Document:

2000 10K Exbibit 10.11

EXHIBIT 10.11

AGREEMENT FOR INVENTORY FINANCING

This AGREEMENT FOR INVENTORY FINANCING (as amended, supplemented
or otherwise modified from time to time, this "Agreement") is hereby made
this 28th day of February, 2001, by and between IBM Credit Corporation, a
Delaware corporation with a place of business at 5000 Executive Parkway,
Suite 450, San Ramon, CA  94583 ("IBM Credit"), and Egghead.Com, Inc., duly
organized under the laws of the State of Delaware with its principal place of
business at 1350 Willow Road, Menlo Park, CA   94025 ("Customer").

W I T N E S S E T H

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

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

NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

SECTION 1.  DEFINITIONS; ATTACHMENTS

 Special Definitions.  The following terms shall have the following
respective meanings in this Agreement (such meanings to be equally applicable
to both the singular and the plural forms of the terms defined):

"Accounts":  as defined in the U.C.C.

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

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

"Agreement":  as defined in the caption.

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

"Authorized Suppliers":  as defined in the recitals of this Agreement.

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

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

"Bank":  as defined in Section 3.3.

"Borrowing Base":  as defined in Attachment A.

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

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

"Code":  the Internal Revenue Code of 1986, as amended or any successor
statute.

"Collateral":  as defined in Section 4.1.

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

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

"Credit Line":  as defined in Section 2 1.

"Customer":  as defined in the caption.

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

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

"Eligible Accounts":  as defined in Section 3.1.

"Environmental Laws":  all statutes, laws, judicial decisions, regulations,
ordinances, and other governmental restrictions relating to pollution, the
protection of the environment, occupational health and safety, or to
emissions, discharges or release of pollutants, contaminants, hazardous
substances or wastes into the environment.

"Environmental Liability":  any claim, demand, obligation, cause of action,
allegation, order, violation, injury, judgment, penalty or fine, cost or
expense, resulting from the violation or alleged violation of any
Environmental Laws or the imposition of any Lien pursuant to any
Environmental Laws.

"ERISA":  the Employee Retirement Income Security Act of 1974, as amended, or
any successor statutes.

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

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

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

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

"Free Financing Period Exclusion Fee":  as defined in Attachment A.
"GAAP":  generally accepted accounting principles in the United States as in
effect from time to time.

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

"Hazardous Substances":  all substances, wastes or materials, to the extent
subject to regulation as "hazardous substances" or "hazardous waste" under
any Environmental Laws.

"IBM Credit":  as defined in the caption.

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

"Intellectual Property":  as defined in Section 6.14.

"Investment":  with respect to any Person (the "Investor"), (1) any
investment by the Investor in any other Person, whether by means of share
purchase, capital contribution, purchase or other acquisition of a
partnership or joint venture interest, loan, time deposit, demand deposit or
otherwise, and (2) any guaranty by the Investor of any Indebtedness or other
obligation of any other Person.

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

"Lockbox":  as defined in Section 3.3.

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

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

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

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

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

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

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

"PBGC":  as defined in Section 6.12.

"Permitted Indebtedness":  any of the following:

(1)     Indebtedness to IBM Credit;

(2)     Indebtedness described in Section VII of Attachment B;

(3)     Indebtedness to any Floor Plan Lender,

(4)     Purchase Money Indebtedness;

(5)     guaranties in favor of IBM Credit; and

(6)     other Indebtedness consented to by IBM Credit in writing prior to
incurring such Indebtedness.

"Permitted Liens":  any of the following:

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

(2)     Purchase Money Security Interests;

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

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

(5)     attachment or judgment Liens individually or in the aggregate not in
excess of $50,000 (exclusive of (A) any amounts that are duly bonded to
the satisfaction of IBM Credit or (B) any amount fully covered by
insurance as to which the insurance company has acknowledged its
obligation to pay such judgment in full);

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

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

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

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

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

(11)    Liens arising pursuant to this Agreement; and

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

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

"Plans":  as defined in Section 8.12.

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

"Prime Rate":  as of the date of determination, the average of the rates of
interest announced by Citibank, N.A., Chase Manhattan Bank and Bank of
America National Trust 8 Savings Association (or any other bank which IBM
Credit uses in its normal course of business of determining Prime Rate) as
their prime or base rate, as of the last Business Day of the calendar month
immediately preceding the date of determination, whether or not such
announced rates are the actual rates charged by such banking institutions to
their most creditworthy borrowers.

"Products":  as defined in the recitals of this Agreement.

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

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

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

"Purchase Money Indebtedness":  any Indebtedness (including capital leases)
incurred to finance the acquisition of assets (other than assets manufactured
or distributed by or bearing any trademark or trade name of any Authorized
Supplier) to be used in the Customer's business not to exceed the lesser of
(1) the purchase price or acquisition cost of such asset and (2) the fair
market value of such asset.

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

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

"Shortfall Amount":  as defined in Section 2.5.

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

"Special Account":  as defined in Section 3.3.

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

"Supplier Credits": as defined in Section 2.2.

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

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

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

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

SECTION 2.  CREDIT LINE; FINANCE CHARGES; OTHER CHARGES

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

 Product Advances.

 Subject to the terms and conditions of this Agreement, IBM Credit shall
make Product Advances in connection with Customer's purchase of Products from
Authorized Suppliers upon at least a two-day prior written notice from
Authorized Suppliers. Customer hereby authorizes and directs IBM Credit to
pay the proceeds of Product Advances directly to the applicable Authorized
Supplier in respect of invoices delivered to IBM Credit for such Products by
such Authorized Supplier and acknowledges that (i) any delivery to IBM Credit
of an invoice by an Authorized Supplier shall be deemed as a request for a
Product Advance by Customer, and (ii) each such Product Advance constitutes a
loan by IBM Credit to Customer pursuant to this Agreement as if the Customer
received the proceeds of the Product Advance directly from IBM Credit. IBM
Credit may, upon written notice to Customer, cease to Include a supplier as
an Authorized Supplier.

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

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

 Customer hereby authorizes IBM Credit to collect directly from any
Authorized Supplier any credits, rebates, bonuses or discounts owed by such
Authorized Supplier to Customer ("Supplier Credits"). Any Supplier Credits
received by IBM Credit may be applied by IBM Credit to the Outstanding
Advances. Any Supplier Credits collected by IBM Credit shall in no way reduce
Customer's debt to IBM Credit in respect of the Outstanding Advances until
such Supplier Credits are applied by IBM Credit; provided, however, that in
the event any such Supplier Credits must be returned or disgorged or are
otherwise unavailable for application, then Customer's Obligations will be
reinstated as if such Supplier Credits had never been applied.

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

 Customer will indemnify and hold IBM Credit harmless from and against any
claims or demands asserted by any Person relating to or arising from the
Products for any reason whatsoever, including, without limitation, the
condition of the Products, any misrepresentation made about the Products by
any representative of Customer, or any act or failure to act by Customer
except to the extent such claims or demands are directly attributable to IBM
Credit's gross negligence or willful misconduct. Nothing contained in the
foregoing shall impair any rights or claims which the Customer may have
against any manufacturer, distributor or Authorized Supplier.

 Finance and Other Charges. 

 Finance charges for an Advance for a calendar month shall be equal to (i)
one twelfth (1/12) of the applicable Product Financing Charge multiplied by
(ii) the Average Daily Balance of such Advance for the period when such
finance charge accrues during such calendar month multiplied by (iii) the
actual number of days during such calendar month when such finance charge
accrues divided by (iv) thirty (30).

Late charges pursuant to subsection (D) of this Section 2.3 for an Advance
for a calendar month shall be equal to (i) one twelfth (1/12) of the
Delinquency Fee Rate multiplied by (ii) the Average Daily Balance of such
Advance for the period when such Advance is past due during such calendar
month multiplied by (iii) the actual number of days during such calendar
month when such Advance is past due divided by (iv) thirty (30).

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

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

 If any amount owed under this Agreement, including, without limitation,
any Advance, is not paid within two (2) Business Days of the date of
determination (whether at maturity, by acceleration or otherwise), the unpaid
amount thereof will bear a late charge from and including the day after it
was due and payable to and including the date IBM Credit receives payment
thereof, at a per annum rate equal to the lesser of (a) the amount set forth
in Attachment A to this Agreement as the "Delinquency Fee Rate" and (b) the
highest rate from time to time permitted by applicable law. In addition, if
any Shortfall Amount shall not be paid when due pursuant to Section 2.5
hereof, Customer shall pay IBM Credit a Shortfall Transaction Fee. If it is
determined that amounts received from Customer were in excess of such highest
rate, then the amount representing such excess, shall be considered
reductions to principal of Advances.

 Customer Account Statements.  IBM Credit will send statements of each
transaction hereunder as well as monthly billing statements to Customer with
respect to Advances and other charges due on Customer's account with IBM
Credit. Each statement of transaction and monthly billing statement shall be
deemed, absent manifest error, to be correct and shall constitute an account
stated with respect to each transaction or amount described therein unless
within seven (7) Business Days after such statement of transaction or billing
statement is received by Customer, Customer provides IBM Credit written
notice objecting that such amount or transaction is incorrectly described
therein and specifying the error(s), if any, contained therein. IBM Credit
may at any time adjust such statements of transaction or billing statements
to comply with applicable law and this Agreement.

 Shortfall.  If on any date the Outstanding Advances owed by Customer to
IBM Credit exceeds the Maximum Advance Amount (such excess, the "Shortfall
Amount"), Customer shall immediately pay to IBM Credit within two (2)
Business Days an amount equal to such Shortfall Amount provided, however,
payment by Customer to IBM Credit of such Shortfall Amount is accompanied by
a current Collateral Management Report.

