Document:

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                                                                    EXHIBIT 10.1

                           TAX SEPARATION AGREEMENT

                                    between

                              Pitney Bowes Inc.,
                              on behalf of itself
                                and the members
                           of the Pitney Bowes Group

                                      and

                      Pitney Bowes Office Systems, Inc.,
                              on behalf of itself
                                and the members
                   of the Pitney Bowes Office Systems Group
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                            TAX SEPARATION AGREEMENT

     This Tax Separation Agreement (the "Agreement") is entered into as of the
___ day of August, 2001 between Pitney Bowes Inc. ("PBI"), a Delaware
corporation, on behalf of itself and the members of PBI Group, and Pitney Bowes
Office Systems, Inc. ("Office Systems"), a Delaware corporation, on behalf of
itself and the members of Office Systems Group.

                              W I T N E S S E T H:

     WHEREAS, pursuant to the tax laws of various jurisdictions, certain members
of Office Systems Group, as defined below, will file certain tax returns on a
stand-alone basis as well as on an affiliated, consolidated, combined, unitary,
fiscal unit or other group basis (including as permitted by Section 1501 of the
Internal Revenue Code of 1986, as amended (the "Code") with certain members of
PBI Group, as defined below, for taxable periods beginning prior to the
Distribution, as defined below;

     WHEREAS, PBI and Office Systems intend that PBI distribute to its
shareholders all of the Office Systems common stock held by PBI (the
"Distribution");

     WHEREAS, PBI has received a private letter ruling from the Internal Revenue
Service confirming the qualification of the Distribution as tax-free to PBI and
its shareholders, which, together with the underlying Ruling Request, as defined
below, has been provided to, and reviewed by, Office Systems;

     WHEREAS, PBI and Office Systems desire to set forth their agreement on the
rights and obligations of PBI, Office Systems and the members of PBI Group and
Office Systems Group, respectively, with respect to the handling and allocation
of federal, state, local and foreign taxes incurred in taxable periods beginning
prior to the Distribution Date, as defined below, and various other tax matters;

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:

     1.   Definitions.

     (a)  As used in this Agreement:

     "2001 Short Year" shall mean the short taxable year beginning on the first
day of Office Systems' first taxable period in 2001 and ending on the
Distribution Date.
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     "After-Tax Amount" shall mean an additional amount necessary to reflect the
hypothetical tax consequences of the receipt or accrual of any payment that is
treated as income of the recipient of such payment, using the maximum statutory
tax rate (or tax rates, in the case of an item that affects more than one tax)
applicable to the recipient of such payment for the relevant year.  The After-
Tax Amount shall reflect, for example, the effect of the deductions available
for interest paid or accrued and for taxes such as state and local income taxes.

     "Combined Income Tax" shall mean, with respect to each state, local or
foreign taxing jurisdiction, any income, franchise or similar tax (together with
any related interest or penalty) payable to such state, local or foreign taxing
jurisdiction in which a member of Office Systems Group files tax returns with a
member of PBI Group, on a consolidated, combined or unitary basis.

     "Distribution Agreement"  shall mean the Distribution Agreement between
Pitney Bowes Inc. and Pitney Bowes Office Systems, Inc. dated as of August __,
2001.

     "Distribution Date" shall mean the date on which the Distribution is
effected.

     "Federal Tax" shall mean any tax imposed under Subtitle A of the Code and
any related interest or penalty imposed under Subtitle F of the Code.

     "Final Determination" shall mean (i) with respect to Federal Taxes, a
"determination" as defined in Section 1313(a) of the Code or execution of an IRS
Form 870AD and, with respect to taxes other than Federal Taxes, any final
determination of liability in respect of a tax that, under applicable law, is
not subject to further appeal, review or modification through proceedings or
otherwise, (ii) any final disposition of a tax issue by reason of the expiration
of a statute of limitations or (iii) the payment of tax by PBI with respect to
any item disallowed or adjusted by any taxing authority where PBI determines in
good faith that no action should be taken to recoup such payment.

     "Income Tax" shall mean Federal Tax, Combined Income Tax and Separate
Income Tax.

     "IRS" shall mean the Internal Revenue Service.

     "Non-Income Taxes" shall mean all taxes, levies, charges or fees including,
without limitation, gross receipts, transfer, excise, property, sales, use,
value-added, goods and services, license, payroll, withholding, social security
or other governmental taxes or charges (including any interest, penalties or
additional taxes attributable thereto), imposed by the United States or any
state, county, local or foreign government, but excluding any Income Taxes.

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     "Office Systems 2001 Federal Tax Liability" shall mean the Federal Tax
liability of the Office Systems Group for the 2001 Short Year computed as if the
Office Systems Group were not and never were part of any consolidated group,
provided, however, that transactions with members of PBI Group shall be
reflected according to the provisions of the consolidated return regulations
promulgated under the Code governing intercompany transactions, and that the
Distribution will trigger any deferred amounts or similar items.  The Office
Systems 2001 Federal Tax Liability shall be determined (i) without regard to the
income, deductions (including net operating loss and capital loss deductions)
and credits in any year of any member of PBI Group that is not a member of
Office Systems Group, (ii) as though the highest rate of tax specified in
subsection (b) of Section 11 of the Code (or any other similar rates applicable
to specific types of income) were the only rates set forth in that subsection,
and with other similar adjustments as described in Section 1561 of the Code,
(iii) reflecting the positions, elections and accounting methods used by PBI in
preparing the consolidated federal income tax return for PBI Consolidated Group,
and (iv) by not permitting Office Systems Group any compensation deductions
arising in respect of any exercise of options on PBI stock by, or the issuance
or vesting of PBI restricted stock to, any employee of Office Systems Group.

     "Office Systems Group" shall mean, at any time, Office Systems and each of
its direct or indirect corporate subsidiaries.

     "Office Systems Tax Liability" shall mean, with respect to any taxable year
that includes any date in 2001 and any jurisdiction, the sum of (i) Office
Systems 2001 Federal Tax Liability and (ii) the amount of Combined Income Taxes
plus the amount of Separate Income Taxes determined in accordance with the
principles set forth in the definition of Office Systems 2001 Federal Tax
Liability.

     "Office Systems UK" shall mean Pitney Bowes Office Systems Limited, a
wholly owned direct subsidiary of Office Systems incorporated in the United
Kingdom and that will purchase certain assets from Pitney Bowes Limited under
the Agreement for the Sale and Purchase of the Office Systems Division of Pitney
Bowes Limited.

     "PBI Consolidated Group" shall mean PBI and each direct and indirect
corporate subsidiary, including a member of Office Systems Group, that is
eligible to join with PBI or a member of the PBI Group in the filing of (i) for
Federal Tax purposes, a consolidated federal income tax return, and (ii) for
Combined Income Tax purposes, a Combined Income Tax Return.

     "PBI Group" shall mean, at any time, PBI and each of its direct and
indirect corporate subsidiaries other than those subsidiaries that are members
of Office Systems Group.

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     "Post-Distribution Tax Period" means (i) any tax period beginning after the
Distribution Date and (ii) with respect to a tax period that begins on or before
and ends after the Distribution Date, the portion of the tax period that
commences on the day immediately after the Distribution Date.

     "Pre-Distribution Tax Period" means (i) any tax period ending before or on
the Distribution Date and (ii) with respect to a period that begins before and
ends after the Distribution Date, the portion of the tax period ending on and
including the Distribution Date.

     "Prime" shall mean, the rate announced from time to time as "prime" as
reported in the Wall Street Journal's Money Rates table as the prime rate with
respect to the applicable currency.

     "Return" shall mean any tax return, statement, report or form (including
estimated tax returns and reports, extension requests and forms, and information
returns and reports) required to be filed with any taxing authority.

     "Ruling Request" shall mean the request for rulings under Sections 355 and
368(a)(1)(D) of the Code filed by PBI with the Internal Revenue Service on
December 19, 2000, together with all supplemental materials subsequently filed
with the IRS in connection therewith.

     "Separate Income Tax" shall mean, with respect to each state, local or
foreign taxing jurisdiction, any income, franchise or similar tax (together with
any related interest or penalty) payable to such state, local or foreign taxing
jurisdiction in which a member of Office Systems Group files a separate tax
return.

     "Tax Asset" shall mean any net operating loss, net capital loss, investment
tax credit, foreign tax credit, deduction or any loss, credit or tax attribute
that could be carried forward or back to reduce taxes (including without
limitation deductions and credits related to alternative minimum taxes).

     "Tax Benefit" shall mean an amount derived with respect to a Tax Asset that
is equal to the excess of (A) the amount of Federal Taxes, or Combined Income
Taxes, as the case may be, that would have been payable by the recipient of the
Tax Benefit without the use a Tax Asset (including, but not limited to, a
carryback, carryforward, or reattribution of the Tax Asset), over (B) the amount
of Federal Taxes or Combined Income Taxes, as the case may be, actually payable
by such recipient.  In the case of a tax refund arising out the use of a Tax
Asset, the Tax Benefit shall be equal to the amount of the refund that was
actually received over the amount of the refund that would have been received in
the absence of such Tax Asset.

     "Tax Packages" shall mean one or more packages of information that are (i)
reasonably necessary for the purpose of preparing tax Returns of PBI

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Consolidated Group with respect to any tax period in which the information is
relevant, and (ii) completed in all material respects in accordance with the
standards that PBI has established for its subsidiaries.

     "Tax Proceeding" shall mean any tax audit, dispute or proceeding (whether
administrative or judicial).

     (b)  Any term used in this Agreement that is not defined in this Agreement
shall, to the extent the context requires, have the meaning assigned to it in
the Code or the applicable Treasury regulations promulgated thereunder (as
interpreted in administrative pronouncements and judicial decisions) or in
comparable provisions of applicable law.

     2.  Administrative and Compliance Matters.

     (a) Sole Tax Sharing Agreement. Any and all existing tax sharing agreements
or arrangements, written or unwritten, between any member of PBI Group and any
member of Office Systems Group shall be terminated as of the date of this
Agreement.  As of the date of this Agreement, neither the members of Office
Systems Group nor the members of PBI Group shall have any further rights or
liabilities under any such preexisting tax sharing agreements, and this
Agreement shall be the sole tax sharing agreement between the members of Office
Systems Group and the members of PBI Group.

     (b) Designation of Agent.  Office Systems and each member of Office Systems
Group hereby irrevocably authorizes and designates PBI as its agent,
coordinator, and administrator, for the purpose of taking any and all actions
(including the execution of waivers of applicable statutes of limitation)
necessary or incidental to the filing of any Return, any amended Return, or any
claim for refund (even where an item or Tax Asset giving rise to an amended
Return or refund claim arises in a Post-Distribution Tax Period), credit or
offset of tax or any other proceedings, and for the purpose of making payments
to, or collecting refunds from, any taxing authority, in each case relating only
to any Pre-Distribution Tax Period.

     (c) Pre-Distribution Tax Period Returns.

         (i) Preparation of Income Tax Returns.  PBI will prepare and file,
with the assistance of Office Systems Group, all Returns of PBI Consolidated
Group and all Separate Income Tax Returns of any member of that group for all
Pre-Distribution Tax Periods.  PBI shall have the right with respect to such
Returns to determine (A) the manner in which such returns, documents or
statements shall be prepared and filed, including, without limitation, the
manner in which any item of income, gain, loss, deduction or credit shall be
reported, (B) whether any extensions should be requested, and (C) the elections
that will be made by any member of PBI Group or Office Systems Group; provided,
however, that PBI will consult with Office Systems regarding the manner in which
items

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related to Office Systems Group will be reflected in such returns and will
undertake in good faith to prepare such Returns in a manner that PBI determines
may be substantively beneficial to the Office Systems Group for any Post-
Distribution Tax Period, but only to the extent that such manner of preparing
Returns has no adverse impact on PBI.

          (ii) Audits and Refunds.  With respect to all Returns of PBI
Consolidated Group and all Separate Income Tax Returns of any member of that
group for all Pre-Distribution Tax Periods, except as otherwise provided in
Section 8, PBI shall have the right to (A) contest, compromise or settle any
adjustment or deficiency proposed, asserted or assessed as a result of any audit
of any such return, (B) file, prosecute, compromise or settle any claim for
refund, and (C) determine whether any refunds to which any member of PBI Group
may be entitled shall be received by way of refund or credit against tax
liability.

          (iii) Delivery of Tax Packages.  No later than 60 days after the
Distribution Date, Office Systems shall prepare and deliver to PBI Tax Packages
that include information of Office Systems Group for the Pre-Distribution Tax
Period.

     (d)  Allocation.  Immediately after the Distribution, PBI and the Office
Systems Group will close their books utilizing a "cut off" method and the
provisions of 1.1502-76(b)(1)(ii)(A), End of Day Rule, shall be applied to the
2001 Short Year.

     (e)  Non-Income Tax Returns and Post-Distribution Tax Period Income Tax
Returns of Office Systems Group. Office Systems shall be solely responsible for
the preparation and filing of (i) Income Tax Returns of Office Systems Group for
all Post-Distribution Tax Periods and (ii) the Returns of Office Systems Group
for Non-Income Taxes for any tax period.

     (f)  2001 Short-Year State, Local and Foreign Returns.  PBI and Office
Systems agree that Combined Income Tax Returns and Separate Income Tax Returns
filed for tax periods that begin prior to the Distribution Date will reflect a
short taxable year for Office Systems ending on the Distribution Date in any
state, local or foreign taxing jurisdiction in which such tax year is allowed by
administrative practice, whether or not required by law.

     3.  Tax Sharing.

     (a) General. For each Taxable period during which income, profits, gains,
net worth, receipts, sales, loss or credit against tax of at least one member of
each of the PBI Group and Office Systems Groups are includible in a Return of
PBI Consolidated Group, (i) no later than 45 days after the Distribution Date
the Office Systems Group shall pay to the PBI Group an amount equal to the
Office Systems Tax Liability for such Taxable period, if any, and (ii) at the
time the PBI Group realizes any such benefit, the PBI Group shall pay to the
Office Systems

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Group the Tax Benefit received by PBI Consolidated Group from the use of any net
operating loss of Office Systems Group arising in such period.

     (b) True-Up When Return Filed. At the time PBI files PBI Consolidated
Group's consolidated Federal Tax Returns for the calendar year ended December
31, 2001, PBI shall deliver to Office Systems a copy of the portion of such
returns relating to Office Systems together with a statement setting forth the
difference between (A) Office Systems 2001 Federal Tax Liability and (B) the
aggregate amount of payments with respect to the Office Systems 2001 Federal Tax
Liability made by Office Systems to PBI prior to that time. At the time PBI
files any Combined Income Tax Return and any Separate Income Tax Return prepared
by PBI in accordance with Section 2(c) that include any member of Office Systems
Group, PBI shall deliver a copy of such Return to Office Systems, together with
a statement setting forth the difference between (C) the Office Systems Tax
Liability for such Return and (D) the aggregate amount of payments with respect
to the Office Systems Tax Liability for such Return made by Office Systems to
PBI prior to that time. Any amount shown as payable on any statement described
in this Section 3(b) shall be paid pursuant to Section 9.

     (c)  Carrybacks From Post-Distribution Years.

          (i) Office Systems agrees not to carry back any Tax Asset of Office
Systems Group from a Post-Distribution Tax Period without the advance written
consent of PBI, which shall not be unreasonably withheld.  If PBI consents to
such carryback, PBI agrees to pay to Office Systems the Tax Benefit received by
PBI Consolidated Group from the use in any Pre-Distribution Tax Period of a
carryback of any Tax Asset of Office Systems Group from a Post-Distribution Tax
Period.

          (ii)  If, subsequent to the payment by PBI Group to Office Systems
Group of any amount, there is (A) a Final Determination that results in a
disallowance or a reduction of the Tax Asset so carried back or (B) a reduction
in the amount of the benefit realized by PBI Consolidated Group from such Tax
Asset as a result of a Final Determination or the use by PBI Consolidated Group
of a Tax Asset of PBI Group, Office Systems Group shall repay to PBI, within 30
days of such event described in (A) or (B) (an "Event"), any amount which would
not have been payable to Office Systems Group pursuant to the subparagraph
3(c)(i) had the amount of the benefit been determined in light of such Event.
In addition, Office Systems Group shall hold each member of PBI Group harmless
from any penalty or interest payable by any member of PBI Group as a result of
any such Event.  Any such amount shall be paid by Office Systems Group within 30
days of the payment by PBI Group of any such interest or penalty.  Nothing in
this Section 3(c) shall require PBI to file a claim for refund of Federal Taxes
or Combined Income Taxes that PBI, in its sole discretion, has determined is not
more likely than not to succeed.  Provisions of this subparagraph 3(c)(ii) shall
be carried out consistently with provisions of Sections 7, 9 and 11.

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     (d)   Audit Payments.

          (i) Responsibility for Payment.  Except as provided in paragraph
(d)(ii) below or in Section 8, PBI shall be responsible for any payment due to
any taxing authority as a result of an audit adjustment to any Income Tax Return
which relates solely to a Pre-Distribution Tax Period.  Office Systems shall be
responsible for any payment due to any taxing authority as a result of an
adjustment to any Return of Office Systems Group which relates solely to a Post-
Distribution Tax Period.  In the case of any adjustment not covered in the
preceding sentence, PBI shall determine the amount to be paid by each party in a
manner consistent with the principles of this Agreement and with past practice.

          (ii) Timing Differences.  To the extent that any audit adjustment of
an Income Tax Return relating to a Pre-Distribution Tax Period is attributable
to timing differences attributable to Office Systems, PBI shall pay to Office
Systems, or Office Systems shall pay to PBI, as appropriate, an amount
reflecting the timing differences.  In the case of Federal Tax Return, this
amount shall be equal to the actual amount of the adjustment to PBI's tax
liability which is attributable to the timing differences as determined by PBI
with the consent of Office Systems, which consent may not be unreasonably
withheld.  In the case of Combined Income Tax Return or Separate Income Tax
Return, the amount shall be equal to the difference between the tax actually due
on the adjusted Return and the amount that would have been due on the adjusted
Return had Office Systems not been included as a member of PBI Consolidated
Group.

     4.  Certain Representations and Covenants.

     (a) (i)  Office Systems Representations.  Office Systems and each member of
Office Systems Group represent as of the date hereof, and covenant that on the
Distribution Date, there is no plan or intention (A) to liquidate Office Systems
or to merge or consolidate Office Systems, or any member of Office Systems Group
with any other person subsequent to the Distribution, (B) to sell or otherwise
dispose of any asset of Office Systems or any member of Office Systems Group
subsequent to the Distribution, except in the ordinary course of business, (C)
to take any action inconsistent with the information and representations
furnished to the Internal Revenue Service in connection with the Ruling Request
or (D) to enter into any negotiations, agreements, or arrangements with respect
to transactions or events (including stock issuances, pursuant to the exercise
of options or otherwise, option grants, capital contributions, or acquisitions,
but not including the Distribution) that may cause the Distribution to be
treated as part of a plan pursuant to which one or more persons acquire directly
or indirectly Office Systems stock representing a "50-percent or greater
interest" within the meaning of Section 355(d)(4) of the Code.

