Document:

Exhibit 10.2

 

ORIGINAL SECOND   AMENDED AND RESTATED REVOLVING CREDIT LOAN NOTE $20,000,000.00 Iselin, New   Jersey November 15 , 2017 FOR VALUE RECEIVED, the undersigned, WAYSIDE   TECHNOLOGY GROUP, INC., a corporation duly organized, validly existing and in   good standing under the laws of the State of Delaware, LIFEBOAT DISTRIBUTION,   INC., a corporation duly organized, validly existing and in good standing   under the laws of the State of Delaware, TECHXTEND, INC., a corporation duly   organized, validly existing and in good standing under the laws of the State   of Delaware, PROGRAMMER'S PARADISE, INC., a corporation duly organized,   validly existing and in good standing under the laws of the State of   Delaware, and ISP INTERNATIONAL SOFTWARE PARTNERS, INC., a corporation duly   organized, validly existing and in good standing under the laws of the State   of Delaware (hereinafter collectively referred to as the   "Co-Borrowers"), promise to pay to the order of CITIBANK, N.A., its   successors and/or assigns (hereinafter collectively referred to as the   "Lender") on or before the Maturity Date, or such earlier date as   may be determined pursuant to the terms, conditions and provisions of the   "Loan Agreement" (as such term is defined below), the lesser of (i)   the principal sum of TWENTY MILLION AND 00/100 ($20,000,000.00) DOLLARS or   (ii) the aggregate unpaid principal amount of all Loans made by the Lender to   the Co-Borrowers pursuant to the terms, conditions and provisions of the Loan   Agreement. The Co-Borrowers hereby further promise to pay to the order of the   Lender interest on the unpaid principal amount outstanding under this Second   Amended and Restated Revolving Credit Loan Note (hereinafter, as it may be   from time to time amended, modified, extended, renewed, substituted, and/or   supplemented, referred to as this "Note") from the date outstanding   until paid in full at the applicable interest rate per annum determined   pursuant to the terms, conditions and provisions of Section 2.02(i)(a) and   Section 2.02(ii i) of, or as otherwise provided for in, the Loan Agreement   payable on the dates set forth in Section 2.01(v) and Sect ion 2.02(1D of, or   as otherwise provided in, the Loan Agreement. Capitalized terms used but not   expressly defined herein shall have the same meanings when used herein as set   forth in the Loan Agreement. All payments of principal, interest and fees   hereunder shall be due and payable to the Lender not later than 1:00 P.M.   (Iselin, New Jersey time), on the day when due, all as more fully and   accurately set forth in Section 2.05 of the Loan Agreement. Such payments   shall be made in Dollars in immediately available funds without setoff,   counterclaim (other than a compulsory counterclaim) or other deduction of any   nature. Except as otherwise provided in the Loan Agreement, if any payment of   principal, interest or fees hereunder shall become due on a day which is not   a Business Day, such payment shall be made on the next following Business Day   and such extension of time shall be included in computing interest in   connection with such payment. This Note is the "Note" referred to   in, and is entitled to the benefits of, that certain Second Amended and   Restated Revolving Credit Loan Agreement dated November 15 , 2017, executed   by and among the Co-Borrowers and the Lender (hereinafter, as it may be from   time to time amended, modified, extended, renewed, substituted, and/or   supplemented, referred to as the "Loan Agreement"), which among   other things provides for the acceleration of the maturity hereof upon the   occurrence of certain events and for prepayments in certain circumstances and   upon certain terms and conditions. The Co-Borrowers hereby expressly waive   presentment, demand, notice, protest and all other demands and notices in   connection with the delivery, acceptance, performance, default or enforcement   of this Note and the Loan Agreement. [SECOND AMENDED AND RESTATED REVOLVING   CREDIT LOAN NOTE] 

    

 

The   Co-Borrowers hereby grant to the Lender, a continuing lien, security interest   and right of setoff as security for all Obligations owed to the Lender,   whether now existing or hereafter arising, upon and against all deposits,   credits, collateral and property, now or hereafter in the possession,   custody, safekeeping or control of the Lender or any entity under the control   of Citibank, N.A. and its successors and assigns, or in transit to any of   them. At any time after the occurrence and during the continuance of an Event   of Default, without demand or notice (any such notice being hereby expressly   waived by the Co-Borrowers), the Lender may setoff the same or any part   thereof and apply the same to any Obligation of the Co-Borrowers even though   unmatured and regardless of the adequacy of any other collateral securing the   Loan Facility. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO EXERCISE ITS   RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE   LOAN FACILITY, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH   DEPOSITS, CREDITS, COLLATERAL OR OTHER PROPERTY OF THE CO-BORROWERS, ARE   HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY IRREVOCABLY WAIVED. The   Lender may at any time pledge or assign all or any portion of its rights   under the Loan Documents, including any portion of this Note, to any of the   twelve (12) Federal Reserve Banks organized under Section 4 of the Federal   Reserve Act, 12 U.S.C. §341. No such pledge or assignment or enforcement   thereof shall release the Lender from its obligations under any of the Loan   Documents. THE CO-BORROWERS AND THE LENDER (BY ACCEPTANCE OF THIS NOTE)   MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY (i) WAIVE ANY AND   ALL RIGHTS THAT THEY MAY NOW OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED   STATES OF AMERICA OR ANY STATE THEREOF TO A TRIAL BY JURY IN RESPECT OF ANY   CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE OR   ANY OF THE OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION   HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER   VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY   COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE LENDER   RELATING TO THE ADMINISTRATION OF THE LOAN FACILITY OR ENFORCEMENT OF THIS   NOTE, AND (ii) AGREE THAT NEITHER THE CO-BORROWERS NOR THE LENDER WILL SEEK   TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL   CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY APPLICABLE LAW,   EACH OF THE CO-BORROWERS AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY AND   INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY   LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY   DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF THE   CO-BORROWERS AND THE LENDER HEREBY CERTIFIES THAT NO REPRESENTATIVE, AGENT OR   ATTORNEY OF THE OTHER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER   WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS.   THE WAIVERS MADE BY THE CO-BORROWERS HEREIN CONSTITUTE A MATERIAL INDUCEMENT   FOR THE LENDER TO MAKE THE LOAN FACILITY AVAILABLE TO THE CO-BORROWERS AND TO   ACCEPT THIS NOTE. IT IS INTENDED THAT SAID WAIVERS SHALL APPLY TO ANY AND ALL   DEFENSES, RIGHTS, AND/OR COUNTERCLAIMS IN ANY ACTION OR PROCEEDING. THE   CO-BORROWERS AND THE LENDER 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. [SECOND AMENDED AND RESTATED   REVOLVING CREDIT LOAN NOTE] 

    

 

