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Sample Business Contracts

Collateralized Guaranty - Priority Fulfillment Services Inc. and IBM Credit Corp.

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IBM CREDIT CORPORATION

                              AMENDED AND RESTATED
                             COLLATERALIZED GUARANTY


         Priority Fulfillment Services, Inc. ("Guarantor") and IBM Credit
Corporation having an office located at 4000 Executive Parkway, 3rd Floor, San
Ramon, CA 94583 ("IBM Credit") entered into a Collateralized Guaranty dated
September 27, 2001 (the "Prior Guaranty"). IBM Credit and Guarantor wish and
amend and restate the Prior Guaranty on the terms and conditions set forth
herein. In consideration of credit and financing accommodations granted or to be
granted by IBM Credit to Supplies Distributors, Inc. (formerly BSD Acquisition
Corp.) ("Borrower"), which is in the best interest of the Guarantor, and for
other good and valuable consideration received, Guarantor jointly and severally
guaranties to IBM Credit, from property held separately, jointly or in
community, the prompt and unconditional performance and payment by Borrower of
any and all obligations, liabilities, contracts, mortgages, notes, trust
receipts, secured transactions, inventory financing and security agreements, and
commercial paper on which Borrower is in any manner obligated, heretofore, now,
or hereafter owned, contracted or acquired by IBM Credit ("Liabilities"),
whether the Liabilities are individual, joint, several, primary, secondary,
direct, contingent or otherwise. Guarantor also agrees to indemnify IBM Credit
and hold IBM Credit harmless against any losses it may sustain and expenses it
may incur, suffer or be liable for as a result of or in any way arising out of,
following, or consequential to any transactions with or for the benefit of
Borrower. Capitalized terms used herein without definition shall have the
meaning described thereto in the Agreement for Inventory Financing dated March
29, 2002 among Borrower, Guarantor, Business Supplies Distributors Holdings,
LLC, Inventory Financing Partners, LLC, and PFSweb, Inc. (as amended, modified
and supplemented from time to time, the "Financing Agreement").

If Borrower fails to pay or perform any Liabilities to IBM Credit when due, all
Liabilities to IBM Credit shall then be deemed to have become immediately due
and payable, and Guarantor shall then pay upon demand the full amount of all
sums owed to IBM Credit by Borrower, together with all expenses, including
reasonable attorney's fees.

The liability of Guarantor is direct and unconditional and shall not be affected
by any extension, renewal or other change in the terms of payment of any
security agreement or any other agreement between IBM Credit and Borrower, or
any change in the manner, place or terms of payment or performance thereof, or
the release, settlement or compromise of or with any party liable for the
payment or performance thereof, or the waiver of any default or event of default
under any financing agreement between IBM Credit and Borrower, or the release or
non-perfection of any security thereunder, any change in Borrower's financial
condition, or the interruption of business relations between IBM Credit and
Borrower. This Amended and Restated Guaranty is and shall be deemed to be a
continuing guaranty and shall remain in full force and effect until the
indefeasible payment in full of the Liabilities and any other amounts payable
under this Amended and Restated Guaranty and the cessation of all obligations of
IBM Credit to extend credit to Borrower. Guarantor acknowledges that its
obligations hereunder are in addition to and independent of any agreement or
transaction between IBM Credit and Borrower or any other person creating or
reserving any lien, encumbrance or security interest in any property of Borrower
or any other person as security for any obligation of Borrower. IBM Credit need
not exhaust its rights or recourse against Borrower or any other person or any
security IBM Credit may have at any time before being entitled to payment from
Guarantor.

To secure payment of all of Guarantor's current and future debts and obligations
to IBM Credit, whether under this Amended and Restated Guaranty or any other
agreement between IBM Credit and Guarantor and to secure the Liabilities,
whether direct or contingent, Guarantor does assign, pledge and give to IBM
Credit a security interest in all of Guarantor's personal property, whether now
owned or hereafter acquired or existing and wherever located, including the
following: (a) all inventory and equipment manufactured or sold by or bearing
the trademark or tradename of International Business Machines Corporation
("IBM") or any other Authorized Supplier and all parts thereof, attachments,
additions, accessories and accessions thereto, all substitutions, repossessions,
exchanges, replacements and



