PFSWEB INC
1ST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT
<DOCUMENT>
<TYPE>EX-10.42
<SEQUENCE>4
<FILENAME>d14001exv10w42.txt
<DESCRIPTION>1ST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.42

                  FIRST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT

         THIS FIRST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT (this "Amendment")
is made as of the Amendment Date (as hereinafter defined) by and between NEW
YORK LIFE INSURANCE COMPANY, a New York mutual insurance company ("Landlord"),
and DAISYTEK, INC., a Delaware corporation ("Tenant") and PRIORITY FULFILLMENT
SERVICES, INC., a Delaware corporation ("Assignee").

                                   WITNESSETH:

         WHEREAS, Landlord and Tenant entered into that certain Industrial Lease
Agreement dated March 31, 1999 (the "Lease") relating to the lease of
approximately 120,000 square feet of space within Building "I" (the "Building")
of Southpark, located in Memphis, Shelby County, Tennessee (the "Original
Demised Premises"); and

         WHEREAS, Landlord and Tenant desire to amend the Lease to, among other
things, expand the Original Demised Premises to include the remaining 100,100
square feet of space within the Building (the "Expansion Space"; the Original
Demised Premises and the Expansion Space being referred to hereinafter
collectively as the "Demised Premises") subject to the terms and conditions set
forth herein; and

         WHEREAS, without releasing the Tenant therefrom, the Tenant wishes to
assign the Lease (as herein amended) to the Assignee, and the Assignee wishes to
accept the Lease (as so amended) and assume the obligations of the Tenant
thereunder .

         NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00), the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

         1.       All capitalized terms used in this Amendment shall have the
                  meanings ascribed thereto in the Lease unless otherwise set
                  forth herein.

         2.       As of the later of (i) the date upon which Go/Dan (as defined
                  below) shall vacate the Expansion Space and (ii) February 8,
                  2000 (such later date being herein referred to as the
                  "Expansion Date"), the Expansion Space shall be added to and
                  made a part of the Demised Premises for all purposes under the
                  Lease.

         3.       Effective as of the Expansion Date, Section 1(b) of the Lease
                  shall be deleted in its entirety and the following shall be
                  inserted in lieu thereof:

                      (b) Demised Premises Square Footage: approximately 220,100
                          sq. ft.

<PAGE>

         4.       Effective as of the Expansion Date, Section 2 of the Lease
                  shall automatically be amended by deleting therefrom the
                  phrase "approximately 120,000 square feet of space,
                  approximately 6,000 square feet of which is office space," and
                  by inserting in lieu thereof the phrase "approximately 220,100
                  square feet of space, approximately 11,069 square feet of
                  which is office space."

         5.       Effective as of the Expansion Date, Section 1(j) of the Lease
                  shall be deleted in its entirety and the following shall be
                  inserted in lieu thereof:

                        (j)Tenant's Operating Expense Percentage:  100%.

         6.       Base Rent shall be paid pursuant to the Lease through the
                  Expansion Date. Notwithstanding anything in Section 1(d) of
                  the Lease to the contrary, from and after the Expansion Date,
                  the following Annual Base Rent shall be due with respect to
                  the Demised Premises, as expanded pursuant to the terms
                  hereof:
<TABLE>
<S>                                     <C>
Expansion Date - March 31, 2000         $663,627.12
April 1, 2000-March 31, 2001            $663,627.12
April 1, 2001-March 31, 2002            $663,627.12
April 1, 2002-March 31, 2003            $663,627.12
April 1, 2003-March 31, 2004            $663,627.12
</TABLE>

         7.       Notwithstanding anything in Section 1(e) of the Lease to the
                  contrary, from and after the Expansion Date, the following
                  Monthly Base Rent Installments shall be due with respect to
                  the Demised Premises, as expanded pursuant to the terms
                  hereof:

<TABLE>
<S>                                         <C>
February 1, 2000 - March 31, 2000           $55,302.26
April 1, 2000 - March 31, 2001              $55,302.26
April 1, 2001 - March 31, 2002              $55,302.26
April 1, 2002 - March 31, 2003              $55,302.26
April 1, 2003 - March 31, 2004              $55,302.26
</TABLE>

                  If the Expansion Date shall fall on a day other than the first
                  day of a calendar month, the Base Rent shall be apportioned
                  pro rata on a per diem basis for the period between the
                  Expansion Date and the first day of the following calendar
                  month, and for the last partial month of the Term.

