Exhibit 10.4

 



SECOND AMENDED   AND RESTATED PLEDGE AND SECURITY AGREEMENT THIS SECOND AMENDED AND RESTATED   PLEDGE AND SECURITY AGREEMENT (hereinafter. as it may be from time to time   amended, modified. extended, renewed, substituted, and/or supplemented, referred   to as this "Agreement") is made this 15th day of November, 2017, by   and between WAYSIDE TECHNOLOGY GROUP, INC., a corporation duly organized,   validly existing and in good standing under the laws of the State of   Delaware, having its principal office located at 4 Industrial Way, 3rd Floor,   Eatontown, New Jersey 07724 (hereinafter referred to as the   "Grantor"), AND CITIBANK, N.A., a national banking association duly   organized and validly existing under the laws of the United States of   America, having an address located at 99 Wood Avenue South, 2nd floor,   Iselin, New Jersey 08830 (hereinafter referred to as the "Secured   Party"). WITNESSETH: WHEREAS, pursuant to the terms, conditions, and   provisions of that certain Business Loan Agreement dated as of January 4,   2013 (hereinafter referred to as the "Original Loan Agreement"),   executed by and among Grantor, Lifeboat Distribution, Inc., a Delaware   corporation (hereinafter referred to as "Lifeboat"), Techxtend,   Inc., a Delaware corporation (hereinafter referred to as   "Techxtend"), Programmer's Paradise, Inc., a Delaware corporation   (hereinafter referred to as "Programmer's Paradise"), and the   Lender, the Lender made available to the Grantor, Lifeboat, Techxtend, and   Programmer's Paradise a secured electronic line of credit loan facility in   the maximum principal amount of up to $10,000,000.00 for the purposes of   providing working capital and for general corporate purposes (hereinafter   referred to as the "Original Loan Facility"); and WHEREAS, pursuant   to the terms, conditions, and provisions of that certain Joinder and   Amendment Agreement dated as of March 29, 2013 (hereinafter referred to as   the "Joinder and Amendment Agreement"), executed by and among,   inter alia, the Grantor, Lifeboat, Techxtend, Programmer's Paradise, ISP   International Software Partners, Inc., a Delaware corporation (hereinafter   referred to as "ISP" and hereinafter the Grantor, Lifeboat,   Techxtend, Programmer's Paradise, and ISP shall be collectively referred to   as the "Co-Borrowers"), and the Lender, the parties thereto agreed   to amend and modify, inter alia, the Original Loan Agreement for the purposes   more particularly set forth therein (hereinafter the Original Loan Agreement,   as amended by the Joinder and Amendment Agreement, shall be referred to as   the "Existing Loan Agreement"); and WHEREAS, the obligations of the   Co-Borrowers in connection with the Existing Loan Facility were secured by,   inter alia, that certain Amended and Restated Commercial Pledge Agreement   dated March 28, 2013, executed by Wayside, as grantor, the Co-Borrowers, as   borrowers, and the Secured Party, as lender (hereinafter, as it may have been   from time to time amended, modified, extended, renewed, substituted, and or   supplemented, referred to as the "Original pledge Agreement"); and WHEREAS,   the Co-Borrowers have requested that the Secured Party, and the Secured Party   has agreed, pursuant to the terms, conditions, and provisions of that certain   Second Amended and Restated Revolving Credit Loan Agreement dated of even date   herewith (hereinafter, as it may be from time to time amended, modified,   extended, renewed, substituted, and/or supplemented, referred to as the   "Loan Agreement"), executed by the Co-Borrowers, as co-borrowers,   and the Secured Party, as lender, to amend [SECOND AMENDED AND RESTATED   PLEDGE AND SECURITY AGREEMENT] 


    




 










