Document:

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                                                                   Exhibit 10.46

                          AGREEMENT AND GENERAL RELEASE
                                  BY AND AMONG
                         LITHIUM TECHNOLOGY CORPORATION
                               AND GEORGE FERMENT

         THIS AGREEMENT ("Agreement") is entered into and given as of this 31st
day of May, 2000 by and between Lithium Technology Corporation (the "Company"),
and George Ferment ("Ferment") on the following terms and conditions:

                                    RECITALS

         A. Ferment has been employed as an officer of the Company pursuant to
the terms of an Employment Agreement dated July 24, 1996 as amended and extended
(the "Ferment Employment Agreement") and served on its Board of Directors.

         B. On January 19, 2000 the Company and Pacific Lithium Limited ("PLL")
entered into a Merger Agreement providing for the merger of the Company with and
into PLL (the "Merger") after the domestication of PLL to Delaware, its name
change to Ilion Technology Corporation ("Ilion") and the initial public offering
of Ilion (the "Ilion IPO").

         C. Ferment desires to resign from the Company effective on the date
hereof.

         E. The parties desire to enter into an amicable resolution relating to
the end of the employment relationship between the Company and Ferment.

         NOW THEREFORE, for full and adequate consideration, the sufficiency of
which is hereby acknowledged by Ferment, the parties hereby agree as follows:

1.       In full consideration of Ferment's execution of this Agreement, and his
         agreement to be legally bound by its terms, the parties agree as
         follows:

         (a) The Company shall (i) pay Ferment his salary from the date hereof
         until June 30, 2000 and (ii) pay to Ferment an amount equal to $77,500
         (6 months salary) on June 30, 2000.

         (b) Ferment shall be entitled until June 30, 2000 to receive all
         benefits under the Corporation's medical insurance, disability
         insurance, life insurance and other benefit plans as are then in effect
         for executives of the Corporation

         (c) All Company options shall be treated in accordance with the terms
         of the applicable Stock Option Agreement as amended from time to time
         by the Board of Directors and as further amended by any applicable
         employment agreements between the Company and Ferment.
<PAGE>   2
         (d) The Company shall cause the 92,520 Ilion stock options to be
         allocated to Ferment pursuant to Section 7.5 of the Merger Agreement
         (the "Ilion Options") to be issued to Ferment by Ilion on the later of
         the Ilion IPO or the Merger. The Ilion Options shall be 100% vested on
         the date of issuance and shall be exercisable for a period of 90 days
         after the shares underling the Ilion Options are (x) registered on an
         effective Form S-8 Registration Statement with the Securities and
         Exchange Commission and (y) eligible for sale under any contractual
         lock-up agreement between Ferment and Ilion.

         (e) Commencing on July 1, 2000 , in the event Ferment exercised his
         COBRA rights, the Company shall pay the medical insurance premium due
         on behalf of Ferment directly to the insurance provider until the
         earlier of (x) the date on which the Company has paid $12,000 in
         premium coverage, or (y) the date Ferment is employed and has medical
         coverage with such new employer.

         (f) The Company shall continue to cover Ferment under the Company's
         director and officer policy for a period of one year from the date
         hereof.

2.       The Company agrees to support any claim by Ferment for unemployment
         insurance payments.

3.       Ferment hereby resigns from all positions of any nature which he holds
         with the Company on the date hereof, including his position as a
         director of the Company; provided, however, Ferment hereby agrees to
         provide consultancy services to the Company, PLL and/or Ilion for a
         period of 12 months from and after the date hereof on an as needed
         basis (not to exceed three hours per month). These consultancy services
         shall be rendered for no additional consideration other than as set
         forth in Section 1 hereof and may be terminated by Ferment in the event
         that such consultancy services interfere or restrict him from gaining
         full time employment with another entity.