          (ii)  PBI Representations.  PBI represents as of the date hereof, and
covenants that on the Distribution Date, there is no plan or intention to take
any

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action inconsistent with the information and representations furnished to
the Internal Revenue Service in connection with the Ruling Request.

          (iii)  Office Systems and PBI Representations.  Each of Office
Systems, PBI and the members of Office Systems Group, respectively, represent as
of the date hereof, and covenant that on the Distribution Date, neither Office
Systems, PBI nor the members of Office Systems Group, respectively (as
applicable), is aware of any present plan or intention by the current
shareholders of PBI to sell, exchange, transfer by gift, or otherwise dispose of
any of their stock in, or securities of, PBI or Office Systems subsequent to the
Distribution, other than pursuant to open market transactions.

     (b)  Office Systems Covenants.  Office Systems covenants to PBI that,
except as provided in paragraph (c) below, during the two-year period following
the Distribution Date:

          (i) neither Office Systems nor any member of Office Systems Group will
liquidate, merge or consolidate with any other person;

          (ii) Office Systems will not sell, exchange, distribute or otherwise
dispose of its assets or those of any member of Office Systems Group, except in
the ordinary course of business;

          (iii) Office Systems will continue the active conduct of the historic
business that was conducted by Office Systems throughout the five year period
prior to the Distribution;

          (iv) Office Systems will not, nor will it permit any member of Office
Systems Group, to take any action inconsistent with the information and
representations furnished to the Internal Revenue Service in connection with the
Ruling Request;

          (v) Office Systems will not repurchase stock of Office Systems in a
manner contrary to the requirements of Revenue Procedure 96-30 or in a manner
contrary to the representations made in connection with the Ruling Request and

          (vi) Office Systems will not enter into any transaction or make any
change in equity structure (including stock issuances, pursuant to the exercise
of options, option grants or otherwise, capital contributions, or acquisitions,
but not including the Distribution) that may cause the Distribution to be
treated as part of a plan pursuant to which one or more persons acquire directly
or indirectly Office Systems stock representing a "50-percent or greater
interest" within the meaning of Section 355(d)(4) of the Code.

     Further, Office Systems covenants to PBI that:

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          (vii) it will not, nor will it permit any member of Office Systems
Group, to make or change any tax accounting method, change its taxable year,
amend any tax Return or take any tax position on any Return, take any other
action, omit to take any action or enter into any transaction that results in
any increased tax liability or reduction of any Tax Asset of PBI Consolidated
Group or any member thereof in respect of any Pre-Distribution Tax Period;

          (viii) it will file federal consolidated returns, to the extent
applicable, with its subsidiaries for the tax period that begins immediately
after the Distribution Date, and

          (ix) it will execute all necessary forms, including powers of
attorney, requested by PBI in connection with exercise of PBI's rights and
responsibilities under this Agreement, including those described in Section
2(b).

     (c)  Exceptions.  Notwithstanding the foregoing, Office Systems and the
members of Office Systems Group may take actions inconsistent with the covenants
contained in Section 4(b)(i) through (vi) above, if:

          (i)  Office Systems notifies PBI of its proposal to take such action
and Office Systems and PBI obtain a ruling from the IRS to the effect that such
actions will not result in the Distribution being taxable to PBI or its
shareholders, provided that Office Systems agrees in writing to bear any
expenses associated with obtaining such a ruling and, provided further, that
Office Systems shall not be relieved of any liability under Section 5 of this
Agreement by reason of seeking or having obtained such a ruling; or

          (ii)  Office Systems notifies PBI of its proposal to take such action
and obtains an opinion of counsel recognized as an expert in federal income tax
matters and acceptable to PBI to the same effect as in subparagraph 4(c)(i),
provided that such opinion is acceptable to PBI in its sole discretion.

     (d)  Deductions and Certain Taxes Related to Options.

     PBI shall file Returns claiming (i) the tax deductions attributable to the
exercise of options to purchase stock of PBI or the vesting of PBI restricted
stock that are held by employees or former employees of Office Systems Group or
(ii) any other similar stock-based compensation-related tax deductions.  The
Returns of PBI Group and Office Systems Group shall reflect the entitlement of
PBI Group to such deductions.  To the extent such deductions are disallowed
because a taxing authority determines that Office Systems Group should have
claimed such deductions, as consideration for PBI's issuance of shares of its
stock as a result of the exercise described in clause (i) of the preceding
sentence, Office Systems Group shall in good faith and to the extent permitted
by law, file all applicable returns or claims for refund claiming such
deductions and pay to PBI Group an amount equal to the Tax Benefit if any,
actually received by Office Systems with respect to the applicable returns or
claims for refund.

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Notwithstanding the foregoing, Office Systems Group shall not be required to pay
to PBI Group any amount with respect to deductions attributable to a year for
which, at the time PBI notifies Office Systems of its claim pursuant to this
Section 4(d), the applicable statute of limitations has run or which is
otherwise closed. Upon the exercise of any option or the vesting of any
restricted stock described in clause (i), or the occurrence of any other event
that would result in a compensation-related tax deduction, as the case may be,
PBI shall prepare and file all applicable Returns and pay the applicable tax
liability under the Federal Insurance Contributions Act, the Federal
Unemployment Tax Act or any state employment tax law in connection with such
event.

     5.  Indemnities.

     (a)  Office Systems Indemnity.  Office Systems and each member of Office
Systems Group will jointly and severally indemnify PBI and the members of PBI
Group against and hold them harmless from:

          (i)  any liability or damage resulting from a breach by Office Systems
or any member of Office Systems Group of any representation or covenant made by
Office Systems herein,

          (ii) any tax liability resulting from the Distribution and
attributable to any action of Office Systems or any member of Office Systems
Group, without regard to whether PBI or any agent or officer of PBI has
consented to such action, and

          (iii)  all liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements or judgments arising out of
or incident to the imposition, assessment or assertion of any tax liability or
damage described in (i) or (ii) of this Section 5(a), including those incurred
in the contest in good faith in appropriate proceedings relating to the
imposition, assessment or assertion of any such tax, liability or damage.

          (b) PBI Indemnity.  PBI will indemnify Office Systems and the members
of Office Systems Group against and hold them harmless from:

          (i)  any tax liability of PBI Group and any tax liability resulting
from the Distribution, other than any such liabilities described in Section
5(a),

          (ii) any liability or damage resulting from a breach by PBI or any
member of PBI Group of any representation or covenant made by PBI herein, and

          (iii)  all liabilities, costs, expenses (including, without
limitation, reasonable expenses of investigation and attorneys' fees and
expenses), losses, damages, assessments, settlements or judgments arising out of
or incident to the imposition, assessment or assertion of any tax liability or
damage described in

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paragraphs (i) and (ii) of this Section 5(b), including those incurred in the
contest in good faith in appropriate proceedings relating to the imposition,
assessment or assertion of any such tax, liability or damage.

     (d)  Tax Benefits.  If an indemnification obligation of any member of PBI
Group or any member of Office Systems Group, as the case may be, under this
Section 5 with respect to PBI Consolidated Group arises in respect of an
adjustment that makes allowable to a member of Office Systems Group or a member
of PBI Group, respectively, any Tax Benefit that would not, but for such
adjustment, be allowable, then any payment by any member of PBI Group or any
member of Office Systems Group, respectively, pursuant to this Section 5 shall
be an amount equal to (A) the amount otherwise due but for this subsection (d),
minus (B) the tax savings actually realized as a result of such Tax Benefit.

     6.  Subsidiaries.

     PBI agrees and acknowledges that PBI shall be responsible for the
performance by each member of PBI Group of the obligations hereunder applicable
to such member.  Office Systems agrees and acknowledges that Office Systems
shall be responsible for the performance by each member of Office Systems Group
of the obligations hereunder applicable to such member.

     7.  Communication and Cooperation.

     (a)  Consult and Cooperate.  Office Systems and PBI shall consult and
cooperate (and shall cause each member of Office Systems Group or PBI Group,
respectively, to cooperate) fully at such time and to such extent as are
reasonably requested by the other party in connection with all matters subject
to this Agreement.  Such cooperation shall include, without limitation:

          (i)  the retention and provision on reasonable request of any and all
information including all books, records, documentation or other information
pertaining to tax matters (including Income Taxes and Non-Income Taxes) relating
to PBI Group and Office Systems Group, any necessary explanations of
information, and access to personnel, in each case until two years after the
expiration of the applicable statute of limitation (giving effect to any
extension, waiver, or mitigation thereof);

          (ii)  the execution of any document that may be necessary or helpful
in connection with any required Return or in connection with any audit,
proceeding, suit or action and

          (iii)  the use of the parties' best efforts to obtain any
documentation from a governmental authority or a third party that may be
necessary or helpful in connection with the foregoing.

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     (b)  Provide Information.  PBI and Office Systems shall keep each other
fully informed with respect to any material development relating to the matters
subject to this Agreement.

     (c)  Tax Attribute Matters.  PBI and Office Systems shall advise each other
with respect to any proposed tax adjustments relating to a Pre-Distribution Tax
Period, which are the subject of an audit or investigation, or are the subject
of any proceeding or litigation, and which may affect any tax liability or any
tax attribute of PBI, Office Systems, PBI Group, Office Systems Group or any
member of Office Systems Group or PBI Group (including, but not limited to,
basis in an asset or the amount of earnings and profits).  Except as otherwise
provided herein, PBI shall in good faith determine the apportionment of tax
attributes between PBI Group and Office Systems Group in accordance with
applicable laws.

     8.  Audits and Contest.

     (a)  PBI Control.  Notwithstanding anything in this Agreement to the
contrary, except to the extent provided in paragraphs (b) and (c) below, PBI
shall have the right to control all matters relating to any tax Return or any
Tax Proceeding with respect to any tax matters of PBI Consolidated Group or any
member of PBI Consolidated Group, other than Non-Income Tax Returns relating to
the Office Systems business and any Tax Proceedings related to them.  PBI shall
have absolute discretion with respect to any decisions to be made, or the nature
of any action to be taken, with respect to any Income Tax matter described in
the preceding sentence provided, however, that PBI shall keep Office Systems
informed of all material developments and events relating to such matters to the
extent they affect the Office Systems Tax Liability or may give rise to a claim
for indemnity by PBI against Office Systems under Section 5(a) of this
Agreement; and at its own cost and expense, Office Systems shall have the right
to participate in (but not to control) the defense of any such tax claim.  In
cases where an audit adjustment or refund claim related to a Pre-Distribution
Tax Period is reasonably likely to have the effect of increasing the tax
liability of Office Systems in a Post Distribution Tax Period, PBI shall consult
with Office Systems and to the extent practicable, avoid taking any action that
is reasonably likely to have a material adverse effect on Tax Returns, Tax
Assets or Tax liabilities of Office Systems Group for any Post-Distribution Tax
Period.

     (b)  Office Systems Assumption of Control; Non-Section 355 Matters.  If
PBI determines that the resolution of any matter relating to a Tax Return or Tax
Proceeding (other than a Tax Proceeding relating to the qualification of the
Distribution  under Section 355 of the Internal Revenue Code) is reasonably
likely to have an adverse effect on Office Systems Group with respect to any
Post-Distribution Tax Period, PBI shall permit Office Systems Group to elect to
assume control over disposition of such matter at Office Systems' sole cost and
expense provided, however, that if Office Systems so elects, it will (i) be
responsible for the payment of any liability arising from the disposition of
such matter notwithstanding any other provision of this Agreement to the
contrary and

                                      14
<PAGE>

(ii) indemnify PBI Group for any increase in a liability and any reduction of a
Tax Asset of PBI Group arising from such matter.

     (c)  Office Systems Assumption of Control; Section 355 Matters. In the
event of a Tax Proceeding relating to the qualification of the Distribution
under Section 355 of the Internal Revenue Code, PBI shall have the right to
control the defense of the matter in all proceedings before the Internal Revenue
Service, provided that PBI shall keep Office Systems fully informed of all
material developments and shall permit Office Systems a reasonable opportunity
to participate in the defense of the matter.   If the issues relating to the
qualification of the Distribution under Section 355 of the Internal Revenue Code
(x) do not involve Section 355(e) of the Internal Revenue Code, (y) are not
favorably resolved in proceedings before the Internal Revenue Service and (z)
PBI has determined that Office Systems would be required to indemnify PBI as a
result of the disqualification of the Distribution, PBI shall permit Office
Systems Group to elect to assume control over final disposition of such matter
pursuant to judicial proceedings at Office Systems' sole cost and expense
provided, however, that if Office Systems so elects, it will (i) be responsible
for the payment of any liability arising from the disposition of such matter
notwithstanding any other provision of this Agreement to the contrary and (ii)
indemnify PBI Group for any increase in a liability and any reduction of a Tax
Asset of PBI Group arising from such matter.

     (d)  Office Systems Control.  Office Systems shall have full control over
all matters relating to any Tax Proceeding with respect to Returns of Office
Systems Group relating to any Post-Distribution Tax Period.

     9.  Payments.

     (a)  Timing, After-tax Amounts.  All payments to be made hereunder shall be
made in immediately available funds.  Except as otherwise provided, all payments
required to be made pursuant to this Agreement will be due 30 days after the
receipt of notice of such payment or, where no notice is required, 30 days after
the fixing of liability or the resolution of a dispute.  Payments shall be
deemed made when received.  Any payment that is not made when due shall bear
interest at a rate equal to Prime for each day until paid.  If, pursuant to a
Final Determination, any amount paid by PBI or the members of PBI Group, or
Office Systems or the members of Office Systems Group, as the case may be,
pursuant to this Agreement results in any increased tax liability or reduction
of any Tax Asset of Office Systems or any member of Office Systems Group, or PBI
or any member of PBI Group, respectively, then PBI or Office Systems, as
appropriate, shall indemnify the other party and hold it harmless from any
interest or penalty attributable to such increased tax liability or the
reduction of such Tax Asset and shall pay to the other party, in addition to
amounts otherwise owed, the After-Tax Amount.

     (b)  Netting of Payments.  If, on the day payment is due under this
Agreement, each of Office Systems and PBI (each, a "Party") owes an amount to

                                      15
<PAGE>

the other Party pursuant to this Agreement and any other agreement between the
Parties, including, without limitation, the Distribution Agreement and any
Ancillary Agreement, as defined in the Distribution Agreement, the Parties shall
satisfy their respective obligations to each other by netting the aggregate
amounts due to one Party against the aggregate amounts due to the other Party,
with the Party, if any, owning the greater aggregate amount paying the other
Party the difference between the amounts owed.  Such net payment shall be made
pursuant to the provision of Section 9(a).

     10.  Injunction.

     The parties hereto agree that the payment of monetary compensation would
not be an adequate remedy to a breach of the obligations contained in Section
4(b) hereof, and Office Systems consents to the issuance and entry of an
injunction to prevent a breach of those obligations; provided, however, that the
foregoing shall be without prejudice to and shall not constitute waiver of any
other remedy either party may be entitled to at law or at equity hereunder.

     11.  U.K. Tax Separation Agreement.

     (a) Office Systems UK Returns.  Notwithstanding anything in this Agreement
to the contrary, Office Systems UK shall be solely responsible for (i) preparing
and filing of  all Returns for any taxes payable by it to any tax authorities in
the United Kingdom for all Tax Periods, (ii) paying any taxes shown on such
Returns, (iii) contesting, compromising or settling adjustment or deficiency
proposed, asserted or assessed as a result of any audit of any such Return and
(iv) filing, prosecuting, compromising or settling any claim for refund with
respect to taxes shown on such Returns.

     (b)  Any matters related to taxes other than those described in Section
11(a) above shall be resolved in accordance with the provisions of the Agreement
for the Sale and Purchase of the Office Systems Division of Pitney Bowes Limited
between Pitney Bowes Limited and Office Systems UK.

     12.  Notices.

     Any notice, demand, claim, or other communication under this Agreement
shall be in writing and shall be deemed to have been given upon the delivery or
mailing thereof, as the case may be, if delivered personally or sent by
certified mail, return receipt requested, postage prepaid, to the parties at the
following addresses (or at such other address as a party may specify by notice
to the other):

     If to PBI:

     Pitney Bowes Inc.
     One Elmcroft Road
     Stamford, CT 06926-0700

                                      16
<PAGE>

     Attn: Arlen F. Henock
     Vice President-Finance

     with copies to:
     Executive Director, Global Tax Planning & General Tax Counsel and
     Director of Tax Compliance and Audits

     If to Office Systems:

     Pitney Bowes Office Systems, Inc.
     100 Oakview Drive
     Trumbull, CT 06611
     Attn: Joseph Skrzypczak
     Chief Financial Officer

     with copies to:
     General Counsel
     and Vice President-Taxes

     13.  Costs and Expenses.

     (a) Reimbursement for Certain Services. PBI shall provide services in
connection with this Agreement, including determination of Office Systems Tax
Liability as described in Sections 2 and 3 and other services described in
Services Agreement between Office Systems and PBI (the "Transition Services
Agreement").  Payments for these services shall be made consistent with the
invoice and payment procedures provided for in the Transition Services
Agreement.

     (b) Others.  Except as expressly set forth in this Agreement, each party
shall bear its own costs and expenses incurred pursuant to this Agreement.  For
purposes of this Agreement, "out-of-pocket" expenses shall include reasonable
attorneys' fees, accountant fees and other related professional fees and
disbursements.

     14.  Effectiveness; Termination and Survival.

     This Agreement shall become effective upon the consummation of the
Distribution.  All rights and obligations arising hereunder with respect to a
Pre-Distribution Tax Period shall survive until they are fully effectuated or
performed.  Notwithstanding anything in this Agreement to the contrary, this
Agreement shall remain in effect and its provisions shall survive for the full
period of all applicable statutes of limitation (giving effect to any extension,
waiver or mitigation thereof).

     15.  Headings.

                                      17
<PAGE>

     The headings contained in this Agreement are inserted for convenience only
and shall not constitute a part hereof or in any way affect the meaning or
interpretation of this Agreement.

     16.  Entire Agreement; Amendments and Waivers; Severability.

     (a)  Entire Agreement.  This Agreement contains the entire understanding of
the parties hereto with respect to the subject matter contained herein.  No
alteration, amendment, modification, or waiver of any of the terms of this
Agreement shall be valid unless made by an instrument signed by an authorized
officer of each of PBI and Office Systems, or in the case of a waiver, by the
party against whom the waiver is to be effective.

     (b)  Amendments and Waivers.  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 right, power or privilege.
This Agreement shall not be waived, amended or otherwise modified except as in
writing, duly executed by all of the parties hereto.

     (c)  Severability.  If any provision of this Agreement or the application
of any such provision to any party or circumstances shall be determined by any
court of competent jurisdiction to be invalid, illegal or unenforceable to any
extent, the remainder of this Agreement or such provision or the application of
such provision to such party or circumstances, other than those determined to be
so invalid, illegal or unenforceable, shall remain in full force and effect to
the fullest extent permitted by law and shall not be affected by such
determination, unless such a construction would be unreasonable.