and restate in   their entirety the Existing Loan Agreement, for the purposes of, inter alia   providing for an amended and restated revolving credit loan facility in the   maximum principal amount of up to Twenty Million and 00/100 ($20,000,000.00)   Dollars (hereinafter, as it may be from time to time amended, modified,   extended, renewed, substituted, and/or supplemented, referred to as the   "Loan Facility"), which amended and restated revolving credit loan   facility amends and restates the Original Loan Facility in its entirety; and WHEREAS,   capitalized terms used but not expressly defined herein shall have the same   meanings when used herein as set forth in the Loan Agreement; and WHEREAS, as   an inducement to the Lender to make the Loan Facility available to the Co-   Borrowers, the Lender has required that the Grantor agree to amend and amend   and restate in its entirety the Original Pledge Agreement with the terms,   conditions, and provisions of this Agreement. NOW, THEREFORE, IN   CONSIDERATION OF THESE PREMISES AND THE MUTUAL REPRESENTATIONS, COVENANTS AND   AGREEMENTS OF THE GRANTOR AND THE SECURED PARTY, EACH PARTY BINDING ITSELF   AND ITS SUCCESSORS AND/OR ASSIGNS, HEREBY PROMISES, COVENANTS, AND AGREES TO   AMEND AND RESTATE THE ORIGINAL PLEDGE AGREEMENT WITH ALL OF THE TERMS,   CONDITIONS, AND PROVISIONS SET FORTH HEREINBELOW, AND ALL OF THE TERMS,   CONDITIONS, AND PROVISIONS OF THE ORIGINAL PLEDGE AGREEMENT ARE HEREBY DEEMED   SUPERSEDED, SUBSTITUTED, AND REPLACED BY THE FOLLOWING: 1. Pledge. Upon and   pursuant to the terms, conditions and provisions of this Agreement, the   Grantor hereby grants and delivers to the Secured Party a continuing pledge,   first lien on and security interest in and to (hereinafter referred to as the   "Security interest"), all of the rights, title and interests of the   Grantor in and to all of the following securities instruments and property   (said securities instruments and property hereinafter being collectively   referred to as the "Collateral"): sixty-five percent (65%), on a   fully diluted basis, of all the shares of the authorized, issued and   outstanding capital stock (hereinafter collectively referred to as the   "Wayside Canada Shares") of Wayside Technology (Canada), Inc.   (hereinafter referred to as "Wayside Canada"); sixty-five percent   (65%), on a fully diluted basis, of all the shares of the authorized, issued   and outstanding capital stock (hereinafter collectively referred to as the   "Wayside Europe Shares" and hereinafter the Wayside Canada Shares   and the Wayside Europe Shares shall be collectively referred to as the   "Shares") of Wayside Technology Group Europe BV (hereinafter   referred to as "Wayside Europe" and hereinafter Wayside Canada and   Wayside Europe shall be collectively referred to as the   "Companies"); All certificates, options, rights, securities or   other distributions issued as an addition to, in substitution or in exchange   for, or on account of, the Shares described in subparagraphs (i) and (ii) of   this Paragraph I (including, without limitation, any and all stock options to   purchase shares) so that the Secured Party maintains at all times under this   Agreement, a pledge of and security interest in and to sixty-five percent   (65%), on a fully diluted basis, of all shares of the authorized issued and   outstanding capital stock of each of the Companies; Any stock or other   securities acquired by the Grantor or the Grantor's designee with respect to,   incident to or in lieu of the Shares described in this Paragraph 1 or with   respect to, [SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










incident to or   in lieu of the Collateral (a) due to any dividend, stock-split, stock   dividend or distribution on dissolution, on partial or total liquidation, or   for any other reason, (b) in connection with a reduction of capital, capital   surplus or paid-in-surplus or (c) in connection with any spin-off, split-off,   reclassification, readjustment, merger, consolidation, sale of assets,   combination of shares or any other plan of distribution affecting the   Companies; Any subscription or other rights or options issued in connection   with the Shares described in this Paragraph I, and, if exercised by the   Grantor, all new shares or other securities so acquired by the Grantor, which   shall immediately be assigned and delivered to the Secured Party and held   under the terms of this Agreement in the same manner as the Shares originally   pledged hereunder; and Any and all proceeds, monies, income and benefits   arising from or by virtue of, and all dividends and distributions (cash or   otherwise) payable and/or distributable with respect to, all or any of the   Shares or other securities and rights and interests described in this   Paragraph I. Obligations Secured. This Agreement and the Security Interest   granted hereunder secure the payment and performance by the Grantor, when   due, of all of the liabilities and obligations of the Grantor to the Secured   Party (i) in connection with the Loan Facility and (ii) under and pursuant to   the terms, conditions and provisions of the Loan Agreement and all of the   other Loan Documents (hereinafter collectively referred to as the   "Obligations"): Delivery of Collateral. All certificates,   securities or instruments representing or evidencing the Collateral shall be   delivered to and held by the Secured Party pursuant to the terms of this   Agreement and said delivered Collateral shall be in suitable form for   transfer by delivery or shall be accompanied by duly executed instruments of   transfer or assignment in blank, all in form and substance satisfactory to   the Secured Party. The Secured Party shall have the right, at any time after   the occurrence of an Event of Default, in its sole discretion and without   notice to the Grantor, to transfer to or to register in the name of the   Secured Party or any of the Secured Party's nominees, all or any part of the   Collateral, subject only to the revocable rights specified in Paragraph 7   hereof and the terms, conditions and provisions of Paragraph 9 and Paragraph   I 0 hereof. In addition, the Secured Party shall have the right at any time   to exchange certificates or instruments representing or evidencing the   Collateral for certificates or instruments of smaller or larger   denominations. Representations and Warranties. The Grantor hereby represents   and warrants to the Secured Party that: (i) the Shares represent, in the   aggregate, sixty-five percent (65%) of the authorized, issued and outstanding   shares of each Company's voting capital stock, on a fully-diluted basis; (ii)   the Grantor is the legal, record and/or beneficial owner of the Collateral;   (iii) the Collateral is duly authorized and issued, fully paid, and   nonassessable, and all documentary, stamp, or other taxes or fees owing in   connection with the issuance, transfer and/or pledge thereof hereunder have   been paid and will be hereafter paid by the Grantor as same becomes due and   payable; (iv) no dispute, counterclaim or defense exists with respect to all   or any part of the Collateral; (v) all of the Collateral is owned or   controlled by the Grantor free of any pledge, mortgage, hypothecation, lien,   charge, encumbrance or security interest in the Collateral and all of the   Collateral will remain so at all times during the continuation of the   Security Interest; (vi) there are no restrictions upon the transfer,   hypothecation or pledge of any of the Collateral, other than such   restrictions which may be imposed by applicable law; (vii) the Grantor has   the full power, capacity and legal right to grant a security interest in the   Collateral free of any encumbrances and without obtaining the consent of any   other Person; (viii) the execution and delivery of this Agreement, and the   performance of its terms, will not violate or constitute a default under the   terms of any agreement, indenture or other instrument, license, judgment,   decree, order, law, statute, ordinance or other governmental rule or   regulation of the United States of America or any state or political   subdivision [SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










