neither Pitney Bowes nor any of its
Subsidiaries makes any warranty or representation as to the validity of any
Mark, Patent or Copyright licensed by it to Office Systems or any warranty or
representation that any use of any Mark, Patent or Copyright with respect to any
product or service will be free from infringement or violation of any rights of
any Third Party.

         SECTION 14.02. Other Agreements. In the event there is any
inconsistency between the provisions of this Agreement, on the one hand, and the
provisions of the Distribution Agreement, on the other hand, the provisions of
the Distribution Agreement shall govern.

         SECTION 14.03. No Implied Licenses. Nothing contained in this Agreement
shall be construed as conferring any rights by implication, estoppel or
otherwise, under any intellectual property right, other than the rights
expressly granted in this Agreement with respect to the Licensed Marks, the
Licensed Copyrights, the Licensed Patents and the Licensed Technology. Neither
party is required hereunder to furnish or disclose to the other any information
(including

                                       24
<PAGE>

copies of registrations of the Licensed Marks and Licensed Patents), except as
specifically provided herein.

         SECTION 14.04. Further Assurances and Consents. In addition to the
actions specifically provided for elsewhere in this Agreement, each of the
parties hereto shall use its reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things, reasonably
necessary, proper or advisable under applicable laws, regulations and agreements
or otherwise to consummate and make effective the transactions contemplated by
this Agreement, including but not limited to using its reasonable best efforts
to obtain any consents and approvals and to make any filings and applications
necessary or desirable in order to consummate the transactions contemplated by
this Agreement; provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to any
Third Party from whom such consents or approvals are requested or to take any
action or omit to take any action if the taking of or omission to take such
action would be unreasonably burdensome to the party, its Group or its Group's
business.

         SECTION 14.05. Infringement Suits. Except as set forth in Section 4.03,
(i) neither party shall have any obligation hereunder to institute any action or
suit against Third Parties for infringement or violation of any of the Licensed
Marks, the Licensed Copyrights, the Licensed Patents or the Licensed Technology
or to defend any action or suit brought by a Third Party which challenges or
concerns the validity of any of the Licensed Marks, the Licensed Copyrights, the
Licensed Patents or the Licensed Technology and (ii) Office Systems shall not
have any right to institute any action or suit against Third Parties for
infringement or violation of any of the Licensed Marks, the Licensed Copyrights,
the Licensed Patents or the Licensed Technology.

         SECTION 14.06. No Other Obligations. Neither party assumes any
responsibilities or obligations whatsoever, other than the responsibilities and
obligations expressly set forth in this Agreement or a separate written
agreement. Without limiting the generality of the foregoing, neither party, nor
any of its Subsidiaries, is obligated to (i) file any application for
registration of any Mark, any Patent or any Copyright, or to secure any rights
in any Marks, any Patents or any Copyrights, (ii) to maintain any Mark or any
Patent registration, or (iii) provide any assistance, except for the obligations
expressly assumed in this Agreement.

         SECTION 14.07. Force Majeure. (a) For purposes of this Section, "force
majeure" means an event beyond the control of either party, which by its nature
could not have been foreseen by such party, or, if it could have been foreseen,
was unavoidable, and includes without limitation, acts of God, storms, floods,
riots,

                                       25
<PAGE>

fires, sabotage, civil commotion or civil unrest, interference by civil
or military authorities, acts of war (declared or undeclared) and failure of
energy sources.

         (b) Without limiting the generality of Article 13 herein, neither party
shall be under any liability for failure to fulfill any obligation under this
Agreement, so long as and to the extent to which the fulfillment of such
obligation is prevented, frustrated, hindered, or delayed as a consequence of
circumstances of force majeure; provided that such party shall have exercised
all due diligence to minimize to the greatest extent possible the effect of
force majeure on its obligations hereunder.

         (c) Promptly on becoming aware of force majeure causing a delay in
performance or preventing performance of any obligations imposed by this
Agreement (and termination of such delay), the party affected shall give written
notice to the other party giving details of the same, including particulars of
the actual and, if applicable, estimated continuing effects of such force
majeure on the obligations of the party whose performance is prevented or
delayed. If such notice shall have been duly given, the actual delay resulting
from such force majeure shall be deemed not to be a breach of this Agreement,
and the period for performance of the obligation to which it relates shall be
extended accordingly; provided that if force majeure results in the performance
of a party being delayed by more than one hundred eighty (180) days, the other
party shall have the right to terminate this Agreement with respect to any
provision affected by such delay forthwith by written notice.

         SECTION 14.08. Entire Agreement. This Agreement, the Distribution
Agreement and the other Ancillary Agreements and the Exhibits and Schedules
referenced or attached hereto and thereto constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and
shall supersede all prior written and oral and all contemporaneous oral
agreements and understandings with respect to the subject matter hereof and
thereof. To the extent there is a conflict between this Agreement and the
Distribution Agreement between the parties, the terms of this Agreement shall
govern.