     17.  Governing Law and Interpretation.

     This Agreement has been made in, and shall be construed and enforced in
accordance with the laws of, the State of  New York without giving effect to
laws and principles relating to conflicts of law.

     18.  Dispute Resolution.

     The parties shall endeavor in good faith promptly to resolve any
disagreement or dispute relating to this Agreement.  If the parties are unable
to resolve any disagreement or dispute relating to the matters referred to in
paragraph (d)(ii) of Section 3 or in paragraphs (a), (b) or (c) of Section 4, or
the related indemnities, of this Agreement within 20 days, such disagreement or
dispute shall be resolved by PBI acting in good faith and so as to avoid a
windfall to either party.  Any such resolution shall be binding on the parties
to this Agreement without further recourse.

     19.  Counterparts.

                                      18
<PAGE>

     This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same Agreement.

     20.  Assignments; Third Party Beneficiaries.

     Except as provided below, this Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto and their respective successors
and assigns, by merger, acquisition of assets or otherwise (including but not
limited to any successor of a party hereto succeeding to the tax attributes of
such party under applicable law).  This Agreement is not intended to benefit any
person other than the parties hereto and such successors and assigns, and no
other person shall be a third party beneficiary hereof.

     21.  Further Assurances.

     PBI and Office Systems shall execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such instruments and take such other
action as may be necessary or advisable to carry out their obligations under
this Agreement and under any exhibit, document or other instrument delivered
pursuant hereto.

     22.  Authorization.

     Each of the parties hereto hereby represents and warrants that it has the
power and authority to execute, deliver and perform this Agreement, that this
Agreement has been duly authorized by all necessary corporate action on the part
of such party, that this Agreement constitutes a legal, valid and binding
obligation of each such party and that the execution, delivery and performance
of this Agreement by such party does not contravene or conflict with any
provision or law or of its charter or bylaws or any agreement, instrument or
order binding on such party.

                                      19
<PAGE>

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first written above.

                         PBI on its own behalf and on behalf of each member of
                         PBI Group.

                         By:__________________________
                         Name:  Arlen F. Henock
                         Title: Vice President-Finance

                         Office Systems on its own behalf and on
                         behalf of each member of Office Systems
                         Group.

                         By:__________________________
                         Name:  Joseph D. Skrzypczak
                         Title: Chief Financial Officer

                                      20<PAGE>

                                                                    EXHIBIT 10.2

                         TRANSITION SERVICES AGREEMENT

                                    between

                               Pitney Bowes Inc.

                                      and

                       Pitney Bowes Office Systems, Inc.

                          Dated as of __________, 2001
<PAGE>

                               TABLE OF CONTENTS

                                                                    Page
                                                                    ----

                                   ARTICLE 1
               Definitions
Section 1.01.  Definitions...........................................1

                                   ARTICLE 2
               Purchase and Sale of Services
Section 2.01.  Purchase and Sale of Services.........................5
Section 2.02.  Subsidiaries..........................................6
Section 2.03.  Additional Services...................................6
Section 2.04.  Services Provided by Office Systems...................6

                                   ARTICLE 3
               Service Costs; Other Charges
Section 3.01.  Service Costs Generally...............................6
Section 3.02.  Sales Tax.............................................7
Section 3.03.  Certain Benefits Matters..............................7
Section 3.04.  Invoicing and Settlement of Costs.....................7

                                   ARTICLE 4
               The Services
Section 4.01.  General Standard of Service...........................8
Section 4.02.  Personnel.............................................9
Section 4.03.  Systems Support.......................................9
Section 4.04.  Delegation............................................9
Section 4.05.  Limitation of Liability..............................10
Section 4.06.  Indemnification of Pitney Bowes by Office Systems....11
Section 4.07.  Indemnification of Office Systems by Pitney Bowes....11
Section 4.08.  Further Indemnification..............................11
Section 4.09.  Notice of Certain Matters............................12

                                  ARTICLE 5
               Term and Termination
Section 5.01.  Term.................................................12
Section 5.02.  Termination..........................................13
Section 5.03.  Effect of Termination................................13

                                   ARTICLE 6
               Operating Committee
Section 6.01.  Organization.........................................14
<PAGE>

                                                                    Page
                                                                    ----

Section 6.02.  Decision Making......................................15
Section 6.03.  Meetings.............................................15

                                   ARTICLE 7
               Third Party Consents and Licenses
Section 7.01.  Separation...........................................15
Section 7.02.  Additional Licenses..................................15
Section 7.03.  Fees.................................................15

                                   ARTICLE 8
               Additional Agreements
Section 8.01.  Confidential Information.............................16
Section 8.02.  Security.............................................17
Section 8.03.  Service Level at Termination of Transition Period....17

                                   ARTICLE 9
               Miscellaneous
Section 9.01.  Prior Agreements.....................................18
Section 9.02.  Other Agreements.....................................18
Section 9.03.  No Agency............................................18
Section 9.04.  Subcontractors.......................................18
Section 9.05.  Force Majeure........................................18
Section 9.06.  Entire Agreement.....................................19
Section 9.07.  Information..........................................19
Section 9.08.  Notices..............................................19
Section 9.09.  Governing Law........................................20
Section 9.10.  WAIVER OF JURY TRIAL.................................20
Section 9.11.  Severability.........................................21
Section 9.12.  Amendment............................................21
Section 9.13.  Counterparts.........................................21

                                       ii
<PAGE>

Schedule 1 -   Summary of Non-IT Service Agreements

                                                               Schedule
                                                               --------

Service Parts Logistics                                        1A

Real Estate Transaction Services                               1B

Accounting

     Sales, Use and Property Tax                               1C-1

     Payroll, Travel Reimbursement, Accounts Payable           1C-2

     General Ledger                                            1C-3

     Fixed Assets                                              1C-4

     Inventory Accounting                                      1C-5

     Accounts Receivable                                       1C-6

Benefits Administration                                        1D

Supplies Line Order Entry System                               1E

Customer Care Call Dispatch                                    1F

Safety and Environmental                                       1G

Field Service Systems Support                                  1H

Non-Focus Field Service                                        1J

Telecom Costs in Shared Locations                              1K

Mailroom Services                                              1L

Import and Customs Compliance                                  1M

Document Services Group Services                               1N

Schedule 2 -   Service Provisioning and Service Level Agreement
<PAGE>

                         TRANSITION SERVICES AGREEMENT
                         -----------------------------

     This Transition Services Agreement (this "Agreement") is entered into as of
__________, 2001 by and between Pitney Bowes Inc., a Delaware corporation
("Pitney Bowes"), and Pitney Bowes Office Systems, Inc., a Delaware corporation
("Office Systems").

                                     RECITALS

     WHEREAS, Pitney Bowes owns 100% of the outstanding common stock of Office
Systems prior to the consummation of the Distribution (as defined below);

     WHEREAS, Pitney Bowes will no longer own any of the outstanding common
stock of Office Systems after the consummation of the Distribution; and

     WHEREAS, Pitney Bowes has heretofore directly or indirectly provided
certain administrative, financial, management and other services to the Office
Systems Group (as defined below).

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pitney Bowes and Office Systems,
for themselves, their successors and assigns, hereby agree as follows:

                                   ARTICLE 1

                                  Definitions

     Section 1.01.  Definitions.  (a) As used in this Agreement, the following
terms shall have the following meanings, applicable both to the singular and the
plural forms of the terms described:

    "Actions" has the meaning set forth in Section 4.07.

    "Affiliate" has the meaning set forth in the Distribution Agreement,
provided, however, that the Affiliates of each party for purposes of this
agreement shall be determined after giving effect to the consummation of the
Distribution.

    "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.
<PAGE>

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

    "Benefits Services" has the meaning set forth in Section 3.03.

    "Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.

    "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 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.

    "Common Stock" means the Common Stock, par value $.01 per share, of Office
Systems.

    "Confidential Information" has the meaning set forth in Section 8.01.

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

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

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

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

                                       2
<PAGE>

    "Employee Benefit Plans" has the meaning set forth in Section 4.04.

    "force majeure" has the meaning set forth in Section 9.05.

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

    "IT Services" has the meaning set forth in Section 2.01(b).

    "Intellectual Property Agreement" has the meaning set forth in the
Distribution Agreement.

    "Non-Compliance Notice" has the meaning set forth in Section 4.09.

    "Non-IT Services" has the meaning set forth in Section 2.01(a).

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

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

    "Office Systems Indemnified Person" has the meaning set forth in Section
4.07.

    "Operating Committee" has the meaning set forth in Section 6.01.

    "Payment Date" has the meaning set forth in Section 3.04(b).

    "Person" means individual, corporation, limited liability company,
partnership association, trust or agency thereof) 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 hereto.

    "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 Indemnified Person" has the meaning set forth in Section
4.05(a).

    "Pitney Bowes Plans" has the meaning set forth in Section 3.03.

                                       3
<PAGE>

    "Prior Agreements" has the meaning set forth in Section 9.01.

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

    "Schedules" means Schedules 1 (and all subschedules thereto) and 2 hereto.

    "Service Costs" has the meaning set forth in Section 3.01.

    "Service Level Breach" has the meaning set forth in Section 4.01(b).

    "Services" has the meaning set forth in Section 2.01(b).

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

    "Subsidiary" means, with respect to any Person, any other entity of which
securities or other ownership interests having a 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.

    "Systems Support" has the meaning set forth in Section 4.03.

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

    "Total Voting Power" with respect to any Person means the total combined
voting power of all securities of such Person entitled to vote generally in the
election of directors of such Person.

    "Transition Period" has the meaning set forth in Section 5.01.

    "Transition Services Agreement" has the meaning set forth in the preamble
hereto.

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

                                       4
<PAGE>

                                   ARTICLE 2

                         Purchase and Sale of Services

     Section 2.01.  Purchase and Sale of Services.  On the terms and subject to
the conditions of this Agreement and in consideration of the Service Costs
described below, Pitney Bowes agrees to:

       (a)  provide to Office Systems, or procure the provision to Office
Systems of, and Office Systems agrees to purchase from Pitney Bowes, the
transition services (the "Non-IT Services") as set forth on Schedule 1 (and the
subschedules thereto), as such may be amended by the parties and any other
services that (i) Office Systems, in the ordinary course prior to the
Distribution Date, received in whole or in part from the Pitney Bowes Group or
in reliance upon or in connection with Pitney Bowes' business (but, in the case
of a service provided only in part by the Pitney Bowes Group, only to the extent
such service was provided in the ordinary course by the Pitney Bowes Group prior
to the Distribution Date); (ii) are provided to Office Systems pursuant to (i)
above and are identified in writing by Office Systems to Pitney Bowes within
forty-five days of the Distribution Date; or (iii) are reasonably necessary for
Office Systems to conduct its operations as conducted in the ordinary course
prior to the Distribution Date, consistent with the historical provision of such
services and the other terms of this agreement, or otherwise upon pricing and
other terms and conditions reasonably acceptable to both parties.

       (b)  provide to Office Systems, or procure the provision to Office
Systems of, and Office Systems agrees to purchase from Pitney Bowes, the
information technology, computing and telecommunications services (the "IT
Services" and, together with the Non-IT Services, the "Services" and each, a
"Service") as set forth on Schedule 2.  Unless otherwise specifically agreed by
Pitney Bowes and Office Systems, the IT Services to be provided or procured by
Pitney Bowes hereunder shall be substantially similar in scope, quality, and
nature to those customarily provided to, or procured on behalf of, the Office
Systems Group prior to the Distribution Date and shall include IT Services that
(i) Office Systems, in the ordinary course prior to the Distribution Date,
received in whole or in part from the Pitney Bowes Group; (ii) are identified in
writing by Office Systems to Pitney Bowes within forty-five days of the
Distribution Date; or (iii) are reasonably necessary for Office Systems to
conduct its operations as conducted in the ordinary course prior to the
Distribution Date, consistent with the historical provision of such services and
the other terms of this agreement, or otherwise upon pricing and other terms and
conditions reasonably acceptable to both parties.

                                       5
<PAGE>

     Section 2.02.  Subsidiaries.  It is understood that (i) the Services to be
provided to Office Systems under this Agreement shall, at Office Systems'
request, be provided to Subsidiaries of Office Systems and (ii Pitney Bowes may
satisfy its obligation to provide or procure Services hereunder by causing one
or more of its Subsidiaries to provide or procure such Services.  With respect
to Services provided to, or procured on behalf of, any Subsidiary of Office
Systems, Office Systems agrees to pay on behalf of such Subsidiary all amounts
payable by or in respect of such Services pursuant to this Agreement.

     Section 2.03.  Additional Services.  In addition to the Services to be
provided in accordance with Section 201, if requested by Office Systems and as
needed by Office Systems to conduct its business, as conducted in the ordinary
course prior to the Distribution Date (or as needed by Office Systems to
facilitate its transition to a stand-alone business following the Distribution
Date), and to the extent that Pitney Bowes and Office Systems may mutually
agree, Pitney Bowes shall provide reasonable additional services (including
services not provided by Pitney Bowes to the Office Systems prior to the
Distribution Date) to Office Systems.  The scope of any such services, as well
as the term, costs, and other terms and conditions applicable to such services,
shall be as mutually agreed by Pitney Bowes and Office Systems.

     Section 2.04.  Services Provided by Office Systems.  If it is necessary for
Office Systems to provide any services or resources to Pitney Bowes or any third
party regarding any aspect of the Office Systems Group business (the "Office
Systems Services") so that Pitney Bowes may provide or have provided the
Services hereunder, Office Systems shall provide such Services (i) without cost
to Pitney Bowes or any third party and (ii) of a nature, quality, service level
and standard of care substantially similar to the Office Systems Services as
provided to the Office Systems Group.

                                   ARTICLE 3

                          Service Costs; Other Charges

     Section 3.01.  Service Costs Generally.  (a) Unless any Schedule hereto
indicates otherwise or the parties shall agree in writing to a different
arrangement, for each period in which Office Systems receives a Service, Office
Systems shall pay Pitney Bowes its actual out-of-pocket cost for such Service,
including a proportionate share of Pitney Bowes' overhead, if applicable,
computed in accordance with Pitney Bowes' internal chargeback practices
("Service Costs").

                                       6
<PAGE>

       (b)  If the volume of transactions for a specific Service provided to
Office Systems exceeds the level which historically has been utilized by the
Office Systems Group during the twelve months prior to the date hereof and, as a
result, requires human or equipment resources in excess of the level of
resources allocated to such Service by Pitney Bowes, the additional cost
associated with the increased volume shall be included in the Service Costs.

     Section 3.02.  Sales Tax.  Office Systems shall pay all applicable sales or
use taxes incurred with respect to provision of the Services.  These taxes shall
be incremental to other payments or charges identified in this Agreement.

     Section 3.03.  Certain Benefits Matters.  (a) Prior to the Distribution
Date, certain employees of Office Systems participated in certain benefit plans
sponsored by Pitney Bowes ("Pitney Bowes Plans").

       (b)  The costs payable by Office Systems for Services relating to
employee plans and benefit arrangements ("Benefits Services") shall be
determined and, to the extent specified in Schedule 1D, billed as set forth on
Schedule ID.  It is the express intent of the parties that Service Costs
relating to the administration of Office Systems employee plans and the
performance of related Services shall not exceed reasonable compensation for
such Services as defined in 29 CFR (S)2550.408c-2.

       (c)  Pitney Bowes and Office Systems agree to cooperate fully with each
other in the administration and coordination of regulatory and administrative
requirements associated with Pitney Bowes Plans and Benefits Services.

     Section 3.04.  Invoicing and Settlement of Costs.  (a)  Pitney Bowes shall
invoice or notify in writing the Chief Financial Officer of Office Systems on a
monthly basis (not later than the tenth day of each month), in a manner
substantially consistent with the billing practices used in connection with
services provided to the Office Systems Group prior to the Distribution Date
(except as otherwise agreed), of the Service Costs.  In connection with the
invoicing described in this Section 3.04, Pitney Bowes shall provide to Office
Systems the same billing data and level of detail as it customarily provided to
the Office Systems Group prior to the Distribution Date and such other data as
may be reasonably requested by Office Systems.

       (b)  Office Systems agrees to pay on or before 30 days after the date on
which Pitney Bowes invoices or notifies Office Systems of the Service Costs (or
the next Business Day, if such day is not a Business Day) (each, a "Payment
Date") by wire transfer of immediately available funds payable to the order of
Pitney Bowes all amounts invoiced by Pitney Bowes pursuant to Section 3.04(a)

                                       7
<PAGE>

during the preceding calendar month. If Office Systems fails to pay any monthly
payment within 30 days of the relevant Payment Date, Office Systems shall be
obligated to pay, in addition to the amount due on such Payment Date, interest
on such amount at the prime, or best, rate (as quoted from time to time in the
Wall Street Journal) compounded monthly from the relevant Payment Date through
the date of payment.

       (c)  Office Systems agrees to pay on or before 30 days after the date on
which it is invoiced or otherwise notified (or on or before any other due date
previously established) any amount owed by Office Systems to any third party
vendor in relation to any Service provided hereunder.  In the event that Office
Systems fails to pay any such amount due in a timely manner and Pitney Bowes
becomes liable for such amount, Pitney Bowes may pay any such amount to any
vendor and Office Systems shall be obligated to pay Pitney Bowes the full amount
due plus any interest due on such amount and any delinquency or other fees
accrued.

                                   ARTICLE 4

                                  The Services

     Section 4.01.  General Standard of Service.  (a) Except as otherwise agreed
with Office Systems or described in this Agreement or the Schedules hereto, and
provided that Pitney Bowes is not restricted by contract with third parties or
by applicable law, Pitney Bowes agrees that the nature, quality, service level
and standard of care applicable to the delivery of the Services hereunder shall
be substantially the same as that of the Services which Pitney Bowes provides
from time to time throughout its businesses.  If Pitney Bowes and Office Systems
do not have comparable operations with respect to a certain Service, then the
service level shall be consistent with the standards provided to Office Systems
for the twelve months prior to the Distribution Date.  Pitney Bowes shall use
its reasonable efforts to ensure that the nature and quality of Services
provided to Office Systems employees either by Pitney Bowes directly or through
administrators under contract shall be undifferentiated as compared with the
same services provided to or on behalf of Pitney Bowes employees under Pitney
Bowes Plans.  Subject to Pitney Bowes' express obligations under this Agreement,
the management of and control over the provision of the Services shall reside
solely with Pitney Bowes.  Without limiting the generality of the foregoing, all
labor matters relating to employees of Pitney Bowes and its Subsidiaries
(including, without limitation, employees involved in the provision of Services
to Office Systems) shall be within the exclusive control of Pitney Bowes, and
Office Systems shall not take any action affecting such matters.