This Note and   the rights and obligations of the parties hereunder shall be construed,   interpreted, enforced and governed by the laws of the State of New Jersey,   excluding the laws applicable to conflicts and choice of laws. THE CO-BORROWERS   HEREBY COVENANT AND AGREE THAT: they are jointly and severally liable for all   of the Obligations and each Co-Borrower expressly understands, agrees, and   acknowledges that (a) the Co-Borrowers are affiliates by common direct or   indirect ownership, (b) each Co-Borrower desires to have the availability of   one common credit facility instead of separate credit facilities, (c) each   Co-Borrower has requested that the Lender extend such a common credit   facility on the terms provided in this Note and in the other Loan Documents,   (d) the Lender will be lending against, and relying on a lien upon, all of   the Collateral even though all of the proceeds of the Loan may not be   advanced directly to a particular Co-Borrower, (e) each Co-Borrower will   nonetheless benefit by the advance of all of the proceeds of the Loan by the   Lender and the availability of a single credit facility of a size greater   than each could independently warrant, and (f) no Co-Borrower would be able   to obtain the credit provided by the Lender hereunder without the financial   support provided by the other Co-Borrowers; and each of the Co-Borrower's   obligations hereunder shall be unconditional irrespective of: (a) the   validity or enforceability of the Obligations of any other Co-Borrower under   this Note or any of the other Loan Documents; (b) the absence of any attempt   to collect the Obligations from any other Co- Borrower, or any other security   therefor, or the absence of any other action to enforce same; (c) the waiver,   consent, extension, forbearance, or granting of any indulgence by the Lender   with respect to any of the terms, conditions, or provisions of this Note or   any of the other Loan Documents as against any other Co-Borrower; (d) the   failure by the Lender to take any steps to perfect and maintain its security   interest in, or to preserve its rights to, any security or collateral for the   Obligations with respect to any other Co-Borrower; (e) the Lender's election   in any proceeding instituted under the Bankruptcy Code of the application of   Section 111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a   security interest by any other Co-Borrower, as debtor-in-possession under   Section 364 of the Bankruptcy Code; (g) the disallowance of all or any   portion of the Lender's claim(s) for the repayment of the Obligations from   any other Co-Borrower under Section 502 of the Bankruptcy Code; or (h) any   other circumstances that might constitute a legal or equitable discharge or   defense of any other Co-Borrower (other than the actual indefeasible payment   in full in cash of the Obligations); and with respect to any Co-Borrower's   Obligations arising as a result of the joint and several liability of the   Co-Borrowers for the Loan under this Note with respect to all advances or   other extensions of credit made to any of the other Co-Borrowers hereunder,   each of the Co-Borrowers hereby waives, until the Obligations shall have been   indefeasibly repaid in full and this Note and the other Loan Documents shall   have been cancelled and terminated, any right to enforce any right of   subrogation or any remedy that the Lender now has or may hereafter have   against any other Co-Borrower or any endorser of all or any portion of the   Obligations, and any benefit of, and right to participate in, any security or   collateral given to the Lender to secure the repayment of the Obligations or   any other liability or obligation of any Co-Borrower to the Lender. Upon the   occurrence and during the continuance of any Event of Default, the Lender may   proceed directly and immediately, without notice, against any Co- Borrower to   collect and recover the full amount, or any portion of, the Obligations   without first proceeding against any other Co-Borrower or any other Person or   against any security or collateral for the Obligations, each Co-Borrower   hereby agreeing that the Lender shall be under no obligation to marshal any   assets in favor of any Co-Borrower or against or in payment of any or all of   the Obligations; and it is intended by the Co-Borrowers and the Lender that   the terms, conditions, and provisions of this Note are severable, and that   the joint and several nature of the liability of each Co- [SECOND AMENDED AND   RESTATED REVOLVING CREDIT LOAN NOTE]

    

 

Borrower for   the Obligations not constitute a fraudulent conveyance under the Uniform   Fraudulent Transfer Act, as in effect from time to time (hereinafter referred   to as the "UFTA"), the Uniform Fraudulent Conveyance Act, as in   effect from time to time (hereinafter referred to as the "UFCA"),   or Section 548 of the Bankruptcy Code, or as a fraudulent conveyance or   fraudulent transfer under the applicable provisions of any other state or   Federal bankruptcy, insolvency, fraudulent transfer or conveyance,   liquidation, conservatorship, moratorium, rearrangement, receivership,   reorganization, debtor relief, or other law affecting the rights of creditors   generally (hereinafter collectively referred to as "Debtor Re!   Laws") and that, in any action or proceeding involving any Debtor Relief   Laws: if any clause or provision of this Note shall be held invalid or   unenforceable in whole or in part in any jurisdiction, then such invalidity   or unenforceability shall affect only such clause or provision, or part   thereof, in such jurisdiction and shall not in any manner affect such clause or   provision in any other jurisdiction, or any other clause or provision in this   Note in any jurisdiction; and if all or any portion of (1) the Obligations or   (2) any security interest in any collateral granted by any Co-Borrower in   favor or for the benefit of the Lender in connection with the Obligations is   held or determined to be void, invalid, or unenforceable against any   Co-Borrower as a fraudulent conveyance or fraudulent transfer on account of   or as a result of the amount of such Co-Borrower's aggregate liability under   the Loan, then, notwithstanding any other term, condition, or provision of   this Note or any other Loan Document to the contrary, the aggregate amount of   such liability shall be, without any further action by the Lender, the   Co-Borrowers, or any other Person, automatically limited and reduced to the   highest amount which is valid and enforceable against such Co-Borrower as   determined in such action or proceeding to not constitute such a fraudulent   conveyance or fraudulent transfer, which amount (without limiting the   generality of the foregoing) may be an amount which is not greater than the   greatest of: the fair consideration actually received by such Co-Borrower   under the terms of and as a result of the Loan, including, without limiting the   generality of the foregoing, and to the extent not inconsistent with   applicable Federal and state law affecting the enforceability of notes   generally, distributions or advances made to one or more of the Co- Borrowers   with the proceeds of the credit extended hereunder in exchange for its   execution and delivery of this Note and the other Loan Documents; or the   excess of (x) the amount of the fair saleable value of the assets of such   Co-Borrower as of the date of this Note as determined in accordance with applicable   Federal and state law governing determinations of the insolvency of debtors   as in effect on the date thereof over (y) the amount of all liabilities of   such Co-Borrower as of the date of this Note, also as determined on the basis   of applicable Federal and state law governing the insolvency of debtors as in   effect on the date thereof; or the maximum amount of liability under the Loan   which could be asserted against such Co-Borrower hereunder without (x)   rendering such Co-Borrower "insolvent" within the meaning of   Section 101(31) of the Bankruptcy Code, Section 2 of the UFTA, or Section 2   of the UFCA, (y) leaving such Co-Borrower with unreasonably small capital or   assets, within the meaning of Section 548 of the Federal Bankruptcy Code,   Section 4 of the UFTA, or Section 5 of the UFCA, or (z) leaving such   Co-Borrower unable to pay its debts as they become due within the meaning of   Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of   the UFCA. [SECOND AMENDED AND RESTATED REVOLVING CREDIT LOAN NOTE]

    

 