4.       Ferment, for and in consideration of the undertakings of the Company
         contained herein, and intending to be legally bound does hereby
         release, remise and forever discharge the Company, as well as the
         Company's current and former shareholders, directors, officers, agents,
         members, managers, affiliates, attorneys and employees (the Company and
         all such persons and entities collectively, the "Recipients"), of and
         from any and all actions, suits, proceedings, controversies, claims
         and/or demands ("Claims") whatsoever, other than for a breach of this
         Agreement itself, so that Ferment shall not have any claim on or
         against the Company or the Recipients, directly or indirectly, arising
         from or relating to any matter undertaken, done, or omitted to be done
         from the beginning of the world to the date hereof, including, without
         limitation, any Claims arising out of or relating to Ferment's
         employment and resignation of employment with the Company. This
         releases all claims, including those of which Ferment is not aware and
         those not mentioned in this Agreement.

5.       The Company, for and in consideration of the undertakings of Ferment
         set forth contained herein, and intending to be legally bound does
         hereby release, remise and forever discharge

                                       2
<PAGE>   3
         Ferment, of and from any and all claims whatsoever, other than for a
         breach of this Agreement itself or any claim that would not be eligible
         for indemnification under Section 145 of the Delaware General
         Corporation Law, so that the Company shall not have any claim on or
         against Ferment, directly or indirectly, arising from or relating to
         any matter undertaken, done, or omitted to be done from the beginning
         of the world to the date hereof, including, without limitation, any
         Claims arising out of or relating to Ferment's employment with the
         Company. This releases all claims, including those of which the
         Company is not aware and those not mentioned in this Agreement.

6.       Ferment and the Company further agree and covenant that neither of
         them, nor any person, organization or other entity on their respective
         behalves, will file, charge, claim, sue or cause or permit to be filed,
         charged or claimed any action for damages against each other (including
         injunctive, declaratory, monetary, relief or other) involving any
         matter occurring at any time since the beginning of Ferment's
         employment with the Company up to date of this Agreement or involving
         any continuing effects or any acts or practices which may have arisen
         or occurred prior to the date of this Agreement other than for a breach
         of the Agreement itself or any claim that would not be eligible for
         indemnification under Section 145 of the Delaware General Corporation
         Law. Ferment further agrees that he will not commence a claim, lawsuit,
         or other cause of action against the Company under Title VII of the
         Civil Rights Acts of 1964, as amended; the Age Discrimination in
         Employment Act; the Americans with Disabilities Act; the Family and
         Medical Leave Act; the Employee Retirement Income Security Act
         ("ERISA") and any applicable state law equivalent of the foregoing
         federal statutes; or any other applicable federal, state or local
         statute. Ferment recognizes and acknowledges, further, that the
         obligation of the Company to provide the consideration recited herein
         is expressly contingent upon his fulfillment and satisfaction of the
         obligations set forth herein and that should he fail to comply with any
         of the covenants or provisions set forth herein, the Company can
         immediately cease the payment of any amount set forth in Section 1
         which remains unpaid as liquidated damages.

7.       Ferment and the Company agree that all obligations of Ferment and the
         Company under the Ferment Employment Agreement shall terminate on the
         date hereof other than Section 7 (Confidentiality), Section 8
         (Non-Competition) and Section 9 (Remedies and Survival) shall survive.
         Notwithstanding the foregoing the parties acknowledge and agree that
         the one year period contained in Section 8 of the Ferment Employment
         Agreement is hereby amended to six months or such shorter period agreed
         to by the Company (the "Surviving Provisions").

8.       The parties hereto shall not disparage or make any statements of a
         negative nature regarding any of the parties to this Agreement. The
         Company agrees to provide Ferment with a copy of any press release
         announcing or describing the resignation of Ferment prior to the
         release of the same.

9.       Ferment certifies that he has read the terms of this Agreement and
         General Release, that he has had an opportunity to discuss it with an
         attorney, and that he understands its terms and effect. Ferment
         acknowledges, further, that he is executing this Agreement and General

                                       3
<PAGE>   4
         Release of his own volition, with a full understanding of its terms and
         effects, and with the intention of releasing all claims recited herein
         in exchange for the consideration described herein, which he
         acknowledges is adequate and satisfactory to him. Neither the Company
         nor its agents, representatives, or attorneys have made any
         representations to Ferment concerning the terms or effects of this
         Agreement and General Release other than those contained herein.
         Ferment further acknowledges that Gallagher, Briody & Butler and Thomas
         P. Gallagher provided legal advice solely to the Company with respect
         to this Agreement and that he has been advised to and has had an
         opportunity to consult with his own independent legal counsel.

