Exhibit 10.26

Christopher R. Kaup
State Bar No. 014820
Tiffany & Bosco, P.A.
FIFTH FLOOR VIAD TOWER
1850 NORTH CENTRAL AVENUE
PHOENIX, ARIZONA 85004-4546
TELEPHONE: (602) 255-6000
FACSIMILE: (602) 255-0103

Attorneys for Debtors

J. Thomas Beckett
State Bar No. 05587
R. David Grant
Utah State Bar No. 6233
Parsons Behle & Latimer
201 South Main Street
Suite 1800
Salt Lake City, Utah  84111
Telephone: (801) 532-1234
Facsimile: (801) 536-6111

Attorneys for Canopy

                         UNITED STATES BANKRUPTCY COURT
                               DISTRICT OF ARIZONA

In re:                                   Chapter 11 Proceedings

EBIZ ENTERPRISES, INC.,                  Case Nos.  _____________ and
a Nevada corporation,                               _____________


                           Debtor.       (Joint Administration Pending)
- ----------------------------------

In re:

JONES BUSINESS SYSTEMS, INC.,
a Texas corporation,                       STIPULATION PROVIDING FOR USE OF CASH
                                           COLLATERAL AND ADEQUATE PROTECTION OF
                           Debtor.         SECURED CREDITOR'S LIEN
- ----------------------------------

     Debtors,  EBIZ ENTERPRISES,  INC. ("EBIZ") and JONES BUSINESS SYSTEMS, INC.
("JBSI")  (collectively,  "Debtors"),  and The Canopy Group,  Inc.  (hereinafter
"Canopy"),  stipulate  and  agree to entry of an Order  approving  the terms and
conditions of this Stipulation Providing For Use of Cash Collateral and Adequate
Protection of Secured Creditor's Lien (this "Stipulation"), as set forth herein.
Debtors also have sought, by separate Motion filed  contemporaneously  herewith,
to have their Bankruptcy Estates joint administered.

I. RECITALS

     A. On or about  _____________,  Debtors filed their separate  petitions for
relief under Chapter 11 of the Bankruptcy Code.

     B. Debtors are operating a business involved in the manufacture and sale of
computers and computer  components (the "Business").  Pursuant to Section 541 of
the Bankruptcy Code, the business,  personal property  (furniture,  fixtures and
equipment)  used  therein,   and  accounts  and  accounts  receivable  generated
therefrom are property of Debtors' estates.

     C.  Debtors'  purpose  and  intent in filing  their  respective  Chapter 11
proceedings  is to  accomplish  an effective  reorganization  of their  business
affairs and operations.  Canopy has entered into this Stipulation in reliance on
Debtors' intent as expressed in this paragraph.

     D.  Canopy is a secured  creditor of Debtors  holding a properly  perfected
security  interest in all of Debtors'  accounts  receivable  and  inventory,  by
virtue of several  prepetition  loan  arrangements  pursuant to which Canopy and
Finova Capital  Corporation  ("Finova")  advanced funds to Debtors.  The debt to
Canopy  consists of five  components:  a term loan (the "Term Loan"),  a line of
credit (the "Line of Credit"),  an amended and restated  promissory note and two
secured  convertible  promissory  notes  (the  "Notes").  Prior to the filing by
Debtors of their  Bankruptcy  Petitions,  Canopy purchased the Term Loan and the
Line of Credit from Finova and Finova  assigned its security  interests  and all
other rights as against Debtors and their assets to Canopy.

                                      -2-

     E. For purposes of this  Stipulation,  Debtors  concede that  proceeds from
collection  of  prepetition  accounts  receivable  and proceeds from the sale of
prepetition  inventory  are cash  collateral  of Canopy within the meaning of 11
U.S.C. ss. 363(a) ("Cash  Collateral").1  Debtors further  acknowledge that they
are aware of no defenses to  Canopy's  security  interest  and  acknowledge  the
validity and perfection of Canopy's security interest in the Cash Collateral.