if (a) any   court of competent jurisdiction holds that the Co-Borrowers are guarantors   and not jointly and severally liable for the Loan or (b) bankruptcy or   reorganization proceedings at any time are instituted by or against any   Co-Borrower under any Debtor Relief Laws, each Co-Borrower hereby: (1) until   indefeasible payment in full in cash of the Obligations, hereby expressly and   irrevocably waives, to the fullest extent possible, on behalf of such   Co-Borrower, any and all rights at law or in equity to subrogation, to   reimbursement, to exoneration, to contribution, to indemnification, to set   off or to any other rights that could accrue to a surety against a principal,   to a guarantor against a maker or obligor, to an accommodation party against   the party accommodated, to a holder or transferee against a maker, or to the   holder of a claim against any Person, and that such Co-Borrower may have or   hereafter acquire against any Person in connection with or as a result of such   Co-Borrower's execution, delivery, and/or performance of this Note or any of   the other Loan Documents to which such Co-Borrower is a party or otherwise;   (2) expressly and irrevocably waives any "claim" (as such term is   defined in the Bankruptcy Code) of any kind against any other Co-Borrower,   and further agrees that it shall not have or assert any such rights against   any Person (including any surety), either directly or as an attempted set off   to any action commenced against such Co-Borrower by the Lender or any other   Person; and (3) acknowledges and agrees (A) that this waiver is intended to   benefit the Lender and shall not limit or otherwise affect such Co-Borrower's   liability hereunder or the enforceability of this Note or any of the other   Loan Documents, and (B) that the Lender and their successors and assigns are   intended beneficiaries of this waiver, and the agreements set forth in this   Section and their rights under this Section shall survive payment in full of   the Obligations; and in the event the obligations of any Co-Borrower in   connection with the Loan or any of the other Loan Documents are held or   determined to be void, invalid, or unenforceable, in whole or in part, such   holding or determination shall not impair or affect (a) the validity and enforceability   of this Note or any of the other Loan Documents or the Obligations against   any other Co-Borrower or obligor, which validity and enforceability shall   continue in full force and effect in accordance with the terms hereof; or (b)   the validity and enforceability of any clause or provision not so held to be   void, invalid or unenforceable as against the Co-Borrowers; and to the extent   that any payment to, or realization by, the Lender on the Obligations exceeds   the limitations of this Section and is otherwise subject to avoidance and   recovery in any such proceeding, the amount subject to avoidance shall in all   events be limited to the amount by which such actual payment or realization   exceeds such limitation, and this Note and the other Loan Documents as   limited shall in all events remain in full force and effect and be fully   enforceable against each Co- Borrower. This Section is intended solely to   reserve the rights of the Lender hereunder against each Co- Borrower, in such   proceeding to the maximum extent permitted by applicable Debtor Relief Laws   and/or other applicable laws and none of the Co-Borrowers, any guarantor of   the Obligations, or any other Person shall have any right, claim, or defense   under this Section that would not otherwise be available under applicable   Debtor Relief Laws and/or other applicable laws in such proceeding. This Note   is given in full substitution for and in full replacement of that certain   Promissory Note dated December 18, 2015, executed by the Co-Borrowers, as   makers, in favor of the Lender, as payee, in the maximum principal amount of   up to $10,000,000.00 (hereinafter referred to as the "Original   Note"). The execution and delivery of this Note does not evidence a   refinancing, repayment, accord and satisfaction, or novation of the   indebtedness evidenced by the Original Note. [REMAINDER OF PAGE INTENTIONALLY   LEFT BLANK] [SECOND AMENDED AND RESTATED REVOLVING CREDIT LOAN NOTE]

    

 

 IN WITNESS WHEREOF, each Co-Borrower has   caused this Second Amended and Restated Revolving Credit Loan Note to be   executed and delivered by its proper and duly Authorized Officer, all on the   day and year first hereinabove written. CO-BORROWERS: WAYSIDE TECHNOLOGY   GROUP, INC., a Delaware corporation Michael Vesey Chief Financial Officer   LIFEBOAT DISTRIBUTION, INC., a Delaware corporation „ By. Michael Vesey Chief   Financial Officer TECHXTEND, INC., a Delaware corporation By. Michael Vesey   Chief Financial Officer PROGRAMMER'S PARADISE, INC., a Delaware corporation A   By. Michael Vesey Chief Financial Officer ISP INTERNATIONAL SOFTWARE   PARTNERS, INC., a Delaware corporation By. Michael Vesey Chief Financial   Officer [SECOND AMENDED AND RESTATED REVOLVING CREDIT LOAN NOTE]

    

 

ORIGINAL THE   UNDERSIGNED PAYEE HEREBY ACKNOWLEDGES ITS ACCEPTANCE OF THE AMENDMENT AND   RESTATEMENT OF THE ORIGINAL NOTE, AS EVIDENCED BY THE TERMS, CONDITIONS, AND   PROVISIONS OF THIS NOTE SET FORTH AT LENGTH ABOVE. CITIBANK, N.A. By: Craig   Heal Senior Vice President [SECOND AMENDED AND RESTATED REVOLVING CREDIT LOAN   NOTE]Exhibit 10.3

 

SECOND AMENDED   AND RESTATED SECURITY AGREEMENT THIS SECOND AMENDED AND RESTATED SECURITY   AGREEMENT (hereinafter, as it may be from time to time amended, modified,   extended, renewed, substituted, and/or supplemented, referred to as this   "Security Agreement") is made as of November If , 2017, by and   among 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 "Wayside"), AND LIFEBOAT   DISTRIBUTION, 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 "Lifeboat"), AND TECHXTEND, 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 "Techxtend"), AND PROGRAMMER'S PARADISE, 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   "Programmer's Paradise"), AND ISP INTERNATIONAL SOFTWARE PARTNERS,   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 "ISP" and hereinafter Wayside, Lifeboat, Techxtend,   Programmer's Paradise, and ISP shall be collectively referred to as the   "Debtors" and each individually as a "Debtor"), 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 "Lender"). 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 Wayside, Lifeboat, Techxtend,   Programmer's Paradise, and the Lender, the Lender made available to Wayside,   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 [SECOND AMENDED AND RESTATED SECURITY AGREEMENT] 

 

 
    

 

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 Debtors 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   Debtors in connection with the Existing Loan Facility were secured by, inter   alia, (i) that certain Commercial Security Agreement dated January 4, 2013,   executed by Wayside, as grantor, Wayside, Lifeboat, Techxtend, Programmer's   Paradise, as borrower, and the Lender, 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 Wayside Security   Agreement"), (ii) that certain Commercial Security Agreement dated   January 4, 2013, executed by Lifeboat, as grantor, Wayside, Lifeboat,   Techxtend, Programmer's Paradise, as borrower, and the Lender, as lender   (hereinafter referred to as the "Original Lifeboat Security   Agreement"), (iii) that certain Commercial Security Agreement dated   January 4, 2013, executed by Techxtend, as grantor, Wayside, Lifeboat,   Techxtend, Programmer's Paradise, as borrower, and the Lender, as lender   (hereinafter referred to as the "Original Techxtend Security   Agreement"), (iv) that certain Commercial Security Agreement dated   January 4, 2013, executed by Programmer's Paradise, as grantor, Wayside,   Lifeboat, Techxtend, Programmer's Paradise, as borrower, and the Lender, as   lender (hereinafter referred to as the "Original Programmer's Paradise   Security Agreement"), and (v) that certain Commercial Security Agreement   dated January 4, 2013, executed by ISP, as grantor, the Debtors, as borrower,   and the Lender, as lender (hereinafter referred to as the "Original [ SP   Security Agreement" and hereinafter the Original Wayside Security   Agreement, the Original Lifeboat Security Agreement, the Original Techxtend   Security Agreement, the Original Programmer's Paradise Security Agreement,   and the Original ISP Security Agreement shall be collectively referred to as   the "Original Security Agreements"); and WHEREAS, the Debtors have   requested that the Lender, and the Lender 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 Debtors, as co-borrowers, and the Lender,   as lender, to amend 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 Debtors, the Lender has   required that the Debtors agree to amend and amend and restate in its   entirety the Original Security Agreements with the terms, conditions, and   provisions of this Security Agreement; and WHEREAS, each of the Debtors   conducts its business at certain facilities set forth on Schedule   "A" attached hereto and made a part hereof (hereinafter referred to   as the "Premises"). [SECOND AMENDED AND RESTATED SECURITY   AGREEMENT]

    

 