10.      The existence and the terms of this Agreement shall remain confidential
         and shall not be revealed to anyone by any party hereto.
         Notwithstanding the foregoing, disclosure to a third party may occur,
         to the minimum extent necessary, in the following situations:

         (a)      insofar as disclosure is required pursuant to a subpoena or
                  order issued by a court of competent jurisdiction or
                  legislative body;

         (b)      insofar as disclosure is reasonably necessary to carry out and
                  effectuate the terms of this Agreement; and

         (c)      insofar as disclosure is otherwise required by law.

11.      This Agreement and the Surviving Provisions constitute the entire
         agreement among the parties and supercedes any and all prior agreements
         or understandings between and among the parties or any of them arising
         out of or relating to the employment and termination of the employment
         of Ferment. This Agreement may be changed only by agreement in writing
         among the parties.

12.      This Agreement shall be binding upon Ferment and his respective heirs,
         successors and assigns, and shall enure to the benefit of the
         Recipients and their respective heirs, successors and assigns.

13.      This Agreement and any controversy which might arise herefrom will in
         all respects be interpreted, enforced and governed by the laws of the
         Commonwealth of Pennsylvania. The parties agree that this Agreement
         will be construed as a whole according to its fair meaning and is not
         to be strictly construed for or against either of the parties hereto.

14.      This Agreement may be executed in any number of counterparts, each of
         which together shall constitute one and the same instrument.

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         IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Agreement as of the date first above written.

                                       LITHIUM TECHNOLOGY CORPORATION

                                       By:      /s/ David J. Cade
                                                -------------------------------
                                                David J. Cade, Chairman and
                                                Chief Executive Officer

                                                /s/ George Ferment
                                       ----------------------------------------
                                                George Ferment, Personally

The foregoing Agreement is accepted by
Pacific Lithium Limited

By:      /s/ Robin T. Johannink
   ------------------------------------
Name: Robin T. Johannink
Title: Managing Director
Date: June 6, 2000

                                       5FORBEARANCE AGREEMENT

         THIS FORBEARANCE  AGREEMENT (the  "Agreement"),  is made as of the 10th
day of August 2000 by and among  PROGRAMMER'S  PARADISE,  INC.,  CORSOFT,  INC.,
LIFEBOAT   DISTRIBUTION,   INC.  and  PROGRAMMER'S   PARADISE   CATALOGS,   INC.
(collectively the "Obligors"),  and PNC BANK, NATIONAL  ASSOCIATION,  a national
banking association (the "Lender").

                                   WITNESSETH:

         WHEREAS,  the  Obligors and the Lender  entered  into a certain  Letter
Agreement  dated  February 24, 1998 (the "Letter  Agreement")  providing for the
terms  and  conditions  of a Line of  Credit  Loan up to the  maximum  amount of
$7,500,000 (the "Loan") to the Obligors;

         WHEREAS,  the Obligors  executed a Committed  Line of Credit Note dated
February 28, 1998 (the "Note") in favor of the Lender for  repayment of the Loan
under the terms and  conditions  set forth in the  Letter  Agreement,  which was
incorporated into the Note;

         WHEREAS,  the Note  provided  for  interest  to  accrue on the basis of
either the  Lender's  Prime Rate or the Euro Rate,  as defined  therein,  at the
Obligors' option, and for all sums outstanding under the Note to be repaid on or
before June 30, 1999 (the "Expiration Date");

         WHEREAS, repayment of the Loan was secured by the Obligors' pledge of a
security interest in the personalty of each of the Obligors (the  "Collateral"),
as more fully set forth in certain  Security  Agreements dated December 31, 1997
and executed by each of the Obligors (the "Security Agreements");