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

 Prepayment and Reborrowing By Customer.  (A)  Customer may at any time
prepay, without notice or penalty, in whole or in part amounts owed under
this Agreement.  IBM Credit may apply payments made to it (whether by the
Customer or otherwise) to pay finance charges and other amounts owing under
this Agreement first and then to the principal amount owed by the Customer.

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

SECTION 3.  CREDIT LINE ADDITIONAL PROVISIONS

 Ineligible Accounts.  IBM Credit and Customer agree that IBM Credit shall
have the sole right to determine eligibility of Accounts from an Account
debtor for purposes of determining the Borrowing Base; however, without
limiting such right, the following Accounts will be deemed to be ineligible
for purposes of determining the Borrowing Base:

 Accounts created from the sale of goods and/or performance of services on
non-standard terms or that allow for payment to be made more than thirty (30)
days from the date of such sale or performance of services;

 Accounts unpaid more than ninety (90) days from date of invoice;

 Accounts payable by an account debtor if fifty percent (50%) or more of
the aggregate outstanding balance of all such Accounts remain unpaid for more
than ninety (90) days from the date of invoice;

 Accounts payable by an account debtor that is an Affiliate of Customer, or
an officer, employee, agent, guarantor or stockholder of Customer or
Affiliate of Customer, or is related to or has common shareholders, officers
or directors with Customer,

 Accounts arising from consignment sales;

 Except for state, local and United States government institutions and
public educational institutions, Accounts with respect to which the payment
by the Account debtor is or may be conditional;

 Except for state, local and United States government institutions and
public educational institutions, Accounts with respect to which:

 the Account debtor is not a commercial entity, or

 the Account debtor is not a resident of the United States;

 Accounts payable by any Account debtor to which Customer is or may become
liable for goods sold or services rendered by such account debtor to
Customer,

 Accounts arising from the sale or lease of goods purchased for a personal,
family or household purpose;

 Accounts arising from the sale or other disposition of goods that have
been used for demonstration purposes or loaned or leased by the Customer to
another party;

 Accounts which are progress payment accounts or contra accounts;

 Accounts upon which IBM Credit does not have a valid, perfected, first
priority security interest;

 Accounts payable by an Account debtor that is or Customer knows will
become, subject to proceedings under United States Bankruptcy Law or other
law for the relief of debtors;

 Accounts that are not payable in US dollars;

 Accounts payable by any Account debtor that is a remarketer of computer
hardware and software products and whose purchases of such products from
Customer have been financed by another person, other than IBM Credit, who
pays the proceeds of such financing directly to Customer on behalf of such
debtor ("Third Party Financer") unless (i) such Third Party Financer does not
have a separate financing relationship with Customer or (ii) such Third Party
Financer has a separate financing relationship with Customer and has waived
its right to set off its obligations to Customer

 Accounts arising from the sale or lease of goods which are billed to any
Account debtor but have not yet been shipped by Customer;

 Accounts with respect to which Customer has permitted or agreed to any
extension, compromise or settlement, or made any change or modification of
any kind or nature, including, but not limited to, any change or modification
to the terms relating thereto;

 Accounts that do not arise from undisputed bonafide transactions completed
in accordance with the terms and conditions contained in the invoices,
purchase orders and contracts relating thereto;

 Accounts that are discounted for the full payment term specified in
Customer's terms and conditions with its Account debtors, or for any longer
period of time;

 Accounts on cash on delivery (C.O.D.) terms;

 Accounts arising from maintenance or service contracts that are billed in
advance of full performance of service;

 Accounts arising from bartered transactions;

 Accounts arising from Incentive payments, rebates, discounts, credits, and
refunds from a supplier unless (y) each incentive payment, rebate, discount,
credit, and refund is (i) verifiable with Authorized Supplier, (ii) payable
in cash, and (iii) deposited directly or indirectly into the Lockbox and (y)
Authorized Supplier waives its right to setoff such amounts owed to Customer
with any amount Customer may owe to the Authorized Supplier; and

 Any and all other Accounts that IBM Credit deems, in its sole and absolute
discretion, to be ineligible.

The aggregate of all Accounts that are not ineligible Accounts shall
hereinafter be referred to as "Eligible Accounts".

 Reimbursement for Charges.  Customer agrees to pay for all costs and
expenses of Customer's bank in respect to collection of checks and other
items of payment, all fees relating to the use and maintenance of the Lockbox
and the Special Account and with respect to remittances of proceeds of the
Advances hereunder.

 Lockbox and Special Account.  Customer shall establish and maintain
lockbox(es) (each, a "Lockbox") at the address(es) set forth in Attachment A
with the financial institution(s) listed in Attachment A (each, a "Bank")
pursuant to an agreement between the Customer and each Bank in form and
substance satisfactory to IBM Credit. Customer shall also establish and
maintain a deposit account which shall contain only proceeds of Customer's
Accounts ("Special Account") with each Bank. Customer shall enter into and
maintain a contingent blocked account agreement with each Bank for the
benefit of IBM Credit in form and substance satisfactory to IBM Credit
pursuant to which, among other things, such Bank shall agree that, upon an
Event of Default, IBM Credit may provide notice to Bank that disbursements
from the Special Account shall be made only as IBM Credit shall direct.
However, upon the cure of such Event of Default, IBM Credit shall not be
required to return the control of the Special Account to the Customer.

 Collections.  Customer shall instruct all Account debtors to remit
payments directly to a Lockbox. In addition, Customer shall have such
instruction printed in conspicuous type on all invoices.  Customer shall
instruct such Bank to deposit all remittances to such Bank's Lockbox into its
Special Account. Customer further agrees that it shall not deposit or permit
any deposits of funds other than remittances paid in respect of the Accounts
into the Special Account(s) or permit any commingling of funds with such
remittances in any Lockbox or Special Account.

Without limiting the Customer's foregoing obligations, if, at any time,
Customer receives a remittance directly from an Account debtor, then Customer
shall make entries on its books and records in a manner that shall reasonably
identify such remittances and shall keep a separate account on its record
books of all remittances so received and deposit the same into a Special
Account. Until so deposited into the Special Account, Customer shall keep all
remittances received in respect of Accounts separate and apart from
customer's other property so that they are capable of identification as the
proceeds of Accounts in which IBM Credit has a security interest.

 Application of Remittances and Credits.  Customer shall apply all
remittances against the aggregate of Customer's outstanding Accounts no later
than the end of the Business Day on which such remittances are deposited Into
the Special Account. Customer also agrees to apply each remittance against
its respective Account no later than three (3) Business Days from the date
such remittance is deposited into the Special Account.  In addition, Customer
shall promptly apply any credits owing in respect to any Account when due.

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

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

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

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

 demand payment, enforce payment and otherwise exercise all Customer's
rights and remedies with respect to the collection of any Accounts;

 settle, adjust, compromise, extend or renew any Accounts;

 settle, adjust or compromise any legal proceedings brought to collect
any Accounts;

 sell or assign any Accounts upon such terms, for such amounts and at such
time or times as IBM Credit may deem advisable;

 discharge and release any Accounts;

 prepare, file and sign Customer's name on any Proof of Claim in Bankruptcy
or similar document against any Account debtor;

 prepare, file and sign Customers name on any notice of lien, claim of
mechanic's lien, assignment or satisfaction of lien or mechanic's lien, or

similar document in connection with any Accounts;

 endorse the name of Customer upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement
relating to any Account or goods pertaining thereto;

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

 sign the name of Customer to requests for verification of Accounts and
notices thereof to Account debtors;

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

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

 take control in any manner of any term of payment or proceeds and for such
purpose to notify the postal authorities to change the address for delivery
of mail addressed to Customer to such address as IBM Credit may designate.

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

SECTION 4.  SECURITY -- COLLATERAL

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

 all inventory and equipment and all parts thereof, attachments,
accessories and accessions thereto, products thereof and documents therefor;

 all accounts, contract rights, chattel paper, instruments, deposit
accounts, obligations of any kind owing to Customer, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of
services and all books, invoices, documents and other records in any form
evidencing or relating to any of the foregoing;

 general intangibles;

 all rights now or hereafter existing in and to all mortgages, security
agreements, leases or other contracts securing or otherwise relating to any
of the foregoing; and

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

All of the above assets shall be collectively defined herein as the
"Collateral", provided, however, that Collateral shall not include leasehold
interests as a lessee, sub-lessee or sub-lessor with regard to real property
leases and provided further that Collateral shall not include leasehold
interests as a lessee under equipment leases.  Customer covenants and agrees
with IBM Credit that:  (a) the security constituted to by this Agreement is
in addition to any other security from time to time held by IBM Credit and
(b) the security hereby created is a continuing security interest and will
cover and secure the payment of all Obligations both present and future of
Customer to IBM Credit.

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

SECTION 5.  CONDITIONS PRECEDENT

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

 this Agreement executed and delivered by Customer and IBM Credit;

 a favorable opinion of counsel for Customer in substantially the form of
Attachment H;

 a certificate of the secretary or an assistant secretary of Customer,
substantially in the form and substance of Attachment I hereto, certifying
that, among other items, (i) Customer is duly organized under the laws of the
State of its organization or incorporation and has its principal place of
business as stated therein, (ii) Customer is registered to conduct business
in specified states and localities, (iii) true and complete copies of the
articles of incorporation, or corresponding organizational documents, as
applicable, and by-laws of Customer are delivered therewith, together with
all amendments and addenda thereto as in effect on the date thereof, (iv) the
resolution as stated in the certificate is a true, accurate and compared copy
of the resolution adopted by the Customer's Board of Directors or, if
Customer is a limited liability company, by Customer's authorized members,
authorizing the execution, delivery and performance of this Agreement and
each Other Document executed and delivered in connection herewith, and (v)
the names and true signatures of the officers of Customer authorized to sign
this Agreement and the Other Documents;

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

 copies of all approvals and consents from any Person in each case in form
and substance satisfactory to IBM Credit, which are required to enable
Customer to authorize, or required in connection with, (a) the execution,
delivery or performance of this Agreement and each of the Other Documents,
and (b) the legality, validity, binding effect or enforceability of this
Agreement and each of the Other Documents;

 a lockbox agreement executed by Customer and each Bank, in form and
substance satisfactory to IBM Credit;

 a contingent blocked account agreement executed by Customer and each Bank
in form and substance satisfactory to IBM Credit;

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

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

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

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

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

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

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

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

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

Except as Customer has otherwise disclosed to IBM Credit in writing prior to
each request, each request (or deemed request pursuant to Section 2.2(A)) for
an Advance hereunder shall be deemed to be a representation and warranty by
Customer that, as of and on the date of such Advance, the statements set
forth in (A) through (D) above are true statements.  No such disclosures by
Customer to IBM Credit shall in any manner be deemed to satisfy the
conditions precedent to each Advance that are set forth in this Section 5.2.