         8.       Tenant shall accept and shall be deemed to have accepted the
                  Expansion Space AS IS, WHERE IS.

                                      - 2 -
<PAGE>

         9.       Section 10 of Exhibit C to the Lease shall not apply to the
                  Expansion Space, but remains in full force and effect as to
                  the Original Demised Premises.

         10.      Section 12 of Exhibit C to the Lease is hereby deleted in its
                  entirety.

         11.      Tenant acknowledges that as of the date of this Amendment,
                  Go/Dan Industries ("Go/Dan") is the tenant currently occupying
                  the Expansion Space pursuant to a lease between Landlord and
                  Go/Dan (the "Go/Dan lease"). Upon execution of this Amendment
                  by both Tenant and Landlord, Landlord hereby agrees to
                  terminate the Go/Dan Lease effective on or before January 31,
                  2000 (the "Go/Dan Termination Date"). Landlord further agrees
                  to use reasonable good faith efforts to cause Go/Dan to vacate
                  the Expansion Space on or before the Go/Dan Termination Date.
                  To the extent that Go/Dan refuses or fails to vacate the
                  Expansion Space on or before the Go/Dan Termination Date, such
                  refusal or failure to vacate shall not in any way affect the
                  obligation of Tenant hereunder except that the Expansion Date
                  shall be postponed one day for each day that Go/Dan delays in
                  vacating the Expansion Space.

         12.      Except for Commercial Tennessee, Inc., who represents the
                  Tenant, Landlord and Tenant each represent and warrant to the
                  other than neither party has engaged or had any conversations
                  or negotiations with any broker, finder or other third party
                  concerning the matters set forth in this Amendment who would
                  be entitled to any commission or fee based on the execution of
                  this Amendment. Landlord and Tenant each hereby indemnify the
                  other against and from any claims for any brokerage
                  commissions and all costs, expenses and liabilities in
                  connection therewith, including, without limitation,
                  reasonable attorneys' fees and expenses, for any breach of the
                  foregoing. The foregoing indemnification shall survive the
                  termination of the Lease for any reason.

         13.      Tenant shall have the right to remove the wall which presently
                  separates the Original Demised Premises and the Expansion
                  Space and the Landlord consents thereto, provided that such
                  removal shall be done in accordance with the applicable
                  provisions of the Lease, including without limitation Section
                  18 of the Lease, and all legal requirements.

         14.      Tenant does hereby assign, convey, sell, transfer and deliver
                  to the Assignee, free and clear of all liens, claims and
                  encumbrances, all of the Tenant's right, title and interest
                  in, to and under the Lease, as amended herein, and (ii) the
                  Assignee does hereby agree to assume, discharge and perform
                  all obligations and responsibilities of the Tenant arising
                  under the Lease, as so amended, from and after the date hereof
                  with respect to the remaining term thereof . The Assignee
                  shall be directly liable to the Landlord for all obligations
                  of the Tenant under the Lease, as herein

                                     - 3 -
<PAGE>

                  amended, from and after the date hereof with respect to the
                  remaining term thereof; provided, however, that the Tenant
                  shall not be relieved of any liability or obligation
                  thereunder. The Landlord hereby consents to the assignment
                  described herein and agrees to recognize the Assignee as the
                  "Tenant" under the Lease; provided, however, that such consent
                  and recognition shall not relieve the Tenant of any existing
                  or future liability or obligation under the Lease. From and
                  after the date hereof, all obligations of the Tenant under the
                  Lease, as herein amended, with respect to the remaining term
                  thereof shall be the joint and several obligations of the
                  Tenant and the Assignee. This consent shall not be deemed
                  Landlord's consent to any future assignment.