         WHEREAS,  to  further  secure  repayment  of  the  Loan,   Programmer's
Paradise,  Inc. ("PPI") executed a Pledge Agreement dated December 31, 1997 (the
"Pledge Agreement")  pledging to the Lender all or a portion of its stock in the
other Obligors and in other related entities (the "Stock");

         WHEREAS,  the  Obligors and the Lender  executed an  Amendment  No.1 to
Letter  Agreement dated June 30, 1999,  which modified certain terms of the Loan
including  extending  the  Expiration  Date to March  31,  2000  (the  "Extended
Expiration Date");

         WHEREAS,  the  Obligors and the Lender  executed a Second  Amendment to
Loan Documents dated March 31, 2000,  which modified  certain terms of the Loan,
including  extending the Extended  Expiration  Date to June 30, 2000 (the "Final
Expiration Date");

         WHEREAS,  the principal balance due under the Loan as of August 1, 2000
is $328,086.56, without defense, offset or counterclaim;

Request for Forbearance:

         WHEREAS,  the  Obligors are in default of their  obligations  under the
Loan and the documents  executed in connection  therewith (the "Loan Documents")
as a result of their failure

<PAGE>

to pay all sums due upon the Final  Expiration  Date,  the Obligors'  failure to
maintain certain of the financial  covenants set forth in the Loan Documents and
PPI's failure to deliver the Stock to the Lender in  accordance  with the Pledge
Agreement;

         WHEREAS,  all  amounts  outstanding  under  the  Loan  are  now due and
payable;

         WHEREAS,  the  Obligors  have  requested  that the Lender  forbear from
pursuing its rights and remedies under the Loan Documents to permit the Obligors
an opportunity to refinance their obligations thereunder; and

         WHEREAS,  the  Lender  has  agreed  to  forbear  under  the  terms  and
conditions set forth herein.

                                    AGREEMENT
                                    ---------

         NOW  THEREFORE,  for and in  consideration  of the premises  (which are
deemed herein contained) and other good and valuable consideration,  the receipt
and adequacy of which are hereby acknowledged, the parties agree as follows:

1.       RECITALS INCORPORATED.
         ---------------------
         The  Recitals  set forth  above  are true and  correct  and are  hereby
incorporated into this Forbearance Agreement as if set forth at length herein.

2.       PRINCIPAL AMOUNTS OUTSTANDING.
         -----------------------------
         The Obligors and the Lender  acknowledge  that as of July 31, 2000, the
amount due under the Loan is  $328,086.56  (the  "Indebtedness"),  consisting of
$328,000 in outstanding principal and $86.56 in accrued and unpaid interest. The
Obligors and the Lender hereby represent,  warrant and confirm that there are no
set-off rights,  claims or causes of action of any nature  whatsoever  which the
Obligors have or may assert against the Lender with respect to the Loan and Loan
Documents as of the date hereof.

3.       FORBEARANCE TERMS.
         -----------------
         The Obligors  have  requested and the Lender has agreed to forbear from
pursuing  its rights and  remedies  under the Loan until  December 31, 2000 (the
"Forbearance Period") under the following terms and conditions:

         (a)  Lender agrees to continue to extend funds under the Loan up to the
              maximum  aggregate  principal  amount of the lesser of  $2,000,000
              (the "New Loan Amount")or 60% of the Obligors'  Qualified Accounts
              Receivable,  defined as those accounts  receivable  which are less
              than  ninety  (90) days  past due from date of sale,  are due from
              domestic and unrelated companies and are approved by Lender;

         (b)  The Obligors shall make timely payments under the Loan as if there
              had been no defaults thereunder,  with payments made thereunder to
              be applied in accordance  with the terms of the Loan  Documents as
              long as there is no Event of Default,  as defined herein, with all
              outstanding  principal  and accrued and unpaid  interest due on or
              before December 31, 2000;

                                     Page 2

<PAGE>

         (c)  The  Obligors  are no longer  permitted  to  utilize  the Loan for
              stand-by letters of credit and funds extended under the Loan shall
              only be made in the lawful currency of the United States;