thereof,   applicable to the Grantor or any of its property; (ix) this Agreement has   been duly executed and delivered by the Grantor and constitutes a legal,   valid and binding obligation of the Grantor enforceable in accordance with   its terms subject to applicable bankruptcy and insolvency laws; (x) upon   delivery of the Collateral to the Secured Party, this Agreement creates a   valid first lien upon and perfected security interest in and to the   Collateral and the proceeds thereof, subject to no prior security interest,   lien, charge, encumbrance or agreement purporting to grant any Person a   security interest in the property or assets of the Grantor which would   include the Collateral and (xi) there are no stock options, warrants, subscriptions   or other rights outstanding on the date hereof with respect to the Shares,   except as has been previously disclosed in writing to the Secured Party. 5. Covenants.   The Grantor hereby further covenants and agrees to do the following, all at its   own cost and expense: from time to time to promptly execute, assign, endorse   and deliver to the Secured Party all Collateral (including, without   limitation, duly executed instruments of transfer or assignment in blank in   each case with respect to all such Collateral) which may now or hereafter   come into its possession and all proxies, applications, acceptances, stock   powers, chattel paper, documents, instruments or other evidences of payment   or writing constituting or relating to any of the Collateral, and all such   other assignments, certificates, supplemental writings, and financing   statements and do all other acts or things as the Secured Party may   reasonably request in order to, or more fully to, evidence and perfect the   Security Interest; to promptly furnish to the Secured Party with any   information or writings which the Secured Party may reasonably request   concerning the Collateral; to allow the Secured Party to inspect all records   of the Grantor relating to the Collateral, and to make and take away copies   of such records during normal business hours (subject to the terms and   conditions of the Loan Documents); to promptly notify the Secured Party of   any material change in any fact or circumstances warranted or represented by   the Grantor in this Agreement or in any other writing furnished by the   Grantor to the Secured Party in connection with the Collateral; to promptly   notify the Secured Party of any claim, action or proceeding affecting title   to the Collateral, or any part thereof, or the Security Interest, and at the   request of the Secured Party, appear in and defend, at the Grantor's own cost   and expense, any such action or proceedings; provided if the Grantor fails to   so appear in and defend after request of the Secured Party, the Secured Party   may in its sole discretion so appear in and defend, for which the Grantor   hereby irrevocably grants the Secured Party a power of attorney to do or   undertake any such actions and execute and deliver any such documents as the   Grantor may deliver in any such appearance in and defense, such power of   attorney being coupled with an interest, and all fees and expenses incurred   by the Secured Party in such appearance in and defense shall be added to the   Obligations secured by this Agreement; to promptly pay to the Secured Party the   amount of all court costs and reasonable attorneys' fees incurred by the   Secured Party hereunder; and not to vote, in any of the Grantor's capacities   as shareholder, in favor of the issuance of any additional capital stock of   either of the Companies without the prior express written consent of the   Secured Party. [SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