     F. Debtors and Canopy have entered into this  Stipulation  to: (i) preserve
the value of the estate assets; (ii) permit continued operations that will allow
for a distribution to general  unsecured  creditors;  (iii) avoid protracted and
costly cash collateral  litigation;  (iv) provide a means for  accountability of
Cash Collateral receipt and expenditure;  and (v) adequately protect Canopy from
the  diminution  of its  interest  in the Cash  Collateral.  Debtors  and Canopy
believe this  Stipulation  to be in the best interests of the estate and Canopy,
and  respectfully  request the Court approve this  Stipulation  according to its
terms.

II. OPERATIVE PROVISIONS - USE OF CASH COLLATERAL/ADEQUATE PROTECTION

     A. The parties  hereby  incorporate  the  foregoing  "Recitals"  into these
"Operative Provisions" as though fully set forth.

     B.  Debtors  shall have the right and  authority  to operate and manage the
Business, subject to the terms of this Stipulation.

     C. Canopy hereby consents to the use of its Cash Collateral,  to the extent
and up to an amount  that  shall not  exceed  ninety-five  percent  (95%) of the
aggregate amount of its Cash Collateral, under the following conditions:

- ----------
(1) Assuming Court approval of this  Stipulation,  Debtors concede that proceeds
from collection of post-petition  accounts receivable and proceeds from the sale
of  post-petition  inventory also will be cash collateral of Canopy and included
in the definition of "Cash Collateral" used herein.

                                       -3-

     1. Debtors may,  with the Cash  Collateral,  pay the  reasonable  costs and
expenses of the Business provided:  (i) no expenditure of Cash Collateral during
any four-week  period may exceed the  respective  amount set forth in the budget
for the  Business,  attached  hereto as Exhibit "A,"  without the express  prior
consent of Canopy;  (ii) in the event the specific  persons named in Exhibit "A"
are not employed by Debtors during any successive four-week period for which use
of Cash Collateral is authorized (e.g.,  having accepted employment with another
employer), Debtors may employ alternate workers to perform the tasks anticipated
to have been  performed  by the  listed  person at a rate no  greater  than that
authorized on Exhibit "A"; and (iii) Debtors and Canopy specifically reserve the
right to agree to a  modification  of the budget without  additional  Bankruptcy
Court  approval  if such  modification  appears  to  Debtors  and  Canopy  to be
justified by the costs and benefits associated with administering the estate. In
the event that any unforeseen,  additional, or emergency costs or expenses shall
arise,  Debtors may make  payment  thereof  from Cash  Collateral  only upon the
express  consent of Canopy or  further  Order of this  Court.  If funds for such
unforeseen,  additional  or  emergency  expenses  are  advanced  to Debtors by a
principal or insider of Debtors,  reimbursement  of sums so advanced may be made
from the Cash  Collateral  only with the  consent  of Canopy or an Order of this
Court;

     2. Canopy  shall  collect  any Cash  Collateral  paid to Debtors  under the
"lockbox"  arrangement  provided for by the loan  documentation with Debtors and
shall immediately forward or make available to Debtors ninety-five percent (95%)
of all such Cash Collateral.  Canopy may, at its discretion, apply the remaining
five percent (5%) of such Collateral first to interest and then to principal due
to Canopy by Debtors;

     3. In the event that ninety-five  percent (95%) of all such Cash Collateral
forwarded or made  available to Debtors is  insufficient  to pay the  reasonable
costs and expenses of the Business as set forth in the budget for the  Business,

                                      -4-

attached  hereto as Exhibit  "A,"  Canopy may  advance  additional  funds to the
Debtors beyond the ninety-five percent (95%) of all such Cash Collateral;

     4. Debtors  acknowledge  that, by agreeing to forward or make  available to
Debtors ninety-five percent (95%) of all such Cash Collateral, without receiving
in exchange substitute collateral of equal or greater value, and potentially, by
advancing additional funds to the Debtors, Canopy is providing credit to Debtors
post-petition,  and  Canopy  is  only  willing  to  provide  credit  to  Debtors
post-petition on the terms contained in this Stipulation. Debtors represent that
they are unable to obtain unsecured credit allowable under section  503(b)(1) of
the Bankruptcy Code.