         (d)  The  Obligors   shall  deliver  to  the  Lender   borrowing   base
              certificates,  in the form  previously  delivered  to the  Lender,
              bi-monthly,  on or before the 10th and 25th days of each month for
              the previous month, beginning in August 2000;

         (e)  During the  Forbearance  Period,  interest  shall accrue under the
              Loan at the Lender's Prime Rate plus one percent (1%);

         (f)  Upon the  Obligors'  execution of this  Agreement,  payment by the
              Obligors to the Lender,  of a fee of 2% of the New Loan Amount, or
              $40,000, in immediately available funds;

         (g)  On or before execution of this Agreement, payment to the Lender in
              immediately  available  funds  of all  expenses  related  to  this
              Agreement,  including  but not  limited to the field audit fees of
              $8,795.10 and  attorney's  fees and costs  estimated not to exceed
              $3,500;

         (h)  Within five (5) days of a written request from Lender,  payment in
              immediately  available  funds  of any  additional  costs  and fees
              incurred in  connection  with this  Agreement,  including  without
              limitation, fees for a second field audit, such fees not to exceed
              $9,000,  to occur prior to October 31, 2000,  which  reimbursement
              obligation shall survive the termination of this Agreement and any
              Loan Document;

         (i)  The Obligors'  consolidated  net loss,  for the  six-month  period
              ending June 30,  2000,  shall not exceed  $2,000,000  and, for the
              nine-month  period  ending  September  30, 2000,  shall not exceed
              $2,250,000;

         (j)  In  addition  to the  financial  reporting  contained  in the Loan
              Documents,  the  Obligors  shall  deliver  to the  Lender  monthly
              unaudited  financial  statements  and  accounts  receivable  aging
              reports, which shall include current lists of all account debtors,
              including the address and contact person for each;

         (k)  The  following  financial  covenants  are hereby waived during the
              Forbearance  Period:  the Current Ratio,  Domestic Leverage (Total
              Liabilities/Total    Net    Worth)    and    Consolidated    Total
              Liabilities/Total Net Worth;

         (l)  Within five (5) days of a request from Lender,  the Obligors shall
              execute UCC-1 Financing  Statements to perfect Lender's  interests
              in any of the collateral  pledged as security for repayment of the
              Loan;

         (m)  There shall be no defaults under the Loan Documents other than the
              existing defaults set forth in the Recitals above, and no Event of
              Default under this Agreement.

                                     Page 3

<PAGE>

4.       NO WAIVER; FORBEARANCE; CUMULATIVE REMEDIES.
         -------------------------------------------
         The execution of this Forbearance Agreement and the consummation of the
forbearance transaction  contemplated in this Forbearance Agreement are not, and
shall not be deemed to  constitute,  a  waiver,  except as  expressly  set forth
herein,  or cure of any default  arising prior or subsequent to the date of this
Forbearance  Agreement,  nor shall it  constitute a  reinstatement  of the terms
described in the Loan Documents. The Obligors acknowledge that (i) the events of
default  which exist as of the date of execution of this  Agreement are material
defaults  under the Loan  Documents,  (ii) they are unable to cure the  existing
defaults and have requested that the Lender forbear from exercising their rights
to proceed  against them in respect of the  defaults.  In  consideration  of the
Obligors  entering  into and  fully  performing  their  obligations  under  this
Forbearance Agreement,  the Lender has agreed to such forbearance.  In the event
that an Event of Default occurs and continues hereunder, the Lender shall not be
bound by its  agreement to forbear and may  immediately  exercise its rights and
remedies under the Loan Documents and under  applicable  law. The Obligors agree
that no delay on the part of  Lender  in  exercising  any  power or right  shall
operate as a waiver of any such power or right or preclude the further  exercise
of any  other  power or  right.  The  remedies  herein  are  cumulative  and not
exclusive of any remedies  provided by law. Notice to or demand in circumstances
under which the terms of this  Agreement  do not  require  such demand or notice
shall not entitle  the  Obligors to further  notice or demand nor  constitute  a
waiver of the  rights of Lender  to take any  other or  further  action  without
notice or demand.