Except to the   extent required by Law, the Grantor hereby further covenants and agrees that,   without the prior express written consent of the Secured Party, the Grantor   shall not sell, assign, transfer, exchange or otherwise dispose of or grant   any option with respect to the Collateral, or permit any of the Collateral or   any interest therein, or any proceeds thereof, to ever be or become subject   to any lien, attachment, execution, sequestration, other legal or equitable   process, or any lien or encumbrance of any kind, except for presently   existing liens noted above. The Grantor hereby further covenants and agrees that   the Grantor will have title to and right to pledge any other property at any   time hereafter pledged to the Secured Party as Collateral hereunder and will   defend the Secured Party's right thereto and Security Interest therein. All   assignments and endorsements by the Grantor shall be in such form and   substance as may be reasonably satisfactory to the Secured Party. 6. Adjustments   and Distributions Concerning Collateral. Should all or any portion of the   Collateral, or any part thereof, ever be converted in any manner by either of   the Companies into another type of property or any money or other proceeds   ever be paid or delivered to the Grantor as a result of the Grantor's rights   in the Collateral, then in any such event (except as expressly provided in   Paragraph 7 hereof), all such property, money and other proceeds shall   immediately be and become part of the Collateral, and the Grantor covenants   and agrees to forthwith pay and deliver all money so received to the Secured   Party; and, if the Secured Party deems it necessary and so requests, to   properly endorse, assign or transfer any and all such other proceeds to the   Secured Party and to deliver to the Secured Party any and all such other   proceeds which require perfection by possession under the Uniform Commercial   Code of the State of New Jersey or other appropriate jurisdiction   (hereinafter, as from time to time amended and/or modified, referred to as   the "UCC"). With respect to any of such property of a kind   requiring an additional security agreement, financing statement or other   writing to perfect a security interest therein in favor of the Secured Party,   the Grantor will forthwith execute and deliver to the Secured Party whatever   the Secured Party shall reasonably deem necessary or proper for such purposes.   7 Voting Rights; Dividends: etc. (i) Until such time as when the Secured   Party is entitled to proceed against the Grantor pursuant to the Loan   Agreement, the Note or any of the other Loan Documents: The Grantor shall be   entitled to exercise any and all voting and other consensual rights   pertaining to the Collateral or any part thereof for any purpose not   inconsistent with the terms of this Agreement, the Loan Agreement and the   Loan Documents and which would not jeopardize this security or prevent its   enforcement; provided, however, that the Grantor shall not exercise or   refrain from exercising any such right if, in the Secured Party's reasonable   judgment, such action or inaction would have a Material Adverse Effect or be   inconsistent with or violate any provision of this Agreement and the Grantor   shall give the Secured Party at least five (5) Business Days' express written   notice of the manner in which it intends to exercise, or the reasons for   refraining from exercising, any such right. In addition, the Grantor shall   not exercise or refrain from exercising any such right which would result in   the issuance of any stock or other securities of any nature in addition to or   in exchange or substitution for the Collateral. The Grantor shall be entitled   to receive and retain any and all dividends paid in respect of the   Collateral; provided, however, that any and all: (1) dividends paid or   payable other than in cash in respect of, and instruments and other property   received, receivable or otherwise distributed in respect of, or in exchange   for, any Collateral, [SECOND AMENDED AND RESTATED PLEDGE AND SECURITY   AGREEMENT] 


    




 










(2) dividends   and other distributions paid or payable in cash in respect of any Collateral   in connection with a partial or total liquidation or dissolution or in   connection with a reduction of capital, capital surplus or paid-in-surplus,   and (3) cash paid, payable or otherwise distributed in respect of principal of,   or in redemption of, or in exchange for, any Collateral, shall be, and shall   be forthwith delivered to the Secured Party to hold as, Collateral and shall,   if received by the Grantor, be received in trust for the benefit of the   Secured Party, be segregated from the other property or funds of the Grantor,   and be forthwith delivered to the Secured Party as Collateral in the same   form as so received (with any necessary endorsement). (c) The Secured Party   shall execute and deliver (or cause to be executed and delivered) to the   Grantor all such proxies and other instruments as the Grantor may reasonably   request for the purpose of enabling the Grantor to exercise the voting and   other rights which he is entitled to exercise pursuant to subparagraph (a)   above, and to receive the dividends or interest payments which it is   authorized to receive and retain pursuant to subparagraph (b) above. (ii) At   such time as when the Secured Party is entitled to proceed against the   Grantor pursuant to the Loan Documents: (a) All rights of the Grantor to   exercise the voting and other consensual rights which it would otherwise be   entitled to exercise pursuant to Paragraph 7( i) and to receive the dividends   and interest payments which it would otherwise be authorized to receive and   retain pursuant to Paragraph 7( i) shall cease, and all such rights shall   thereupon become vested in the Secured Party who shall thereupon have the   sole right to exercise such voting and other consensual rights and to receive   and hold as Collateral such dividends and interest payments. (b) All   dividends and interest payments which are received by the Grantor contrary to   the provisions of subparagraph (a) of this Paragraph 7( ii } shall be   received in trust for the benefit of the Secured Party, shall be segregated   from other funds of the Grantor and shall be forthwith paid over to the   Secured Party as Collateral in the same form as so received (with any   necessary endorsement or instrument of transfer). 8. Default. The Grantor   shall be in default under this Agreement upon the happening of any of the   following events or conditions (hereinafter referred to as an "Event of   Default"): The occurrence of an "Event of Default" as defined   in the Loan Agreement; The filing of any financing statement with regard to   the Collateral, other than relating to or permitted by this Agreement or any   other Loan Document, or the attachment of any additional lien or security   interest to any portion of the Collateral, for the benefit of any Person   other than the Secured Party, other than those permitted by this Agreement or   any other Loan Document; Failure of the Grantor to observe any of its   covenants set forth in this Agreement, which failure shall have remained   uncured for a period of five (5) Business Days after notice to the Grantor   thereof, and If at any time, the Collateral does not comprise sixty-five   percent (65%) of the authorized, issued and outstanding capital stock of each   of the Companies, on a fully-diluted basis, after [SECOND AMENDED AND   RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