     5. Any Cash  Collateral  collected by Debtors or  transferred to Debtors by
Canopy shall be held by Debtors in a  Debtor-in-Possession  account that may, in
the exercise of Debtors'  reasonable  business  discretion,  be interest bearing
(the "Cash Collateral Account").  The Cash Collateral Account shall contain only
the Cash  Collateral  of Canopy,  and no other estate assets shall be commingled
with the Cash Collateral proceeds;

     6. Debtors, in the exercise of their reasonable business judgment, may from
time to time during the term of this Stipulation disburse to Canopy excess funds
on hand in either of the bankruptcy estates ("Excess Funds") that are undisputed
to be the Cash  Collateral of Canopy.  In the event there exists,  or Debtors in
good faith  believe there  exists,  a dispute or competing  claim to said Excess
Funds,  Debtors may give notice of their  intention to disburse  estate funds to
Canopy  by use of a 10-day  bar date  notice.  Nothing  contained  herein  shall
prevent or  restrict  Canopy  from  seeking  an order from this Court  directing
Debtors  to  disburse  Excess  Funds in an  amount  greater,  or at  times  more
frequent, than that deemed appropriate by Debtors;

                                      -5-

     7. Debtors  shall timely file the required  interim  financial  reports and
such other accountings as are required by Local Bankruptcy Rules.  Debtors shall
provide  copies of said  reports to Canopy by mail or  delivery  to counsel  for
Canopy upon filing with the Court;

     8.  Debtors  shall  prepare and deliver (by hand  delivery or  telecopy) to
Canopy bi-weekly reports of accounts receivable and itemizations of all receipts
and  disbursements in a format to be reasonably  designated from time to time by
Canopy, but which may include:

          a. All billing  information  from the  prepetition  and  post-petition
period, including the parties billed, and the amounts of those bills;

          b. A list of all accounts receivable  containing the name, address and
account  information of each payor,  the dates of all billings and the amount(s)
still owing on such accounts;

          c. A list of all  funds  received  and  expended  including  receipts,
invoices or evidence of payment for all expenses paid in accordance with Exhibit
"A." Canopy  reserves  the right to require from  Debtors  additional  financial
reports that are  reasonably  related to  determining  and  confirming  Debtors'
financial condition during the term of this Stipulation.

          F.  Upon  receipt  of  the  accountings  described  in  the  preceding
paragraphs,  Canopy  shall  have the right to inspect  the books and  records of
Debtors from which such accounts  were made.  Such  inspection  may be made upon
48-hour  request  by  Canopy  to  Debtors  and  to  Counsel  for  Debtors.  Such
inspections  shall be  conducted  at  Debtors'  place of  business at a mutually
agreed time so as not to unduly  interfere with Debtors'  administration  of the
estate.

          G. In order to  adequately  protect  Canopy from a  diminution  in the
value of its collateral,  which will  necessarily  occur as Debtors utilize Cash
Collateral,  and to provide security for any additional advances made to Debtors
by Canopy,  Debtors:  (i) confirm the validity of Canopy's  security interest to

                                      -6-

the fullest  extent  described in their  agreements  with Canopy;  and (ii) have
agreed and consent to and hereby do grant to Canopy to secure the loans owing by
the Debtors to Canopy to the extent of the Cash Collateral advanced by Canopy to
the  Debtors and not repaid by the  Debtors,  and any  additional  post-petition
advances,  in addition to the security  interest already held by Canopy, a first
position  security  interest in the  accounts  receivable  of  Debtors,  if any,
generated post-petition,  all inventory acquired by Debtors post-petition and in
the proceeds of same. In determining the amount of cash  collateral  advanced by
Canopy to the  Debtors  and not  repaid  by the  Debtors,  only Cash  Collateral
collected  by  Canopy  under  the   "lockbox"   arrangement   that  is  paid  on
post-petition  accounts  receivable  and  inventory  will be  applied  to reduce
post-petition  advances of Cash  Collateral.  Debtors and Canopy agree the loans
owing by the Debtors to Canopy to the extent of the Cash Collateral  advanced by
Canopy  to the  Debtors  and not  repaid  by the  Debtors,  and  any  additional
post-petition  advances,  will  have  priority  over  any or all  administrative
expenses of the kind  specified  in section  503(b) or 507(b) of the  Bankruptcy
Code,  and Debtors  agree and grant a security  interest in the  property of the
estate that is not otherwise subject to a lien, as provided in section 364(c)(2)
of the Bankruptcy  Code, and Debtors agree and grant a security  interest in the
property  of the  estate  that is  subject  to a lien  junior to such  lien,  as
provided in section  364(c)(3) of the Bankruptcy Code, to secure the loans owing
by the Debtors to Canopy to the extent of the Cash Collateral advanced by Canopy
to the Debtors and not repaid by the Debtors,  and any additional  post-petition
advances. However, the liens granted to Canopy shall be subject to the following
carve-out  expenses  (the  "Carve-Out  Amounts")  and  shall  not  attach to the
property  of Debtors to the extent of:

     (1) The fees  payable  or which may become  payable  to the  United  States
Trustee, pursuant to 228 U.S.C. ss. 1930;

                                      -7-

     (2) The fees payable or which may become payable to the Clerk of the Court;
and

     (3) The unpaid reasonable fees and expenses actually incurred,  on or after
the date of the filing by Debtors of their petitions for relief under Chapter 11
of the  Bankruptcy  Code and as shall be approved from time to time by the Order
of the Court, by any attorneys,  accountants and other professionals retained by
the Bankruptcy Estate, pursuant to 11 U.S.C. ss.ss. 327 & 1103, in an amount not
to exceed the aggregate amount of $150,000.00.

     H. Any payments received by Canopy from Debtors, including the five percent
(5%) of the Cash Collateral to be retained by Canopy, shall be applied to reduce
first the  accrued  but unpaid  interest,  next to the  principal  amount of the
prepetition debt, and last to any other sum due pursuant to debt instruments.

III. OPERATIVE PROVISIONS - GENERAL

     A. This  Stipulation  shall  remain in effect until the earlier of: (i) the
close of business  on the fifth  (5th)  business  day  following  the receipt by
Counsel  for  Debtors  of a  Notice  of  Default  and  Termination  from  Canopy
describing with particularity the nature of Debtors' breach of the terms of this
Stipulation,  if Debtors  fail to cure that breach  prior to that date and time;
(ii) further Order of this Court modifying the terms hereof;  (iii) confirmation
of a Plan of  Reorganization in both of the above captioned cases; (iv) the date
of the entry of an Order by this Court converting  either of the above captioned
cases to a case under  Chapter 7 of the  Bankruptcy  Code;  or (v)  dismissal of
either of the above captioned cases.

     B. Debtors agree that, in the event Debtors seek other Debtor-In-Possession
financing  under section 364 of the  Bankruptcy  Code,  Canopy will have a first
right of refusal for thirty days to provide the  Debtor-In-Possession  financing
on the same terms as offered by the  alternate  lender.  Further,  to the extent
Debtors receive  financing from any source other than Canopy,  whether through a
debt instrument or equity or other vehicle, such as a rights offering,  prior to

                                      -8-

confirmation of any Plan of Reorganization,  Debtors agree that Canopy will have
the right, but not the obligation to participate in providing such financing, in
such amount as Canopy  desires.  In the event that Canopy chooses not to provide
all of the Debtors'  Debtor-in-Possession  or other  financing,  and the Debtors
obtain  financing  from  another  source  prior to  confirmation,  any  security
interest in collateral or other rights granted to the alternate financier, other
than the right to repayment, to the extent they have not already been granted to
Canopy,  will be granted to Canopy by the  Debtors,  and Canopy and the  Debtors
agree that all such rights and collateral will be shared pro rata between Canopy
and the new financier to serve as security for the  repayment of new  financing,
as well as any amounts due and owing by the Debtors to Canopy under the terms of
this Stipulation to the extent of the Cash Collateral  advanced by Canopy to the
Debtors  and  not  repaid  by the  Debtors,  and  any  additional  post-petition
advances.

     C. Debtors shall comply with the Debtor-in-Possession account and
reporting requirements of the guidelines promulgated by the Office of the United
States  Trustee.  However,  to the extent  the  administrative  activity  in the
jointly  administered  estates is provided for the benefit of each estate and is
not readily  susceptible of segregation,  such activity may be consolidated  and
performed in the EBIZ estate,  and paid from the  Debtor-in-Possession  accounts
and reported as activity of that estate.