SECTION 6.  REPRESENTATIONS AND WARRANTIES

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

 Organization and Qualifications.  Customer and each of its Subsidiaries
(i) is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization, (ii) has the power and authority to
own its properties and assets and to transact the businesses in which it
presently is engaged and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where it presently is
engaged in business and is required to be so qualified. As of the Closing
Date, Egghead.com Advertising, Inc., EO Corporation, Surplus Software, Inc.,
EH Direct, Inc., MPI Corp., and D.J. & J. Software Corp. are dormant
companies that own no assets.

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

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

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

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

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

 Fictitious Business Names.  Customer has not used any company or
fictitious name during the five (5) years preceding the date of this
Agreement, other than those listed on Attachment B.

 Organization.  If Customer is a corporation, all of the outstanding
capital stock of Customer has been validly issued, is fully paid and
nonassessable.

 No Judgments or Litigation.  Except as set forth on Attachment B, no
judgments, orders, writs or decrees are outstanding against Customer in
excess of $100,000 nor is there now pending or, to the best of Customers
knowledge after due inquiry, threatened, any litigation, contested claim,
investigation, arbitration, or governmental proceeding by or against Customer
which has had or could reasonably be expected to have a Material Adverse
Effect.

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

 Labor Matters.  Except as set forth on any notice provided by Customer to
IBM Credit pursuant to Section 7.1(H) of this Agreement, the Customer is not
a party to any labor dispute.  There are no strikes or walkouts or labor
controversies pending or threatened against the Customer which could
reasonably be expected to have a Material Adverse Effect.

 Compliance with Law.  Customer has not violated or failed to comply with
any Requirement of Law or any requirement of any self regulatory
organization.

 ERISA.  Each "employee benefit plan", "employee pension benefit plan",
"defined benefit plan", or "multi-employer benefit plan", which Customer has
established, maintained, or to which it is required to contribute
(collectively, the "Plans") is in compliance with all applicable provisions
of ERISA and the Code and the rules and regulations thereunder as well as the
Plan's terms and conditions.  There have been no "prohibited transactions"
and no "reportable event" has occurred within the last 60 months with respect
to any Plan.  Customer has no "multi-employer benefit plan".  As used in this
Agreement the terms "employee benefit plan", "employee pension benefit plan",
"defined benefit plan", and "multi-employer benefit plan" have the respective
meanings assigned to them in Section 3 of ERISA and any applicable rules and
regulations thereunder.  The Customer has not incurred any "accumulated
funding deficiency" within the meaning of ERISA or incurred any liability to
the Pension Benefit Guaranty Corporation (the "PBGC") in connection with a
Plan (other than for premiums due in the ordinary course).

 Compliance with Environmental Laws.  Except as otherwise disclosed in
Attachment B:

 The Customer has obtained all government approvals required with respect
to the operation of their businesses under any Environmental Law.

 (i) the Customer has not generated, transported or disposed of any
Hazardous Substances; (ii) the Customer is not currently generating,
transporting or disposing of any Hazardous Substances; (iii) the Customer has
no knowledge that (a) any of its real property (whether owned, leased, or
otherwise directly or indirectly controlled) has been used for the disposal
of or has been contaminated by any Hazardous Substances, or (b) any of its
business operations have contaminated lands or waters of others with any
Hazardous Substances; (iv) the Customer and its respective assets are not
subject to any Environmental Liability and, to the best of the Customer's
knowledge, any threatened Environmental Liability; (v) the Customer has not
received any notice of or otherwise learned of any governmental investigation
evaluating whether any remedial action is necessary to respond to a release
or threatened release of any Hazardous Substance for which the Customer may
be liable; (vi) the Customer is not in violation of any Environmental Law,
(vii) there are no proceedings or investigations pending against Customer
with respect to any violation or alleged violation of any Environmental Law;
provided however, that the parties acknowledge that any generation,
transportation, use, storage and disposal of certain such Hazardous
Substances in Customer's or its Subsidiaries' business shall be excluded from
representations (i) and (ii) above, provided, further, that Customer is at
all times generating, transporting, utilizing, storing and disposing such
Hazardous Substances in accordance with all applicable Environmental Laws and
in a manner designed to minimize the risk of any spill, contamination,
release or discharge of Hazardous Substances other than as authorized by
Environmental Laws,

 Intellectual Property.  Customer possesses such assets, licenses, patents,
patent applications, copyrights, service marks, trademarks, trade names and
trade secrets and all rights and other property relating thereto or arising
therefrom ("Intellectual Property") as are necessary or advisable to continue
to conduct its present and proposed business activities.

 Licenses and Permits.  Customer has obtained and holds in full force and
effect all franchises, licenses, leases, permits, certificates,
authorizations, qualifications, easements, rights of way and other rights and
approvals which are necessary for the operation of its businesses as
presently conducted.  Customer is not in violation of the terms of any such
franchise, license, lease, permit, certificate, authorization, qualification,
easement, right of way, right or approval.

 Investment Company.  The Customer is not (i) an investment company or a
company controlled by an investment company within the meaning of the
Investment Company Act of 1940, as amended, (ii) a holding company or a
subsidiary of a holding company, or an Affiliate of a holding company or of a
subsidiary of a holding company, within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or (iii) subject to any other law
which purports to regulate or restrict its ability to borrow money or to
consummate the transactions contemplated by this Agreement or the Other
Documents or to perform its obligations hereunder or thereunder.

 Taxes and Tax Returns.  Customer has timely filed all federal, state, and
local tax returns and other reports which it is required by law to file, and
has either duly paid all taxes, fees and other governmental charges indicated
to be due on the basis of such reports and returns or pursuant to any
assessment received by the Customer, or made provision for the payment
thereof in accordance with GAAP.  The charges and reserves on the books of
the Customer in respect of taxes or other governmental charges are in
accordance with GAAP.  No tax liens have been filed against Customer or any
of its property.

 Status of Accounts.  Each Account is based on an actual and bonafide sale
and delivery of goods or rendition of services to customers, made by
Customer, in the ordinary course of its business; the goods and inventory
being sold and the Accounts created are its exclusive property and are not
and shall not be subject to any Lien, consignment arrangement, encumbrance,
security interest or financing statement whatsoever (other than Permitted
Liens).  The Customer's customers have accepted goods or services and owe and
are obligated to pay the full amounts stated in the invoices according to
their terms.  There are no proceedings or actions known to Customer which are
pending or threatened against any Material Account debtor (as defined in
Section 7.14(B) of this Agreement) of any of the Accounts which could
reasonably be expected to result in a Material Adverse Effect on the debtor's
ability to pay the full amounts due to Customer.

 Affiliate/Subsidiary Transactions.  Customer is not a party to or bound by
any agreement or arrangement (whether oral or written) to which any Affiliate
or Subsidiary of the Customer is a party except (i) in the ordinary course of
and pursuant to the reasonable requirements of Customer's business and (ii)
upon fair and reasonable terms no less favorable to Customer than it could
obtain in a comparable arm's-length transaction with an unaffiliated Person.

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

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

 Indebtedness.  Customer (i) has no indebtedness, other than Permitted
Indebtedness; and (ii) has not guaranteed the obligations of any other Person
(except as permitted by Section 8,4).

SECTION 7.  AFFIRMATIVE COVENANTS

Until termination of this Agreement and the indefeasible payment and
satisfaction of all Obligations:
 Financial and Other Information.  Customer shall cause to be furnished to
IBM Credit the following information within the following time periods:
 as soon as available and in any event within ninety (90) days after the
end of each fiscal year of Customer the Form 10-K Annual Report filed with
the Securities and Exchange Commission for that fiscal year just ended;

 as soon as available and in any event within forty-five (45) days after
the end of each fiscal quarter of Customer the Form 10-Q Quarterly Report
filed with the Securities and Exchange Commission for that quarter just
ended;

 as soon as available and in any event within sixty (60) days after the end
of each fiscal year of Customer (i) projected Financial Statements, broken
down by quarter, for the current and following fiscal year; and (ii) if
composed, a narrative discussion relating to such projected Financial
Statements;

 as soon as available and in any event within thirty (30) days after the
end of each six-month period ending June 30, revised projected Financial
Statements, broken down by quarter, for (i) the current fiscal year from the
beginning of such six-month period to the fiscal year end and (ii) the
following fiscal year;

 promptly after Customer obtains knowledge of (i) the occurrence of a
Default or Event of Default, or (ii) the existence of any condition or event
which would result in the Customer's failure to satisfy the conditions
precedent to Advances set forth in Section 5, a certificate of the chief
executive officer or chief financial officer of Customer specifying the
nature thereof and the Customer's proposed response thereto, each in
reasonable detail;