                                       8
<PAGE>

       (b)  If Office Systems becomes aware of a material deficiency in the
performance of a Service provided or procured by Pitney Bowes or one of its
subsidiaries (a "Service Level Breach"), Office Systems may deliver a written
notice of the Service Level Breach to the Service Provider.  Upon receipt of
such notice, Pitney Bowes shall use it reasonable best efforts to remedy the
Service Level Breach as soon as reasonably possible.

     Section 4.02.  Personnel.  Subject to Schedule 1D hereof, Pitney Bowes
shall, at its own expense, employ and retain staff, and contract with third
parties and other vendors with a level of experience, skill, diligence and
expertise consistent with Pitney Bowes' normal business practices, needed to
perform the Services.  The provisions of this paragraph shall not apply to
contracts entered into by Pitney Bowes and third parties prior to the
Distribution Date.

     Section 4.03.  Systems Support.  In each instance where Pitney Bowes
provides application, technical or infrastructure support to Office Systems
under this Agreement ("Systems Support"), such Systems Support shall, except as
limited by this Agreement and the Schedules hereto, be provided in a scope and
manner substantially consistent with past practices.

     Section 4.04. Delegation. Subject to Section 4.01(a), Office Systems hereby
delegates to Pitney Bowes final, binding, and exclusive authority,
responsibility, and discretion to interpret and construe the provisions of
employee welfare benefit plans in which Office Systems has elected to
participate and which are administered by Pitney Bowes under this Agreement
(collectively, "Employee Benefit Plans"). Pitney Bowes may further delegate such
authority to plan administrators to:

     (i)   provide administrative and other services;

     (ii)  reach factually supported conclusions consistent with the terms of
the Employee Benefit Plans;

     (iii) make a full and fair review of each claim denial and decision related
to the provision of benefits provided or arranged for under the Employee Benefit
Plans, pursuant to the requirements of ERISA, if within 60 days after receipt of
the notice of denial, a claimant requests in writing a review for
reconsideration of such decisions.  The plan administrator shall notify the
claimant in writing of its decision on review.  Such notice shall satisfy all
ERISA requirements relating thereto; and

     (iv)  notify the claimant in writing of its decision on review.

                                       9
<PAGE>

     Section 4.05.  Limitation of Liability.  (a) Office Systems agrees that
none of the members of the Pitney Bowes Group and their respective directors,
officers, agents, and employees (each, a "Pitney Bowes Indemnified Person")
shall have any liability, whether direct or indirect, in contract or tort or
otherwise, to any Office Systems Entity or any other Person for or in connection
with the Services rendered or to be rendered by any Pitney Bowes Indemnified
Person pursuant to this Agreement, the transactions contemplated hereby or any
Pitney Bowes Indemnified Person's actions or inactions in connection with any
such Services or transactions, except for damages which have resulted from such
Pitney Bowes Indemnified Person's gross negligence or willful misconduct in
connection with any such Services, actions or inactions.

       (b)  Notwithstanding the provisions of Section 4.05(a), none of the
Pitney Bowes Group shall be liable for any special, indirect, incidental, or
consequential damages of any kind whatsoever (including, without limitation,
attorneys' fees) in any way due to, resulting from or arising in connection with
any of the Services or the performance of or failure to perform Pitney Bowes'
obligations under this Agreement.  This disclaimer applies without limitation
to claims arising from the provision of the Services or any failure or delay in
connection therewith; to claims for lost profits;  regardless of the form of
action, whether in contract, tort (including negligence), strict liability, or
otherwise; and  regardless of whether such damages are foreseeable or whether
Pitney Bowes has been advised of the possibility of such damages.

       (c)  None of the Pitney Bowes Group shall have any liability to any
Office Systems Entity or any other Person for failure to perform Pitney Bowes'
obligations under this Agreement or otherwise, where such failure to perform is
not caused by the gross negligence or willful misconduct of the Pitney Bowes
Entity providing such Services and such failure to perform similarly affects
the Pitney Bowes Group receiving such Services and does not have a
disproportionately adverse effect on the Office Systems Group, taken as a whole.

       (d)  In addition to the foregoing, Office Systems agrees that it shall,
in all circumstances, use commercially reasonable efforts to mitigate and
otherwise minimize its damages and those of the other Office Systems Group,
whether direct or indirect, due to, resulting from or arising in connection with
any failure by Pitney Bowes to comply fully with its obligations under this
Agreement.

       (e)  Notwithstanding the foregoing provisions of this Section 4.05, in
the event of a substantial and continuing failure on the part of Pitney Bowes to
provide or procure any material Services, where such failure is reasonably
expected to have a material adverse effect on Office Systems and its
Subsidiaries,
                                       10
<PAGE>

considered as a whole, Office Systems shall be entitled to seek specific
performance to cause Pitney Bowes to provide or procure such Services.

     Section 4.06.  Indemnification of Pitney Bowes by Office Systems.  Office
Systems agrees to indemnify and hold harmless each Pitney Bowes Indemnified
Person from and against any damages, and to reimburse each Pitney Bowes
Indemnified Person for all reasonable expenses as they are incurred in
investigating, preparing, pursuing, or defending any claim, action, proceeding,
or investigation, whether or not in connection with pending or threatened
litigation and whether or not any Pitney Bowes Indemnified Person is a party
(collectively, "Actions"), arising out of or in connection with Services
rendered or to be rendered by any Pitney Bowes Indemnified Person pursuant to
this Agreement, the transactions contemplated hereby or any Pitney Bowes
Indemnified Person's actions or inactions in connection with any such Services
or transactions; provided that Office Systems shall not be responsible for any
damages of any Pitney Bowes Indemnified Person that have resulted from such
Pitney Bowes Indemnified Person's gross negligence or willful misconduct in
connection with any of the advice, actions, inactions, or Services referred to
above (it being understood and agreed that the provision by any Pitney Bowes
Entity of any of the Services contemplated by Schedule 2 hereof without
obtaining the consent of any party to any contract or agreement to which any
Pitney Bowes Entity is a party as of the date hereof shall not constitute gross
negligence or wilful misconduct by any Pitney Bowes Entity; provided that the
relevant Pitney Bowes Entity has used commercially reasonable efforts to obtain
the relevant consent).  Sections 4.04 and 4.05 of the Distribution Agreement
shall apply in the event that any indemnification is sought pursuant to this
Section 4.06.

     Section 4.07.  Indemnification of Office Systems by Pitney Bowes.  Pitney
Bowes agrees to indemnify and hold harmless each member of the Office Systems
Group and their respective directors, officers, agents, and employees (each, a
"Office Systems Indemnified Person") from and against any damages, and shall
reimburse each Office Systems Indemnified Person for all reasonable expenses as
they are incurred in investigating, preparing, or defending any Action, arising
out of the gross negligence or willful misconduct of any Pitney Bowes
Indemnified Person in connection with the Services rendered or to be rendered
pursuant to this Agreement.  Sections 4.04 and 4.05 of the Distribution
Agreement shall apply in the event that any indemnification is sought pursuant
to this Section 4.07.

     Section 4.08.  Further Indemnification.  To the extent that any other
Person has agreed to indemnify any Pitney Bowes Indemnified Person or to hold a
Pitney Bowes Indemnified Person harmless and such Person provides services to
Pitney Bowes or any affiliate of Pitney Bowes relating directly or indirectly to
any employee plan or benefit arrangement for which Benefit Services are provided

                                       11
<PAGE>

under this Agreement, Pitney Bowes shall exercise reasonable efforts (a) to make
such agreement applicable to any Office Systems Indemnified Person so that each
Office Systems Indemnified Person is held harmless or indemnified to the same
extent as any Pitney Bowes Indemnified Person or (b) otherwise make available to
each Office Systems Indemnified Person the benefits of such agreement.

     Section 4.09.  Notice of Certain Matters. If Office Systems at any time
believes that Pitney Bowes is not in full compliance with its obligations under
Section 4.01(a) of this Agreement, Office Systems shall so notify Pitney Bowes
in writing promptly (but not later than 30 days) after becoming aware of such
possible non-compliance by Pitney Bowes. Failure to notify Pitney Bowes within
30 days shall not relieve Pitney Bowes of liability except to the extent Pitney
Bowes is actually prejudiced due to such failure to notify. Such notice (a "Non-
Compliance Notice") shall set forth in reasonable detail the basis for Office
Systems' belief as well as Office Systems's view as to the steps to be taken by
Pitney Bowes to address the possible non-compliance. For the 30 days after
receipt of such a notice, appropriate representatives of Pitney Bowes and Office
Systems shall work in good faith to develop a plan to resolve the matters
referred to in the Non-Compliance Notice. In the event such matters are not
resolved through such discussions, Office Systems may elect to terminate Pitney
Bowes' obligation to provide or procure, and its obligation to purchase, the
Service or Services referred to in its Non-Compliance Notice in accordance with
Section 5.02. In the event such matters are resolved through such discussions
and Office Systems does not elect to terminate such Service or Services within
60 days of the end of the 30-day period referred to in the third sentence of
this Section 4.09, Office Systems shall not be entitled to deliver another Non-
Compliance Notice or pursue other remedies with respect to same or any
substantially similar matter so long as Pitney Bowes complies in all material
respects with the terms of such resolution. In no event shall any termination of
this Agreement pursuant to this Section 4.09 limit or affect Office Systems's
right to seek remedies in accordance with Section 4.08 in respect of any breach
by Pitney Bowes of any of its obligations under this Agreement prior to such
termination.

                                   ARTICLE 5

                              Term and Termination

     Section 5.01.  Term.  Except as otherwise provided in this Article 5, in
Section 9.05 or as otherwise agreed in writing by the parties, Pitney Bowes
shall provide (through one or more of its Affiliates and/or outside service
providers to the extent utilized by Office systems as of the date hereof or
engaged hereafter with the prior written consent of Office Systems) to the
Office Systems Group, the

                                       12
<PAGE>

Non-IT Services and any additional services as identified and agreed upon by
Pitney Bowes and Office Systems pursuant to Section 2.03 for an initial term of
twelve months from the Distribution Date (the "Transition Period"). Pitney Bowes
shall provide the IT Services (in the manner provided in the preceding sentence)
for an initial term from the Distribution Date until December 31, 2002. Pitney
Bowes' obligation to provide or procure, and Office Systems' obligation to
purchase, a Service shall cease as of the applicable date set forth in the
applicable Schedules or such earlier date determined in accordance with Section
5.02. The Transition Period shall be deemed to be extended, as and for the
period needed but, in any event, not to exceed six months, on account of any one
of the following: (i) a requirement by a Government Authority; (ii) at the
discretion of the non-breaching party, any failure by Office Systems or Pitney
Bowes, as the case may be, to perform any action required on its part under this
agreement including the schedules hereto, but only to the extent of such
failure; or (iii) the inability of the parties to achieve a suitable replacement
for provision of the Services as set forth in any schedule hereto after applying
reasonable efforts, provided that, to the extent the Transition Period is
extended pursuant to clause (i) or (iii), in addition to the amounts otherwise
due pursuant to Section 3.01 of this Agreement, Office Systems shall pay all
costs actually incurred by reason of the extension. Pitney Bowes shall make
commercially reasonable efforts (which shall not require it to incur any out of
pocket costs) to minimize the costs referred to in the immediately preceding
proviso.

     Section 5.02.  Termination.  (a) Except as otherwise provided in any
Schedule hereto, Office Systems may (i) from time to time terminate this
Agreement with respect to one or more of the Services, in whole or in part, upon
giving at least 180 days' prior notice to Pitney Bowes or (ii) terminate this
Agreement at any time upon 180 days' written notice.

       (b)  Pitney Bowes may terminate any Service at any time if Office Systems
shall have failed to perform any of its material obligations under this
Agreement relating to any such Service, 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.

       (c)  Office Systems may terminate any Service at any time if Pitney Bowes
shall have failed to perform any of its material obligations under this
Agreement relating to any such Service, Office Systems has notified Pitney Bowes
in writing of such failure, and such failure shall have continued for a period
of 60 days after receipt by Pitney Bowes of written notice of such failure.

     Section 5.03.  Effect of Termination.  (a) Other than as required by law,
upon termination of any Service pursuant to Section 5.02, or upon termination of

                                       13
<PAGE>

this Agreement in accordance with its terms, Pitney Bowes shall have no further
obligation to provide the terminated Service (or any Service, in the case of
termination of this Agreement) and Office Systems shall have no obligation to
pay any fees relating to such Services or make any other payments hereunder;
provided that notwithstanding such termination, (i) Office Systems shall remain
liable to Pitney Bowes for fees owed and payable in respect of Services provided
prior to the effective date of the termination; (ii) Pitney Bowes shall continue
to charge Office Systems for administrative and program costs relating to
benefits paid after but incurred prior to the termination of any Service and
other services required to be provided after the termination of such Service and
Office Systems shall be obligated to pay such expenses in accordance with the
terms of this Agreement; and (iii) the provisions of Articles 4, 5, 6 and 8.01
shall survive any such termination indefinitely.  All program and administrative
costs attributable to employees of any of the Office Systems Group for Pitney
Bowes Plans that relate to any period after the effective date of any such
termination shall be for the account of Office Systems.

       (b)  Following termination of this Agreement with respect to any Service,
Pitney Bowes and Office Systems agree to cooperate in providing for an orderly
transition of such Service to Office Systems or to a successor service provider.
Without limiting the foregoing, Pitney Bowes agrees to (i) provide, within 60
days of the termination, copies in a usable format designated by Pitney Bowes,
of all records relating directly or indirectly to benefit determinations of
Office Systems employees, including but not limited to compensation and service
records, correspondence, plan interpretive policies, plan procedures,
administration guidelines, minutes, or any data or records required to be
maintained by law and (ii) work with Office Systems in developing a transition
schedule.

                                   ARTICLE 6

                              Operating Committee

     Section 6.01.  Organization.  The parties shall use an operating committee
(the "Operating Committee") to implement the terms of this Agreement.  Each of
Pitney Bowes and Office Systems shall appoint three employees, at least one of
whom shall be a senior executive, to the Operating Committee for a two year
term.  The Operating Committee will oversee the implementation and ongoing
operation of this Agreement and shall attempt in good faith to resolve disputes
between the parties.  Each of the parties shall have the right to replace one or
more of its Operating Committee members at any time with employees or officers
with comparable knowledge, expertise and decision-making authority.

                                       14
<PAGE>

     Section 6.02.  Decision Making.  The Operating Committee shall act by a
majority vote of its members.  If the Operating Committee fails to make a
decision, resolve a dispute, agree upon any necessary action, or if Office
Systems so requests in the event of a material breach significantly and
adversely affecting the business of Office Systems, a senior officer of Pitney
Bowes and a senior officer of Office Systems, neither of whom shall have direct
responsibility for the subject matter in dispute, shall attempt in good faith
within a period of 14 days to conclusively resolve any such unresolved matter.

     Section 6.03.  Meetings.  During the Transition Period, the full Operating
Committee shall meet, in person or via teleconference at least once every
quarter.  In addition, the Operating Committee shall meet as necessary to
promptly resolve any disputes submitted to it by any representative of Pitney
Bowes or of Office Systems.

                                   ARTICLE 7

                       Third Party Consents and Licenses

     Section 7.01.  Separation.  With respect to any hardware or software
licenses that are utilized as of the date hereof by both the Pitney Bowes Group
and the Office Systems Group related to the Services to be provided hereunder,
Pitney Bowes and Office Systems agree to cooperate and use their reasonable
efforts to cause, on or before the expiration of the relevant terms hereunder,
such licenses to be separated and allocated between the parties so that the
Office Systems Group receives a number of such licenses that is consistent with
the historical usage of the licensed hardware or software by the Office Systems
Group.

     Section 7.02.  Additional Licenses.  The Pitney Bowes Group and the Office
Systems Group shall obtain and maintain all material permits, approvals and
licenses necessary or appropriate so that the Pitney Bowes Group may perform its
duties and obligations (including the provision of the Services) hereunder.  To
the extent that it is necessary for the Pitney Bowes Group to obtain and
maintain all such material permits, approvals and licenses, the Pitney Bowes
Group shall use commercially reasonable efforts to obtain and maintain all such
material permits, approvals and licenses.  Each of the Pitney Bowes Group and
the Office Systems Group shall at all times comply with the terms and conditions
of such permits, approvals and licenses.

     Section 7.03.  Fees.  If any consent or license to provide or have provided
any of the Services contemplated by the Agreement cannot be obtained by the
Pitney Bowes Group or by the Office Systems Group, the Pitney Bowes Group

                                       15
<PAGE>

will not provide the Services until such consent or license consent can be
obtained unless such consent has been sought and is reasonably expected to be
approved. Costs relating to obtaining such consents or licenses shall be paid by
the Office Systems Group.

                                   ARTICLE 8

                             Additional Agreements

     Section 8.01.  Confidential Information.  (a) Office Systems and Pitney
Bowes hereby covenant and agree to hold in trust and maintain confidential all
Confidential Information relating to the other party or any of such other
party's Subsidiaries.  Without limiting the generality of the foregoing,
Confidential Information relating to a party or any of its Subsidiaries shall be
disclosed only to those employees of the other party who need to know such
information in connection with their ordinary course employment activities and
in no event shall any such Confidential Information be disclosed to any other
Person. "Confidential Information" shall mean all information, materials and
processes relating to a party or any Subsidiary of such party obtained by the
other party or any Subsidiary of such other party at any time (whether prior to
or after the date hereof and whether in connection with this Agreement or
otherwise) in any format whatsoever (whether orally, visually, in writing,
electronically or in any other form) and shall include, but not be limited to,
economic and business information or data, business plans, computer software and
information relating to employees, vendors, customers, products, financial
performance and projections, processes, strategies and systems but shall not
include (i) information which becomes generally available other than by release
in violation of the provisions of this Section 8.01, (ii) information which
becomes available on a non-confidential basis to a party from a source other
than the other party to this Agreement, provided the party in question
reasonably believes that such source is not or was not bound to hold such
information confidential and (iii) information acquired or developed
independently by a party without violating this Section 8.01 or any other
confidentiality agreement with the other party. Each party shall use
commercially reasonable efforts to restrict access to the other party's
Confidential Information to those employees of such party requiring access for
the purpose of providing Services hereunder. Notwithstanding any provision of
this Section 8.01 to the contrary, a party may disclose such portion of the
Confidential Information relating to the other party to the extent, but only to
the extent, the disclosing party reasonably believes that such disclosure is
required under law or the rules of a securities exchange; provided that the
disclosing party first notifies the other party hereto of such requirement and
allows such party a reasonable opportunity to seek protective order or other
appropriate remedy to prevent such disclosure. The parties acknowledge that
money damages would not be a sufficient remedy for any breach of the provisions
of this Section 8.01 and that the non-breaching party

                                       16
<PAGE>

shall be entitled to equitable relief in a court of law
in the event of, or to prevent, a breach or threatened breach of this Section
8.01.