NOW, THEREFORE,   IN CONSIDERATION OF THESE PREMISES AND THE MUTUAL REPRESENTATIONS, COVENANTS   AND AGREEMENTS OF THE DEBTORS AND THE LENDER, EACH PARTY BINDING ITSELF AND   ITS SUCCESSORS AND/OR ASSIGNS, HEREBY PROMISES, COVENANTS, AND AGREES TO   AMEND AND RESTATE THE ORIGINAL SECURITY AGREEMENTS WITH ALL OF THE TERMS,   CONDITIONS, AND PROVISIONS SET FORTH HEREIN BELOW, AND ALL OF THE TERMS,   CONDITIONS, AND PROVISIONS OF THE ORIGINAL SECURITY AGREEMENTS ARE HEREBY   DEEMED SUPERSEDED, SUBSTITUTED, AND REPLACED BY THE FOLLOWING: THE DEBTORS   AND THE LENDER HEREBY COVENANT AND AGREE AS FOLLOWS: 1. Grant of Security   Interest. As security for the prompt and complete payment and performance   when due by the Debtors of all of the obligations and liabilities of the   Debtors under the Loan Agreement and all of the other Loan Documents,   including, without limitation, the following: (i) all indebtedness of the   Debtors owed to the Lender arising on or after the date hereof under the Loan   Agreement, the Note and/or any of the other Loan Documents, including,   without limitation, all principal and interest, and any extensions, renewals,   refundings, substitutions of or for such indebtedness in whole or in part,   (ii) all indebtedness of the Debtors owed to the Lender for fees, costs and   expenses contemplated by the Loan Agreement, the Note, and/or the other Loan   Documents, (iii) all obligations of the Debtors to the Lender arising under   the Loan Agreement, the Note, and/or the other Loan Documents, (iv) all other   indebtedness, obligations and liabilities of the Debtors owed to the Lender   now or hereafter existing, in connection with the Loan Agreement, the Note,   and/or the other Loan Documents whether or not contemplated by the Lender and/or   the Debtors at the date hereof and whether direct or indirect, matured or   contingent, joint or several or otherwise, (v) all future advances made by   the Lender for the protection or preservation of the Collateral, including,   without limitation, reasonable advances for storage and transportation   charges, taxes, insurance, repairs and the like when and as the same become   due whether at maturity or by declaration, acceleration or otherwise, or, if   not due, when payment thereof shall be demanded by the Lender, and (vi) any   and all reasonable costs and expenses, including costs and expenses of   collection, paid or incurred by the Lender in connection with the collection   of the amounts referred to in the preceding clauses (ii ( i v) and (v), in   connection with the enforcement or realization upon any or all of the   Collateral or the Lender's security interest therein or in connection with   the taking of any other action permitted by this Security Agreement   (hereinafter collectively referred to as the "Obligations"), each   of the Debtors hereby collaterally assigns, mortgages, hypothecates, conveys,   transfers, and grants to the Lender a security interest in and so pledges and   assigns to the Lender the following properties, assets and rights of such   Debtor, wherever located, whether now owned or hereafter acquired or arising,   and all proceeds and products thereof (all of the same being hereinafter   collectively referred to as the "Collateral"): all personal and   fixture property of every kind and nature including without limitation all   goods (including inventory, equipment and any accessions thereto),   instruments (including, without limitation, promissory notes), documents,   accounts (including, without limitation, health care insurance receivables),   chattel paper (whether tangible or electronic), deposit accounts,   letter-of-credit rights (whether or not the letter of credit is evidenced by   a writing), commercial tort claims, securities and all other investment   property (other than the Excluded Securities (as defined below)), supporting   obligations, any other contract rights or rights to the payment of money   (other than the "Interests" (as such term is defined in the KeyBank   Assignment Agreement) and any other extended payment receivables assigned by   a Co-Borrower as permitted by the Loan Agreement), insurance claims and   proceeds, tort claims, and all general intangibles including, without   limitation, all payment intangibles, patents, patent applications,   trademarks, trademark applications, trade names, copyrights, copyright applications,   software, engineering drawings, service marks, customer lists, goodwill, and   all licenses, permits, agreements of any kind or nature pursuant to which   such Debtor possesses, uses or has authority to possess or use property   (whether tangible or intangible) of others or others possess, use or [SECOND   AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

have authority   to possess or use property (whether tangible or intangible) of such Debtor,   and all recorded data of any kind or nature, regardless of the medium of   recording including, without limitation, all software, writings, plans,   specifications and schematics. The Debtors hereby further covenant and agree   that the grant of Collateral in this Security Agreement covers, and is intended   to cover, except as otherwise set forth herein, all assets of the Debtors. 2.   Authorization to rile Financing Statements. The Debtors hereby specifically   and irrevocably authorize the Lender, at any time and from time to time, to   file in any Uniform Commercial Code jurisdiction any initial financing   statements and amendments thereto that (i) indicate that the Collateral   consists of all assets of the Debtors (except as otherwise set forth herein)   or words of similar effect, regardless of whether any particular asset   comprised in the Collateral falls within the scope of Article 9 of the   Uniform Commercial Code of the State or such jurisdiction, or is of an equal   or lesser scope or with greater detail, and (ii) contain any other   information required by part 5 of Article 9 of the Uniform Commercial Code of   the State for the sufficiency or filing office acceptance of any financing   statement or amendment, including, without limitation, (a) whether a Debtor   is an organization, the type of organization of the Debtors, and any   organizational identification number issued to a Debtor, and (b) in the case   of a financing statement filed as a fixture filing or indicating Collateral   as as-extracted collateral or timber to be cut, a sufficient description of   real property to which the Collateral relates. The Debtors hereby covenant   and agree to furnish any such information to the Lender promptly upon   request. 3. Other Actions with Respect to the Collateral. Further to insure   the attachment, perfection and first priority of, and the ability of the   Lender to enforce, the Lender's security interest in the Collateral, each of   the Debtors hereby covenants and agrees, in each case at such Debtor's sole   cost and expense, to take the following actions with respect to the following   Collateral: (i) Promissory Notes and Tangible Chattel Paper. If such Debtor   shall at any time hold or acquire any promissory notes or tangible chattel   paper, such Debtor shall forthwith endorse, assign and deliver the same to   the Lender, accompanied by such instruments of transfer or assignment, duly   executed in blank, as the Lender may from time to time specify and/or   require. (ii) Deposit Accounts. For each deposit account that such Debtor at   any time opens or maintains, such Debtor shall, at the Lender's request and   sole option, pursuant to a written agreement in form and substance   satisfactory to the Lender in its sole and absolute discretion, use   commercially reasonable efforts to either (a) cause the depositary bank to   agree to comply at any time with instructions from the Lender to such   depositary bank directing the disposition of funds from time to time credited   to such deposit account, without further consent of such Debtor, or (b)   arrange for the Lender to become the customer of the depositary bank with   respect to the deposit account, with such Debtor being permitted, only with   the express written consent of the Lender, to exercise rights to withdraw   funds from such deposit account. The Lender hereby agrees with such Debtor   that the Lender shall not give any such instructions or withhold any   withdrawal rights from such Debtor, unless an Event of Default shall have   occurred and be continuing, or unless, after giving effect to any withdrawal   not otherwise permitted by the Loan Documents, an Event of Default would   occur. The provisions of this Section 3( ii) shall not apply to (1) any   deposit account for which such Debtor, any depositary bank and the Lender   have entered into a cash collateral agreement specially negotiated by and   among such Debtor, such depositary bank, and the Lender for the specific   purpose set forth therein, (2) deposit accounts for which the Lender is the   depositary bank, and (3) deposit accounts specially and exclusively used for   payroll, payroll taxes and other employee wage and benefit payments to or for   the benefit of such Debtor's salaried employees. (iii) Investment Property.   If such Debtor shall at any time hold or acquire any certificated securities   (other than (i) certificated securities representing thirty-five percent   (35%), on a fully-diluted basis, of all the shares of the authorized, issued   and outstanding capital stock of (1) Wayside [SECOND AMENDED AND RESTATED   SECURITY AGREEMENT]