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

 promptly after Customer obtains knowledge that (i) any order, judgment or
decree in excess of $100,000 shall have been entered against Customer or any
of its properties or assets, or (ii) it has received any notification of a
material violation of any Requirement of Law from any Governmental Authority,
a certificate of the chief executive officer or chief financial officer of
Customer specifying the nature thereof and the Customer's proposed response
thereto, each in reasonable detail;

 promptly after Customer learns of any material labor dispute to which
Customer may become a party, any strikes or walkouts relating to any of its
plants or other facilities, and the expiration of any labor contract to which
Customer is a party or by which it is bound, a certificate of the chief
executive officer or chief financial officer of Customer specifying the
nature thereof and the Customer's proposed response thereto, each in
reasonable detail;

 within five (5) Business Days after request by IBM Credit, any written
certificates, schedules and reports together with all supporting documents as
IBM Credit may reasonably request relating to the Collateral or the
Customer's or any guarantor's business affairs and financial condition;

 by the fifth and twentieth day of each month, or as otherwise agreed in
writing, a Collateral Management Report as of a date no earlier than the last
day of the immediately preceding month and the fifteenth of each month,
respectively;

 Along with the Financial Statements set forth in Section 7.1(A) and (B),
the name, address and phone number of each of its Account debtors primary
contacts for each Account on the Accounts aging report contained in its most
recent Collateral Management Report; and

 upon the request of IBM Credit, copies of all Financial Statements and
reports which Customer sends to its stockholders, and all Financial
Statements and reports which Customer may make to, or file with, the
Securities and Exchange Commission or any successor or analogous governmental
authority.

Each certificate, schedule and report provided by Customer to IBM Credit
shall be signed by an authorized officer of Customer, which signature shall
be deemed a representation and warranty that the information contained in
such certificate, schedule or report is true and accurate in all material
respects on the date as of which such certificate, schedule or report is made
and does not omit to state a material fact necessary in order to make the
statements contained therein not misleading at such time.  Each Financial
Statement delivered pursuant to this Section 7.1 shall be prepared in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods.  Customer shall cause the audited Financial
Statements and accompanying documents set forth in Section 7.1(A)(i) to be
delivered directly by the Auditors to IBM Credit only via first class mail.

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

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

 Legal Entity Existence.  Customer shall (A) maintain its legal entity
existence, maintain in full force and effect all licenses, bonds, franchises,
leases and qualifications to do business, and all contracts and other rights
necessary to the profitable conduct of its business, (B) continue in, and
limit Its operations to, the same general lines of business as presently
conducted by it unless otherwise permitted in writing by IBM Credit and (C)
comply with all Requirements of Law.

 ERISA.  Customer shall promptly notify IBM Credit in writing after it
learns of the occurrence of any event which would constitute a "reportable
event" under ERISA or any regulations thereunder with respect to any Plan, or
that the PBGC has instituted or will institute proceedings to terminate any
Plan.  Notwithstanding the foregoing, the Customer shall have no obligation
to notify IBM Credit as to any "reportable event" as to which the 30-day
notice requirement of Section 4043(b) has been waived by the PBGC, until such
time as such Customer is required to notify the PBGC of such reportable
event.  Such notification shall include a certificate of the chief financial
officer of Customer's setting forth details as to such "reportable event" and
the action which Customer proposes to take with respect thereto, together
with a copy of any notice of such "reportable event" which may be required to
be filed with the PBGC, or any notice delivered by the PBGC evidencing its
intent to institute such proceedings.  Upon request of IBM Credit, Customer
shall furnish, or cause the plan administrator to furnish, to IBM Credit the
most recently filed annual report for each Plan.

 Environmental Matters.  (A) Customer and any other Person under Customer's
control (including, without limitation, agents and Affiliates under such
control) shall (1) comply with all Environmental Laws in all material
respects, and (ii) undertake to use commercially reasonable efforts to
prevent any unlawful release of any Hazardous Substance by Customer or such
Person into, upon, over or under any property now or hereinafter owned,
leased or otherwise controlled (directly or indirectly) by Customer.

(B)     Customer shall notify IBM Credit, promptly upon its obtaining
knowledge of (i) any non-routine proceeding or investigation by any
Governmental Authority with respect to the presence of any Hazardous
Substances on or in any property now or hereinafter owned, leased or
otherwise controlled (directly or indirectly) by Customer, (ii) all claims
made or threatened by any Person or Governmental Authority against Customer
or any of Customer's assets relating to any loss or injury resulting from any
Hazardous Substance, (iii) Customer's discovery of evidence of unlawful
disposal of or environmental contamination by any Hazardous Substance on any
property now or hereinafter owned, leased or otherwise controlled (directly
or indirectly) by Customer, and (iv) any occurrence or condition which could
constitute a violation of any Environmental Law.

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

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

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

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

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

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

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

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

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

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

 Intellectual Property.  Customer shall do and cause to be done all things
necessary to preserve and keep in full force and effect all registrations of
Intellectual Property which the failure to do or cause to be done could
reasonably be expected to have a Material Adverse Effect.

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

 Collateral.  Customer shall:

 from time to time upon request by IBM Credit, provide IBM Credit with
access to copies of all invoices, delivery evidences and other such documents
relating to each Account;

 promptly upon Customer's obtaining knowledge thereof, furnish to and
inform IBM Credit of all material adverse information relating to the
financial condition of any Account debtor whose outstanding obligations to
Customer constitute two percent (2%) or more of the Accounts at such time (a
"Material Account Debtor");

 promptly upon Customer's learning thereof, notify IBM Credit in writing of
any event which would cause any obligation of a Material Account debtor to
become an Ineligible Account;

 keep all goods rejected or returned by any Account debtor and all goods
repossessed or stopped in transit by Customer from any Account debtor
segregated from other property of Customer, holding the same in trust for IBM
Credit until Customer applies a credit against such Account debtor's
outstanding obligations to Customer or sells such goods in the ordinary
course of business, whichever occurs earlier;

 stamp or otherwise mark chattel paper and instruments now owned or
hereafter acquired by it in conspicuous type to show that the same are
subject to IBM Credit's security interest and immediately thereafter deliver
or cause such chattel paper and instruments to be delivered to IBM Credit or
any agent designated by IBM Credit with appropriate endorsements and
assignments to vest title and possession in IBM Credit;

 use commercially reasonable efforts to collect all Accounts owed;

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

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

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

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

 Subsidiaries.  Customer shall immediately notify IBM Credit in writing in
the event Egghead.com Advertising, Inc., EO Corporation, Surplus Software,
Inc., EH Direct, Inc., MPI Corp., D.J. & J. Software Corp. or any other
Subsidiary of Customer has assets in excess of $10,000 or otherwise becomes
operational or active.  In addition, Customer will immediately, but in no
event later than five (5) days after such notification, cause any Subsidiary
that is an operating company, becomes active or has assets in excess of
$10,000, to (i) execute a collateralized guaranty guarantying Customer's
Obligations, such guaranty to be in form and substance satisfactory to IBM
Credit, in its sole discretion, (ii) grant to IBM Credit a security interest
in all of such Subsidiary's assets pursuant to the collateralized guaranty,
and (iii) execute UCC-1 Financing Statements for each jurisdiction requested
by IBM Credit.  In connection with the foregoing, IBM Credit shall receive an
opinion of counsel in form and substance satisfactory to it and from counsel
satisfactory to it.  IBM Credit may require that any Subsidiaries of Customer
become parties to this Agreement or any other agreement executed in
connection with this Agreement as guarantors or sureties.  Customer will
comply, and cause all Subsidiaries of Customer to comply with Sections 7 and
8 of this Agreement, as if such sections applied directly to such
Subsidiaries.

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

SECTION 8.  NEGATIVE COVENANTS

Until termination of this Agreement and the indefeasible payment and
satisfaction of all Obligations hereunder.
 Liens.  The Customer will not, directly or indirectly mortgage, assign,
pledge, transfer, create, incur, assume, permit to exist or otherwise permit
any Lien or judgment to exist on any of its property, assets, revenues or
goods, whether real, personal or mixed, whether now owned or hereafter
acquired, except for Permitted Liens.

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

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

 Guaranties.  The Customer will not, directly or indirectly, assume,
guaranty, endorse, or otherwise become liable upon the obligations of any
other Person except (i) by the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business, (ii) by the giving of indemnities in connection with the sale of
inventory or other asset dispositions permitted hereunder, and (iii) for
guaranties in favor of IBM Credit.

 Restricted Payments.  The Customer will not, directly or indirectly:  (i)
declare or pay any dividend (other than dividends payable solely in common
stock of Customer or membership interest if Customer is a limited liability
company) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of capital stock
of Customer or any warrants, options or rights to purchase any such capital
stock, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or
property or in obligations of Customer; or (ii) make any optional payment or
prepayment on or redemption (including, without limitation, by making
payments to a sinking or analogous fund) or repurchase of any indebtedness
(other than the Obligations).

 Investments.  The Customer will not, directly or indirectly, make,
maintain or acquire any Investment in any Person other than:

 interest bearing deposit accounts (including certificates of deposit)
which are insured by the Federal Deposit Insurance Corporation ("FDIC") or a
similar federal insurance program;

 direct obligations of the government of the United States of America or
any agency or instrumentality thereof or obligations guaranteed as to
principal and interest by the United States of America or any agency thereof;

 stock or obligations issued to Customer in settlement of claims against
others by reason of an event of bankruptcy or a composition or the
readjustment of debt or a reorganization of any debtor of Customer;

 commercial paper of any company organized under the laws of any State of
the United States or any bank organized or licensed to conduct a banking
business under the laws of the United States or any State thereof having the
short-term highest rating then given by Moody's Investor's Services, Inc. or
Standard & Poor's Corporation; and

 the publicly traded equity or debt obligations of any corporation provided
all such investments shall be and at all times remain rated "investment
grade" by Moody's or S&P.