       (b)  Notwithstanding the provisions of Section 8.01(a), upon a Change of
Control, Office Systems shall, if requested by Pitney Bowes, (i) promptly (but
in no event later than 30 days after the occurrence of such Change of Control)
return to Pitney Bowes or destroy all Confidential Information in its possession
(or that of any of its Subsidiaries) relating to Pitney Bowes or any of its
Subsidiaries, (ii) no longer be permitted to use such Confidential Information
in its business or operations (or the business or operations of any of its
Subsidiaries) and (iii) promptly (but in no event later than 30 days after the
occurrence of such Change of Control) deliver a written certificate to Pitney
Bowes executed by Office Systems' Chief Executive Officer expressly
acknowledging the obligations set forth in clauses (i) and (ii) of this sentence
and certifying that Office Systems has and shall continue to adhere to such
requirements.

     Section 8.02.  Security.  Pitney Bowes shall provide physical and data
security for the businesses or functions to which the Services relate at a level
at least comparable to security provided to other comparable Pitney Bowes
businesses or functions.  Office Systems shall be responsible for all security
issues at Office Systems facilities.  Each party agrees to comply with the other
party's systems security procedures and shall not circumvent such procedures.
Each party retains the right to monitor and audit the other party's compliance
with such systems and security procedures.  If either party reasonably
determines that personnel from the other party have attempted to circumvent its
systems security procedures, that party may immediately terminate such
personnel's access to its systems security procedures, that party may
immediately terminate such personnel's access to it systems and shall
immediately advise the other party of such incident and termination.

     Section 8.03.  Service Level at Termination of Transition Period.  At least
90 days prior to the termination of the Transition Period, Office Systems shall
provide to Pitney Bowes a written notice of its plan for termination of each
Service and for transition to a provider of each Service other than Pitney Bowes
or any such third party that Pitney Bowes has caused to provide such Service
(the "Transition Plan") for Pitney Bowes' review and comment.  To the extent the
Transition Plan indicates that any such Service provided by Pitney Bowes or
caused to be provided by Pitney Bowes under this Agreement shall be provided by
any other party at the termination of the Transition Period, Pitney Bowes shall
use commercially reasonable efforts to assist in the transfer of all required
data and otherwise facilitate the transfer of responsibility for such Service to
such other party and to continue the provision of each Service during the
transition to such party prior to the termination of the Transition Period or
other termination of this

                                       17
<PAGE>

Agreement. Following the termination of the Transition Period or upon any other
termination of this Agreement, Pitney Bowes shall have no obligation to continue
to provide any of the Services identified in the Agreement or otherwise agreed
to by the parties prior to the termination of this Agreement.

                                   ARTICLE 9

                                 Miscellaneous

     Section 9.01.  Prior Agreements.  In the event there is any conflict
between the provisions of this Agreement, on the one hand, and provisions of
prior services agreements among any Pitney Bowes Entity and any Office Systems
Entity (the "Prior Agreements"), on the other hand, the provisions of this
Agreement shall govern and such provisions in the Prior Agreements are deemed to
be amended so as to conform with this Agreement.

     Section 9.02.  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 9.03.  No Agency.  Nothing in this Agreement shall constitute or be
deemed to constitute a partnership or joint venture between the parties hereto
or, except to the extent provided in Section 4.04, constitute or be deemed to
constitute any party the agent or employee of the other party for any purpose
whatsoever and neither party shall have authority or power to bind the other or
to contract in the name of, or create a liability against, the other in any way
or for any purpose.

     Section 9.04.  Subcontractors.  Pitney Bowes may hire or engage one or more
subcontractors to perform all or any of its obligations under this Agreement;
provided that, subject to Section 4.05, Pitney Bowes shall in all cases remain
primarily responsible for all obligations undertaken by it in this Agreement
with respect to the scope, quality and nature of the Services provided to Office
Systems.

     Section 9.05.  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, fires, sabotage, civil commotion or civil unrest, interference by civil
or military authorities, acts of war (declared or undeclared) and failure of
energy sources.

                                       18
<PAGE>

       (b)  Without limiting the generality of Section 4.05(a), 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 60 days, the other party shall have the
right to terminate this Agreement with respect to any Service affected by such
delay forthwith by written notice.

     Section 9.06.  Entire Agreement.  This Agreement (including the Schedules
constituting a part of this Agreement) and any other writing signed by the
parties that specifically references this Agreement constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof.  This
Agreement is not intended to confer upon any Person other than the parties
hereto any rights or remedies hereunder.

     Section 9.07.  Information.  Subject to applicable law and privileges, each
party hereto covenants and agrees to provide the other party with all
information regarding itself and transactions under this Agreement that the
other party reasonably believes are required to comply with all applicable
federal, state, county and local laws, ordinances, regulations and codes,
including, but not limited to, securities laws and regulations.

                                       19
<PAGE>

     Section 9.09.  Notices.  Any notice, instruction, direction or demand under
the terms of this Agreement required to be in writing shall be duly given upon
delivery, if delivered by hand, facsimile transmission, or mail, to the
following addresses:

     (a)   If to Pitney Bowes to:

            Pitney Bowes Inc.
            1 Elmcroft Road
            Stamford, CT 06926-0700
            Telecopy: (203) [            ]
            Attention:     [                    ]

            with a copy to:

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

     (b)   If to Office Systems to:

            Pitney Bowes Office Systems, Inc.
            100 Oakview Drive
            Trumbull, CT 06611
            Telecopy: (203) 365-7497
            Attention: Joseph Skrzypczak

            with a copy to:

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

or to such other addresses or telecopy numbers as may be specified by like
notice to the other parties.

     Section 9.09.  Governing Law.  This Agreement shall be construed in
accordance with and governed by the substantive internal laws of the State of
New York.

     Section 9.10.  WAIVER OF JURY TRIAL.  THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                                       20
<PAGE>

     Section 9.11.  Severability.  If any provision of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not render
the entire Agreement invalid.  Rather, the Agreement shall be construed as if
not containing the particular invalid or unenforceable provision, and the rights
and obligations of each party shall be construed and enforced accordingly.

     Section 9.12.  Amendment.  This Agreement may only be amended by a written
agreement executed by both parties hereto.

     Section 9.13.  Counterparts.  This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one agreement.

                                       21
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives.

                                PITNEY BOWES INC.

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

                                PITNEY BOWES OFFICE
                                SYSTEMS, INC.

                                By:
                                   ----------------------------------
                                   Name:
                                   Title:
<PAGE>

                                                                   Schedule 1

                    PBI / PBOS Transition Services Agreement

               Schedule 1 - Summary of Non-IT Service Agreements
               -------------------------------------------------

                                                                   Schedule
                                                                   --------

Service Parts Logistics                                            1A

Real Estate Transaction Services                                   1B

Accounting

  Sales, Use and Property Tax                                      1C-1

  Payroll, Travel Reimbursement, Accounts Payable                  1C-2

  General Ledger                                                   1C-3

  Fixed Assets                                                     1C-4

  Inventory Accounting                                             1C-5

  Accounts Receivable                                              1C-6

Benefits Administration                                            1D

Supplies Line Order Entry System                                   1E

Customer Care Call Dispatch                                        1F

Safety and Environmental                                           1G

Field Service Systems Support                                      1H

Non-Focus Field Service                                            1J

Telecom Costs in Shared Locations                                  1K

Mailroom Services                                                  1L

Import and Customs Compliance                                      1M

Document Services Group Services                                   1N
<PAGE>

                    PBI / PBOS Transition Services Agreement

                     Schedule 1A - Service Parts Logistics
                     -------------------------------------

General
-------

PBI will furnish PBOS with logistics support for its U.S. service parts.  This
service will cover warehousing and outbound logistics for service parts.
Finished goods logistics are excluded from this agreement.

Duration
--------

The period commencing at the Distribution Date and concluding December 31, 2002.

Cost
----

$211,000 per month (excluding carrier costs).

Costs for outbound carrier services and repackaging of parts will be billed to
PBOS by PB based on the percentage of parts that are shipped on a monthly basis.
This charge will be an allocation of total outbound freight costs, based on PBOS
monthly line-item volumes as a percentage of total line-items shipped.

At the termination of the agreement, PBOS will pay for all expenses related to
the pick/pack and transport of parts to a new facility.  This charge will be
based on actual costs and overheads incurred.

PBOS volume levels are assumed to be equal to levels supported in 2000.  Should
PBOS annual parts volumes (defined by SKUs) or space usage vary from 2000 levels
by more than 10%, a revised charge will be calculated by PB and will not be
unreasonably refused by PBOS.

Included Services
-----------------

PB will provide logistics for service parts:
  .  Receipt and repackaging of parts from vendors.
  .  Storage of parts in warehouse.
  .  Pick/pack of parts for field service.
  .  Load shipments onto outbound carriers.

                                       2
<PAGE>

In addition, PB will provide the following services:
---------------------------------------------------
Negotiate terms with outbound carriers.
Support IT systems related to parts logistics (PARTS system, Inventory Control
Integration ICI system).
Provide access to PBOS to the ICI system to allow them to analyze and manage
inventory levels).
Insure inventory from physical loss.
Provide inventory controls.
Conduct track and trace on lost/late outbound shipments.  Reship if necessary.

Excluded Services
-----------------
Procurement and payment for all parts is the sole responsibility of PBOS.
Parts inventory will be owned by PBOS.
Ongoing support of ACESS system is covered by Field Service agreement Schedule
1H.
Any liability for damages to parts shipments or for third party claims of
damages as a result of parts shipments to PBOS will be the sole responsibility
of PBOS unless caused by willful misconduct by PB.

                                       3
<PAGE>

                    PBI - PBOS Transition Services Agreement

                 Schedule 1B - Real Estate Transaction Services
                 ----------------------------------------------

General
-------

PBI Corporate Real Estate (CRE) will furnish Real Estate Transaction Services to
PBOS for delivery of real estate projects that are commenced prior to the
Distribution Date and deliverable prior to December 31, 2001 on an as needed
basis.  PBOS will be responsible for all PBOS real-estate projects that commence
after the Distribution Date or that are deliverable after December 31, 2001.  As
soon as practical, PBI will transfer responsibility for delivery of all PBOS
projects deliverable after December 31, 2001 to PBOS.

Real Estate Transaction Services are specifically related to facility
acquisition and project management support for PBOS operations in PBI locations
with expiring leases.  The services are based on current practices and standards
employed by the Corporate Real Estate Department (CRE) to fulfill MSD/OSD
district requirements.  The procedure includes coordination with PBOS management
as well as outside vendors.  PBOS represents that it accepts the current process
and costs for all outside services currently engaged in project delivery as
reflected in Exhibit B to this Schedule 1B.

The existing process between CRE and TechCentral IT will be used to provide the
resources needed for design, acquisition or installation of telephone or data
infrastructure or services.  The costs of these services will be identified and
budgeted in the scope of the project and paid for by PBOS.  PBOS IT will oversee
these resources and provide input as required to ensure services and timeliness
to meet project objectives.

Transaction Services do not include ongoing property management and lease
administration services.  These services for locations where PBOS is a subtenant
in PBI leaseholds, are detailed in the appropriate Sublease Agreements.  Lease
Administration and Property Management for locations where PBOS is the Primary
Tenant on the lease will be the responsibility of PBOS.

Duration
--------

Beginning on the Distribution Date and ending no later than December 31, 2001.

                                       4
<PAGE>

Cost
----

At the Distribution Date, PBI will furnish estimates of hours required to
complete all projects that have commenced prior to the Distribution Date.  Due
to the large number of variables, interdependencies and uncontrollables,
estimates for a project timeframe will not be considered guarantees.   Projects
will be billed for actual time spent by the CRE department.  As a frame of
reference, a typical project from inception to delivery requires 170 hours of
CRE oversight over a 9 month period.

PBI will invoice PBOS for all actual labor (at a rate of $100 per hour) and
reimbursables including travel expenses, supplies, copying plans and other
materials used in the course of the business (at cost).  Out-sourced services
including project management/implementation, lease negotiation, legal due
diligence, architectural services, environmental and security reviews will be
requisitioned and approved by PBI CRE and paid directly by PBOS within 10 days
of receiving an approved invoice.

Specific Services
-----------------

PBI CRE will appoint a project manager who will be responsible for coordinating
the provision of services to PBOS.  In general, with the participation of PBOS
personnel and outside vendors, PBI will coordinate the following services.
These services and their accountabilities are more specifically detailed on
Exhibit A (attached).

  .  Identify property requirements (i.e. Size, location, attributes based on
     operating requirements and based on standard PBI guidelines).
  .  Engage outside vendors to perform various activities including brokerage
     services, architectural, project implementation, lease negotiation.
  .  Coordinate and oversee vendor performance.
  .  Identify financial parameters based on market conditions and develop and
     circulate a standard CRE CIP for approval by PBOS management.
  .  Negotiate business terms to obtain leaseholds for those properties on
     behalf of PBOS.
  .  Oversee lease language negotiation by outside counsel.
  .  Initiate environmental and security reviews.
  .  Oversee and coordinate construction and move process.
     o  Design projects based on current PBI construction standards
     o  Review/approve Construction Documents (CDs).  Approval of CDs is not a
        professional approval of design.
     o  Oversee landlord's implementation of construction.
     o  Identify furniture inventory and order furniture requirements.

                                       5
<PAGE>

     o  Advise TechCentral identified resources of necessary timeframes for
        coordination of tele/data installations. The identified TechCentral
        resources and PBOS IT will be responsible for tele/data equipment and
        service installation.
  .  Issue RFPs and contracts for support services.
  .  Oversee vendor/landlord inspection and close-out of vacated properties.

PBI CRE will not be responsible for costs associated with PBOS failure to act or
make decisions in a timely fashion.

PBI will manage project expenses within the proposed financial guidelines
presented to PBOS based on market conditions (i.e. Capital Investment Proposals
(CIP)) which will be based on current PBI Real Estate practices.  PBI will
approve invoices for payment of all vendors during the transition services
period.  The payment will be made by PBOS within 30 days of receipt of an
approved invoice. PBI CRE will review over-runs of projects with PBOS management
(defined as the person who signed-off the project CIP).  CRE will not be
responsible for project over runs due to failure of PBOS to approve or make
timely decisions, force majeure or other delays not reasonably within control of
PBI.

Upon the earlier of substantial completion of a project in accordance with
generally accepted construction practices of the project locale or occupancy by
PBOS personnel - PBOS will become accountable for all requirements of the
property including lease administration and property management.

Additional project management and training support may be provided if both
parties agree to specific terms.

                                       6
<PAGE>

CRE - PBOS REAL ESTATE PROJECT PROCESS  Sched. 1B - Exhibit A

PROJECT CONTACTS:

 . PBOS Facolities:
  .  Office Systems Districts (Commercial Sales & Service and National Sales).
  .  Business Products Centers ("BPC")

 . PBOS Home Office Contacts:
  . Office Systems District : Georgia Ludovico, 365-2371 fax 365-6193 Mail
    Loc: 17-20
  . Office Systems BPC: George Clark (ph PB external 365) 430-7061 fax
    203-396-5641 Mail Loc: 17-23
  . PBOS IT  - Voice and Data Requirements - Gary Geiger (ph PB external
    365) 430-7036

 . PBI CRE Contacts
  . CRE West Wendi Gruskin 351-7296
  . CRE East Jessica Bray - 351-6286

  IMPLEMENTATION DESCRIPTION:

I.   PROJECT KICKOFF:

 . Identify Space Alternatives:
  .  Consolidation & Relocation of Operations
  .  Relocation of District Office
  .  Separation from PBI (demise in same facility or separate locations)
  .  Lease Renewal (maybe w/ a consolidation of another group)
  .  New space requirement (New District Office or BPC).

 . Calculate Facility Requirement
  .  Incorporate Personnel ("PSN") into standard PSN spreadsheet
  .  Circulate Completed PSN spreadsheet to PBOS Home Office Contacts for
     approval
  .  Once facility requirement is established, compare to existing facility (to
     determine if existing space meets current requirements).

                                       7
<PAGE>

 . Request Telecomm Budget From TechCentral Resources
  .  Forward approved Personnel Spreadsheet to TechCentral Resources.
  .  CRE to provide TechCentral Resources with projected move in date, local
     PBOS contacts and a description of all options that will be explored
     (Consolidation & Relocation of PBOS, Lease Renewal (maybe w/ a
     consolidation and/or demise existing space) and/or New space requirement).
  .  TechCentral Resources to review all phone/data requirements with local PBOS
     contacts.
  .  TechCentral Resources to provide CRE with tele/data budget for all facility
     options.
  .  PBOS IT will review, approve and manage provided budgets and equipment
     requirements.

 . Contact Local PBOS Service Management  to discuss:
  .  Approved Personnel
  .  Service Requirements
  .  Preferred Geographic Areas (request 1st 2nd & 3rd choice and a Map based on
     growth areas and current customer base).
  .  Condition and Functionality of Existing space and improvements needed.

 . Contact Local PBOS Sales Management (Commercial and National Sales Manager's)
  to review:
  .  Requirements provided by Service Management.

 . Contact Local PBOS Commercial and National Region Management (Commercial
  Region Service and Sales VP and National Region VP to review:
  .  Requirements provided by their respective Local PBOS Management.

II.    MARKET SURVEY

 . Provide Cushman & Wakefield with the following information:
  .  Preferred Geographic Area (request 1st 2nd & 3rd choice and a Map showing
     areas with instruction to educate as to the entire market).
  .  Space requirement and Type of facility (flex, warehouse, and retail)
  .  Lease expiration date and Target move in date.
  .  Existing facility info (address, Local PBOS Management, and, if exploring
     lease renewal, provide copy of lease, landlord contact, renewal terms,
     rental rate, and desired improvements).

                                       8
<PAGE>

III. SITE TOUR

 . Preparation:
  .  Review market survey provided by local C&W broker.
  .  Select 5-10 properties (if available) that meet requirement and desired
     rental rates.
  .  Schedule site tour. Advise Local PBOS Management of date and time of tour
  .  One-week prior, confirm the local PBOS Management attendees and fax tour
     itinerary.
  .  Mail Copy of CRE Procedures Guide to local PBOS Management.
  .  Request local Broker to prepare books (must include map, market scope,
     property profile) and to have enough on hand for all attendees.

IV.  SITE SELECTION

 . Develop Short List and proceed as follows:
  .  Local Broker to send out PB standard RFP and Environmental Questionnaire to
     prospective landlords.
  .  Review all RFP's and Counter
  .  Review Counter proposals and select 2 to 3 properties (if available) and
     counter again (include PB standard lease document).
  .  Request Landlords to provide proposed layout (Provide them with program
     requirement (Personnel spreadsheet) and sample space plan of a similar
     space requirement.).
  .  Upon receipt of 2nd round of counters, C&W to run comparison analysis.
  .  Select 1st and 2nd choice properties.

VI.  SITE APPROVAL

 . PB Due Diligence:
  .  Environmental Assessment
  .  Corporate Security- CAP Index Report

V.   SITE DEVELOPMENT

 . Financial  Approval
  .  CRE PM to Prepare CIP for new facility lease or lease renewal.
  .  CIP to identify: Total Estimated Facility Expense (Lease, Opex, Cam,
     Utilities, janitorial and moving costs) and Total Estimated Capital request
     (LHI, Furniture and Phone and Data)
  .  Attach to CIP; the approved Personnel spreadsheet, Telecomm budget and site
     comparison analysis.