giving effect   to the exercise or conversion of all outstanding rights to acquire such   capital stock, which failure shall have remained uncured for a period of five   (5) Business Days after notice to the Grantor thereof. Registration of   Collateral in Name of Secured Party. At such time as when the Secured Party   is entitled to proceed against the Grantor pursuant to the Loan Agreement,   the Note or any of the other Loan Documents, the Secured Party, at its   option, may have any or all of the Collateral registered in its name or that   of its nominee, and the Grantor hereby covenants and agrees that, upon the   Secured Party's request, the Grantor will cause each of the Companies to   effect such registration at the Grantor's expense. Immediately thereafter and   without further notice, whether or not the Collateral shall have been   registered in the name of the Secured Party or its nominee, the Secured Party   or its nominee shall have, with respect to the Collateral, the right to   exercise all voting rights as to all shares subject to the Security Interest   and, as to all of the Collateral, all other corporate rights and all   conversion, exchange, subscription or other rights, privileges or options   pertaining thereto as if it were the absolute owner thereof, including, but   not limited to, the right to exchange any or all of the Collateral upon the   merger, consolidation, reorganization, recapitalization or other readjustment   of either of the Companies thereof, or upon the exercise by either of the   Companies of any right, privilege, or option pertaining to any of the Collateral,   and, in connection therewith, to deliver any of the Collateral to any   committee, depository, transfer agent, registrar or other designated agency   upon such terms and conditions as it may determine, all without liability   except to account for property actually received by it; but Secured Party   shall have no duty to exercise any of the aforesaid rights, privileges or   options and shall not be responsible to the Grantor or any other Person for   any failure to do so or delay in doing so. Thereafter, at such time as all   Events of Default and Potential Events of Default have been cured, then the   right to exercise all voting and other rights with respect to the Collateral   shall revert to the Grantor. Upon any sale or other disposition, the Secured   Party shall have the right to deliver, assign and transfer to the purchaser   thereof the Collateral so sold or disposed of. Each purchaser at any such   sale or other disposition (including the Secured Party) shall hold the   Collateral free from any claim or right of whatever kind other than those   imposed by applicable securities law, including any equity or right of   redemption of the Grantor. The Grantor specifically waives all rights of   redemption, stay or appraisal, to the extent permitted by law, which it had   or may have under any rule of law or statute now existing or hereafter   adopted. Remedies Upon Default. At such time as when the Secured Party is   entitled to proceed against the Grantor pursuant to the Loan Agreement, the   Note or any of the other Loan Documents, in addition to any and all other   rights and remedies which the Secured Party may then have hereunder, under   the UCC or otherwise, to the extent permitted by law, the Secured Party may   at its option do any one or more of the following, without liability to the   Grantor, except to account for property actually received by the Secured   Party: (i) transfer to or register in the Secured Party's name or the name of   its nominees (if the same has not already been done) any of the Collateral   with or without indication of the security interest herein created, and   whether or not so transferred or registered, receive the income, dividends   and other distributions thereon and hold them or apply them to the   Obligations in any order of payment; (ii) exercise or cause to be exercised   all voting and corporate powers with respect to any of the Collateral so   registered or transferred, including all rights to conversion, exchange,   subscription or any other rights, privileges or options pertaining to such   Collateral, as if the absolute owner thereof; (iii) insure any of the   Collateral; (iv) exchange any of the Collateral for other property upon a   reorganization, recapitalization or other readjustment and, in connection   therewith, deposit any of the Collateral with any committee or depository   upon such terms as the Secured Party may determine; (v) in its name or in the   name of the Grantor demand, sue for, collect or receive any money or property   at any time payable or receivable on account of or in exchange for any of the   Collateral and, in connection therewith, endorse notes, checks, drafts, money   orders, documents of title or other evidences of payment, shipment or storage   in the name [SECOND AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