 Affiliate/Subsidiary Transactions.  The Customer will not, directly or
indirectly, enter into any transaction with any Affiliate or Subsidiary,
including, without limitation, the purchase, sale or exchange of property or
the rendering of any service to any Affiliate or Subsidiary of Customer
except in the ordinary course of business and pursuant to the reasonable
requirements of Customer's business upon fair and reasonable terms no less
favorable to Customer than could be obtained in a comparable arm's-length
transaction with an unaffiliated Person.

 ERISA.  The Customer will not (A) terminate any Plan so as to incur a
material liability to the FBGC, (B) permit any "prohibited transaction"
involving any Plan (other than a "multi-employer benefit plan") which would
subject the Customer to a material tax or penalty on "prohibited
transactions" under the Code or ERISA, (C) fail to pay to any Plan any
contribution which they are obligated to pay under the terms of such Plan, if
such failure would result in a material "accumulated funding deficiency",
whether or not waived, (D) allow or suffer to exist any occurrence of a
"reportable event" or any other event or condition, which presents a material
risk of termination by the PBGC of any Plan (other than a "multi-employer
benefit plan"), or (E) fail to notify IBM Credit as required in Section 7.5.
As used in this Agreement, the terms "accumulated funding deficiency" and
"reportable event" shall have the respective meanings assigned to them in
ERISA, and the term "prohibited transaction" shall have the meaning assigned
to it in the Code and ERISA.  For purposes of this Section 8.8, the terms
"material liability", "tax", "penalty', "accumulated funding deficiency" and
"risk of termination" shall mean a liability, tax, penalty, accumulated
funding deficiency or risk of termination which could reasonably be expected
to have a Material Adverse Effect.

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

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

 Accounts.  The Customer shall not permit or agree to any extension,
compromise or settlement or make any change or modification of any kind or
nature with respect to any Account, including any of the terns relating
thereto, which would affect IBM Credit's ability to collect payment on any
Account in whole or in part, except for such extensions, compromises or
settlements made by Customer in the ordinary course of its business,
provided, however, that the aggregate amount of such extensions, compromises
or settlements does not exceed five percent (5%) of the Customers Accounts at
any time.

 Indebtedness.  The Customer will not create, incur, assume or permit to
exist any Indebtedness, except for Permitted Indebtedness.

 Loans.  The Customer will not make any loans, advances, contributions or
payments of money or goods to any Subsidiary, Affiliate or parent company or
to any officer, director or stockholder of Customer or of any such company
(except for compensation for personal services actually rendered), except for
transactions expressly authorized in this Agreement.

SECTION 9.  DEFAULT

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

 The failure to make timely payment of the Obligations or any part thereof
when due and payable; if such failure shall remain unremedied for two (2)
Business Days after written notice thereof shall have been given to Customer
by IBM Credit during which period Customer shall be charged the Delinquency
Fee Rate set forth in Attachment A beginning on the day after the payment was
due and including the day payment is received;

 Customer fails to comply with the financial covenants set forth on
Attachment A, Section 7.4 or Section 8 hereof;

 Customer or any of its Affiliates fail to comply with or observe any term,
covenant or agreement contained in this Agreement or any Other Documents (not
covered by (A) or (B) above), if such failure shall remain unremedied for two
(2) Business Days after the earlier of (i) Customer obtains actual knowledge
thereof and (ii) written notice thereof shall have been given to Customer by
IBM Credit or for such other period of time as IBM Credit may agree to in
writing;

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

 The occurrence of any event or circumstance which could reasonably be
expected to have a Material Adverse Effect;

 Customer, any Subsidiary or any guarantor shall generally not pay its
debts as such debts become due, become or otherwise declare itself insolvent,
file a voluntary petition for bankruptcy protection, have filed against it
any involuntary bankruptcy petition, cease to do business as a going concern,
make any assignment for the benefit of creditors, or a custodian, receiver,
trustee, liquidator, administrator or person with similar powers shall be
appointed for Customer, any Subsidiary or any guarantor or any of its
respective properties or have any of its respective properties seized or
attached, or take any action to authorize, or for the purpose of
effectuating, the foregoing, provided, however, that Customer, any Subsidiary
or any guarantor shall have a period of forty-five (45) days within which to
discharge any involuntary petition for bankruptcy or similar proceeding;

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

 The entry of any judgment against Customer or any guarantor in an amount
in excess of $100,000 and such judgment is not satisfied, dismissed, stayed
or superseded by bond within thirty (30) days after the day of entry thereof
(and in the event of a stay or supersedes bond, such judgment is not
discharged within thirty (30) days after termination of any such stay or
bond) or such judgment is not fully covered by insurance as to which the
insurance company has acknowledged its obligation to pay such judgment in
full;

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

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

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

 Customer suspends business;

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

 Any guaranty of any or all of the Customer's Obligations executed by any
guarantor in favor of IBM Credit, shall at any time for any reason cease to
be in full force and effect or shall be declared to be null and void by a
court of competent jurisdiction or the validity or enforceability thereof
shall be contested or denied by any such guarantor, or any such guarantor
shall deny that it has any further liability or obligation thereunder or any
such guarantor shall fail to comply with or observe any of the terms,
provisions or conditions contained in any such guaranty;

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

 There shall occur a "reportable event" with respect to any Plan, or any
Plan shall be subject to termination proceedings (whether voluntary or
involuntary) and there shall result from such "reportable event" or
termination proceedings a liability of Customer to the PBGC which in the
reasonable opinion of IBM Credit will have a Material Adverse Effect;

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

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

 Remedies.  (A) Upon the occurrence and during the continuance of any Event
of Default which has not been waived in writing by IBM Credit, IBM Credit may
exercise all rights and remedies of a secured patty under the U.C.C.  Without
limiting the generality of the foregoing, IBM Credit may: (i) remove from any
premises where same may be located any and all documents, instruments, files
and records (including the copying of any computer records), and any
receptacles or cabinets containing same, relating to the Collateral, or IBM
Credit may use (at the expense of the Customer) such of the supplies or space
of the Customer at Customer's place of business or otherwise, as may be
necessary to properly administer and control the Collateral or the handling
of collections and realizations thereon; (ii) bring suit, in the name of the
Customer or IBM Credit and generally shall have all other rights respecting
said Accounts, including without limitation the right to accelerate or extend
the time of payment, settle, compromise, release in whole or in part any
amounts owing on any Accounts and issue credits in the name of the Customer
or IBM Credit; (iii) sell, assign and deliver the Accounts and any returned,
reclaimed or repossessed merchandise, with or without advertisement, at
public or private sale, for cash, on credit or otherwise, at IBM Credit's
sole option and discretion, and IBM Credit may bid or become a purchaser at
any such sale; and (iv) foreclose the security interests created pursuant to
this Agreement by any available judicial procedure, or to take possession of
any or all of the Collateral without judicial process and to enter any
premises where any Collateral may be located for the purpose of taking
possession of or removing the same.

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

(C)     Unless expressly prohibited by the licensor thereof, if any, IBM
Credit is hereby granted, upon the occurrence and during the continuance of
any Event of Default which has not been waived in writing by IBM Credit, an
irrevocable, non-exclusive license to use, assign, license or sublicense all
computer software programs, data bases, processes and materials used by the
Customer in its businesses or in connection with any of the Collateral.

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

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

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

SECTION 10.  MISCELLANEOUS

 Term; Termination.     This Agreement shall remain in force until the
earlier of (i) the Termination Date, (ii) the date specified in a written
notice by the Customer that they intend to terminate this Agreement which
date shall be no less than thirty (30) days following the receipt by IBM
Credit of such written notice, and (iii) termination by IBM Credit after the
occurrence and during the continuance of an Event of Default.  Upon the date
that this Agreement is terminated, all of Customer's Obligations shall be
immediately due and payable in their entirety, even if they are not yet due
under their terms.

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

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

 If either party brings any action or asserts any claim against the other
party which arises out of this Agreement or any Other Documents, the party
which does not prevail in such action or claim shall pay to the prevailing
party all costs and expenses of the prevailing party's defense of such action
or claim including, but not limited to, all attorney's fees.

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

 LIMITATION OF LIABILITY.  NEITHER IBM CREDIT NOR ANY OTHER INDEMNIFIED
PERSON SHALL HAVE ANY LIABILITY WITH RESPECT TO ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES SUFFERED BY CUSTOMER IN CONNECTION WITH THIS AGREEMENT,
ANY OTHER AGREEMENT, ANY DELAY, OMISSION OR ERROR IN THE ELECTRONIC
TRANSMISSION OR RECEIPT OF ANY E-DOCUMENT, OR ANY CLAIMS IN ANY MANNER
RELATED THERETO.  NOR SHALL IBM CREDIT OR ANY OTHER INDEMNIFIED PERSON HAVE
ANY LIABILITY TO CUSTOMER OR ANY OTHER PERSON FOR ANY ACTION TAKEN OR OMITTED
TO BE TAKEN BY IT OR THEM HEREUNDER, EXCEPT FOR ITS OR THEIR OWN GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.  IN THE EVENT CUSTOMER REQUESTS IBM CREDIT
TO EFFECT A WITHDRAWAL OR DEBIT OF FUNDS FROM AN ACCOUNT OF CUSTOMER, THEN IN
NO EVENT SHALL IBM CREDIT BE LIABLE FOR ANY AMOUNT IN EXCESS OF ANY AMOUNT
INCORRECTLY DEBITED, EXCEPT IN THE EVENT OF IBM CREDIT'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.  NO PARTY SHALL BE LIABLE FOR ANY FAILURE TO PERFORM ITS
OBLIGATIONS IN CONNECTION WITH ANY E-DOCUMENT, WHERE SUCH FAILURE RESULTS
FROM ANY ACT OF GOD OR OTHER CAUSE BEYOND SUCH PARTY'S REASONABLE CONTROL
(INCLUDING, WITHOUT LIMITATION, ANY MECHANICAL, ELECTRONIC OR COMMUNICATIONS
FAILURE) WHICH PREVENTS SUCH PARTY FROM TRANSMITTING OR RECEIVING
E-DOCUMENTS.