5.       RELEASE OF LENDER.
         -----------------
         As additional  consideration  for the  forbearance as set forth herein,
Obligors  hereby remise,  release,  waive and forever  discharge  Lender and its
predecessors,  successors and assigns,  their parents,  subsidiaries,  officers,
directors, members, shareholders, agents, employees, representatives,  attorneys
and any affiliated companies, their parents, subsidiaries,  officers, directors,
shareholders,  agents,  employees,  representatives and attorneys (collectively,
the "Released Parties") from, any and all claims, demands,  damages,  actions or
causes  of action  whatsoever,  known or  unknown,  from the  beginning  of time
through the date of this Forbearance Agreement, related to the Loan Documents or
the administration of any of the above.

6.       FORBEARANCE AGREEMENT CONTROLS.
         ------------------------------
         In the event of a conflict  betwee n  the terms and  conditions of this
Forbearance  Agreement and the terms and conditions of the Loan  Documents,  the
terms and conditions of this Forbearance Agreement shall control.

7.       INDEMNIFICATION.
         ---------------
         (a) The Obligors hereby indemnify and agree to protect, defend and hold
harmless the Lender,  any entity which  "controls" the Lender within the meaning
of Section 15 of the  Securities  Act of 1933,  as amended,  or is under  common
control with the Lender, and any member,  officer,  director,  official,  agent,
employee or attorney of the Lender, and their respective heirs,  administrators,
executors,  successors and assigns  (collectively,  the "Indemnified  Parties"),
from and against any and all losses,  damages,  expenses or  liabilities  of any
kind or nature  and from any  suits,  claims or  demands,  including  reasonable
attorneys'  fees  incurred

                                     Page 4

<PAGE>

defending  such  claim,  suffered  by any of them and  caused by,  relating  to,
arising out of, resulting from, or in any way connected with the Loan Documents,
this Forbearance  Agreement or the transactions  contemplated  therein or herein
including,  without  limitation:  (i) any untrue  statement  of a material  fact
contained in information  submitted to Lender by the Obligors or the omission of
any material fact necessary to be stated therein in order to make such statement
not misleading or incomplete; and (ii) the failure of any Obligor to perform any
obligations  herein  required to be performed by the  Obligors,  except that the
Obligors shall not be required to indemnify the Lender for its gross  negligence
or willful  misconduct.  In case any action shall be brought against Lender,  or
any other  Indemnified Party in respect to which indemnity may be sought against
the Obligors,  Lender, or such other Indemnified Party shall promptly notify the
Obligors and the Obligors shall assume the defense  thereof,  and the payment of
all costs and expenses.  Lender may select and employ counsel, provided that the
Obligors shall pay all of such counsel's fees,  expenses and  disbursements  and
the Obligors shall  indemnify  Lender for any loss  associated with or resulting
from such  representation.  The failure of Lender to so notify any Obligor shall
not relieve  the  Obligors of any  liability  they may have under the  foregoing
indemnification  provisions or from any liability  which they may otherwise have
to Lender,  or any of the other Indemnified  Parties,  except to the extent such
failure to notify  results in  unreasonable  prejudice to the  Obligors.  Lender
shall not be liable for any settlement of any such action effected without their
written  consent,  but if settled with the Obligors'  consent,  or if there be a
final  judgment  for the  claimant in any such  action,  the  Obligors  agree to
indemnify  and save  harmless  Lender from and against any loss or  liability by
reason of such settlement or judgment.

         (b) The  provisions  of this  Section  shall  survive  the term of this
Agreement and the repayment or other satisfaction of the Loan.

8.       NO NOVATION.
         -----------
         It is the  intention  of  the  parties  hereto  that  this  Forbearance
Agreement  shall not constitute a novation and shall in no way adversely  affect
or impair the lien priority of any of the Loan Documents.

9.       SURVIVAL PROVISIONS.
         -------------------
         The  covenants,  representations  and  obligations  contained  in  this
Forbearance   Agreement   shall  survive  the  execution  of  all   transactions
contemplated by this Forbearance Agreement, and this Forbearance Agreement shall
bind and benefit  the  parties  hereto and their  respective  heirs,  executors,
administrators, personal representatives, successors and assigns.