    

 

Technology   (Canada), Inc. (hereinafter collectively referred to as the "Unpledged   Wayside Canada Shares") and (2) Wayside Technology Group Europe BV   (hereinafter collectively referred to as the "Unpledged Wayside Europe   Shares" and hereinafter the Unpledged Wayside Canada Shares and the   Unpledged Wayside Europe Shares shall be collectively referred to as the   "Unpledged Shares"), and (ii) certificated securities of a Debtor   repurchased or otherwise acquired from stockholders of a Debtor and no longer   outstanding (hereinafter collectively referred to as the "Repurchased   Shares" and hereinafter the Repurchased Shares and the Unpledged Shares   shall be collectively referred to as the "Excluded Securities")),   such Debtor shall forthwith endorse, assign and deliver the same to the   Lender, accompanied by such instruments of transfer or assignment duly   executed in blank as the Lender may from time to time specify and/or require.   If any securities now or hereafter acquired by such Debtor are uncertificated   and are issued to such Debtor or its nominee directly by the issuer thereof,   such Debtor shall immediately notify the Lender thereof in writing and, at   the Lender's request and sole option, pursuant to a written agreement in form   and substance satisfactory to the Lender in its sole and absolute discretion,   use commercially reasonable efforts to either (a) cause such issuer to agree   to comply with instructions from the Lender as to such securities, without   further consent of such Debtor or such nominee, or (b) arrange for the Lender   to become the registered owner of the securities. If any securities, whether   certificated or uncertificated (other than the Excluded Securities), or other   investment property now or hereafter acquired by such Debtor are held by such   Debtor or its nominee through a securities intermediary or commodity   intermediary, such Debtor shall immediately notify the Lender thereof in   writing and, at the Lender's request and sole option, pursuant to a written   agreement in form and substance satisfactory to the Lender, use commercially   reasonable efforts to either (1) cause such securities intermediary or, as   the case may be, commodity intermediary to agree to comply with entitlement   orders or other instructions from the Lender to such securities intermediary   or such commodity intermediary as to such securities or other investment   property, or, as the case may be, to apply any value distributed on account   of any commodity contract as directed by the Lender to such commodity   intermediary, in each case without further consent of such Debtor or such   nominee, or (2) in the case of financial assets or other investment property   held through a securities intermediary, arrange for the Lender to become the   entitlement holder with respect to such investment property, with such Debtor   being permitted, only with the express written consent of the Lender, to   exercise rights to withdraw or otherwise deal with such investment property.   The Lender hereby agrees with such Debtor that the Lender shall not give any   such entitlement orders or instructions or directions to any such issuer,   securities intermediary or commodity intermediary and shall not withhold its   consent to the exercise of any withdrawal or dealing rights by such Debtor,   unless an Event of Default shall have occurred and be continuing, or unless,   after giving effect to any such investment and withdrawal rights not   otherwise permitted by the Loan Documents, an Event of Default would occur.   The provisions of this Section 3 (ii) shall not apply to any financial assets   credited to a securities account for which the Lender is the securities   intermediary. (iv) Collateral in the Possession of a Bailee. If any goods are   at any time in the possession of a bailee, such Debtor shall promptly notify   the Lender thereof in writing and, if requested by the Lender, shall use   commercially reasonable efforts to promptly obtain a written acknowledgement   from the bailee, in form and substance satisfactory to the Lender in its   reasonable discretion, that the bailee holds such Collateral for the benefit   of the Lender and that such bailee shall act upon the instructions of the   Lender, without the further consent of such Debtor. The Lender hereby agrees   with such Debtor that the Lender shall not give any such instructions unless   an Event of Default shall have occurred and be continuing. (v) Electronic   Chattel Paper and Transferable Records. If such Debtor at any time holds or   acquires an interest in any electronic chattel paper or any   "transferable record," as that term is defined in Section 201 of   the Federal Electronic Signatures in Global and National Commerce Act, or in   §16 of the Uniform Electronic Transactions Act as in effect in any relevant   jurisdiction, the Debtors shall [SECOND AMENDED AND RESTATED SECURITY   AGREEMENT]

    

 

promptly notify   the Lender thereof in writing and, at the request and sole option of the   Lender, shall take such action as the Lender may request to vest in the   Lender control under UCC §9-105 of such electronic chattel paper or control   under Section 201 of the Federal Electronic Signatures in Global and National   Commerce Act or, as the case may be, §16 of the Uniform Electronic   Transactions Act, as so in effect in such jurisdiction, of such transferable   record. The Lender hereby agrees with such Debtor that the Lender will   arrange, pursuant to procedures satisfactory to the Lender in its sole and   absolute discretion, and so long as such procedures will not result in the   Lender's loss of control, for the Debtors to make alterations to the   electronic chattel paper or transferable record permitted under UCC §9-105   or, as the case may be, Section 201 of the Federal Electronic Signatures in   Global and National Commerce Act or § 16 of the Uniform Electronic   Transactions Act for a party in control to make without loss of control,   unless an Event of Default shall have occurred and be continuing or unless,   after taking into account any action by such Debtor with respect to such   electronic chattel paper or transferable record, an Event of Default would   occur. (vi) Letter of Credit Rights. If such Debtor is at any time a   beneficiary under a letter of credit now or hereafter issued in favor of such   Debtor, such Debtor shall promptly notify the Lender thereof in writing and,   at the request and sole option of the Lender, such Debtor shall, pursuant to   a written agreement in form and substance satisfactory to the Lender in its   sole and absolute discretion, use commercially reasonable efforts to either   (a) arrange for the issuer and any confirmer of such letter of credit to   consent to an assignment to the Lender of the proceeds of any drawing under   the letter of credit, or (b) arrange for the Lender to become the transferee   beneficiary of the letter of credit, with the Lender agreeing, in each case,   that the proceeds of any drawing under the letter to credit are to be applied   as provided in Section 9.03 of the Loan Agreement. (vii) Commercial Tort   Claims. If such Debtor shall at any time hold or acquire a commercial tort   claim, such Debtor shall immediately notify the Lender in a writing signed by   such Debtor of the brief details thereof and grant to the Lender in such   writing a security interest therein and in the proceeds thereof, all upon the   terms of this Security Agreement, with such writing to be in form and   substance satisfactory to the Lender in its sole and absolute discretion.   (viii) Other Actions as to any and all Collateral. Each of the Debtors hereby   further covenants and agrees to take any other action reasonably requested by   the Lender to insure the attachment, perfection and first priority of, and   the ability of the Lender to enforce, the Lender's security interest in any   and all of the Collateral including, without limitation, (a) executing,   delivering and, where appropriate, filing financing statements and amendments   relating thereto under the Uniform Commercial Code, to the extent, if any,   that such Debtor's signature thereon is required therefor, (b) causing the   Lender's name to be noted as secured party on any certificate of title for a   titled good if such notation is a condition to attachment, perfection or   priority of, or ability of the Lender to enforce, the Lender's security   interest in such Collateral, (c) complying with any provision of any statute,   regulation or treaty of the United States as to any Collateral if compliance   with such provision is a condition to attachment, perfection or priority of,   or ability of the Lender to enforce, the Lender's security interest in such   Collateral, (d) using commercially reasonable efforts in obtaining   governmental and other third party consents and approvals, including without   limitation any consent of any licensor, lessor or other person obligated on   Collateral, (e) using commercially reasonable efforts in obtaining waivers   from mortgagees and landlords in form and substance satisfactory to the   Lender in its sole and absolute discretion, and (f) taking all actions   required by any earlier versions of the Uniform Commercial Code or by other   Law, as applicable in any relevant Uniform Commercial Code jurisdiction, or   by other law as applicable in any foreign jurisdiction. 4. Payment and Performance.   The Debtors shall pay and perform all of the Obligations secured by this   Security Agreement strictly in accordance with their terms. [SECOND AMENDED   AND RESTATED SECURITY AGREEMENT]