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returns thereof, all price protection credits, rebates, discounts and incentive
payments relating to the foregoing, products, insurance and proceeds thereof and
documents therefor ("IBM Credit Inventory"); (b) all accounts, chattel paper,
instruments, negotiable documents, promissory notes, general intangibles
(including contract rights, software and licenses), deposit accounts, commercial
tort claims, intellectual property, investment property, pledged notes, letter
of credit rights, supporting obligations, obligations of any kind owing to
Guarantor, 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; (c)
all substitutions and replacements for all of the foregoing; and (d) all
products or proceeds of all of the foregoing (all of the above assets are
defined pursuant to the provisions of Article 9 of the Uniform Commercial Code
as in effect in the State of New York and are hereinafter referred to as the
"Collateral"). Collateral shall not include inventory and equipment of the
Guarantor that is not IBM Credit Inventory (as defined above). In connection
with any working capital financing Guarantor receives from another financial
institution or commercial lender ("Lender"), Guarantor may request that IBM
Credit subordinate its interest in the Collateral (excluding the IBM Credit
Inventory) and IBM Credit will not unreasonably withhold its consent provided
that:

         (1) No default or event of default exists;

         (2) IBM Credit and Lender shall have entered into a subordination
         agreement in form and substance satisfactory to IBM Credit in all
         respects in its sole discretion;

         (3) IBM Credit shall be satisfied that the IBM Credit Inventory shall
         be segregated from the other property of Guarantor and its customers
         and IBM Credit shall have a first perfected priority security interest
         in the IBM Credit Inventory; and

         (4) The books and records maintained on behalf of the Borrower shall be
         kept separately from Guarantor's other books and records and Guarantor
         shall have conspicuously noted on the Borrower's books and records that
         such books and records are the property of Borrower.

IBM Credit shall have the right, but not the obligation, from time to time, as
IBM Credit in its sole discretion may determine, and all without any advance
notice to Guarantor, to: (a) examine the Collateral; (b) appraise it as
security; (c) verify its condition and nonuse; (d) verify that all Collateral
has been properly accounted for and this Agreement complied with, and (e)
assess, examine, check and make copies of any and all of Guarantor's books,
records and files.

If Guarantor does not comply with any of the terms of this Agreement or the
Financing Agreement, or Guarantor fails to fulfill any obligation to IBM Credit
or any of IBM Credit's affiliates under any other agreement between IBM Credit
and Guarantor or between Guarantor and any of IBM Credit's affiliates, or
Guarantor becomes insolvent or ceases to do business as a going concern, or a
bankruptcy, insolvency proceeding, arrangement or reorganization is filed by or
against Guarantor, or any of Guarantor's property is attached or seized, or a
receiver is appointed for Guarantor, or Guarantor commits any act which impairs
the prospect of full performance or satisfaction of Guarantor's obligations to
IBM Credit, or Guarantor shall lose any franchise, permission, license or right
to conduct its business, or Guarantor misrepresents its financial condition or
organizational structure, or whenever IBM Credit deems the debt or Collateral to
be insecure:

         a) IBM Credit may call all or any part of the amount Guarantor or
         Borrower owes IBM Credit due and payable immediately, if permitted by
         applicable law, together with court costs and all costs and expenses of
         IBM Credit's repossession and collection activity, including, but not
         limited to reasonable attorney's fees.

         b) Guarantor will hold and keep the Collateral in trust, in good order
         and repair, for IBM Credit's benefit and shall not exhibit or sell it.



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         c) Upon IBM Credit's demand, Guarantor will immediately deliver the
         Collateral to IBM Credit, in good order and repair, at a place
         reasonably convenient to IBM Credit, together with all related
         documents; or IBM Credit may, in IBM Credit's sole discretion and
         without demand, take immediate possession of the Collateral, together
         with all related documents.

         d) Guarantor waives and releases: (i) any and all claims and causes of
         action which Guarantor may now or ever have against IBM Credit as a
         result of any possession, repossession, collection or sale by IBM
         Credit of any of the Collateral, notwithstanding the effect of such
         possession, repossession, collection or sale upon Guarantor's business;
         (ii) all rights of redemption from any such sale; and (iii) the benefit
         of all valuation, appraisal and exemption laws. If IBM Credit seeks to
         take possession of any of the Collateral by replevin or other court
         process, Guarantor irrevocably waives any notice, 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.

         e) Guarantor appoints IBM Credit or any person IBM Credit may delegate
         as its duly authorized Attorney-in-Fact (without notifying Guarantor)
         to do, in IBM Credit's sole discretion, any of the following: (i) sell,
         assign, transfer, negotiate or pledge any and all accounts, chattel
         paper, or contract rights; (ii) endorse Guarantor's name on any and all
         notes, checks, drafts, or other forms of exchange received as payment
         on any accounts, chattel paper and contract rights, for deposit in IBM
         Credit's account; (iii) grant any extension, rebate or renewal on any
         and all accounts, chattel paper or contract rights, or enter into any
         settlement thereof; (iv) demand, collect and receive any and all
         amounts due on accounts, chattel paper and contract rights; and (v)
         exercise any and all rights Guarantor has in the Collateral.

         f) In the event Guarantor brings any action or asserts any claim
         against IBM Credit which arises out of this Agreement, any other
         agreement or any of Guarantor's and IBM Credit's business dealings, in
         which Guarantor does not prevail, Guarantor agrees to pay IBM Credit
         all court costs and all costs and expenses of IBM Credit's defense of
         such action of claim including, but not limited to, reasonable
         attorney's fees.