10.      ENTIRE AGREEMENT.
         ----------------
         (a) This Forbearance Agreement, and any document executed in connection
herewith,  contains  all  of  the  covenants,  representations,  warranties  and
agreements  between the parties  with respect to the subject  matters  contained
herein, and supercedes all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof. The parties
to this Forbearance Agreement acknowledge that all the terms of this Forbearance
Agreement  were  negotiated at arm's length and after  adequate and  independent
investigation on their respective parts and that this Forbearance  Agreement and
all  documents  executed in  connection  therewith  were  prepared  and executed
without  duress,  undue  influence  or coercion of any kind exerted by any party
upon the other.

         (b) Each party  acknowledges  and confirms  that it has not relied upon
Lender or any officer, director or employee of the Lender, or upon the advice of
any  but  its  own  accountants  or

                                     Page 5

<PAGE>

counsel,  concerning  any  aspect  of  the  transactions  contemplated  by  this
Forbearance  Agreement  including,  without  limitation,  the  tax  implications
thereof and the representations herein made.

11.      FURTHER ASSURANCES.
         ------------------
         The parties  hereto agree to execute all such further  instruments  and
take all such  further  action that may be  reasonably  required by any party to
fully effectuate the terms and provisions of this Forbearance  Agreement and the
transaction contemplated herein.

12.      PARTICIPATIONS.
         --------------
         Lender expressly retains and reserves its rights to sell and assign its
interests  under the Loan  Documents  and this  Forbearance  Agreement and fully
disclose its files in connection with the Loan Documents,  and/or any collateral
pledged  in  connection  therewith,  to  potential  purchasers  of the  Lender's
interests under the Loan Documents.

13.      NO MODIFICATION OF FORBEARANCE AGREEMENT EXCEPT IN WRITING.
         ----------------------------------------------------------
         The within Forbearance  Agreement encompasses all the forbearance terms
between  the  parties,  notwithstanding  any verbal  communications  between the
parties.  No further  forbearance  terms  shall be deemed  effective,  unless in
writing, executed by both parties. The parties hereto acknowledge the provisions
of  N.J.S.A.  25:1-5,  which  precludes  enforcement,  inter  alia,  of any oral
promises  relating to  extensions  of credit and agree that its  provisions  are
fully applicable to this Forbearance Agreement.

14.      WAIVER OF JURY TRIAL.
         --------------------
         THE OBLIGORS  AND THE LENDER  HEREBY WAIVE ANY RIGHT TO REQUEST A TRIAL
BY JURY IN ANY  LITIGATION  WITH RESPECT TO ANY ASPECT OF THIS  AGREEMENT OR THE
LOAN DOCUMENTS.  THE OBLIGORS  ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO
CONSULT WITH INDEPENDENT COUNSEL WITH RESPECT TO THIS WAIVER.

15.      GOVERNING LAW.
         -------------
         This Agreement  shall be construed and enforced in accordance  with the
laws of New Jersey without regard to principles of conflicts of law.

16.      EVENTS OF DEFAULT.
         -----------------
         The  following  shall   constitute  an  Event  of  Default  under  this
Agreement:

         (a)  An Event of  Default  under any of the Loan  Documents,  including
              without  limitation  the  filing  of any  petition,  voluntary  or
              involuntary,  by or  against  any of the  Obligors,  except  those
              defaults set forth in the Recitals to this Agreement; or

         (b)  The failure of the Obligors to comply with this Agreement.

                                     Page 6

<PAGE>

         The Events of Default  defined  in this  Section 16 are the  enumerated
Events of Default for purposes of this  Agreement.  Except as  specifically  set
forth in Section 3 of this  Agreement,  nothing  herein  shall be  construed  as
altering,  eliminating, curing or modifying any of the express Events of Default
set forth in the Loan Documents, nor shall anything contained herein be deemed a
waiver,  cure or  modification  of any other  non-specified  defaults which have
occurred or may occur during the Forbearance Period except as to which Lender is
specifically forbearing hereunder.