                                       9
<PAGE>

  .  Forward CIP to respective PBOS Home Office Management for Approval.

 . Space Plan
  .  CRE PM to forward landlord's proposed layout or As-Built (request plan on
     CAD) to PB Architect for review and incorporation of PB standards.

 . Approval of Space Plan
  .  CRE PM to forward proposed space plan (once all of CRE PM's comments have
     been incorporated) to:
  .  Local PBOS Management and Region Management for review/approval and/or
     comments. If reasonable modifications are requested, incorporate and
     forward modified plan to local PBOS management and Region Management for
     approval.
  .  CRE PM to provide TCC PM with Proposed TI language, Landlord's work letter
     and Base Building Info.
  .  TCC PM visits proposed site for pre-design review and existing facility.
  .  Also if CRE PM has not seen the proposed facility, TCC PM to inspect the
     HVAC units (if applicable) and take pictures of the interior space (ceiling
     tile, lights, doors, restrooms, etc).

 . Telephone/Data Services
  .  CRE or TCC PM to Provide TechCentral Resources (ASAP) with the following
     info:
  .  New facility address, landlord contact, a name and phone number of a tenant
     in the proposed building, any revised Personnel, proposed space plan,
     confirm target completion date.
  .  Confirm with TechCentral Resources that local PBOS management requirements
     were discussed. Confirm with TechCentral Resources installation date for
     new or existing phone switch and data lines.

 . Development of Base Plans and Construction Documents
  .  Depending upon agreement with landlord, either PB Architect will prepare a
     full set of base plans (Demolition, construction, tele/elect/, reflected
     ceiling, and finish schedule) and forward to landlord's architect for
     preparation of CD's (review for code compliance, and M.E.P's) or Landlord's
     architect will prepare all drawings.

 . Lease
  .  Prepare Lease Objective Sheet
  .  Forward Proposed Lease Document or Lease Amendment (whether it be PB
     standard lease that LL has marked up or Landlord's standard lease
     document), Lease Objective Sheet and Accepted RFP to PB outside counsel.

                                      10
<PAGE>

 . Furniture
  .  Request furniture inventory. Forward proposed layout (if completed) to
     furniture vendor, Name and Phone number of local PBOS management.

VI.  PRE-CONSTRUCTION THROUGH MOVE IN

 . Trammell Crow Scope of Services
 . TCC shall:
  .  Coordinate with PBOS IT for procurement and installation of Telecomm and
     Data requirements.
  .  Coordinate order and installation of Telecom/Data Cabling
  .  Coordinate specification and procurement for new furniture (work with PB
     vendors.
  .  Furniture Vendor to provide TCC with the furniture inventory.
  .  Coordinate the development of Construction Documents
  .  Obtain a minimum of Three Bids for all work.
  .  Secure issuance of  Building Permit (may be via Contractor or Landlord)
  .  Manage Construction Process
  .  Coordinate installation of Furniture
  .  Obtain final Certificate of Occupancy
  .  Administer move process (includes completion and distribution of PB
     standard relocation schedule to local PBOS Contacts).
  .  Develop, issue and manage completion of final Punch List.

                                      11
<PAGE>

 .  Project Management Activity Responsibilities

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
Activity                                                  Responsible Parties
-----------------------------------------------------------------------------------
                                                          PBOS  CRE  Vendor
-----------------------------------------------------------------------------------
<S>                                                       <C>   <C>  <C>
Project Request and Assignment                            x
-----------------------------------------------------------------------------------
Identify strategy/ Define geographic area                 x
-----------------------------------------------------------------------------------
Provide CRE personnel information in standard             x
spreadsheet format (attached)
-----------------------------------------------------------------------------------
Propose alternatives                                      x     x
-----------------------------------------------------------------------------------
Dimension Size requirement based on approved                    x
standards (attached)
-----------------------------------------------------------------------------------
Approve Size and Geographic search area                   x
-----------------------------------------------------------------------------------
Determine Telecomm/data requirements and provide          x          TCC PM
budget                                                               TechCentral
                                                                     Data Resource
-----------------------------------------------------------------------------------
Obtain market data, develop short list and coordinate     x     x    RE broker
schedule for market tour
-----------------------------------------------------------------------------------
Tour short list of sites                                  x          x
-----------------------------------------------------------------------------------
Analyze RFP's , Counter proposals, propose property             x
-----------------------------------------------------------------------------------
Prepare and circulate facility CIP for approval                 x
-----------------------------------------------------------------------------------
Review and approve facility CIP                           x
-----------------------------------------------------------------------------------
Finalize site selection                                   x
-----------------------------------------------------------------------------------
Request Environmental and Security review of property           x
-----------------------------------------------------------------------------------
Conduct Environmental assessment                                     PBI Corporate
                                                                     Safety
-----------------------------------------------------------------------------------
Conduct Security review                                              Security Firm
-----------------------------------------------------------------------------------
Negotiate and finalize lease document                           x    RE Atty
-----------------------------------------------------------------------------------
Execute Lease Agreement                                   x
-----------------------------------------------------------------------------------
Request and analyze furniture inventory. Develop                x    Furniture
furniture installation drawing.  Order components                    Distributor -
needed to complete new configurations or to replace                  Inventory/
damaged furniture.                                                   design
-----------------------------------------------------------------------------------
Develop space plan                                        x     x    Architect
-----------------------------------------------------------------------------------
Approve final space plan                                  x
-----------------------------------------------------------------------------------
Develop construction documents                                  x    Architect
-----------------------------------------------------------------------------------
Manage construction process                                     x    TCCS
-----------------------------------------------------------------------------------
Manage installation of voice and data                     x          TCCS
-----------------------------------------------------------------------------------
Manage installation of new furniture and the tear down          x    Furniture
and rebuild or move of existing furniture                            Distributor &
                                                                     TCCS
-----------------------------------------------------------------------------------
Schedule and Coordinate move into new facility            x     x    Move vendor &
                                                                     TCCS
-----------------------------------------------------------------------------------
</TABLE>

                                      12
<PAGE>

                    PBI / PBOS Transition Services Agreement

       Schedule 1C-1 - Accounting Services - Sales, Use and Property Tax
       -----------------------------------------------------------------

General
-------

PBI will provide PBOS with transitional accounting services to cover tax
compliance, research and tax-audit planning for sales, use and property taxes.

Duration
--------

Distribution Date to December 31, 2001 (general support excluding maintenance of
tables)
Distribution Date to December 31, 2002 (maintenance of all tax tables)

Cost
----

$11,250 per month until December 31, 2001.
$1,000 per month from January 1, 2002 until December 31, 2002.

Included Services
-----------------
 . Maintenance of tax tables includes:
     o Maintain Spitab tables.
     o Maintain use-tax tables.
     o Maintain property tax depreciation tables for tangible personal tax.
     o Maintain PTMS (fixed asset) tax tables.
 . General Support includes:
     o Train PBOS tax group to maintain the PTMS table post-transition period.
     o Support PBOS tax group as consultant to help build competence.
     o Support tax compliance efforts (business licences, sales and use returns,
       property tax returns).
     o Provide tax data and backup documents to PBOS upon request.
     o Provide PBOS with three offices/cubicles equipped with online desktop
       computers and printer, in or near the PBI tax department.
     o Advise PBOS of any sales, use or property tax audit issues which result
       or may result in additional tax (or refund) or written advice by taxing
       authority on suggested or required corrective measures. These issues
       could include audit adjustments that affected the facsimile and/or copier
       component of PBI compliance, or adjustments or issues that could affect
       prospective or post-distribution PBOS compliance or audits.

                                      13
<PAGE>

Excluded Services
-----------------
 . PBI will not conduct any tax research on behalf of PBOS after August 1, 2001.

Conditions
----------
 . PBOS will sign all tax returns submitted by PBOS.
 . PBOS will indemnify PBI for all returns completed by PBI on the behalf of
  PBOS, consistent with the appropriate terms in the tax separation agreement.

                                      14
<PAGE>

                    PBI / PBOS Transition Services Agreement

      Schedule 1C-2 - Accounting Services - Payroll, Travel Reimbursement,
      --------------------------------------------------------------------
                                Accounts Payable
                                ----------------

General
-------

PBI will provide PBOS with transitional accounting services to cover payroll,
accounts payable and travel reimbursement.

Duration
--------

Distribution Date to December 31, 2001 (Payroll and Travel Reimbursement).
Distribution Date to December 31, 2002 (Accounts Payable)

Cost
----

Monthly charges will be as follows:

 Payroll                 $34,870
 Travel Reimbursement      4,855
 Accounts Payable         22,650
                          ------
 Total                   $62,375
                         =======

Included Services
-----------------
Payroll services include:
------------------------

 . Set-up of new employees in Payroll system, assuming ordinary changes to
  payrolls.  Extraordinary numbers of new employees brought on by acquisitions
  or business practice changes may incur higher fees.
 . Processing regular payroll and overtime payments.
 . Payroll tax deposits, returns, payments and W-2 processing.
 . Account reconciliations for all payroll accounts (FICA, unemployment
  insurance, federal/state and local with-holding, other appropriate deductions,
  and payroll).

Travel Reimbursement services include:
-------------------------------------
 . Processing approved Travel Reimbursement Payments and adjustments, consistent
  with existing PB suppliers and practices.
 . Assigning travel expenses to appropriate GL account.
 . Does not include approval of expenses which will be conducted by PBOS.

                                      15
<PAGE>

Accounts Payable services include:
---------------------------------
 . Provide system space for PBOS Accounts Payable on SAP system.
 . Schedule systems runs.
 . Maintain SAP and vendor file.
 . Control systems security.
 . Provide training for PBOS staff to process reports etc in SAP system.
 . Does not include processing, matching and paying bills (done by PBOS staff).

                                      16
<PAGE>

                    PBI / PBOS Transition Services Agreement

              Schedule 1C-3 - Accounting Services - General Ledger
              ----------------------------------------------------

General
-------

PBOS will continue to use the general ledger system within PB's SAP environment
during the transition period.  Maintenance of the system will be provided by PB,
while most accounting activities related to the general ledger will be conducted
by PBOS.

PBOS accounting system structure will be maintained at a level consistent with
the period preceding the spin-off.  Any changes to this structure will be made
at the sole discretion of PB.

Duration
--------

Distribution Date to December 31, 2002

Cost
----

$34,500 per month.

Included Services
-----------------

 . Maintenance of the SAP system (including Chart of Accounts, cost center
  structure, product hierarchy, Accrual reversal, open and close posting
  periods).
 . Maintenance of access security to SAP.
 . Reconciliation of feeder systems to general ledger.
 . Reconciliation of shared accounts to general ledger.
 . Prepare the feeder closing schedule for Danbury Data Center.
 . Facilitate closing entries based on requests from PBOS.
 . Training of PBOS staff to utilize general ledger within SAP.

Metrics/Service Levels
----------------------

PBI will ensure that closing schedules for PBOS books will conform to a monthly
closing schedule that will be provided to PBOS management, consistent with the
pre-spin-off practice.  It is expected that PBOS's monthly close of feeder
systems will conform closely with that of PBI (timing is dictated by the timing
of the run of PBI and PBOS unique feeder systems).

                                      17
<PAGE>

                    PBI / PBOS Transition Services Agreement

               Schedule 1C-4 - Accounting Services - Fixed Assets
               --------------------------------------------------

General
-------

PBOS will continue to use the fixed asset ledger within PB's SAP system during
the transition period.

Duration
--------

Distribution Date to December 31, 2002

Cost
----

$2,000 per month.

Included Services
-----------------

 . Set-up of fixed assets into SAP system.
 . Ongoing maintenance of the account structure.
 . Process write-offs and accounting entries upon request of PBOS.
 . Provide ad-hoc reporting as required by PBOS.
 . Training of PBOS staff to utilize fixed asset ledger within SAP.

                                      18
<PAGE>

                    PBI / PBOS Transition Services Agreement

           Schedule 1C-5 - Accounting Services - Inventory Accounting
           ----------------------------------------------------------

General
-------

PBOS will continue to use the inventory accounting system within PB's financial
system during the transition period.

Duration
--------

Distribution Date to December 31, 2002

Cost
----

$20,400 per month.

Included Services
-----------------

 . Maintenance of the CIS Inventory system (includes all product code hierarchy,
  depreciation rates, etc.)
 . Reconciliation of feeder systems to general ledger (demos, finished goods,
  rental assets).
 . Ensure output from inventory system is accurately reflected within G/L and
  Income Statement.
 . Calculation of Purchase Material Variances on facsimile equipment and parts.
 . Ensure reconciliations are accurate and current for shared accounts.

                                      19
<PAGE>

                    PBI / PBOS Transition Services Agreement

           Schedule 1C-6 - Accounting Services - Accounts Receivable
           ---------------------------------------------------------

General
-------

PBOS will continue to use the Mechanical Accounts Receivable System during the
transition period. Maintenance of the system will be provided by PB.

PB will support reconciliation of Accounts Receivable to the General Ledger, and
will work in conjunction with PBOS to ensure that cash application through the
separate lock-boxes is correct.

PB will continue to issue over-due statements to PBOS customers with outstanding
invoices greater than 40 days.

There will be no cross-divisional (i.e. Inter-company) file corrections within
the Accounts Receivable system.  PBOS will make no changes to the A/R system
beyond normal customer maintenance functions defined below.

Duration
--------

Distribution Date to December 31, 2002 (A/R systems usage and maintenance)
Distribution Date to January 31, 2002 (Reconciliation and accounting support)

Cost
----

Monthly charges are as follows:

 Salaries                  $   590
 A/R System Maintenance      5,700
 Forms and Envelopes         1,840
 Postage                     8,300
                             -----
 Total                     $16,430
                           =======

Commencing January 1, 2002, monthly charge will be reduced by $590 (all salary
charges related to reconciliations and accounting support will cease).

Included Services
-----------------

PB will:

                                      20
<PAGE>

 . Maintain Spitab tables (A/R aging, Bad debts, Statements/Commissions).
 . Tie-out daily Trial Balance to Mechanical Invoice Load (until 1/31/02).
 . Tie-out and reconciliation monthly (until 1/31/02):
      o Cashbook (JV#004)
      o Refunds and Manual A/R Feeder (JV#99)
      o A/R to General Ledger
 . Analyze, in conjunction with PBOS, misapplied cash through lockbox process:
      o Determine if any cash received through PB lockbox is for payment of PBOS
        invoices.
      o Remove from PB G/L and A/R systems any misapplied cash.
      o Wire any misapplied PBOS cash to PBOS on a timely basis, to be
        determined jointly by both parties.
 . Train PBOS staff on Reconciliation procedures on G/L.
 . Set-up & maintain PBOS employees for A/R Security.
 . Provide to PBOS usage of the A/R system, including:
      o On-line functionality of A/R System (entries made by PBOS staff):
          . Write-Off.
          . File Correction.
          . Refund.
      o Use of all existing A/R screens:
          . CMS.
          . Payment history/Fiche information.
      o Reporting (access to PBOS staff to generate following reports):
          . A/R Aging Report.
          . Bad Debt Reporting.
          . Refund Reporting.
 . Issue weekly overdue statements to PBOS customers with invoices outstanding
  more than 40 days (including cost of statement, envelope and postage).

PBOS Services provided to PB
----------------------------
 . Analyze, in conjunction with PB, misapplied cash through lockbox process:
      o Determine if any cash received through PBOS lockbox is for payment of PB
        invoices.
      o Remove from PBOS G/L and A/R systems any misapplied PB cash.
      o Wire any misapplied PB cash to PB on a timely basis, to be determined
        jointly by both parties.

Excluded Services
-----------------
 . All PBOS Fax Accounts Receivable Processes (not presently conducted by PB).
 . Management of PBOS lockboxes.

                                      21
<PAGE>

 . Cash application of cash received through PBOS lockboxes (conducted by PBOS
  A/R staff).
 . All A/R functions related PBOS customers (conducted by PBOS A/R staff)
  including:
      o Write-Off.
      o File Correction.
      o Refund.
 . All daily/monthly reconciliations of PBOS A/R will be assumed by PBOS after
  1/31/02.

                                      22
<PAGE>

                   PBPSI / PBOS Transition Services Agreement

                     Schedule 1D - Benefits Administration
                     -------------------------------------

General
-------

PBI agrees to provide certain administrative services related to employee
benefits to be offered by PBI to PBOS employees as set forth below.

Duration
--------

 . Except for specific items that are noted in Section 5 below, all benefits
  administration support will terminate on December 31, 2001.

Cost
----

 . $74,100 per month (from Distribution Date through December 31, 2001)
 . PBI and PBOS agree to negotiate jointly with 3rd party vendors with respect
  to costs incurred related to pension transition service credit to be provided
  by such vendors on behalf of PBOS employees where the services pertain to
  employee benefits provided by Pitney Bowes.  PBOS agrees to pay the fees of
  such vendors directly to the vendors without involvement of Pitney Bowes.

Included Services
-----------------

1. General Benefits Administration
   -------------------------------
 .  Health Care, Dependent Care claims and administration of flex benefits.
 .  Processing of retirees from PBOS transferred from Pitney Bowes, including
   pension and retiree medical benefits.

2. Administration of Disability Programs
   -------------------------------------
 .  Services to be provided are comparable to historical service provided to PBOS
   employees.

3. Benefits Customer Service Center
   -------------------------------
 .  Services to be provided are comparable to historical service provided to PBOS
   employees.

4. PBI Systems Access
   --------------------
 .  Access to PARS, DSS, Benesoft, MDA.

5. 2002 and Beyond
   ---------------
 .  Benefits Call Center 8:00 - 6:00 PM - (ends 3/31/02)

                                      23
<PAGE>

 . Dependant Care/Healthcare account claims processing - (ends 3/31/02)
 . Disability - run-out of all open claims as of 12/31/01 (ends 6/15/02)
 . Processing of retirees from PBOS transferred from Pitney Bowes, including
  pension and retiree medical benefits.

PBOS Responsibilities
---------------------

 . PBOS agrees to provide Towers Perrin or other provider designated by Pitney
  Bowes with data monthly that tracks employee pay and employment duration for
  PBOS employees.  Data must be provided in a format that is compatible with
  Pitney Bowes' pension benefits software.

                                      24
<PAGE>

                    PBI / PBOS Transition Services Agreement

                 Schedule 1E - Supplies Line Order Entry System
                 ----------------------------------------------

General
-------

PBOS will continue to use the PBI Telemarketing order entry system for the
Supplies Line for all Copier orders.  Fax orders will not use the PBI
Telemarketing order entry system.

The order entry system described in this agreement includes the order entry
system, the customer database, pricing database, product master, credit card,
shipping database and invoicing which are also key support for the overall
Telemarketing system.