    

 

5.   Representations and Warranties. The Debtors hereby represent and warrant to   the Lender that (i) each of the Debtors is a corporation duly organized,   validly existing and is in good standing under the Laws of the State of   Delaware, and that no Debtor has ever changed, altered, amended, and/or   modified its state of organization, whether through or as a result of any   merger, acquisition, consolidation, or otherwise; (ii) the exact full names   of the Debtors as filed with the Office of the Delaware Department of State,   Division of Corporations, respectively, are "Wayside Technology Group,   Inc.", "Lifeboat Distribution, Inc.", "Techxtend,   Inc.", "Programmer's Paradise, Inc.", and "ISP   International Software Partners, Inc." and that no Debtor, other than   Wayside, Programmer's Paradise, and Techxtend, has ever changed, altered,   amended and/or modified its exact full name, whether through or as a result   of any merger, acquisition, consolidation, or otherwise, (iii) the Debtors   are not now, nor have they ever been, known by any tradename, alternate or fictitious   name or any other name, other than the exact full names referred to in clause   ( ii) above; (iv) the Debtors have a principal place of business located at 4   Industrial Way, 3rd Floor, Eatontown, New Jersey 07724; (v) the employer   identification number of (a) Wayside is 13-3136104, (b) Lifeboat is   22-3507219, (c) Techxtend is 22-2449456, (d) Programmer's Paradise is 22­3544479,   and (e) ISP is 22-3507220 and that the organizational identification number   of (1) Wayside is 945404, (2) Lifeboat is 2510367, (3) Techxtend is 2140621,   (4) Programmer's Paradise is 2510365, and (5) ISP is 2651593; (vi) no Debtor   currently holds any "commercial tort claims" (as such term is   defined in the Uniform Commercial Code); (vii) the Debtors are and shall be the   sole owners of all legal and beneficial interests and rights in and to each   item of the Collateral and they shall, at all times, have good and marketable   title thereto, free of all other security interests, liens, encumbrances and   claims or rights of others, except any Liens permitted under the Loan   Agreement; (viii) each of the Debtors has the full corporate power and   authority to execute this Security Agreement, to perform its obligations   hereunder and to subject the Collateral to be acquired by it to the security   interest created hereby; (ix) no dispute, adverse claim, or request for   equitable adjustment, right of set-off, counterclaim or defenses exists with   respect to any part of the Collateral; (x) the security interest granted to   the Lender pursuant to this Security Agreement is a continuing security   interest and no notice of the creation or existence of the renewal, extension   or modification of the Loan Agreement or any other Loan Documents need be   given to the Debtors for the security interest to remain perfected; and (xi)   except as may be expressly permitted by the Loan Agreement, no security   agreement, financing statement, notice of assignment or lien instrument   covering all or any part of the Collateral shall be on file in any public   filing or recording office, and, once filed, the filing of the UCC Financing   Statements covering the security interest created hereby shall continue in   effect, subject to renewal requirements, if any, until released. 6.   Covenants. Except as may be expressly permitted by the Loan Agreement, which   Loan Agreement, in the event of any inconsistency herewith, shall control,   each of the Debtors hereby covenants and agrees (i) to deliver to the Lender   at such intervals as the Lender may require, such documents, lists,   descriptions, certificates, and other information as may be necessary or   proper to keep the Lender fully informed with respect to the description of   the Collateral, (ii) from time to time to promptly execute and deliver to the   Lender, at the sole expense of such Debtor, all such other assignments,   certificates and supplemental documents, and do all other acts or things, as   the latter may reasonably request in order to more fully evidence and perfect   the security interest herein created; (iii) to punctually and properly perform   all of such Debtor's covenants, duties, and liabilities under any other   security agreement, mortgage, deed of trust, collateral pledge agreement or   contract of any kind now or hereafter existing as security for or in   connection with the payment of the Loan Facility, or any part thereof; (iv)   to give written notice to the Lender in the event that such Debtor, at any   time after the date hereof, whether as a result of any merger, acquisition,   consolidation or otherwise, (a) changes its exact full name, (b) changes its   state of organization, (c) changes its type of organization, (d) uses,   establishes or otherwise does business under any tradename, alternate or   fictitious name or any other name, (e) changes its principal place of   business; and/or (1) changes its employer identification number and/or its   organizational identification number, which notice, in any event, shall be   given not less than ten (10) [SECOND AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

Business Days   prior to such change taking place or such tradename, alternate or fictitious   name or other name being used; (v) to promptly notify the Lender of any   change in any fact or circumstances other than the notices referred to in   clause ( iv) of this Section 6, which requires the advance notice provided   for therein warranted or represented by such Debtor in this Security   Agreement or in any other Loan Document furnished by such Debtor to the   Lender in connection with the Collateral or the Loan Facility; (vi) to   promptly notify the Lender of any suit, audit, government investigation or   arbitration, request for equitable adjustment, termination for default or   convenience, claim, action, or proceeding materially affecting title to the   Collateral, or any material part thereof, or the security interest herein   that if determined adversely would have a Material Adverse Effect, and, at   the request of the Lender, to appear in and defend, at such Debtor's expense,   any such action or proceeding; (vii) to promptly, after being requested by   the Lender, pay to the Lender the amount of all (a) amounts actually incurred   by the Lender as court costs hereunder, (b) reasonable attorneys' fees   assessed by a court and incurred by the Lender in enforcing this Security   Agreement, and (c) lawful fees for filing, recording or releasing this   Security Agreement in any public office; and (viii) to do all things   necessary or reasonably appropriate to enable the Lender to fully exercise   its rights under this Security Agreement. In addition, each of the Debtors   hereby covenants and agrees that, except as may be expressly permitted by the   Loan Agreement, which Loan Agreement, in the event of any inconsistency   herewith, shall control, (1) upon the occurrence and during the continuance   of an Event of Default, upon notice from the Lender, each Person obligated to   make any payment to such Debtor with respect to the Collateral, or any part   thereof, is hereby authorized and directed by such Debtor to make payment   directly to the Lender; (2) such Debtor shall promptly collect all sums   payable in respect to the Collateral; (3) upon the occurrence and during the   continuance of an Event of Default, all proceeds of the Collateral received   by such Debtor, whether in the form of cash, checks, or otherwise, shall be   segregated from all other funds of such Debtor and be held in trust for the   Lender and each item of such proceeds, immediately upon receipt thereof by   such Debtor, shall become part of the Collateral and (4) after the occurrence   of an Event of Default and the giving of written notice thereof by the Lender   to such Debtor, such Debtor shall have absolutely no dominion or control over   any payment received in respect of the Collateral, or any part thereof,   except to deliver such payment immediately to the Lender, properly endorsed,   so that the Lender may collect and apply the proceeds in accordance with the   terms hereof Each of the Debtors hereby further covenants and agrees that,   without the prior express written consent of the Lender, such Debtor shall   not, except as may be expressly permitted by the Loan Agreement, which Loan   Agreement, in the event of any inconsistency herewith, shall control, (A)   sell, assign, or transfer any of the Collateral to any person, firm, or   corporation (except the Lender), (B) create in favor of anyone, except the   Lender, any other security interest in the Collateral, or in any part   thereof, or otherwise encumber or permit the same to become subject to any   lien, attachment, execution, sequestration, or other legal or equitable   process, or (C) remove, or permit to be removed, such Debtor's records   concerning the Collateral from the Premises. 7. Additional Covenants   Concerning the Collateral. Except as may be expressly permitted by the Loan   Agreement, which Loan Agreement, in the event of any inconsistency herewith,   shall control, each of the Debtors hereby covenants and agrees (i) to retain   at all times possession of the Collateral during the existence of this   Security Agreement and not to sell, exchange, assign, loan, deliver, lease,   mortgage or otherwise dispose of same without the prior express written   consent of the Lender, except as may be permitted herein and in the Loan   Agreement; (ii) to keep the Collateral located at the site(s) and location(s)   described on Schedule "A" attached hereto and made a part hereof,   and not to remove same from said location (except as may be permitted in the   Loan Agreement and clause (iii) below) without the prior express written   consent of the Lender, unless the Collateral is replaced with items of equal   or greater utility and value (which shall then be included as Collateral);   (iii) at its own cost and expense (a) to maintain, preserve and keep the   Collateral in a manner consistent with the standard operating practices   applicable to a business similar to such Debtor's business, in good and   substantial repair, working order and condition, ordinary wear and tear   excepted, (b) as reasonably necessary, from time to time to make or cause to   be made, all necessary and proper repairs, replacements, renewals,   improvements and [SECOND AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