     D. Debtors will not file or propose any Plan of Reorganization  (including,
but not limited to, any amendment or modification  of a Plan of  Reorganization,
whether before or after confirmation),  which does not incorporate all the terms
of this Stipulation.  In the event of any inconsistency between this Stipulation
and any Plan of Reorganization  filed or proposed by Debtors,  the terms of this
Stipulation will control,  and any such  inconsistent  provisions of any Plan of
Reorganization or any confirmation order thereon will be null and void.

                                      -9-

     E.  All   notices,   requests,   demands,   payment   of  monies  or  other
communications  hereunder shall be in writing and shall be addressed as follows:
(i) in the case of Debtor - c/o Christopher Kaup, Esq.,  Tiffany & Bosco,  P.A.,
1850 North Central, 5th Floor, Phoenix,  Arizona 85004 (telecopy  602-255-0103);
and (ii) in the case of Canopy - c/o J. Thomas Beckett, Esq. and R. David Grant,
Esq.,  Parsons  Behle & Latimer,  201 South Main Street,  Suite 1800,  Salt Lake
City, Utah, 84111 (telecopy (801) 536-6111).

     F. Any  party  may  designate  another  address  in  writing.  All  notices
hereunder  shall be  considered  received  and  effective on the earliest of the
following  (the  "Receipt  Date"):  (i) three (3) days after deposit in the U.S.
Mail,  postage prepaid,  registered or certified mail, return receipt requested;
(ii) 24 hours after  delivery,  if sent by  facsimile  transmission;  (iii) upon
delivery,  if delivered in person, to the address set forth above; or (iii) upon
delivery, if sent by commercial express service, such as Federal Express, except
that notices of change of address,  shall be  effective  ten (10) days after the
Receipt Date.  Any Receipt Date that occurs on a weekend or a legal holiday will
be deemed  extended to the first business day thereafter  occurring.  Any matter
sent by the  methods  and  directed  to the  addressor  and/or  telecopy  number
described above (if telecopy notice reflecting successful delivery exists) shall
be conclusively presumed to have been received.

     G. Except as expressly set forth  herein,  this  Stipulation  and any Order
entered in connection with this Stipulation shall not operate as an adjudication
of adequate  protection  or any other  related  rights  asserted by any party in
interest under 11 U.S.C. ss.ss. 361, 362, or 363. Further,  this Court shall not
prevent Canopy from moving for or obtaining any appropriate relief in this case,
including the request of additional adequate protection of its interests.

     H. Nothing in this  Stipulation will be deemed or construed as an admission
or  waiver  by any  party  regarding  the  validity  or  propriety  of the above
captioned  Chapter 11 cases or regarding  any issue or fact  therein,  including

                                      -10-

(except as expressly set forth  herein) but not limited to adequate  protection,
valuation,  any  matter(s)  pertinent  to the  assumption  or  rejection  of any
executory  contract(s)  or any matter(s)  pertinent to the granting or denial of
stay relief with respect to the Business  and/or its rents,  issues and profits.
This Stipulation has been made for the limited purpose concerning the use of the
Debtors'  inventory  and accounts  receivable to  facilitate  administration  of
Debtors' estates,  to provide adequate protection for the diminution of Canopy's
collateral and to provide a basis for post-petition  financing, and the scope of
this Stipulation is limited to its express provisions.

     I. This Stipulation may be executed in counterparts,  all of which together
shall  constitute  one  complete  Stipulation.   Signatures  sent  by  facsimile
transmission shall be effective in all respects as originals.

               DATED this ____ day of August, 2001.

                                        TIFFANY & BOSCO, P.A.


                                        By: /s/ Christopher R. Kaup
                                            ------------------------------------
                                            Christopher R. Kaup, Esq.
                                            Fifth Floor Viad Tower
                                            1850 North Central Avenue
                                            Phoenix, Arizona 85004-4546
                                            Attorneys for Debtors

                                        THE CANOPY GROUP INC


                                        By: /s/ Darcy Mott
                                            ------------------------------------
                                            Darcy Mott, VP Finance, Treasurer
                                            and Chief Financial Officer

                                      -11-