IBM Credit may also declare a default under this Agreement and exercise any and
all rights and remedies available herein, if, in IBM Credit's sole discretion,
IBM Credit determines that the Collateral has decreased in value, and Guarantor
has been unable to either: (a) provide IBM Credit with additional Collateral in
a form and substance satisfactory to IBM Credit; or (b) pay the Shortfall Amount
as defined in the Financing Agreement.

IBM Credit has and will always possess all the rights and remedies of a secured
party under law, and IBM Credit's rights and remedies are and will always be
cumulative. Guarantor acknowledges and agrees that the Collateral is the subject
of widely distributed standard price quotations and is customarily sold in a
recognized market. Guarantor agrees that a private sale by IBM Credit of any of
the Collateral to a dealer in those types of Collateral is a commercially
reasonable sale. Further, Guarantor agrees that IBM Credit's delivery of any of
the Collateral to a distributor or manufacturer, with a request that it
repurchase Collateral, as provided in any repurchase agreement with IBM Credit,
is a commercially reasonable disposition or sale.

Guarantor promises that (a) the Collateral is and shall remain free from all
claims and liens except IBM Credit's and the lien of Congress Financial
Corporation (Southwest); (b) Guarantor shall defend the Collateral against all
other claims and demands; and (c) Guarantor will notify IBM Credit before it
signs, or authorizes the signing of any financing statement regardless of its
coverage. Guarantor authorizes IBM Credit to file with any filing office such
financing statements, amendments, addenda and other records showing IBM Credit
as secured party and Guarantor as the debtor and identifying IBM Credit's
security interest in the Collateral that IBM Credit deems necessary to perfect
and maintain IBM Credit's security



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interest in the Collateral. Guarantor will execute any and all documents IBM
Credit may request to confirm or perfect IBM Credit's title or security interest
in the Collateral.

Guarantor represents and covenants that the first paragraph of this Amended and
Restated Guaranty states the exact name of Guarantor as set forth in its charter
or other organizational record. Guarantor represents that it is duly organized
under the laws of the State of Delaware and the organization document creating
Guarantor has been filed in the appropriate office of such State. In addition,
Guarantor's organizational identification number assigned by its State of
organization is as follows: 2606094. Guarantor's principal place of business is
located at 500 North Central Expressway, Plano, TX 75074 and Guarantor
represents that its business is conducted as a CORPORATION. Guarantor will not
change its name, location (as defined in Article 9 of the U.C.C.) or State of
organization. Guarantor shall provide IBM Credit at least thirty (30) days prior
written notice of any change in its form of ownership, management, and of any
change in its principal place of business, or any additions or discontinuances
of other business locations. The Collateral shall be kept at Guarantor's
principal place of business and at the following addresses:

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

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

until all sums owed IBM Credit are paid in full. Guarantor will immediately
notify IBM Credit if the Collateral is kept at any other address. This paragraph
is for IBM Credit's informational purposes only, and is not in any way or manner
intended to limit the extent of IBM Credit's security interest in the
Collateral. Guarantor and its predecessors have done and do business only under
the following names: Priority Fulfillment Services, Inc. and PFSweb, Inc.

Guarantor will pay all taxes, license fees, assessments and charges on the
Collateral when due. Guarantor will be responsible for any loss of Collateral
for any reason whatsoever. Guarantor will keep the Collateral insured for its
full insurable value against loss or damage by fire, wind, and theft and for
combined additional coverage, including vandalism and malicious mischief, and
for other risks as IBM Credit may require. Guarantor will obtain insurance under
such terms and in amounts as IBM Credit may specify, from time to time, in
companies acceptable to IBM Credit, with a loss-payee or mortgagee clause
payable to IBM Credit to the extent of any loss to the Collateral and containing
a waiver of all defenses against Guarantor that is acceptable to IBM Credit.
Guarantor further agrees to provide IBM Credit with written evidence of the
required insurance coverage and loss-payee or mortgagee clause. Guarantor
assigns to IBM Credit all sums not in excess of the unpaid debt owed IBM Credit,
and directs any insurance company to make payment directly to IBM Credit to be
applied to the unpaid debt owed IBM Credit. Guarantor further grants IBM Credit
an irrevocable power of attorney to endorse any draft and sign and file all of
the necessary papers, forms and documents to initiate and settle any and all
claims with respect to the Collateral. If Guarantor fails to pay any of the
above-referenced costs, charges or any insurance premiums, or if it fails to
insure the Collateral, IBM Credit may pay such costs, charges or any insurance
premiums, and the amounts paid shall be considered an additional debt owed by
Guarantor to IBM Credit. Guarantor will promptly notify IBM Credit of any loss,
theft or destruction of or damage to any of the Collateral.