         Upon  the  occurrence  of  an  Event  of  Default  hereunder,  Lender's
agreement to forebear  shall  immediately  terminate and Lender shall be free to
pursue all of its legal and  equitable  rights and remedies  including,  but not
limited  to, all of its  remedies  under the Loan  Documents,  this  Forbearance
Agreement and any documents executed in connection herewith.

17.      CONSTRUCTION.
         ------------
         The  parties   hereto  agree  that  the  terms  and  language  of  this
Forbearance  Agreement were the result of negotiations  between the parties and,
as a  result,  there  shall  be no  presumption  that  any  ambiguities  in this
Forbearance  Agreement shall be resolved  against either party.  Any controversy
over the construction of this Forbearance  Agreement shall be decided neutrally,
in  light  of its  conciliatory  purposes,  and  without  regard  to  events  of
authorship  or  negotiation.  All  terms  and  words  used in  this  Forbearance
Agreement, regardless of the number and gender in which used, shall be deemed to
include any other number or gender as the context or use thereof may require. If
more than one  person or entity  is named as the  Obligor,  each such  person or
entity  shall  be  jointly  and  severally   liable  for  the   representations,
warranties, covenants and obligations of the Loan Documents and this Forbearance
Agreement.  The captions  contained in this  Forbearance  Agreement are used for
convenience  of reference  only and in no way define limit or describe the scope
or intent of this Forbearance  Agreement or any particular  paragraph or section
hereof or the proper construction hereof.

18.      ADMISSIBILITY.
         -------------
         The terms of this Forbearance Agreement,  when executed, shall be fully
admissible in any court of law. The parties  hereto waive any objection that may
be  interposed  under  any  state  or  federal  rules  of  evidence  as  to  the
admissibility of this document.

19.      NO THIRD PARTY BENEFICIARIES.
         ----------------------------
         It is not  the  intent  of the  parties  who  are  signatories  to this
Agreement to grant any rights  whatsoever to parties who are not  signatories to
this Forbearance Agreement and no provision of this Forbearance Agreement should
be construed to grant any rights to any party who is not a signatory herein.

20.      ASSIGNMENT.
         ----------
         This  Forbearance  Agreement  shall be  binding  upon and  inure to the
benefit of Lender, the Obligors and their respective permitted heirs, successors
and assigns.  The Obligors shall not assign this Forbearance  Agreement  without
the prior written consent of the Lender.

                                     Page 7

<PAGE>

THE OBLIGORS DECLARE THAT EACH HAS RECEIVED, WITHOUT CHARGE, A TRUE COPY OF THIS
AGREEMENT.

IN WITNESS WHEREOF,  the parties have executed this Forbearance  Agreement as of
the date first above written.

ATTEST:                                PROGRAMMER'S PARADISE, INC.

/s/ Tracy G. Higgins
-----------------------------          By:  /s/ William H. Sheehy
                                            -----------------------------
                                       Name:   William H. Sheehy
                                       Title:  V.P. Finance and Secretary

ATTEST:                                CORSOFT, INC.

/s/ Tracy G. Higgins
-----------------------------          By:  /s/ William H. Sheehy
                                           -----------------------------
                                       Name:   William H. Sheehy
                                       Title:  V.P. Finance and Secretary

ATTEST:                                LIFEBOAT DISTRIBUTION, INC.

/s/ Tracy G. Higgins
-----------------------------          By:  /s/ William H. Sheehy
                                            -----------------------------
                                       Name:   William H. Sheehy
                                       Title:  V.P. Finance and Secretary

ATTEST:                                PROGRAMMER'S PARADISE CATALOGS, INC.

/s/ Tracy G. Higgins
-----------------------------          By:  /s/ William H. Sheehy
                                            -----------------------------
                                       Name:   William H. Sheehy
                                       Title:  V.P. Finance and Secretary

ATTEST:                                PNC BANK, N.A.

/s/ Ralph W. Karken
-----------------------------          By:  /s/ Donald Irwin
                                            -----------------------------
                                       Name:   Donald Irwin
                                       Title:  Vice President

                                     Page 8

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