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

 Severability.  If any provision of this Agreement or the Other Documents
or the application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Agreement and the Other Documents and
the application of such provision to other Persons or circumstances will not
be affected thereby, the provisions of this Agreement and the Other Documents
being severable in any such instance.

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

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

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

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

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

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

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

(i)     If to IBM Credit at:                     (ii)    If to Customer at:
        IBM Credit Corporation                           Egghead.Com, Inc.
        5000 Executive Parkway, Suite 450                1350 Willow Road
        San Ramon, CA 94583                              Menlo Park, CA 94025
        Attention: Region Manager, West                  Attention: John Labbett
        Facsimile: 925-277-5675                          EVP, Chief Financial Officer
                                                         Facsimile: 650-328-7858

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

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

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

CUSTOMER RECIPIENT INFORMATION for Internet transmissions:

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

        John Labbett, Executive Vice President, Chief Financial
Officer

e-mail Address: jlabbett@egghead.com

Phone Number:   (650) 470-2783

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

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

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

 SUBMITS ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND ANY OTHER AGREEMENT, OR FOR THE RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND ANY FEDERAL DISTRICT
COURT IN NEW YORK;

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

 AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID. TO CUSTOMER AT ITS
ADDRESS SET FORTH IN SECTION 10.13 OR AT SUCH OTHER ADDRESS OF WHICH IBM
CREDIT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

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

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

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

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

IBM Credit Corporation                  Egghead.Com, Inc.
By:  /s/ Thomas S. Curcio               By:   /s/ John E. Labbett
Print Name: Thomas S. Curcio            Print Name: John E. Labbett
Title: Manager of Credit                Title: Executive Vice President/Chief Financial Officer

ATTACHMENT A,
("AIF ATTACHMENT A") TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

DATED February 28, 2001

Customer Name: Egghead.com, Inc.

Effective Date of this AIF Attachment A: February 28,
2001

	Fees, Rates and Repayment
Terms:

	Credit Line: Twenty Million
Dollars ($20,000,000.00);

	Borrowing Base:

	70% of the amount of the Customer's Eligible Accounts as
of the date of determination as reflected in the Customer's most recent
Collateral Management Report;

Notwithstanding the terms of Section 3.1(W) of the Agreement,
Accounts arising from Incentive payments, rebates, discounts and refunds which
are (i) verifiable by Authorized Suppliers, and (ii) payable by Authorized
Suppliers by check to the Lockbox will be deemed to be Eligible Accounts.

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

	Collateral Insurance Amount:
Eight Million Dollars ($8,000,000.00)

	Delinquency Fee Rate: Prime Rate
plus 6.500%

	Shortfall Transaction Fee:
Shortfall Amount multiplied by 0.30%

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

	Other Charges:

	Application Processing Fee: $15,000.00 (Paid)

	Closing Fee: $25,000.00

	Annual Facility Fee (payable annually on the facility
anniversary date): $40,000.00, or .20% of the maximum credit line, whichever is
greater.

	Bank Account

Customer's Lockbox(es) and Special Account(s) will be
maintained at the following Bank(s):

Name of Bank:

Address:

Phone:

Lockbox Address:

Special Account #:

	Financial Covenants: Not
Applicable

	Additional Conditions Precedent
Pursuant to Section 5.1(J) of the Agreement:

	Executed Contingent Blocked Account Amendment:

	Executed Waiver of Landlord Lien for all premises in
which a landlord has the right of levy for rent;

	A Certificate of Location of Collateral whereby the
Customer certifies where Customer presently keeps or sells inventory, equipment
and other tangible Collateral;

	Subordination or Intercreditor Agreements from all
creditors having a lien which is superior to IBM Credit in any assets that IBM
Credit relies on to satisfy Customer's obligations to IBM Credit;

	Listing of all creditors providing accounts receivable
financing to Customer;

	A Collateral Management Report in the form of Attachment
F as of the Closing Date;

	An Opinion of Counsel substantially in the form and
substance of Attachment H whereby the Customers counsel states his or her
opinion about the execution, delivery and performance of the Agreement and other
documents by the Customer;

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

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

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

AIF ATTACHMENT B TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: Egghead.com, Inc.

	Liens:

	Locations of Offices, Records and
Inventory:

	Principal Place of Business and
Chief Executive Office:

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

LocationLeased (Y/N)

 

	Fictitious
Names:

	Organization:

	Subsidiaries:

	
Name
	
Jurisdiction
	
Owner
	
% Owned

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	Affiliates:

	
Name
	
Capacity

	
 
	
 

	
 
	
 

	
 
	
 

	Judgments:

	Environmental
Matters:

	Indebtedness:

AIF ATTACHMENT B TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: Egghead.com, Inc.

	Liens: 

	Locations of Offices, Records and
Inventory: 

	Principal Place of Business and
Chief Executive Office:

1350 Willow Road, Menlo Park, CA 94025

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

LocationLeased (Y/N)

521 Chkalou Drive, Vancouver, WA 98683Y

3301 SE Columbia Way, Bldg 45, Vancouver, WA
98661Y

	Fictitious Names:

	Organization: 

	Subsidiaries:

	
Name
	
Jurisdiction
	
Owner
	
% Owned

	
See attached list. None
operational.
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	Affiliates: 

	
Name
	
Capacity

	
None.
	
 

	
 
	
 

	Judgments:

None.

	Environmental
Matters:

None.

	Indebtedness:

None.

Egghead.com, Inc.

Subsidiaries

Item IV.(A) Subsidiaries

	
Legal/dba Name
	
Address
	
Relation
	
FEIN

	
E O Corporation
	
1350 Willow Road, Menlo Park CA
94025
	
Subsidiary
	
 

	
D J & J Software
Corporation
	
1350 Willow Road, Menlo Park CA
94025
	
Subsidiary
	
91-1233491

	
Surplus Software, Inc.
	
1350 Willow Road, Menlo Park CA
94025
	
Subsidiary
	
93-1083982

	
EH Direct, Inc.
	
1350 Willow Road, Menlo Park CA
94025
	
Subsidiary
	
91-1610131

	
MPI Corporation
	
1350 Willow Road, Menlo Park CA
94025
	
Subsidiary
	
91-1610133

	
Egghead.com Advertising,
Inc.
	
1350 Willow Road, Menlo Park CA
94025
	
Subsidiary
	
 

EH Direct is known as Surplus
Direct

 

IF ATTACHMENT E TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer: Egghead.com, Inc.

AUTHORIZED SUPPLIERS

IBM

Tech Data Corp.

Ingram

AIF ATTACHMENT F TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Customer. Egghead.com, Inc.

Collateral Management Report (CMR)

Accounts as of _________ (Date)

COLLATERAL STATUS:

Accounts Receivable less than 90 days aged from invoice
date:

	
Commercial
	

	
 
	
 

	
Total Eligible
	

	
X 70%
	

	
 
	
 
	
plus
	
 

	
IBMCC Financed
Inventory
	
 
	
X 100%
	

	
Total Collateral
	
 
	
=
	

	
LOAN
STATUS:
	
 
	
 
	
 

	
IBMCC Loan Value
	
 
	
less
	

	
 
	
 
	
 
	
*

* if negative please include
paydown.

Signatures:

Authorized Customer Signature(Date)

IBM Credit Corporation(Date)

The above officer or delegated individual of
_________________ certifies that he or she is authorized to provide this
information on behalf of _________________ and agrees that to the best of his or
her knowledge the information is accurate.

 

AIF ATTACHMENT F TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT')

Customer (Legal Name) Egghead.com, Inc.

Collateral Management Report (CMR)

Accounts as of: 2-21-2001

COLLATERAL STATUS:

	
 
	
Other

Values
	
Gross

Collateral
	
Advance %
	
Net Collateral

	
1.Previous assigned A/R
balance:
	
 
	
$0
	
 
	
 

	
(previous CMR line 4) Date:
__/__/__
	
 
	
 
	
 
	
 

	
2.Additions to A/R
(2A+B):
	
 
	
$0
	
 
	
 

	
A.New Billings
	
$0
	
 
	
 
	
 

	
B.Adjustments
	
$0
	
 
	
 
	
 

	
3.Deductions from A/R
(3A+B+C):
	
 
	
$0
	
 
	
 

	
A.Cash Receipts
	
$0
	
 
	
 
	
 

	
B.Credits
	
$0
	
 
	
 
	
 

	
C.Adjustments
	
$0
	
 
	
 
	
 

	
4.New Assigned A/R balance
(1+2-3):
	
 
	
$0
	
 
	
 

	
5.A/R Aging Report (Date:
__/__/__)
	
 
	
$0
	
 
	
 

	
**New Assigned A/R Balance
and A/R Aging Report
	
 
	
 
	
 
	
 

	
(Lines 4 and 5) must be
equal**
	
 
	
 
	
 
	
 

	

	

	

	

	

	
6.Less Adjustments:
	
 
	
$0
	
 
	
 

	
A.Unapplied
Cash
	
$0
	
 
	
 
	
 

	
B.Other
	
$0
	
 
	
 
	
 

	
7.Adjusted assigned A/R balance
(4-6):
	
 
	
$27,651,231
	
 
	
 

	
8.Less Ineligible
A/R:
	
 
	
$0
	
 
	
 

	
A.A/R Over 90
Days
	
$671,597
	
 
	
 
	
 

	
B.50% Rule
(estimate)
	
$30,000
	
 
	
 
	
 