         15.      Except as amended hereby, the Lease shall be and remain in
                  full force and effect and unchanged. As amended hereby, the
                  Lease is hereby ratified and confirmed by all parties hereto.
                  To the extent the terms hereof are inconsistent with the terms
                  of the Lease, the terms hereof shall control.

         16.      This Amendment shall be governed by and construed in
                  accordance with the laws of the State of Tennessee.

         17.      For purposes of this Amendment, the term "Amendment Date"
                  shall mean the date upon which this Amendment is signed by
                  Landlord or Tenant and Assignee, whichever is later.

         18.      The submission of this Amendment to Tenant and Assignee for
                  examination or consideration does not constitute an offer to
                  amend the Lease, and this Amendment shall become effective
                  only upon the execution and delivery thereof by Landlord and
                  Tenant and Assignee.

         19.      Tenant and Assignee shall each cause its corporate secretary
                  or general partner, as applicable, to execute the certificate
                  attached hereto as Exhibit A and Exhibit A-1, respectively.
                  Each of Tenant and Assignee is authorized by all required
                  corporate or partnership action to enter into this Amendment
                  and the individual(s) signing this Amendment on behalf of
                  Tenant and Assignee are each authorized to bind Tenant and
                  Assignee to its terms.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and sealed as of the Amendment Date.

                                     - 4 -
<PAGE>

                                       LANDLORD:

Date:_______________

                                       NEW YORK LIFE INSURANCE COMPANY, a
                                       New York mutual insurance company

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                                            [Corporate Seal]

                                       TENANT:

Date:_______________                   DAISYTEK, INC., a Delaware corporation

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

                                       Attest:__________________________________
                                              Name:_____________________________
                                              Title:____________________________

                                                            [CORPORATE SEAL]
                                       ASSIGNEE:

                                       PRIORITY FULFILLMENT SERVICES, INC., a
                                       Delaware corporation

                                       By: __________________________________
                                           Name:
                                           Title:

                                     - 5 -
<PAGE>

                                    EXHIBIT A

                            CERTIFICATE OF AUTHORITY
                                   CORPORATION

         The undersigned, Secretary of each of DAISYTEK, INC., a Delaware
corporation ("Tenant") and PRIORITY FULFILLMENT SERVICES, INC., a Delaware
corporation ("Assignee"), hereby certifies as follows to NEW YORK LIFE INSURANCE
COMPANY, a New York mutual insurance company ("Landlord"), in connection with
that FIRST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT to Tenant's lease of premises
in Building "I", at Southpark, Memphis, Shelby County, Tennessee (the
"Premises"):

         1.       Tenant and Assignee are each duly organized, validly existing
and in good standing under the laws of the State of Delaware, and duly qualified
to do business in the State of Tennessee.

         2.       That the following named persons, acting individually, are
each authorized and empowered to negotiate and execute, on behalf of each of
Tenant and Assignee, the amendment to, and assignment and assumption of,
Tenant's lease of the Premises and that the signature opposite the name of each
individual is an authentic signature:

        __________________          ___________________     ____________________
             (name)                      (title)                (signature)

        __________________          ___________________     ____________________
             (name)                      (title)                (signature)

        __________________          ___________________     ____________________
             (name)                      (title)                (signature)

         3.       That the foregoing authority was conferred upon the person(s)
named above by the Board of Directors of each of Tenant and Assignee pursuant to
proper corporate action taken prior to the date hereof, which authority remains
in full force and effect.

                                              _________________________________
                                              Secretary

                                                        [CORPORATE SEAL]

</TEXT>
</DOCUMENT>