Duration
--------

Distribution Date to December 31, 2002

Cost
----

Normal maintenance of the system, including updates for changes in products and
or pricing, will be provided through the same arrangement as existed pre-
Spinoff.

Postage, envelopes, letter stock and other soft-costs (such as credit card fees
and other chargebacks) will be charged back to PBOS at actual cost incurred.

Approved PBOS-requested system changes and testing will charged at a rate of
$150 per hour.

Included Services
-----------------

Maintenance of the Order Entry System, including Cost of Sales and Billing.

Daily feed of order information to invoicing system and revenue tie-outs.

Feed to general ledger and all required reconciliations.

Limited systems changes will be provided at rates shown above.  All systems
changes must be approved in advance by PBI, and tested by PBI prior to
implementation.

                                      25
<PAGE>

Fax supply line orders will not use the PBI Order entry system except when
customers use purchase power account to pay for purchase.

PBOS will make no changes to the PBI supply line order entry system, except the
daily maintenance of the PBOS-related portions of the following modules, which
are sole responsibility of PBOS:

  .  Products
  .  Contracts
  .  Cost of Sales/Accounting
  .  Product Routing
  .  Pricing
Note that each of the above modules are maintained by PBOS in the period prior
to the spin-off.

                                      26
<PAGE>

                    PBI / PBOS Transition Services Agreement

                          Schedule 1F - Customer Care
                          ---------------------------

General
-------

The PB Customer Care Group will support PBOS by providing incoming service call
receipt and service call dispatch.  This service includes use of both human and
electronic (Integrated Voice Response, or IVR) call receipt.

Duration
--------

This agreement will terminated concurrently with the termination of the Field
Service agreement.

If a long-term arm's length Field Service agreement is negotiated, this Customer
Care agreement will be deemed to be cancelled concurrently with the termination
of the transitional services agreement for Field Service, and a subsequent
agreement covering the services provided by the Customer Care Group would need
to be agreed to by both parties.

Cost
----

$158,100 per month based on an annual non-IVR call volume of 900,000 to
1,000,000 PBOS calls per year.

On or around August 1, 2002, an annual reconciliation of non-IVR calls will be
completed by the Customer Care Group.   All billing adjustments as a result of
this reconciliation will be made in the next monthly bill following the
reconciliation.  The reconciliation will be based on the following methodology:

Annual Call Range         (Credit)/Charge to PBOS
-----------------         -----------------------
Below 840,000             $(50,000) for every 30,000 calls under 900K
840,000 - 869,999         $(100,000)
870,000 - 899,999         $(50,000)
900,000 - 1,000,000       No adjustment
1,000,001 - 1,030,000     $50,000
1,030,001 - 1,060,000     $100,000
Above 1,060,000           $50,000 for every 30,000 calls over 1 million

Subsequent reconciliations will be undertaken annually.  If this agreement is
cancelled or expires in the middle of a year, a reconciliation will be completed
at time of cancellation based on monthly call volumes, using an equal monthly
pro-

                                      27
<PAGE>

ration of the annual call volume target range of 900,000 to 1,000,000 calls.
Likewise, any incremental charges or credits will be pro-rated in equal monthly
amounts based on the above ranges. For example, if this agreement were cancelled
after 5 months (or 5 months after the last reconciliation period), a target
range of 5/12s of the above Call Ranges and Charges would apply. Any adjustments
will be made in a separate bill following the reconciliation.

Included Services
-----------------

Access to both customer service representatives and the integrated voice
response system (IVR) to accept inbound telephone calls requesting service calls
or service call information related to PBOS products.

The representative will assess the nature of inbound calls and route calls to
field service representatives via the ACESS system.

Monthly reporting of call volumes will be provided to PBOS at comparable levels
as existed prior to spin-off.

Only service-related calls are handled by the Customer Care group.  All billing
issues are routed to PBOS agents in Denver.

Upon receipt of completed call information, the agent will assess whether the
call is billable or covered by a service contract.  The agent will then code the
order appropriately in the system.

PB will provide disaster recovery services for the Melbourne fax diagnostic
center only.  Disaster Recovery service will allow customer telephone calls to
be routed to PB call centers.  PB agents will provide limited service to such
customers at best-efforts level, following previously agreed upon plans.  If
additional expenses are incurred by PB in support of this service, they will be
charged to PBOS.

Excluded Services
-----------------

Service does not include the provision disaster recovery service for PBOS call
centers except as noted above.

                                      28
<PAGE>

                    PBI / PBOS Transition Services Agreement

                     Schedule 1G - Safety and Environmental
                     --------------------------------------

General
-------

PBI will furnish PBOS with Safety and Environmental consulting support during
the transition period.  These services cover the regulatory mandated programs of
EPA, OSHA, DOT and other employee safety, health, property protection, energy
management and environmental compliance initiatives.

PBI will accept no liability for any claims or damages related to any services
provided herein.  PBOS will save harmless PBI from any claims or damages related
to Safety or Environmental concerns.

Duration
--------

The period commencing at the Distribution Date and concluding December 31, 2001.

Cost
----

$12,000 per month.  This fee will cover reasonable personnel and travel expenses
related to on-going business requirements.

If extra-ordinary expenses are required due to unusual business situations, PBI
will advise PBOS of the expected cost of services and PBOS will not unreasonably
reject payment of those expenses.

Included Services
-----------------

Service will include the provision of consulting and training support related to
the following areas:

  .  Industrial Hygiene Programs
  .  Environmental Compliance Audits
  .  Environmental Compliance Support
  .  Asset Recovery Operations
  .  Supply Chain Environmental Management (SCEM)
  .  Environmental Training
  .  Packaging Compliance
  .  Marketing Support
  .  Sales Support

                                      29
<PAGE>

  .  Property Assessments (EHS Focus)
  .  Environmental Metrics
  .  Energy Management Services
  .  Vendor Audits
  .  Chemical Safety
  .  Safety Consulting
  .  Property Protection
  .  Air Permit Administration
  .  OSHA Record-keeping
  .  BLS Record-keeping/Reporting
  .  Field Safety Program
  .  Safety and Health Audits
  .  MSDS Program
  .  Office Ergonomics Program
  .  Contractor Safety/Customer Support
  .  Motor Vehicle Safety Program
  .  Asbestos Management

Limits of Liability
-------------------

PBI will accept no liability for any claims or damages related to any services
provided herein.  PBOS will save harmless PBI from any claims or damages related
to Safety or Environmental concerns.

                                      30
<PAGE>

                    PBI / PBOS Transition Services Agreement

                 Schedule 1H - Field Service Systems Support
                  ---------------------------------------------

General
-------

PBI will furnish PBOS with systems support related to call dispatch, parts
order, customer billing and service history for all US regions through the ACESS
system.

Duration
--------

The period commencing at the Distribution Date and concluding December 31, 2002.

Cost
----

Support of the ACESS system and handhelds will be charged at a monthly rate of
$208,000 ($2.5 Mil annually).

At the termination of this agreement, all costs associated with migrating data
to a new system will be borne by PBOS.

Included Services
-----------------

For all PBOS business, PB will provide the following services:
  .  Ongoing support of the ACESS system.
  .  Access to the ACESS system by PBOS staff.
  .  Daily batch feeds from ACESS to PBOS billing system.
  .  Update and maintenance of hardware and software required for wireless
     communication system (including handheld devices and AIM system).
  .  Logistics for repair and redistribution of wireless devices.

                                      31
<PAGE>

                    PBI / PBOS Transition Services Agreement

                  Schedule 1J - Non-Focus Area Field Service
                   -------------------------------------------

General
-------

PBI will furnish PBOS with maintenance service to PBOS products in areas that
were serviced on June 1, 2001 by global mailing systems representatives (the
"Non-Focus Areas").

Duration
--------

The period commencing at the Distribution Date and concluding December 31, 2002.

This agreement can be cancelled with 90 days written notice by either party.

This agreement may be renewed annually for a one-year period if specific terms
including cost can be agreed between both parties.

Cost
----

$492,000 per month based on a target service population of 6,200 copiers and
13,000 faxes.  Volumes will be re-evaluated quarterly.  A machine is included in
the service volume if it is a rental or has a valid EMA or has had service work
conducted upon it within the past twelve months.

Pricing will remain consistent if volume remains within 5% of the target volume.
Pricing will be modified on a quarterly basis if volume changes by more than 5%
from the target volume.  Revised pricing will be based on a mutually agreed
formula that takes into account changes in volume and model mix.

All initial costs associated with training of new and existing service
technicians on product updates or new products will be borne by PBOS.

All costs associated with supply of parts to field service representatives for
repairs on PBOS products will be borne by PBOS.

Included Services
-----------------

For the specific territories described below, customer service of specific
products (listed below), including:
  .  Preventative, remedial and emergency customer service.

                                      32
<PAGE>

  .  Installation of new products.
  .  Preparation and reinstallation of relocated products (excluding actual
     transport of products which will be charged directly to PBOS).
  .  Customer training and/or consulting.
  .  Specific operating procedures have been mutually agreed upon and are on
     file with PB. These operating procedures may be changed upon mutual consent
     of both parties.

Included Territories
--------------------

  .  The included territories are identified in a list previously provided and
     agreed by PBOS, which is maintained on file by PB. Changes to the list of
     included territories will be allowed if the changes are mutually agreed to
     by PBOS and PB.

Specific Products Covered
-------------------------

  .  Facsimile/Multifunction devices - products whose primary function is the
     transmission and receipt of scanned images. May also have scan and store,
     printing or copying functions as secondary options. May connect to a PC as
     a standalone print device.
  .  Analog Copier/Unconnected Digital Copiers - products whose primary function
     is the reproduction of scanned images locally, not connected to a LAN or
     WAN. May have built-in facsimile functions as a secondary function. May
     connect to a PC as a standalone print device.
  .  Digital Connected Copiers - products whose primary function is the
     reproduction of scanned images, which are connected to a LAN or WAN via an
     external print services device or an embedded printer controller. PB will
     service the copier/print device only. PBOS will install and service
     networking options/software at its own expense.
  .  Color Copiers (connected and unconnected) - products whose primary function
     is the reproduction of scanned images in a CMYK (Color) environment,
     locally or connected to a LAN or WAN. PB is not required to service color
     copiers in any locations.

Services provided by PBOS
-------------------------

For the products listed above and for mutually agreed to approved new products,
PBOS is obligated to provide initial technician training to all PB service
technicians working in the Included Territories.   The level of training will be
equivalent to that provided to PBOS service technicians.  PBOS will train a PB
rep at no cost to PB, within 30 days, if a machine is moved into a non-focus
area by a major or national account.

                                      33
<PAGE>

Technical product changes: Timing of training to the PB service techs will be
reasonably concurrent with training of PBOS, with both parties making best-
efforts to make themselves available for such training.

New technician training: New technicians will be trained at regularly scheduled
PBOS training courses.

PBOS will offer free technical training to all PB reps at regularly scheduled
PBOS training courses if space is available.

All costs associated with initial training for new territories/equipment, not
previously trained will be borne by PBOS (including travel-related costs and all
costs related to training materials and facilities, but excluding any charges
from PB techs for time spent in training).  Where additional training is
required due to unsatisfactory performance by a previously trained PB rep, all
costs associated with this training will be borne by PB.  Where additional
training is required due to turnover of PB reps (defined as any rep with less
than 2 years experience with PB), all travel costs associated with this training
will be borne by PB.

Technical telephone support of specified products will be provided in timely
fashion by PBOS and at no cost to PB.  OS technical support may facilitate local
OS support at no cost to PB if the technical support hotline fails to lend the
support to properly repair the product.

PBOS will provide parts to PBI service technicians in the specified regions
according to the terms of the Service Parts Logistics Schedule at no cost to PB.

Service Standards Definitions
-----------------------------
Response time - the amount of time elapsed from customer call to arrival of rep
at customer location.

Average Uptime percentage - the average of the Uptime Percentages calculated for
each month in a rolling 3-month period.  Monthly Uptime Percentages is
calculated as follows:

          Uptime Percentage = Hours of Operation - Equipment Downtime
                              ---------------------------------------
                                      Hours of Operation

"Hours of Operation" means the hours of operation of a unit of Equipment, during
the hours of 8:00 a.m. to 5:00 p.m., Monday through Friday, for each week of
each calendar month.

                                      34
<PAGE>

"Equipment Downtime" means the Equipment is not functioning in substantial
compliance with its specifications, begins (during the Hours of Operation) from
the time the Customer speaks to an authorized Pitney Bowes Service
Representative about the malfunction to the Equipment, and does not include time
when the Equipment is inoperable due to: (i) scheduled preventative maintenance
and inspections; (ii) damage by misuse, malintent, casualty, or force majeure
events; (iii) failure of Customer to perform, or cause to be performed, adequate
preventative maintenance and inspections, including, without limitation proper
cleaning, handling and servicing of the Equipment; (iv) use of damaged,
improper, or non-PBOS approved materials and supplies in the Equipment; (v)
changes in incoming power beyond published specifications; (vi) maintenance or
repairs required as a result of the Equipment being used in excess of the Hours
of Operation; (vii) maintenance provided by parties other than Pitney Bowes;
(viii) failure of a non-standard part; (ix) malfunction of equipment or software
provided by Customer or third parties which interfaces with the Equipment; (x)
the use of the Equipment for training exercises; (xi) failure of Customer to
provide suitable temperature, humidity, line voltage, or any specified
environmental conditions; and (xii) the Equipment not being used in accordance
with the agreed applications and for the ordinary purpose for which it is
designed and intended.

Zone 1 - 0-35 Miles from a PB District Office.
Zone 2 - 35.1-75 Miles from a PB District Office.
Zone 3 - 75.1-100 Miles from a PB District Office.
Zone 4 - 100.1+ Miles from a PB District Office.

Service Standards
-----------------
Response Time
-------------
Zone 1,2     - Average 4 hours
Zone 3       - Average 5.5 hours
Zone 4       - Average 7 hours

Uptime
Zone 1,2     - Average 98%
Zone 3       - Average 96%
Zone 4       - Average 94%

                                      35
<PAGE>

                    PBI / PBOS Transition Services Agreement

               Schedule 1K - Telecom Expenses in Shared Locations
               --------------------------------------------------

General
-------

PBOS will continue to use the PB telephone systems specified shared locations.
This will include local and long distance service for the PBOS employees in the
specified locations.

Duration
--------

Distribution Date to the termination or expiry of shared lease locations.

PB may at its sole discretion, require PBOS to acquire at PBOS expense their own
telephone switches for any of the specified locations with 90 days written
notice. Such an action will terminate the specific allocation related to the
impacted location, but will not cause the cancellation of the agreement as
relates to the other specified locations.

Cost
----

Actual monthly local and long distance charges in the specified shared locations
will be allocated to PBOS based on the proportion of the PBOS rented space as a
percentage of the total square footage of the location.

In addition, PBOS will be charged a proportionate amount of depreciation (based
on PB's standard accounting practice for depreciation) of all shared switches
based on the above allocation methodology.

Charges will be billed monthly in arrears at cost incurred.  Average PBOS
historic monthly charges have been approximately $18-$20,000 per month.

Included Services
-----------------

Local and Long Distance Service.

                                      36
<PAGE>

Specified Office Locations
--------------------------

The included office locations are identified in a list previously provided and
agreed by PBOS, which is maintained on file by PB.  This list will be reviewed
on a quarterly basis by both parties and modified to adjust for any changes in
switches in the shared locations.

                                      37
<PAGE>

                    PBI / PBOS Transition Services Agreement

                        Schedule 1L - Mailroom Services
                        -------------------------------

General
-------

PBOS will continue to receive the same services from the PBMS mailroom as were
provided prior to the spin-off.  The services will include the sorting and
delivery of inbound mail as well as the printing and mailing of outbound mail
for PBOS locations in Connecticut.

Duration
--------

Agreement will terminate on December 31, 2002 or upon termination of the IT
Services agreement between TechCentral and PBOS (whichever is sooner).

Printing of PBOS payroll checks will be provided between August 2001 and
December 2001.

Cost
----

Sorting and physical handling of mail will be provided for a flat rate of
$10,127 per month.

Payroll checks printing will be charged at $1,000 per month and is incremental
to the base charge.

Postage will be billed at actual cost, one month in arrears and is additional to
the base charge.

Overtime charges will be pre-approved by PBOS and included as required to
support unusual print requests.

All business forms and stationary used in the mailroom are provided by PBMS
Document Services Group at additional charge to PBOS.

Included Services
-----------------

Incoming PBOS mail to the Stamford hub will be sorted and couriered to the
appropriate PBOS mail drop locations.

                                      38
<PAGE>

PBOS invoices will be laser printed onto preprinted stock provided by Document
Services Group (at additional cost to PBOS per Schedule 1N), inserted and mailed
to customers.

Printing of PBOS payroll checks will be laser printed onto preprinted check-
stock also provided by Document Services Group (at additional cost to PBOS per
Schedule 1N), inserted and mailed as applicable.

Printing of PBOS payables checks will be laser printed onto preprinted check-
stock also provided by Document Services Group (at additional cost to PBOS per
Schedule 1N), inserted and mailed as applicable.

                                      39
<PAGE>

                    PBI / PBOS Transition Services Agreement

                  Schedule 1M - Import and Customs Compliance
                  -------------------------------------------

General
-------

PBI will provide PBOS with all import, customs compliance, international
transportation and post entry audit advisory services for all copier and
facsimile imports.

Duration
--------

Agreement will terminate on December 31, 2001.

Cost
----

$10,000 per month (excluding cost of third-party service providers for
international transportation, customs brokerage fees, customs duties, legal and
classification services)

Included Services
-----------------

PBI will provide:
  .  assistance with hiring and training of import personnel for OSD (not
     including any out-of-pocket expenses)
  .  guidance/assistance with establishing PBOS import operations including SOPs
     (standard operating procedure for import brokerage and international
     transportation)
  .  day-to-day import customer service and problem resolution concerning
     freight movement and communication through the appointed Customs Broker.
  .  coding and transmission of all OSD import related freight invoices to CTSI
     & related monthly reports
  .  general guidance and assistance with payment of customs duties through ACH
     (Automated Clearing House) and preparation of monthly journal vouchers
  .  consultation and guidance concerning the resolution of customs compliance
     issues
  .  consultation and guidance concerning the resolution of international
     transportation and customs brokerage service related issues
  .  post-entry audit function & maintenance of OSD classification database (as
     required)

                                      40
<PAGE>

  .  coordination of "in-house import compliance seminars" (as required)
  .  recordkeeping of all OSD imports from pre-spin and transition period for 5
     years and related services (data entry and insurance)
  .  shipping and documentation instructions to new vendors (as required)
  .  updated invoicing instruction (as required)
  .  ongoing customs regulations updates (as applicable)
  .  monthly international freight cost reports & comparisons
  .  monitoring implementation of new procedures (compliance improvement plan)
     as required
  .  guidance and assistance with reporting of any tooling/assists on OSD
     imports (as required)

                                      41
<PAGE>

                    PBI / PBOS Transition Services Agreement

                 Schedule 1N - Document Services Group Services
                 ----------------------------------------------

General
-------

PBMS Document Services Group (DSG) will provide PBOS with conventional and
digital print production, warehousing, fulfillment and distribution services for
PBOS document management needs.