betterments   thereto, and (c) as reasonably necessary, from time to time, to make such   substitutions, additions, modifications and improvements as may be necessary   and as shall not materially impair the structural integrity, operating   efficiency and economic value of the Collateral; (iv) such Debtor will   comply, in all material respects, with all acts, rules, regulations, orders,   decrees and directions of any Governmental Authority, applicable to the   Collateral or any part thereof, or to the operation of such Debtor's   business; provided, however, that such Debtor may contest any act,   regulation, order, decree or direction in any commercially reasonable manner   which shall not in the sole opinion of the Lender adversely affect the   Lender's rights or the first priority of its security interest in the   Collateral; (v) to pay and discharge promptly all taxes, assessments,   governmental charges or levies, or other charges or liens imposed upon it or   in respect of any of the Collateral, payable at any time, whether before or   after the making available of the Loan Facility, except for those taxes,   assessments, governmental charges or levies or other charges or liens then   being contested in good faith by such Debtor by appropriate proceedings   (provided that such contest shall not reasonably be expected to (a) result in   a lien being placed on the Collateral or any part thereof or (b) result in   the Collateral being subject to loss or forfeiture) and for which such Debtor   has maintained adequate reserves or accrued the estimated liability on the   balance sheet of such Debtor for the payment of same; and (vi) to carry   insurance on the Collateral in amounts, types and with insurance companies   reasonably acceptable to the Lender. All such policies of insurance referred   to in clause (vi ) shall contain loss payable clauses in favor of such Debtor   and the Lender as their respective interests may appear, and such policies or   certificates evidencing the same shall be deposited with the Lender. Each of   the Debtors hereby assigns and sets over unto the Lender all monies which may   become payable on account of such insurance referred to in clause (vi) of   this Section 7, including without limitation, any return of unearned premiums   which may be due upon cancellation of any such insurance, and directs the   insurers to pay the Lender any amount so due. The Lender, its officers,   employees and authorized agents are hereby irrevocably appointed   attorney-in-fact of each of the Debtors to endorse any draft or check which   may be payable to any Debtor in order to collect the proceeds of such   insurance or any return of unearned premiums. Such proceeds shall be applied   by the Lender as provided for in the Loan Agreement. Any balance of insurance   proceeds remaining in the possession of the Lender after payment in full of   the Obligations related to such Collateral, provided no Event of Default has   occurred and is continuing, shall be paid to the Debtors on demand. If an   Event of Default has occurred and is continuing, then the Debtors shall have   no right to or claim against the balance of said insurance proceeds. All   alterations, replacements, renewals or additions made pursuant to clause   (iii. of this Section 7 shall become and constitute a part of the Collateral.   The Debtors shall not remove, demolish, materially alter, discontinue the use   of, sell, transfer, assign, hypothecate or otherwise dispose of to any Person   any of the Collateral, other than in the ordinary or usual course of the Debtors'   business or as may be permitted in the Loan Agreement. All Collateral which   has been substituted for any removed, replaced or disposed of Collateral   shall be of a value and quality at least equal to that of the removed,   replaced or disposed of Collateral, and shall be subject to the liens of the   security interest granted to the Lender hereunder. 8. Actions of the Lender.   Except as more fully and accurately set forth in the Loan Agreement, which in   the event of any inconsistency herewith, shall control, should any covenant,   duty, or agreement of the Debtors fail to be performed in accordance with its   terms hereunder, resulting in an Event of Default, the Lender may perform or   attempt to perform such covenant, duty or agreement on behalf of the Debtors,   and any reasonable amount expended by the Lender in such performance or   attempted performance together with interest thereon at the Default Rate   shall become a part of the Obligations secured by this Security Agreement   and, at the request of the Lender, each of the Debtors covenants and agrees   to promptly pay such amount to the Lender at its office in Iselin, New   Jersey; provided, however, that the Lender does not assume and shall never   have any liability for the performance of any duties of the Debtors under or   in connection with the Collateral, or any part thereof, or under any   transaction, agreement, or contract out of which the Collateral, or any part   thereof, may arise. 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9. Repayment of   the Lender. Each of the Debtors hereby covenants and agrees that the Lender   may, from time to time, without giving notice and without impairing or   affecting the security interest created by this Security Agreement, (i)   acquire a security interest in any property in addition to the Collateral, or   release any such interest so acquired, or permit any substitution or exchange   for such property; (ii) acquire the primary or secondary liability of any   party or parties with respect to all or any part of the Loan Facility or   release, modify or compromise the same or any part thereof; (iii) modify,   extend or renew for any period any part of the Loan Facility and (iv) resort   to the Collateral for payment of the Loan Facility whether or not the Lender   shall have resorted to any other collateral or proceeded against any other   party primarily or secondarily liable on the Loan Facility or any of them.   10. Lender's Appointment as Attorney-in-Fact. (i) Except as more fully and   accurately set forth in the Loan Agreement, which in the event of any   inconsistency herewith, shall control, each of the Debtors hereby irrevocably   constitutes and appoints the Lender and any officer or agent thereof, with   full power of substitution, as its true and lawful attorney-in-fact with full   irrevocable power and authority in the place and stead of such Debtor and in   the name of such Debtor or in its own name, from time to time in the Lender's   discretion, for the purpose of carrying out the terms of this Security   Agreement, to take any and all necessary and appropriate action and to   execute any and all documents and instruments which may be necessary or   desirable to accomplish the purposes of this Security Agreement and, without   limiting the generality of the foregoing, hereby gives the Lender the power   and right, on behalf of such Debtor, without notice to or assent by the   Debtors to do the following: (a) upon the occurrence and during the   continuance of any Event of Default to ask, demand, collect, receive and give   acquaintances and receipts for any and all moneys due and to become due under   any contract and, in the name of such Debtor or its own name or otherwise, to   take possession of and endorse and collect any checks, drafts, notes,   acceptances or other instruments for the payment of moneys due under any   contract or account and to file any claim or to take any other action or   proceeding in any court of law or equity or otherwise deemed appropriate by   the Lender for the purpose of collecting any and all such moneys due under   any contract or account whenever payable; (b) to pay or discharge taxes,   liens, security interests or other encumbrances levied or placed on or   threatened against the Collateral, to effect any repairs or any insurance   called for by the terms of this Security Agreement and to pay all or any part   of the premiums therefor and the costs thereof; (c) upon the occurrence and   during the continuance of any Event of Default, (1) to receive payment of and   receipt for any and all moneys, claims and other amounts due and to become   due at any time in respect of or arising out of any Collateral; (2) to   commence and prosecute any suits, actions or proceedings at law or in equity   in any court of competent jurisdiction to collect the Collateral or any part   thereof and to enforce any other right in respect of any part Collateral; (3)   to defend any suit, action or proceeding brought against such Debtor with   respect to any Collateral; (4) to settle, compromise or adjust any suit,   action or proceeding described above and, in connection therewith, to give   such discharges or releases as the Lender may deem appropriate; (5) generally   to sell, transfer, pledge, make any agreement with respect to or otherwise   deal with any of the Collateral as fully and completely as though the Lender   were the absolute owner thereof for all purposes and to do, at the Lender's   option and such Debtor's expense, at any time, or from time to time, all acts   and things which the Lender reasonably deems necessary to protect, preserve   or realize upon the Collateral and the Lender's security interest therein in   order to effect the intent of this Security Agreement, all as fully and   effectively as such Debtor might do and (6) to sign and endorse any invoices,   freight or express bills, bills of lading, storage or warehouse receipts,   drafts against such Debtor, assignments, verifications and notices in   connection with accounts and other documents relating to any such Collateral;   [SECOND AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