of the Grantor;   (vi) make any compromise or settlement deemed advisable with respect to any   of the Collateral; (vii) renew, extend, or otherwise change the terms and   conditions of any of the Collateral or the Obligations; (viii) take or   release any other collateral as security for any of the Collateral or the   Obligations; (ix) add or release any guarantor, endorser, surety or other   party to any of the Collateral or the Obligations; (x) reduce its claim to   judgment or foreclose or otherwise enforce the Security Interest, in whole or   in part, by any available judicial procedure; (xi) without demand of   performance or other demand, advertisement or notice of any kind (except the   notice specified below of time and place of public or private sale) to or   upon the Grantor or any other Person (all of which are, to the extent   permitted by law, hereby expressly waived), forthwith collect, receive,   appropriate and realize upon the Collateral or any part thereof, and may   forthwith, or agree to, sell, assign, give option or options to purchase,   contract to sell or otherwise dispose of or deliver the Collateral or any   part thereof or interest therein, in a commercially reasonable manner, in one   or more parcels at public or private sale or sales, at any exchange, broker's   board or at the Secured Party's principal administrative office or elsewhere,   at such prices and on such terms (including, without limitation, a   requirement that any purchaser of all or any part of the Collateral purchase   the shares constituting the Collateral for investment without any intention   to make any distribution thereof and subject to other restrictions as may be   appropriate or necessary under applicable law) as it may deem best, for cash   or on credit, or for future delivery without assumption of any credit risk,   with the right of the Secured Party or any purchaser to purchase upon any   such sale the whole or any part of the Collateral free from any right or   equity or redemption in the Grantor, which apply by appropriate judicial   proceedings for appointment of a receiver for the Collateral, or any part   thereof, and the Grantor hereby consents to any such appointment; (xii) at   its discretion, retain the Collateral in satisfaction of the Obligations   whenever the circumstances are such that the Secured Party is entitled to do so   under the UCC or otherwise; and (xiii) exercise any and all other rights it   may have hereunder or under the UCC or otherwise. The Grantor hereby grants   to the Secured Party an irrevocable proxy for the Collateral pursuant to   which proxy the Secured Party shall be entitled to vote or consent in its   discretion upon the occurrence and during the continuance of an Event of   Default and in such event the Grantor covenants and agrees to deliver to the   Secured Party such further evidence of the grant of such proxy as Secured   Party may request. The net proceeds of any collection, recovery, receipt,   appropriation, realization, sale or disposition of the Collateral or other   action by the Secured Party after deducting all costs and expenses of every   kind incurred therein or incidental to the care, safekeeping or otherwise of   any and all of the Collateral, including, without limitation, attorneys' fees   and legal expenses shall be applied pursuant to the Loan Facility as more   fully set forth in the Loan Agreement, the Note and the other Loan Documents   to the payment in whole or in part of the outstanding obligations due and   owing under the Loan Agreement, the Note and the other Loan Documents. The   Secured Party shall be under no duty to the Grantor or any other Person to   exercise or to withhold the exercise of any of the rights, powers, privileges   and options expressly or implicitly granted to the Secured Party in this   Agreement, and shall not be responsible to the Grantor or any other Person   for any failure to-do so or delay in so doing. 11. Securities Laws, Consents;   etc. The Grantor hereby covenants and agrees that, because of the Securities   Act of 1933, as amended (hereinafter referred to as "Securities   Act"), or any other law or regulation, and for other reasons, there may   be legal and/or practical restrictions or limitations affecting the Secured   Party in any attempt to dispose of all or certain portions of the Collateral   and for enforcement of its rights, for these reasons, the Secured Party is   hereby authorized by the Grantor, but not obligated, at such time as when the   Secured Party is entitled to proceed against the Grantor pursuant to the Loan   Documents, to sell all or any part of the Collateral at private sale, subject   to investment letter, or in any other manner which will not require the   Collateral, or any part thereof, to be registered in accordance with [SECOND   AMENDED AND RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










the Securities   Act, or the rules and regulations promulgated thereunder, or any other laws   or regulations, or which will permit the Collateral to be sold in a manner   which will not violate any applicable laws or regulations, at the best price   reasonably obtainable by the Secured Party at such private sale or other   disposition in the manner mentioned above. The Grantor understands that the   Secured Party may, in its discretion, approach a restricted number of   potential purchasers and that a sale under such circumstances may yield a   lower price for the Collateral, or any part or parts thereof, than that which   would otherwise be obtainable if same were either offered to a large number   of potential purchasers, or registered and sold in the open market. The   Secured Party agrees that such private sales shall be made in a commercially   reasonable manner and that the Secured Party has no obligation to delay sale   of any Collateral to permit either of the Companies to register it for public   sale under any applicable federal or state securities law. If any consent,   approval or authorization of any state, municipal or other governmental   department, agency or authority should be necessary to effectuate any sale or   other disposition of all or any part of the Collateral, the Grantor shall   execute all such applications and other instruments as may be reasonably   required in connection with securing any such consent, approval or   authorization, and will otherwise cooperate to secure the same. Notification   of Sale. Reasonable notification of the time and place of any public or   private sale or other intended disposition of the Collateral is to be made,   shall be sent to the Grantor and to any other Person entitled under the UCC   to notice; provided that, to the extent permitted by law, if any of the   Collateral threatens to decline speedily in value or is of the type   customarily sold on a recognized market, Secured Party may sell or otherwise   dispose of the Collateral without notification, advertisement, or other   notice of any kind. It is agreed that notice sent or given not less than five   (5) Business Days prior to the taking of the action to which the notice   relates is reasonable notification and notice for the purposes of this   Paragraph 12. Satisfaction of Obligation. Upon the termination and repayment   in full of the Loan Facility, this Agreement shall terminate, and the Secured   Party shall deliver to the Grantor, at the Grantor's expense, such of the   Collateral in the Secured Party's possession as shall not have been sold or   otherwise applied pursuant to this Agreement. Notices. Unless otherwise   specifically provided herein, any notice or other communication herein   required or permitted to be given shall be in writing and may be personally   served, sent by confirmed telecopy transmission or sent by over-night courier   service or United States mail (registered or certified, with postage prepaid   and properly addressed) and shall be deemed to have been given when delivered   in person or by overnight courier service, upon receipt of a telecopy or   telex during normal business hours or three (3) Business Days after deposit   in the United States mail (registered or certified, with postage prepaid and   properly addressed). All notices shall be sent to the applicable party at the   following addresses or in accordance with the last unrevoked written   direction from such party to the other parties hereto: If to the Grantor: With   a copy to: Wayside Technology Group, Inc. 4 Industrial Way, 3rd Floor   Eatontown, New Jersey 07724 Attention: Mr. Michael Vesey Chief Financial   Officer Telecopy No.: (732) 389-1207 McCarter & English, LLP Two Tower   Center Boulevard, 24th Floor East Brunswick, New Jersey 08816 [SECOND AMENDED   AND RESTATED PLEDGE AND SECURITY AGREEMENT] 