Guarantor will not rent, lease, lend, demonstrate, pledge, create a security
interest in, transfer or secrete any of the Collateral, or use the Collateral
for any purpose other than exhibition, without IBM Credit's prior written
consent.

This Amended and Restated Guaranty is assignable by IBM Credit, shall be
construed liberally in IBM Credit's favor, and shall inure to the benefit of and
bind IBM Credit's and Guarantor's respective successors, personal
representatives and assigns. Guarantor shall not assign this Amended and
Restated Guaranty or its obligations hereunder without the prior written consent
of IBM Credit.

If Borrower hereafter is incorporated, acquired by a corporation, dissolved, or
otherwise undergoes any change in its management, ownership, identity, or
organizational structure, this Amended and Restated Guaranty shall continue to
extend to any Liabilities of the Borrower or such resulting corporation,
dissolved corporation, or new or changed legal entity, or identity to IBM
Credit.



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Guarantor waives: notice of the acceptance of this Amended and Restated
Guaranty, and of presentment, demand and protest; notices of nonpayment,
nonperformance and dishonor; notices of amount of indebtedness of Borrower
outstanding at any time; notices of the number and amount of advances made by
IBM Credit to Borrower in reliance on this Amended and Restated Guaranty; notice
of the financial condition of Borrower or any other guarantor or any change
therein; notice of the release of collateral for the Liabilities, of any other
guaranty, pledge or suretyship agreement or any collateral therefor; notices of
any legal proceedings or other efforts to collect against Borrower; notice of
any recoupment, setoff, administrative freeze on Borrower's credit or assets;
notice and any opportunity for a hearing as to any prejudgment remedies; and any
other demands and notices required by law. Guarantor further waives all rights
to assert against IBM Credit any right of recoupment, setoff, and all claims,
defenses, and counterclaims against IBM Credit or Borrower, including any
defense based on the lack of good faith. To the extent permitted by law,
Guarantor also waives any and all rights in and notices or demands relating to
any Collateral now or hereafter securing any of the Liabilities. All waivers by
Guarantor herein shall survive any termination or revocation of this Amended and
Restated Guaranty.

Guarantor authorizes IBM Credit to sell at public or private sale or otherwise
realize upon the Collateral now or hereafter securing any of the Liabilities, in
such manner and upon such terms and conditions as IBM Credit deems best, all
without advertisement or notice to Borrower, Guarantor, or any third parties.
Guarantor further authorizes IBM Credit to deal with the proceeds of such
Collateral as provided in IBM Credit's agreement with Borrower, without
prejudice to IBM Credit's claim for any deficiency and free from any right or
redemption on the part of Borrower, Guarantor or any third parties, which right
or redemption is hereby waived together with every formality prescribed by
custom or by law in relation to any such sale or other realization.

Guarantor further agrees that all of its right, title and interest in, to and
under any loans, notes, debts and all other liabilities and obligations
whatsoever owed by Borrower to Guarantor, whether heretofore or hereafter
created or incurred and for whatever amount, and all security therefor, shall be
now and hereafter at all times fully subordinated to all Liabilities. Guarantor
will not ask, demand or sue for, or take or receive payment of, all or any part
of such loans, notes, debts or any other liabilities or obligations whatsoever
or any security therefor, until and unless all of the Liabilities are paid,
performed and fully satisfied except as expressly permitted by the Financing
Agreement and provided no default or event of default exists. In addition, until
such time that the Liabilities are indefeasibly paid in full, Guarantor
irrevocably waives, for the benefit of IBM Credit, any and all rights which it
presently has, or may hereafter have, whether by virtue of any payment or
payments hereunder or otherwise, to be subrogated to the rights of IBM Credit
against the Borrower with respect to any such indebtedness of the Borrower to
IBM Credit.