	
C.Contra Accts (A/P
offsets)
	
$0
	
 
	
 
	
 

	
D.Other
	
$0
	
 
	
 
	
 

	
E.Non-Trade (see Note
below)
	
$22,066,094
	
 
	
 
	
 

	
F.Egghead.com
related
	
$43,018
	
 
	
 
	
 

	
G.____________________
	
$0
	
 
	
 
	
 

	
H.____________________
	
$0
	
 
	
 
	
 

	
9.Total Eligible A/R
Collateral:
	
 
	
$4,840,522
	
70%
	
$3,388,365

	
(Line 7 - Line 8 X Advance
Rate)
	
 
	
 
	
 
	
 

	
10.Other A/R
Collateral:
	
 
	
 
	
 
	
 

	
A.MDF (<90
days)
	
 
	
$596,646
	
70%
	
$417,652

	
B.____________________
	
 
	
$0
	
$0
	
$0

	
11.Inventory
Collateral:
	
 
	
 
	
 
	
 

	
A.IBM Credit Financed
Eligible Inventory
	
 
	
$0
	
$0
	
$0

	
B.____________________
	
 
	
$0
	
$0
	
$0

	
C.____________________
	
 
	
$0
	
$0
	
$0

	
12.Other
Collateral:
	
 
	
 
	
 
	
 

	
A.RMA
	
 
	
$0
	
$0
	
$0

	
B.Price
Protection
	
 
	
$0
	
$0
	
$0

	
C.____________________
	
 
	
$0
	
$0
	
$0

	
D.____________________
	
 
	
$0
	
$0
	
$0

	
13.Total Net Eligible
Collateral (9+10+11+12)
	
 
	
 
	
 
	
$3,806,017

	

	

	

	

	

Note: Non-trade account balance is
high do to several days credit card cash receipts not yet applied to Accounts
Receivable

 

LOAN STATUS:

	
 
	
Other

Values
	
Gross

Collateral
	
Advance %
	
Net Collateral

	
1.Net IBM Credit
Outstandings
	
 
	
$0
	
 
	
 

	
(1A-
(B+C+D+E+F+G+H+I)+J)
	
 
	
 
	
 
	
 

	
A.Gross IBM Credit
Outstandings (RFS):
	
$0
	
 
	
 
	
 

	
Less:
	
$0
	
 
	
 
	
 

	
B.Suspense
	
$0
	
 
	
 
	
 

	
C.Disputes
	
$0
	
 
	
 
	
 

	
D.In Transit (__
Days)
	
$0
	
 
	
 
	
 

	
E.QSL / QSA
	
$0
	
 
	
 
	
 

	
F.Other
	
$0
	
 
	
 
	
 

	
G.____________________
	
$0
	
 
	
 
	
 

	
H.____________________
	
$0
	
 
	
 
	
 

	
I.____________________
	
$0
	
 
	
 
	
 

	
Plus:
	
 
	
 
	
 
	
 

	
J.Product Received Not
Billed (RNB)
	
$0
	
 
	
 
	
 

	
2.Funds in Lockbox
(2A+B)
	
 
	
$0
	
 
	
 

	
A.Cleared Funds
(transferred not posted)
	
$0
	
 
	
 
	
 

	
B.Unavailable Funds
(float)
	
$0
	
 
	
 
	
 

	
3.Loan Balance (Line 1 - Line
2)
	
 
	
$0
	
 
	
 

	
4.Collateral Excess /
Shortfall:
	
 
	
$0
	
 
	
 

	
(Collateral Line 13 - Loan Line
3:
	
 
	
 
	
 
	
 

	
(Loan balance
available)
	
 
	
 
	
 
	
 

	
5.Advances from IBM Credit to
Customer
	
 
	
$0
	
 
	
 

	
(5A+B+C)
	
 
	
 
	
 
	
 

	
A.Cash Advances from
Lockbox
	
$0
	
 
	
 
	
 

	
B.Cash Advances from IBM
Credit 
	
$0
	
 
	
 
	
 

	
C.WCO Cash
Advance
	
$0
	
 
	
 
	
 

	
6.New Adjusted O/S Balance
(3+5)
	
 
	
$0
	
 
	
 

	
7.Remaining Credit Line
Availability
	
 
	
$0
	
 
	
 

	
(Collateral Line 13 - Loan Line
6)
	
 
	
 
	
 
	
 

	
8.WCO Payment
Advance
	
$0
	
 
	
 
	
 

 

Signatures:

/s/ John E. Labbett2/21/01

Authorized Customer Signature(Date)

IBM Credit Corporation(Date)

The above officer or delegated individual of Egghead.com,
Inc. certifies that he or she is authorized to provide this information on
behalf of Egghead.com, Inc. and agrees that to the best of his or her knowledge
the information is accurate.

 

AIF ATTACHMENT H TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

Form of Opinion of Customer's Counsel

{LETTERHEAD OF CUSTOMER'S COUNSEL}

{DATE}

IBM Credit Corporation

_____________________

_____________________

Re: ________________________

Ladies and Gentlemen:

We have acted as counsel for _________________________, a
_________________________ corporation (the "Borrower") in connection with (A)
the execution and delivery of that certain Agreement for Inventory Financing,
dated as of _________________________, 20___ (the "Financing Agreement"), by and
among the Borrower and IBM Credit Corporation ("IBM Credit"), and (B) the other
agreements, instruments, and documents executed and delivered by the Borrower in
connection with the Financing Agreement. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to such terms in
the Financing Agreement.

In this connection, we have examined the following
documents:
i.The Certificate of Incorporation and the By-laws of the
Borrower, each as amended to date;

ii.The records of the proceedings taken by the Board of
Directors of the Borrower in connection with the execution, delivery, and
performance of the Financing Documents to which they are a party (as defined
below);

iii.The Financing Agreement;

iv.The Contingent Blocked Account Amendment;

v.Acknowledgment copies of the UCC-1 Financing Statements
listed on Exhibit A hereto (the "Financing Statements") executed by the Borrower
naming it as Debtor and IBM Credit as Secured Party and filed in the offices set
forth on Exhibit A;

vi.{Additional Documents ff necessary}

The documents referred to in clauses (iii) through (vi) above
are hereinafter referred to as the Financing Documents.

In our examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents, and, regarding documents
executed by parties other than the Borrower, that those parties had the power
and the capacity to enter into, execute, deliver and perform all obligations
under such documents, the due authorization of all requisite action with respect
to such documents, and the validity and binding effect of such documents upon
such other patties.

As to any facts material to this opinion, we have relied upon
the representations and warranties of the Borrower contained in each of the
Financing Documents, and in certificates delivered by the Borrower pursuant to
each of the Financing Documents, statements, and representations of officers and
other representatives of the Borrower, and, as to the matters addressed therein,
certificates or correspondence from public officials. For purposes of the
opinion set forth in Paragraph 4, the term "Material Contracts" means the
agreements and instruments to which the Borrower is subject which have been
identified to us by officers of the Borrower and set forth on Exhibit B hereto
as the agreements and instruments which are material to the business or
financial condition of the Borrower; and the term "Material Orders" means those
orders and decrees to which the Borrower is subject which have been identified
to us by officers of the Borrower and set forth in Exhibit C hereto as the
orders and decrees, agreements, and instruments which are material to the
business or financial condition of the Borrower.

As used herein, the term "UCC" refers to the Uniform
Commercial Code as in effect in the State of New York.

We are members of the bar in the State of ____________ and
express no opinion as to the laws of any other jurisdiction except the General
Corporation Law of the State of ________________ and the federal laws of the
United States of America.

Based on the foregoing, and subject to the assumptions and
qualifications set forth herein, we are of the opinion that:

1.Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified and authorized to do business and in good
standing as a foreign corporation in each jurisdiction where, to our knowledge,
it presently is engaged in business and is required to be qualified.

2.Borrower has all requisite corporate power and
authority (a) to own, lease, and operate its properties and assets and to carry
on its business as now being conducted; and (b) to execute, delivery, and
performance of the Financing Documents to which it is a party.

3.All corporate action on the part of the Borrower
requisite for the execution, delivery, and performance of the Financing
Documents to which it is a party has been duly taken.

4.The execution, delivery, and performance by the
Borrower of the Financing Documents to which it is a party will not (a) violate,
be in conflict with, result in the breach of, or constitute (with due notice or
lapse of time, or both) a default under (i) the Certificate of Incorporation or
By-laws of Borrower or any resolution of its Board of Directors or any committee
thereof, (ii) any Material Contract, or (iii) any federal or state law
(including, without limitation, environmental or occupational health, and safety
law), regulation, rule, Material Order, or legal requirement of any federal,
state, or public authority or agency applicable to Borrower; or (b) result in
the creation or imposition of a lien of any nature whatsoever upon any of the
Borrower's property or assets other than as represented by the Financing
Documents.

5.Borrower has obtained any and all consents, approvals,
or other authorizations required to be obtained pursuant to its Certificate of
Incorporation and By-laws in connection with the execution, delivery, and
performance of the Financing Documents. No consent, approval, or authorization
of or by any court, administrative agency, other governmental authority, or any
other Person is required in connection with the execution, delivery, and
performance by the Borrower of the Financing Documents that has not already been
obtained.

6.To our knowledge, there are no actions, proceedings, or
investigations pending or threatened against the Borrower which question the
validity of the Financing Documents to which it is a party or relating to the
transactions contemplated thereby.

7.Each of the Financing Documents has been duly executed
and delivered by duly authorized officer of the Borrower and constitutes the
legal, valid, and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms, except that, in each case,
(i) enforcement may be subject to and limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other laws now or hereafter in effect
relating to creditors' rights generally, (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and (iii) certain of the remedial provisions including waivers
with respect to the exercise of remedies against the Collateral contained in the
Financing Documents may be unenforceable in whole or in part, but the inclusion
of such provisions does not affect the validity of the Financing Documents, each
taken as a whole and, the Financing Documents, each taken as a whole, contain
adequate remedial provisions for the practical realization of the security
purported to be afforded thereby.