Duration
--------

Through December 31, 2001.  This duration may be extended or modified if both
parties can agree mutually on terms and pricing (including changes to the
existing product/service range).

Cost
----

Cost will be dependant on services requested by PBOS.  Pricing to PBOS will be
consistent with the established internal PB pricing structure, which is the same
methodology as was used to charge PBOS for these services prior to the spin-off.

Any product/service requirement will be cost-estimated in advance by DSG to
facilitate ordering by PBOS, however all costs will be billed according to above
methodology, regardless of whether this exceeds or is under the estimated cost.

Upon cancellation or expiration of this agreement, all costs associated with
moving PBOS document inventories will be borne by PBOS.

Included Services
-----------------

DSG will provide the following services related to PBOS document management
needs:

  .  Graphics Design and Creative Services
  .  Business Cards and Stationary (letterhead and envelopes)
     o Set-up, type-setting and printing
  .  Printing and assembly as required, including, but not limited to:
     o Preprinted statements and envelopes for invoices
     o Brochures and training materials
     o Operating guides, parts lists and service manuals
     o Assembly of kits, books, brochures etc.

                                      42
<PAGE>

  .  Warehousing, fulfillment and distribution of documents
     o Inventory owned by PBOS
     o Inventory and fulfillment (warehousing, pick, pack and ship)

                                      43
<PAGE>

                                                                      Schedule 2

                              [LOGO] Pitney Bowes

                          Pitney Bowes Office Systems

                              Service Provisioning
                                      and
                                 Service Level
                                   Agreement

                                                                     TechCentral
<PAGE>

SECTION 1.     Introduction.

     The purpose of this Service Level Agreement ("SLA") is to establish
measurable and mutually agreeable targets for service delivery to Pitney Bowes
Office Systems ("PBOS") by the Pitney Bowes TechCentral organization. This SLA
will act as a guide for establishing expectations for both parties for the scope
of services, the metrics associated with the services, as well as tracking and
reporting of the metrics.

     Locations and Business Functions

     The following locations and functions are considered to be part of PBOS:

Locations
---------
 .  100 Oakview Drive, Trumbull CT
 .  7555 East Hampden Ave, Denver CO
 .  PepsiCola Drive, Melbourne FL
 .  Nationwide (BPC's, RDC's, Sales Offices)

Business Functions
------------------
 .  "Back Office" Support (GL, HR, Marketing, Product Development, etc)
 .  Customer Call Centers
 .  Sales Support
 .  Service
 .  FAX Diagnostics
 .  Regional Distribution Centers

Tech Central Contacts
---------------------

Janice Heatley                      Lou Menendez
Sr. Technical Advisor               Mgr., Service Level Management
Internal - 440-6401                 Internal - 421-3785
External (203) 351-6401             External  (203) 739-3785

Brian Bonacci                       Art Conklin
Director, End User Computing        Director, Operations & Network
Internal - 436-4270                 Services
External (203) 922-4270             Internal - 421-3979
                                    External (203) 739-3979
<PAGE>

Jack Rabuse                         Matthew Wessendorf
Vice President, Computer Service    Vice President, Customer
Internal - 421-3673                 Support
External - (203) 739-3673           Services
                                    Internal - 421-3686
                                    External - (203) 739-3686
OSD IT
------
Bob Butler, CIO                     Gary Geiger, Director Customer
Internal - 430-7431                 Support
External - (203) 365-7431           Services
                                    Internal - 430- 7036
                                    External - (203) 365-7036

     SECTION 2.  Scope of Service.

Scope of Service

     TechCentral agrees to provide PBOS with the services summarized below for a
period not to extend beyond December 31, 2002.

     . Application maintenance support of all shared applications.

     . Operational support services for all PBOS and shared applications hosted
       in Danbury including turnover, DBA services, Scheduling, data recovery,
       printing, and mailing services.

     . End user support through the Service Delivery Support Center ("SDSC") to
       respond to system password resets, Lotus Notes server issues, and network
       connectivity issues. The PBOS IT team would handle all other desktop
       related issues directly. SDSC will continue to support OSD Designated
       Support Center to SDSC calls on services provided by PBI that OSD will
       continue to use through 12/31/2002, for example: password resets on
       Mainframe applications.

     . Maintenance and administration of the Lotus Notes server(s).  No support
       related to any  future Notes based applications.

     . Access to PBI voice network using service provided by PBI's carriers.

     . Access to and availability of the PBI mainframe computers through
       12/31/02.

                                       2
<PAGE>

     . Call Center application support and technical services support for the
       A/S 400 and dialer server environment on a best effort, time and
       materials basis.

     . TechCentral will provide voice and data consultative and resource support
       to PBOS and Trammel Crow through 12/31/01 to facilitate relocations. PBOS
       will manage Trammel Crow and assigned data resource as well as maintain
       overall project responsibility.

     . Tech Central will provide telecom consultative support associated with
       disaster recovery at any core PBOS site until 12/31/01.

  Exceptions

     . Support of Wide Area Network ("WAN") services to all existing PBOS
       facilities on PBI's WAN through December 31, 2001. Within PBOS dedicated
       facilities, these services will be inclusive of the network routers only.

       After December 31, 2001, PBOS will be responsible for providing WAN
       services to their dedicated facilities and for any linkage to the PBI WAN
       that is required. PBI will provide troubleshooting assistance related to
       linkage between PBOS and the PBI WAN as required to restore service to
       optimal levels until such linkage is not required. TechCentral will
       continue to provide WAN support to shared PBI / PBOS locations until
       final separation - through October 2006 based on the termination of the
       last shared lease. As shared facility leases terminate or as facilities
       are relocated, PBOS will provide its own WAN services to these then
       dedicated facilities.

     . TechCentral will not provide any programming support of PBOS dedicated
       applications except as follows:

       - ManMan on best effort, maintenance only, time and materials basis

     . TechCentral will not provide application development services related to
       the implementation of any new ERP system by PBOS with the exception of:

       .  TechCentral will provide MQ Series support through the management of
          external resources contracted by and billed directly to PBOS as
          necessary to redirect message traffic to alternate clients.

                                       3
<PAGE>

       .  TechCentral will provide reasonable subject matter expertise for
          shared applications in support of PBOS data conversion/interface
          efforts. These services and related charges will be negotiated on a
          project basis.

     . Continuation of consulting support of telephone systems to all existing
       PBOS facilities through December 31, 2001. Any new PBOS facilities after
       December 31, 2001 will be the responsibility of PBOS.

  After December 31, 2001, PBOS will be responsible for providing and supporting
all telephone systems and services to their dedicated facilities. TechCentral
will continue to provide support to shared PBI / PBOS locations until final
separation - through October 2006 based on the termination of the last shared
lease.  As shared facility leases terminate or as facilities are relocated, PBOS
will provide its own WAN services to these then dedicated facilities.

  PBOS Responsibilities

     . PBOS will acquire and implement their own Wide Area Network (WAN) and
       network equipment for PBOS dedicated facilities by December 31, 2001. Any
       new or relocated PBOS dedicated facilities will be transitioned to the
       PBOS WAN by December 31, 2001. PBOS will also be responsible for the
       initial setup cost plus the recurring cost of the circuits to connect the
       PBI WAN to the PBOS WAN.

     . PBOS will develop the capability (internal or external) to design,
       implement and support all data and telephone network systems and services
       for dedicated PBOS locations by December 31, 2001.

  Any additional costs incurred by TechCentral above its baseline operating
expenses, to support unique technology platforms for PBOS (e.g. ManMan) will be
borne in total, by PBOS.  Any increased licensing cost incurred as a result of
the spin off will be passed through to PBOS

                                       4
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
HELP DESK - SDSC Hours of Coverage
-------------------------------------------------------------------------------------
Period       Monday-Friday  Saturday-Sunday  Specifications
-------------------------------------------------------------------------------------
<S>          <C>            <C>              <C>
 Normal      6AM-1AM EST    Saturday         Standard Help Desk support via Help
 Business                   8AM-4PM EST      Desk Support Analysts.
 Hours                      Sunday
                            Pager Support

-------------------------------------------------------------------------------------
 After       1AM-6AM EST    4PM-8AM EST      Calls will be transferred to a Help
 Hours                                       Desk
                                             voice mailbox.  An "on call" Help
                                             Desk Analyst will be paged.
-------------------------------------------------------------------------------------
 Holidays                                    The SDSC will be closed on the
                                             following holidays:
                                             New Years Day, Memorial Day,
                                             Independence Day, Labor Day,
                                             Thanksgiving, Day after Thanksgiving,
                                             and Christmas
-------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Service Description
---------------------------------------------------------------------------------------------------
Service           Description                                            Specifications
---------------------------------------------------------------------------------------------------
<S>            <C>                                                       <C>
 Level 1       Level 1 support for approved technologies and             Password resets,
 Technical     applications. The OSD technical staff will support        Data Networks,
 Support       desktop hardware, software, and servers.                  Mainframe, and Lotus
                                                                         Notes Support.
---------------------------------------------------------------------------------------------------
Level 2        Problems that are beyond the training of Help Desk        Predefined escalation
 Technical     Analysts, less than 10 minutes to be resolved at          lists will facilitate the
 Support       Level 1, or are undocumented will be assigned to          assignment of
               an appropriate Level 2 Technical Support                  problems to the
               Specialist.                                               appropriate individual
                                                                         or group.
---------------------------------------------------------------------------------------------------
Level 3        Problems that are beyond the training of Level 2          Predefined escalation
 Technical     Technical Support Specialists, or are                     lists will facilitate the
 Support       undocumented will be assigned to an appropriate           assignment of
               Level 3 Technical Support Specialist.                     problems to the
                                                                         appropriate individual
                                                                         or group.
---------------------------------------------------------------------------------------------------
Sr.            Sr. management within TechCentral will be                 Help Desk Analysts
 Management    notified when Urgent (Catastrophic) problems have         during or after normal
 Escalation    been opened.  IT Management will also be notified         business hours will
               when problems have not been closed and are                notify senior
               approaching their agreed upon Resolution Time.            management via
                                                                         phone or pager.
----------------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
Help Desk Outage Resolution Targets
--------------------------------------------------------------------------------------------
Severity Code     Customer Impact    Response to       Resolution  Escalation
                                     Customer*         Time
--------------------------------------------------------------------------------------------
<S>               <C>                <C>               <C>         <C>
Severity 1        Core Business      Updates every     less than   Notify applicable
Urgent            Process outage     30 minutes.       2 Hours     TechCentral and
(Catastrophic)                                                     designated Business
                                                                   management within 10
                                                                   minutes
--------------------------------------------------------------------------------------------
Severity 2        Subset of a Core   Every 60 minutes  less than   Notify applicable
High              Business Process                     5 Hours     TechCentral and
(Urgent)          outage                                           designated Business
                                                                   management if not
                                                                   resolved within 3 hours
--------------------------------------------------------------------------------------------
Severity 3        Single User        Daily             less than   Notify applicable
Medium            Outage                               24 Hours    TechCentral
(Important)                                                        Management if not
                                                                   resolved within 21 hours

--------------------------------------------------------------------------------------------
</TABLE>
Appropriate IVR messages will also be employed.

<TABLE>
<CAPTION>
------------------------------------------------------------------------
Help Desk Call Handling Targets
------------------------------------------------------------------------
Performance Metric                         Target
------------------------------------------------------------------------
<S>                                        <C>
Calls Abandoned by Caller                  less than 8%
------------------------------------------------------------------------
Time before speaking with HD analyst       less than 75 seconds - 90%
                                           of the time
------------------------------------------------------------------------
Severity 3 Tickets resolved in 24 hours    90% (100% within 3 days)
------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
System Availability
-----------------------------------------------------------------------------------------------
<S>               <C>                               <C>
Service           Description                       Hours of Availability
-----------------------------------------------------------------------------------------------
IMSPROD           IMS transaction region hosted     07:00 - 23:00 Monday - Friday
                  on the IBM mainframe System       07:00 - 20:00 Saturday
                  A, not specific business          No availability on Sunday.
                  applications.                     No availability on Holidays - Memorial
                                                    Day, July 4/th/, Labor Day, Christmas Day.
-----------------------------------------------------------------------------------------------
CICSFAXP          The CICS transaction region       07:00 - 21:00 Monday - Friday
                  hosted on the IBM mainframe       07:00 - 20:00 Saturday
                  System C, not specific business   No availability on Sunday.
                  applications.                     No availability on Holidays - Memorial
                                                    Day, July 4/th/, Labor Day, Christmas Day.
-----------------------------------------------------------------------------------------------
AS/400 Denver     Application and Technical         07:00 - 21:30 (EST) Monday - Friday.
                  Services support on a best        No availability on Saturday or Sunday.
                  effort basis
-----------------------------------------------------------------------------------------------
Digital           The DEC system supports the       07:00 - 23:00 Monday - Friday
-----------------------------------------------------------------------------------------------
</TABLE>

                                       6
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
System Availability
-----------------------------------------------------------------------------------------------
<S>               <C>                               <C>
Service           Description                       Hours of Availability
-----------------------------------------------------------------------------------------------
Equipment         Manman application.  The          07:00 - 20:00 Saturday
 Corp.            support for the application and   No availability on Sunday
                  hardware is "best effort",
                  maintenance only.
-----------------------------------------------------------------------------------------------
Tandem -          Tandem hardware functioning       07:00 - 23:00 Monday - Friday
 AIM1/AIM2        as front-end processor
                  converting x25 to SNA,            No availability on Saturday or Sunday.
                  supporting the ACESS
                  application.
-----------------------------------------------------------------------------------------------
Voice             Availability of PBX's the         24 hours a day/7 days a week
 Communication    voice network (AT&T),             PB Voice Technology provides consultant
                  network routing and voice         level services.
                  mail.
-----------------------------------------------------------------------------------------------
Data              Manage and support routers        24 hours a day/7 days a week.
 Communication    and circuits for all OSD
                  locations.
-----------------------------------------------------------------------------------------------
E-mail            Lotus Notes Mail services over    24 hours a day/7 days a week
                  the Pitney Bowes network, the
                  PBOS network, or the internet
                  through 12/31/02. (PBI Notes
                  domain)
-----------------------------------------------------------------------------------------------
MQ Series         Support of all current message    24 hours a day/7 days a week
                  queues serving PBOS
                  applications. Configuration of
                  additional MQ clients and
                  redirection of existing Queues
                  on a chargeable project basis.
-----------------------------------------------------------------------------------------------
</TABLE>

----------------------------------------------
System Availability Metrics
----------------------------------------------
Service                    Prime Shift
                           (7am - 11pm EST)
                           System Availability
----------------------------------------------
IMSPROD                    99.7%
----------------------------------------------
CICSFAXP                   99.7%
----------------------------------------------
AS/400 - Denver            Best Effort
----------------------------------------------
Digital Equipment Corp.    99.7%
----------------------------------------------
Tandem AIM1/AIM2           99.7%
----------------------------------------------
Voice Communications       99.7%
----------------------------------------------
Data Communications        99.7%
----------------------------------------------
PBI Notes Domain           99.7%
----------------------------------------------

                                       7
<PAGE>

     SECTION 3.  Service Tracking and Reporting Procedures.

 . PBOS or Designated PBOS Help Desk must call SDSC with all service requests
  and open up a trouble ticket to be logged into the TechCentral SDSC tracking
  system (REMEDY).  The call record is completed by the SDSC and forwarded to
  the appropriate support team for resolution.  The SDSC is responsible to
  ensure timely closure of supported technologies as outlined in Service
  Description (page 7).  Any service requests not recorded by the SDSC tracking
  system cannot be governed by this SLA.

 . Monthly Service Level Compliance Reports will be distributed to PBOS.
  Reports will be available by the 15/th/ business day of the month following
  the reporting period.   The Monthly Service Level Compliance Report shall
  consist of:

  .  High Level Availability Metrics - The report describes the failing
     component that caused the outages, the SLA target %, the SLA Attainment %,
     and the Outage Hours.

  .  High Level Outage Explanation - A detailed explanation of what happened,
     what we did to correct or circumvent the problem, and what we are doing to
     prevent its reoccurrence.

  .  Year-to-date Availability Charts - Charts depicting the current and
     previous 11-month attainment percentages for all components tracked for
     availability.

  .  Help Desk (SDSC) Call & Ticket Metrics - Current and year-to-date charts
     indicating attainment percentages for all Help Desk SLA's

                                       8
<PAGE>

     SECTION 4. Responsibilities.

PBOS Customer Calling the SDSC
 . Provide name, department and location.
 . Provide your unique identifier (desktop-ID, user-ID, device information,
  etc.)
 . Provide as clear a description of the problem as possible.
 . Provide individual to be contacted, if not the caller, then an alternate with
  telephone number.

TechCentral SDSC
 . Log all problems called in using the Remedy tracking system.
 . Determine severity of problem
 . Dispatch problem to appropriate Level 2 technical support group
 . Keep customer up to date on status of outage
 . Maintain support matrix at all times (identifying Primary/Secondary/Tertiary
  support personnel assignments, phone, and pager numbers for all systems
  supported).
 . Ensure that SDSC personnel receive formal and informal technical training for
  supported applications and technologies.
 . Recommend additional preventative work (if any identified).
 . Maintain and report actual performance against the targets in the SLA.

PBOS IT Personnel
 . Return service to the customer.
 . Provide any support requested for PBOS managed applications or technical
  components.
 . Identify and resolve cause of the outage for problems occurring within PBOS
  managed applications, PBOS technical components, or areas outside the scope
  of this agreement.
 . Recommend additional preventative work (if any identified).

                                       9
<PAGE>

     SECTION 5. Proposed Charges.

Computer Support Services

TechCentral's proposed 2001 charge to PBOS for Computer Support Services is
approximately $2.8 million and includes all direct charges (e.g. ManMan),
mainframe computer utilization based on past utilization rates, and other
indirect expenses.

Customer Support Services

The proposed 2001 charge to PBOS for Customer Support Services is $908,499 which
covers internet access, limited SDSC support, data network utilization, and
Lotus Notes e-mail.  This charge, which is consistent with last years rate, is
based on the number of users.

Voice Charges

Charges for Fairfield County voice network access and long distance usage billed
each month based on actual usage.  The estimated charges for 2001 based on prior
years usage is $89,756.  Additional charges for AT&T Global Network billed as
incurred.

Chargeback Summary

          Application Support Services    $        0
          Computer Support Services        2,790,223
          Customer Support Services          908,499
          Voice                               89,756
                                              ------

          Total 2001 Charges              $3,788,478
                                          ==========

Future Charges

To be determined 12/01; not withstanding any increase in transaction volumes,
cost increases should not exceed 10% except in instances of unique platforms
where PBOS will incur the total actual costs.  In the event transaction volumes
and/or services requirements decrease, costs will be reduced proportionately.

                                      10

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