Guarantor has made an independent investigation of the financial condition of
Borrower and gives this Amended and Restated Guaranty based on that
investigation and not upon any representations made by IBM Credit. Guarantor
acknowledges that it has access to current and future Borrower financial
information which will enable Guarantor to continuously remain informed of
Borrower's financial condition. Guarantor also consents to and agrees that the
obligations under this Amended and Restated Guaranty shall not be affected by
IBM Credit's subsequent increases or decreases in the credit line that IBM
Credit may grant to Borrower; substitutions, exchanges or releases of all or any
part of the Collateral now or hereafter securing any of the Liabilities; sales
or other dispositions of any or all of the Collateral now or hereafter securing
any of the Liabilities without demands, advertisement or notice of the time or
place of the sales or other dispositions; realizing on the Collateral to the
extent IBM Credit, in IBM Credit's sole discretion, deems proper; or purchases
of all or any part of the Collateral for IBM Credit's own account.

This Amended and Restated Guaranty and any and all obligations, liabilities,
terms and provisions herein shall survive any and all bankruptcy or insolvency
proceedings, actions and/or claims brought by or against Borrower, whether such
proceedings, actions and/or claims are federal and/or state.

This Amended and Restated Guaranty is submitted by Guarantor to IBM Credit (for
IBM Credit's acceptance or rejection thereof) at IBM Credit's above specified
office; as an offer by Guarantor to



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guaranty the credit and financial accommodations provided by IBM Credit to
Borrower. If accepted, this Amended and Restated Guaranty shall be deemed to
have been made at IBM Credit's above-specified office. THIS AMENDED AND RESTATED
GUARANTY AND ALL OBLIGATIONS PURSUANT THERETO, SHALL BE GOVERNED AND CONTROLLED
AS TO INTERPRETATION, ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT AND, IN ALL
OTHER RESPECTS BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAWS. GUARANTOR, TO INDUCE IBM CREDIT TO ACCEPT THIS
AMENDED AND RESTATED GUARANTY, AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING
DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF, RELATED TO OR FROM THIS
AMENDED AND RESTATED GUARANTY MAY BE LITIGATED, AT IBM CREDIT'S SOLE DISCRETION
AND ELECTION, IN COURTS WITHIN THE STATE OF NEW YORK. GUARANTOR CONSENTS AND
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN
THAT STATE. GUARANTOR WAIVES ANY RIGHT TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION BROUGHT AGAINST GUARANTOR BY IBM CREDIT IN ACCORDANCE WITH THIS
PARAGRAPH.

Any delay by IBM Credit, or IBM Credit's successors or assigns in exercising any
or all rights granted IBM Credit under this Amended and Restated Guaranty shall
not operate as a waiver of those rights. Furthermore, any failure by IBM Credit,
IBM Credit's successors or assigns, to exercise any or all rights granted IBM
Credit under this Amended and Restated Guaranty shall not operate as a waiver of
IBM Credit's right to exercise any or all of them later.

Notwithstanding anything contained in any document to the contrary, it is
understood and agreed that the rights and claims of IBM Credit under the Prior
Guaranty continue hereunder and the obligations of Guarantor under the Prior
Guaranty constitute Liabilities hereunder.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK.



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This document contains the full agreement of the parties concerning the guaranty
of Borrower's Liabilities and can be varied only by a document signed by all of
the parties hereto.

THE PARTIES AGREE THAT ANY ACTION, SUIT OR PROCEEDING, RELATING DIRECTLY OR
INDIRECTLY TO THIS AMENDED AND RESTATED GUARANTY, OR THE RELATIONSHIP BETWEEN
IBM CREDIT AND GUARANTOR, WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY
A JUDGE WITHOUT A JURY. THUS, THE PARTIES HEREBY WAIVE ANY RIGHT TO A JURY TRIAL
IN ANY SUCH ACTION, SUIT OR PROCEEDING.


<Table>
<S>                                                  <C>
WITNESS                                              PRIORITY FULFILLMENT SERVICES, INC.
                                                     GUARANTOR

                                                     By:
-------------------------------------                   ----------------------------------------

Print Name:                                          Print Name: Thomas J. Madden
           --------------------------                           -----------------
                                                     Title: CFO
                                                           ----
                                                     Date:  3/29/02
              (SEAL)                                      ---------

                                                     Guarantor's Address:

                                                     500 North Central Exp.
                                                     ----------------------
                                                     Suite 500
                                                     ---------
                                                     Plano, TX 75074
                                                     ---------------
ATTEST:
       -------------------------------------
                  Secretary

Print Name:
           ---------------------------------

                                                     IBM CREDIT CORPORATION

                                                     By:
                                                        ----------------------------------------
                                                     Print Name: John M. White
                                                                --------------
                                                     Title: Director of Global Credit Operations
                                                           -------------------------------------
</Table>




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