    




 










Attention: David   J. Sorin, Esq. Telecopy No.: (732) 352-7751 If to the Secured Party: Citibank,   N.A. 99 Wood Avenue South, 2nd Floor Iselin, New Jersey 08830 Attention: Mr.   Craig Heal Senior Vice President Telecopy No. (732) 650-3622 With a copy to: Reed   Smith LLP Princeton Forrestal Village 136 Main Street, Suite 250 Princeton,   New Jersey 08540 Attention: Nicholas J. Valvanis, Esq. Telecopy No.: (609)   951-0824 All notices, payments, requests, reports, information or demands so   given shall be deemed effective upon receipt or, if mailed, upon receipt or   the expiration of the third (3rd) day following the date of mailing,   whichever occurs first, except that any notice of change in address shall be   effective only upon receipt by the party to whom said notice is addressed. A   failure to send the requisite copies does not invalidate an otherwise   properly sent notice to the Grantor and/or the Secured Party. Secured Party   Appointed Attorney-in-Fact. At such time as when the Secured Party is   entitled to proceed against the Grantor pursuant to the Loan Documents, the   Grantor hereby appoints the Secured Party as the Grantor's attorney-in-fact   (coupled with an interest), with full authority in the place and stead of the   Grantor and in the name of Grantor, or otherwise from time to time in the   Secured Party's discretion, to take any action and to execute any instrument   which the Secured Party may deem necessary or advisable to accomplish the   purposes of this Agreement, including, without limitation, to receive,   endorse and collect all instruments made payable to the Grantor representing   any dividend, interest payment or other distribution in respect of Collateral   or any part thereof and to give full discharge for the same and will give the   Grantor notice of any action taken and copies of any document executed. Reasonable   Care. The Secured Party shall be deemed to have exercised reasonable care in   the custody and preservation of the Collateral in its possession if the   Collateral is accorded treatment substantially equal to that which the   Secured Party accords its own property, it being understood that the Secured   Party shall not have any responsibility for (i) ascertaining or taking action   with respect to calls, conversions, exchanges, maturities, tenders or other   matters relative to any Collateral, whether or not the Secured Party has or   is deemed to have knowledge of such matters or (ii) taking any necessary   steps to preserve rights against any parties with respect to any Collateral. Financing   Statement. The Secured Party shall have the right at any time to execute and   file this Agreement as a financing statement, but the failure of the Secured   Party to do so shall not impair the validity or enforceability of this   Agreement. Further Assurances. The Grantor covenants and agrees that at any   time and from time to time upon the written request of the Secured Party, the   Grantor will execute and deliver such further documents and do such further   acts and things as the Secured Party may reasonably request in order to   effect the purposes of this Agreement. [SECOND AMENDED AND RESTATED PLEDGE   AND SECURITY AGREEMENT] 


    




 










Successors and   Assigns. This Agreement shall be binding upon and inure to the benefit of the   Grantor and the Secured Party, and their respective successors and, assigns;   provided, that the Grantor may not, without the prior express written consent   of the Secured Party, assign any rights, powers, duties or obligations   hereunder. Cumulative Remedies, No Waiver. The rights and remedies provided   in this Agreement, the Loan Agreement and in all the other Loan Documents are   cumulative and are in addition to and not exclusive of any rights or remedies   provided by law, including, but without limitation, the rights and remedies   of a secured party under the UCC. The Secured Party shall not by any act,   delay, omission or otherwise be deemed to have waived any of its rights or   remedies hereunder and no waiver shall be valid unless in writing, signed by   the Secured Party, and then only to the extent therein set forth. A waiver by   the Secured Party of any right or remedy hereunder on any one occasion shall   not be construed as a bar to any right or remedy which the Secured Party   would otherwise have on any future occasion. No failure to exercise nor any   delay in exercising on the part of the Secured Party, any right, power or   privilege hereunder shall operate as a waiver thereof; nor shall any single   or partial exercise of any right, power or privilege hereunder preclude any   other or further exercise thereof or the exercise of any other right, power   or privilege. Performance by Secured Party of Grantor's Obligations. If the Grantor   fails to perform or comply with any of its agreements contained herein, and   the Secured Party, as provided for by the terms of this Agreement, shall   itself perform or comply, or otherwise cause performance or compliance, with   such agreement, the expenses of the Secured Party incurred in connection with   such performance or compliance, together with interest thereon at the rate   then provided for in respect of the Loan Facility made under the Loan   Agreement, shall constitute Obligations secured hereby. Modification in   Writing. None of the terms or provisions of this Agreement may be waived,   altered, modified or amended except by a written instrument signed by both   parties. Course of Dealing. No course of dealing between the Grantor and the   Secured Party or any other Person, nor any failure to exercise, nor any delay   in exercising, any right, power or privilege of the Secured Party hereunder   or under any of the Loan Documents shall operate as a waiver thereof; nor   shall any single or partial exercise of any right, power or privilege   hereunder or thereunder preclude any other or further exercise thereof or the   exercise of any other right, power or privileges Invalidity of Any Provision.   The invalidity of any one or more phrases, sentences, clauses, paragraphs or   sections hereof shall not affect the remaining portions of this Agreement,   all of which are being inserted conditionally on their being held legally   valid. In the event that any one or more of the phrases, sentences, clauses,   paragraphs or sections contained herein should be invalid, or should operate   to render this Agreement invalid, then this Agreement shall be construed as   if such invalid phrase or phrases, sentence or sentences, clause or clauses,   paragraph or paragraphs, or section or sections had not been inserted. The   invalidity of any one or more phrases, sentences, clauses, paragraphs or   sections hereof in any jurisdiction shall not invalidate or render   unenforceable such phrase, sentence, clause, paragraph or section in any   other jurisdiction. Governing Law. This Agreement is intended to be performed   in the State of New Jersey, and the substantive laws of the State of New   Jersey shall govern the validity, construction, enforcement and   interpretation of this Agreement, except to the extent that the validity or   perfection of the security interest hereunder, or remedies hereunder, in   respect of any particular Collateral are governed by the laws of a   jurisdiction other than the State of New Jersey. [SECOND AMENDED AND RESTATED   PLEDGE AND SECURITY AGREEMENT] 