         SECTION 14.09. Governing Law. This Agreement shall be governed in
accordance with the laws of the State of New York without regard to New York
choice of law provisions. Each of Pitney Bowes and Office Systems hereby submits
to the non-exclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement.

                                       26
<PAGE>

         SECTION 14.10. Waiver of Jury Trial. Pitney Bowes and Office Systems
hereby irrevocably waive any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement and to the fullest
extent permitted by law waive any rights that they may have to claim or to
receive consequential or special damages in connection with any legal proceeding
arising out of or relating to this Agreement.

         SECTION 14.11. Notices. Notices, offers, requests or other
communications required or permitted to be given by either party pursuant to the
terms of this Agreement shall be given in writing to the respective parties to
the following addresses:

         if to  Pitney Bowes:
                Pitney Bowes Inc.
                1 Elmcroft Drive
                Stamford, CT 06926-0700
                Telecopy:  (203) 351-7984
                Attention: Sara Moss
                Title: Vice President and General Counsel

         with a copy to:
                Pitney Bowes Inc.
                35 Waterview Drive
                Mail Stop Code 26-22
                Shelton, CT 06484-8000
                Telecopy: (203) 924-3028
                Attention: Michael E. Melton
                Title: Deputy General Counsel, Intellectual
                       Property and Technology Law

         with a copy to:
                Davis Polk & Wardwell
                450 Lexington Avenue
                New York, New York 10017
                Telecopy: (212) 450-4800
                Attention:  Sarah J. Beshar

         if to Office Systems:
                Pitney Bowes Office Systems, Inc.
                100 Oakview Drive
                Trumbull, CT 06611
                Telecopy: (203) 365-7497
                Attention: Chief Financial Officer

                                       27
<PAGE>

         with a copy to:
                Pitney Bowes Office Systems, Inc.
                100 Oakview Drive
                Trumbull, CT 06611
                Telecopy: (203) 365-2353
                Attention: General Counsel

or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non- performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also be
sent by fax, confirmed by first class mail. All notices shall be deemed to have
been given and received on the earlier of actual delivery or three (3) days from
the date of postmark.

         SECTION 14.12. Nonassignability. Neither party may, directly or
indirectly, in whole or in part, whether by operation of law or otherwise,
assign or transfer this Agreement, without the other party's prior written
consent, and any attempted assignment, transfer or delegation without such prior
written consent shall be voidable at the sole option of such other party.
Notwithstanding the foregoing, each party (or its permitted successive assignees
or transferees hereunder) may assign or transfer this Agreement as a whole
without consent to a Person that succeeds to all or substantially all of the
business or assets of such party as long as such Person agrees to accept all the
terms and conditions set forth herein. Without limiting the foregoing, this
Agreement will be binding upon and inure to the benefit of the parties and their
permitted successors and assigns.

         SECTION 14.13. Severability. If any term or other provision of this
Agreement is determined by a court, administrative agency or arbitrator to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.

         SECTION 14.14. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of either party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,

                                       28
<PAGE>

nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.

         SECTION 14.15.  Amendment.  No change or amendment will be made to
this Agreement except by an instrument in writing signed on behalf of each of
the parties to such agreement.

         SECTION 14.16. Counterparts. This Agreement, including the Ancillary
Agreements and the Exhibits and Schedules hereto and thereto and the other
documents referred to herein or therein, may be executed in counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.

                                       29
<PAGE>

         WHEREFORE, the parties have signed this Intellectual Property Agreement
effective as of the date first set forth above.

                                            PITNEY BOWES INC.

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

                                            PITNEY BOWES OFFICE SYSTEMS,
                                            INC.

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

                                       30
<PAGE>

                                                                    Schedule A-1

                                 ASSIGNED MARKS
                                 --------------
<PAGE>

                                                                    Schedule A-1

                                 ASSIGNED MARKS
                                 --------------

REGISTERED MARKS
----------------

--------------------------------------------------------------------------------
      MARK                   REG. NO.                     REG. DATE
--------------------------------------------------------------------------------
COPYKEY                     1,295,839                  September 18, 1994
--------------------------------------------------------------------------------
FAXKEY                      1,353,807                  August 13, 1985
--------------------------------------------------------------------------------
PRINTPOWDER                 1,248,021                  August 16, 1983
--------------------------------------------------------------------------------
SMART TOUCH                 2,063,827                  May 20, 1997
--------------------------------------------------------------------------------
TOTAL PACKAGE               1,528,571                  March 7, 1989
--------------------------------------------------------------------------------

UNREGISTERED MARKS
------------------

CONNEX
CONNEX LITE
DIGI-SERVE
DIGITAL LIGHT ARRAY
DIGITAL SMART IMAGE DESIGN
DL SERIES
DL520 PUBLISHER
DOCUFINISH
DOCUMASTER
ESCAN
FASTTRACK
FAX CONNEX
FAX DIRECTOR IP
FYI-FOR YOUR IMAGE
PRO DOCUMENT SERIES/PRODOC 110
RIP-MASTER
SCANCONNEX
SMART COLOR COLOR SMART
SMART IMAGE PUBLISHER
SMART IMAGE SERVER
SMART IMAGER
SMART IMAGER RIP
SMART RIP
SMART RUN
<PAGE>