8.The Financing Agreement is effective to create in favor
of IBM Credit a valid security interest within the meaning of the UCC in the
Collateral as security for the obligations purported to be secured thereby; and
(ii) the Financing Statements are in appropriate form and upon filing in the
state where Customer's principal place of business and chief executive office is
located will result in a perfected security interest (as such term is defined in
Section 9-303 of the UCC) of IBM Credit in the Collateral in which security
interests to which Article 9 of the UCC applies.

9.Borrower is not an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.

This opinion is rendered solely to and for the benefit of IBM
Credit in connection with the execution and delivery of the Financing Documents
and may not be relied upon by any other person, firm, or corporation without our
prior written consent, except that it may be furnished to any prospective
purchaser of a participation in the rights of IBM Credit and may be furnished to
and relied upon by any Person which hereafter acquires such a participation.

This opinion is limited to laws as currently in effect on the
date hereto and to the facts as they currently exist, We assume no obligation to
revise, supplement or otherwise update this opinion.

Very truly yours,

 

 

AIF ATTACHMENT I TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

CORPORATE SECRETARY'S CERTIFICATE AS TO RESOLUTIONS

AUTHORIZING BORROWING BY CORPORATION

IBM CREDIT CORPORATION

I, John Labbett, certify that I am the Secretary of Egghead.com, Inc.
("Customer") and that I am custodian of the Customer's organizational books and
records, including the minutes of the meetings of the Customer's Board of
Directors. I further certify as follows:

1.Customer is a corporation organized under the laws of the State of
Delaware, and has its principal of business at 1350 Willow Road, Menlo Park, CA
94025.

2.Customer is registered to conduct business or as otherwise required
in the following states and localities: California, Washington

3.True and complete copies of the Customer's Articles of
Incorporation and By-laws ("Governing Documents") are delivered herewith,
together with all amendments and addenda thereto as in effect on the date
hereof.

4.The following is a true, accurate and compared copy of a Resolution
(the "Resolution") adopted by the Customer's Board of Directors at a special
meeting thereof held on due notice at which there was present a quorum
authorized to adopt the Resolution and the entire proceedings of which were
proper and in accordance with the Customer's Governing Documents. The Resolution
was duly made, seconded and unanimously adopted, remains in full force and
effect and has not been revoked, annulled, amended or modified in any manner
whatsoever, and each authorization and empowerment contained in the Resolution
is permitted and proper under the Customer's Governing Documents:

Please see attached as a true excerpt from the minutes of the board of
directors meeting held on January 10, 2001.

5.Appearing below are the names, titles and specimen signatures of at
least three Authorized Person as defined in the Resolution cited in the
preceding paragraph, (list at least three such Authorized Persons):

Authorized Person(s)TitleSignature

(print)(print)

Jeffrey F. SheahanPresident & CEO/s/ Jeffrey F. Sheahan

John E. LabbettEVP & CFO/s/ John E. Labbett

David D. TiltonDirector of Finance/s/ David D. Tilton

The foregoing is not intended to be a comprehensive or exclusive list of the
Customer's Authorized Persons. Upon request, Customer will promptly provide to
IBM Credit additional certificates containing the name, title and specimen
signature of other Authorized Persons, and IBM Credit may now and in the future
rely on the signature of any Authorized Person whether or not listed on this or
any other certificate or on the signature page(s) hereof, if consistent with the
books and records of the Customer.

IN WITNESS WHEREOF, I have signed this certificate this 28th
day of February, 2001.

/s/ John E. Labbett

Name: John E. Labbett

 

 

AIF ATTACHMENT J TO

AGREEMENT FOR INVENTORY FINANCING ("AIF AGREEMENT")

E-BUSINESS SCHEDULE A ("SCHEDULE A")

Customer Name: Egghead.com, Inc.

Effective Date of This Schedule A: , 20___

E-DOCUMENTS - SUPPLIERS:

Invoices

Payment Report/Remittance Advice

E-DOCUMENTS - CUSTOMERS:

Invoices

Remittance Advice

Transaction Approval

Billing Statement

Payment Planner

Auto Cash

Statements of Transaction

Common Dispute Form

 

 

Omitted Attachments to Exhibit 10.11

Attachment C - Compliance Certificate - Not applicable

Attachment D

Attachment G - Certificate of Location of Collateral
Section 1.DEFINITIONS; ATTACHMENTS1

1.1Special Definitions1

1.2Other Defined Terms7

1.3Attachments7

Section 2.CREDIT LINE; FINANCE CHARGES; OTHER CHARGES8

2.1Credit Line8

2.2Product Advances.8

2.3Finance and Other Charges.9

2.4Customer Account Statements10

2.5Shortfall10

2.6Application of Payments10

2.7Prepayment and Reborrowing By Customer11

Section 3.CREDIT LINE ADDITIONAL PROVISIONS11

3.1Ineligible Accounts11

3.2Reimbursement for Charges13

3.3Lockbox and Special Account13

3.4Collections.13

3.5Application of Remittances and Credits13

3.6Power of Attorney14

Section 4.SECURITY -- COLLATERAL15

4.1Grant15

4.2Further Assurances16

Section 5.CONDITIONS PRECEDENT16

5.1Conditions Precedent to the Effectiveness of this Agreement16

5.2Conditions Precedent to Each Advance17

Section 6.REPRESENTATIONS AND WARRANTIES18

6.1Organization and Qualifications18

6.2Rights in Collateral; Priority of Liens18

6.3No Conflicts18

6.4Enforceability18

6.5Locations of Offices, Records and Inventory18

6.6Fictitious Business Names19

6.7Organization19

6.8No Judgments or Litigation19

6.9No Defaults19

6.10Labor Matters19

6.11Compliance with Law19

6.12ERISA19

6.13Compliance with Environmental Laws.20

6.14Intellectual Property20

6.15Licenses and Permits20

6.16Investment Company20

6.17Taxes and Tax Returns21

6.18Status of Accounts21

6.19Affiliate/Subsidiary Transactions21

6.20Accuracy and Completeness of Information21

6.21Recording Taxes21

6.22Indebtedness21

Section 7.AFFIRMATIVE COVENANTS21

7.1Financial and Other Information22

7.2Location of Collateral23

7.3Changes in Customer23

7.4Legal Entity Existence23

7.5ERISA24

7.6Environmental Matters24

7.7Collateral Books and Records/Collateral Audit24

7.8Insurance; Casualty Loss25

7.9Taxes25

7.10Compliance With Laws26

7.11Fiscal Year26

7.12Intellectual Property26

7.13Maintenance of Property26

7.14Collateral26

7.15Subsidiaries27

7.16Financial Covenants; Additional Covenants27

Section 8.NEGATIVE COVENANTS28

8.1Liens28

8.2Disposition of Assets28

8.3Legal Entity Changes28

8.4Guaranties28

8.5Restricted Payments28

8.6Investments28

8.7Affiliate/Subsidiary Transactions29

8.8ERISA29

8.9Additional Negative Pledges29

8.10Storage of Collateral with Bailees and Warehousemen29

8.11Accounts30

8.12Indebtedness30

8.13Loans30

Section 9.DEFAULT30

9.1Event of Default30

9.2Acceleration32

9.3Remedies32

9.4Waiver33

Section 10.MISCELLANEOUS33

10.1Term; Termination33

10.2Indemnification34

10.3Additional Obligations34

10.4LIMITATION OF LIABILITY34

10.5Alteration/Waiver35

10.6Severability35

10.7One Loan35

10.8Additional Collateral36

10.9No Merger or Novations36

10.10Paragraph Titles36

10.11Binding Effect; Assignment36

10.12Notices; E-Business Acknowledgment36

10.13Counterparts38

10.14ATTACHMENT A MODIFICATIONS38

10.15SUBMISSION AND CONSENT TO JURISDICTION AND CHOICE OF LAW38

10.16JURY TRIAL WAIVER39AMENDED SECURED PROMISSORY NOTE

$500,000                                                        March 27, 2000

     FOR VALUE RECEIVED, the undersigned, Linux Global Partners, a Delaware
corporation (the "Company"), hereby acknowledges the receipt of an additional
Five Hundred Thousand Dollars ($500,000) financing from Medicore, Inc., a
Florida corporation ("Holder"), which has been borrowed pursuant to the
Investment and Loan Agreement between the parties dated January 27, 2000 and a
Secured Promissory Note of the same date; and that the additional $500,000
borrowing is subject to all the terms and conditions of the Investment and Loan
Agreement as well as the Secured Promissory Note. All the terms of the Secured
Promissory Note will continue in full force and effect with regard to the
additional $500,000 borrowing by the Company from the Holder, which represents
an aggregate borrowing as of this date of $2,000,000.

     IN WITNESS WHEREOF, the Company has duly executed this Amended Secured
Promissory Note as of the day and year first above written.

ATTEST:                          COMPANY:

                                 LINUX GLOBAL PARTNERS, a Delaware corporation

                                    /s/ Wm. Jay Roseman

------------------------------   By:------------------------------------(SEAL)
           Wm. Jay Roseman, Co-Chairman

STATE OF NEW JERSEY )
                    )   SS:
COUNTY OF BERGEN    )

     The foregoing instrument was acknowledged before me this 27th day of
March, 2000 by Wm. Jay Roseman, the Co-Chairman of Linux Global Partners, a
Delaware corporation, on behalf of the corporation.

                                 /s/ Gerard S. DiFiore

                                 ------------------------------
                                 Notary Public
                                 GERARD S. DI FIORE
                                 Attorney at Law of the State of New Jersey

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