    




 










Counterparts.   This Agreement may be executed by one or more of the parties to this   Agreement in any number of separate counterparts and all of said counterparts   taken together shall be deemed to constitute one and the same instrument. A   set of the copies of this Agreement signed by all the parties shall be lodged   with the Grantor and the Secured Party. WAIVER OF JURY TRIAL. THE GRANTOR AND   THE SECURED PARTY HEREBY WAIVE ANY AND ALL RIGHTS THAT THEY MAY NOW OR   HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA, ANY STATE OR   TERRITORY, TO A TRIAL BY JURY OF ANY AND ALL ISSUES ARISING EITHER DIRECTLY   OR INDIRECTLY IN ANY ACTION OR PROCEEDING BETWEEN THE GRANTOR AND THE SECURED   PARTY OR THEIR SUCCESSORS AND ASSIGNS, OUT OF OR IN ANY WAY CONNECTED WITH   THIS AGREEMENT. FURTHER, THE GRANTOR AND THE SECURED PARTY WAIVE ANY RIGHT IT   MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY   SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER   THAN, OR IN ADDITION TO, ACTUAL DAMAGES. IT IS INTENDED THAT THIS WAIVER   SHALL APPLY TO ANY AND ALL DEFENSES, RIGHTS, AND/OR COUNTERCLAIMS IN ANY   ACTION OR PROCEEDING. THE GRANTOR AND THE SECURED PARTY RECOGNIZE THAT ANY   DISPUTE ARISING IN CONNECTION WITH THE LOAN FACILITY IS LIKELY TO BE COMPLEX   AND CONSEQUENTLY THEY WISH TO STREAMLINE AND MINIMIZE THE COST OF THE DISPUTE   RESOLUTION PROCESS BY AGREEING TO WAIVE THEIR RIGHTS TO A JURY TRIAL. 31. Credit   Support Moment. This Agreement is intended to act (i) as a "Credit   Support Document" (as such term is defined in the Hedging Agreement),   with respect to the Grantor and is hereby made a part of the   "Schedule" (as such term is defined in the Hedging Agreement) of   the Hedging Agreement, which such Hedging Agreement includes the Schedules   thereto and all "Confirmations" (as such term is defined in the   Hedging Agreement) exchanged between the parties confirming transactions   thereunder, and (ii) as a "transfer" under a swap agreement made by   or to a swap participant, in connection with a swap agreement, within the   meaning of Section 546(g) of the Bankruptcy Code. [REMAINDER OF PAGE   INTENTIONALLY LEFT BLANK] [SECOND AMENDED AND RESTATED PLEDGE AND SECURITY   AGREEMENT] 


    




 










IN WITNESS   WHEREOF, the parties hereto have caused this Agreement to be executed and   delivered by their proper and duly authorized officers as appropriate all on   the day and year first hereinabove written. WAYSIDE TECHNOLOGY GROUP, INC., a   Delaware corporation Michael Vesey Chief Financial Officer CITIBANK, N.A., as   the Lender By: Craig Heal Senior Vice President [SECOND AMENDED AND RESTATED   PLEDGE AND SECURITY AGREEMENT] 


    




 










IN WITNESS   WHEREOF, the parties hereto have caused this Agreement to be executed and   delivered by their proper and duly authorized officers as appropriate all on   the day and year first hereinabove written. WAYSIDE TECHNOLOGY GROUP, INC., a   Delaware corporation By: Michael Vesey Chief Financial Officer CITIBANK,   N.A., as the Lender By: Craig [seal Senior Vice President [SECOND AMENDED AND   RESTATED PLEDGE AND SECURITY AGREEMENT]