SMART SIZE
SMART TRACK
SMARTFINISH
TEAM PRINT
UNIVERSAL ACCESS
VALUE ADDED MAINTENANCE
VIRTUAL DOCUMENT FACTORY
WEB CONNEX
<PAGE>

                                                        Schedule A-1 (continued)
                                                        ------------------------

                  CERTAIN INFORMATION RELATING TO PRIOR GRANTS
                  --------------------------------------------
                               (per Section 2.02)

                  None.
<PAGE>

                                                                    Schedule A-2
                                                                    ------------

                                 LICENSED MARKS
                                 --------------
<PAGE>

Pitney Bowes

(Pitney Bowes name)

[GRAPHIC]

(Pitney Bowes Symbol)

[LOGO OF PITNEY BOWES]

(Pitney Bowes Signature)
<PAGE>

                                                                      Schedule B
                                                                      ----------

                                LICENSED PATENTS
                                ----------------
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                APPLICATIONS
-----------------------------------------------------------------------------------------------------------------------------------
              CASE                                                             APPLN                           PATENT       ISSUE
 COUNTRY     NUMBER                 TITLE                        STATUS       NUMBER        FILING DATE        NUMBER        DATE
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>   <C>                                     <C>           <C>          <C>              <C>           <C>
    US        C-593   METHOD FOR FOLING AND SEALING SHEETS       Granted      423,156      Oct. 18, 1989      RE 34338     8/10/93
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        C-610   MULTIPURPOSE COMPUTER ACCESSORY FOR
                      FACILITATING FACSIMILE COMMUNICATION       Granted      459,057      Dec. 29, 1989     5,091,790     2/25/92
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        C-724   DEVICE FOR FOLDING AND SEALING SHEETS      Granted      677,013      Mar. 28, 1991      RE 34288     6/22/93
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        E-473   APPARATUS AND METHOD FOR SELECTIVE
                      ARCHIVING OF FACSIMILE MESSAGES            Granted      576,665      Dec. 21, 1995     5,701,183    12/23/97
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        E-940   METHOD AND APPARATUS FOR PREVENTING
                      THE UNAUTHORIZED USE OF A RETAINING
                      CARTRIDGE                                  Amended      456,625       Dec. 8, 1999
-----------------------------------------------------------------------------------------------------------------------------------
    WO        E-940   METHOD AND APPARATUS FOR PREVENTING
                      THE UNAUTHORIZED USE OF A RETAINING
                      CARTRIDGE                                  Pending      33,354        Dec. 8, 2000
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        E-942   METHOD AND SYSTEM FOR MAXIMIZING
                      USE OF A COMMUNICATION LINE                Pending      469,031      Dec. 21, 1999
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    CA        B-533   TEMPERATURE SELF REGULATING FUSER          Granted      351,063       May 1, 1980      1,185,312     04/9/85
-----------------------------------------------------------------------------------------------------------------------------------

</TABLE>
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                       APPLICATIONS
-----------------------------------------------------------------------------------------------------------------------------------
              CASE                                                             APPLN                           PATENT       ISSUE
 COUNTRY     NUMBER                 TITLE                        STATUS       NUMBER        FILING DATE        NUMBER        DATE
-----------------------------------------------------------------------------------------------------------------------------------
<S>             <C>   <C>                                     <C>           <C>          <C>              <C>           <C>
    FR        B-538   DOCUMENT COPIER                           Registered    77,962       Oct. 23, 1979      182,733      9/22/80
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    CA        B-626   CHARGE ROLLER SYSTEM FOR AN
                      ELECTROPHOTOGRAPHIC COPIER                 Granted      383,870      Aug. 14, 1981     1,194,535     10/1/85
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    CA        B-764   GROUNDING DEVICE FOR MOVING
                      PHOTOCONDUCTOR WEB                         Granted      415,292      Nov. 10, 1982     1,194,919     10/8/85
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        B-789   CORRECTION OF IMAGING IMPERFECTIONS        Granted      408,963      Aug. 17, 1982     4,491,963     1/1/85
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        E-771   UNIVERSAL ACCESS PHOTOCOPIER               Granted      188,273       Nov. 9, 1998     6,243,682     6/5/01
-----------------------------------------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------------------------------------
    US        F-201   MAILING SYSTEMS                            Pending     09/851074      May 8, 2001
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                                                      Schedule C
                                                                      ----------

                       EXCEPTIONS TO LICENSE RESTRICTIONS
                       ----------------------------------

None.
<PAGE>

                                                                      Schedule D
                                                                      ----------

                QUALITY STANDARDS AND TRADEMARK USAGE GUIDELINES
                ------------------------------------------------

         Pitney Bowes document "Pitney Bowes Identity System" as amended and
updated from time to time is hereby incorporated by reference into this
Agreement Schedule D.

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