(d) to take   such action as the Lender reasonably deems appropriate to maintain, repair,   protect and insure the Collateral, to attach, perfect, continue, preserve and   protect the Lender's security interest in the Collateral and to perform,   keep, observe and render true and correct any and all covenants, agreements,   representations and warranties of such Debtor hereunder; (e) to negotiate,   complete, execute, and deliver any control agreement(s) by and among the   Lender, such Debtor and any third party that may be or may become required in   connection with the Lender's perfection of its security interest in and to   the Collateral; and (f) to inspect, audit and verify the Collateral,   including reviewing all of such Debtor's books and records and copying and   making excerpts therefrom at reasonable times during normal business hours.   Each of the Debtors hereby ratifies all that said attorneys shall lawfully do   or cause to be done by virtue hereof. This power of attorney is a power   coupled with an interest and shall be irrevocable. (ii) The powers conferred   on the Lender hereunder are solely to protect its interests in the Collateral   and shall not impose any duty upon it to exercise any such powers. The Lender   shall be accountable only for amounts that it actually receives as a result   of the exercise of such powers and neither it nor any of its officers,   directors, employees or agents shall be responsible to the Debtors for any   act or failure to act, except for its, his or her own gross negligence or   willful misconduct. (iii) Each of the Debtors also hereby authorizes the   Lender, at any time and from time to time when there exists any uncured Event   of Default, to execute, in connection with the sale of any Collateral, any   endorsements, assignments or other instruments of conveyance or transfer with   respect to the Col lateral. 1 1 . Events of Default. The Debtors shall be in   default under this Security Agreement if an Event of Default under the Loan   Agreement shall have occurred and is continuing. 12. Remedies, Rights Upon   Default. (i) If an Event of Default shall occur and be continuing: (a) All   payments received by the Debtors under or in connection with any of the   Collateral shall be held by the Debtors in trust for the Lender, shall be   segregated from other funds of the Debtors and shall forthwith, upon receipt   by the Debtors, be turned over to the Lender, in the same form as received by   the Debtors (duly endorsed by the Debtors to the Lender, if required); and   (b) Any and all such payments so received by the Lender (whether from the   Debtors or otherwise) shall, in the sole and absolute discretion of the   Lender, be held by the Lender as collateral security for, and/or then or at   any time thereafter applied in whole or in part by the Lender against, all or   any part of the Obligations in such order as the Lender shall elect. Any   balance of such payments held by the Lender and remaining after payment in   full of all of the Obligations shall be paid over to the Debtors or to   whomsoever may be lawfully entitled to receive the same. (ii) If any Event of   Default shall occur and be continuing, the Lender may exercise in addition to   all other rights and remedies granted to it in this Security Agreement and in   any other instrument or agreement securing, evidencing or relating to the   obligations, all rights and remedies of a secured party under the applicable   Uniform Commercial Code. Without limiting the generality of the [SECOND   AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

foregoing, the   Debtors hereby expressly agree that in any such event the Lender, 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 Debtors or any other person (all and each of which   demands, advertisements and/or notices are hereby expressly waived), may   forthwith collect, receive, appropriate and realize upon the Collateral, or   any part thereof, and/or may forthwith sell, lease, assign, give option or   options to purchase, or sell or otherwise dispose of and deliver said   Collateral (or contract to do so), or any part thereof, in one or more   parcels at public or private sale or sales, at any exchange broker's board or   at any of the Lender's offices or elsewhere at such prices as it may deem   best, for cash or on credit or for future delivery without assumption of any   credit risk. The Lender shall have the right upon any such public sale or   sales, and, to the extent permitted by law, upon any such private sale or   sales, to purchase the whole or any part of said Collateral so sold, free of   any right or equity of redemption in the Debtors, which right or equity is   hereby expressly released. The Debtors further agree, at the Lender's written   request upon the occurrence and during the continuance of an Event of Default,   to assemble the Collateral and make it available to the Lender at the   Premises. The Lender shall apply the net proceeds of any such collection,   recovery, receipt, appropriation, realization or sale, after deducting all   reasonable costs and expenses of every kind incurred therein or incidental to   the care, safekeeping or otherwise of any or all of the Collateral or in any   way relating to the rights of the Lender hereunder, including reasonable   attorneys' fees and legal expenses, to the payment in whole or in part of the   Obligations, in such order as the Lender may elect, the Debtors remaining   liable for any deficiency remaining unpaid after such application, and only   after so paying over such net proceeds and after the payment by the Lender of   any other amount required by any provision of law, including Section 9­615(a)(3)   of the applicable Uniform Commercial Code (or any successor or substitute   provision), need the Lender account for the surplus, if any, to the Debtors.   To the extent permitted by applicable law, each of the Debtors hereby waives   all claims, damages, and demands against the Lender arising out of the   repossession, retention or sale of the Collateral, except arising based upon   the gross negligence or willful misconduct of the Lender. The Debtors hereby   agree that the Lender shall give at least twenty (20) days' notice (which   notification shall be deemed given when mailed, postage prepaid, addressed to   the Debtors at their respective addresses set forth in Section I 9 hereof) of   the time and place of any public sale or of the time after which a private   sale may take place and that such notice is reasonable notification of such   matters. The Debtors shall remain liable for any deficiency if the proceeds   of any sale or disposition of the Collateral are insufficient to pay all   amounts to which the Lender is entitled, the Debtors also being liable for   the reasonable fees of any attorneys employed by the Lender to collect such   deficiency. (iii) Each of the Debtors also hereby agrees to pay all   reasonable costs of the Lender, including attorneys' fees, incurred with   respect to the collection of any of the Obligations and the enforcement of   any of the Lender's rights hereunder and any and all post-Judgement   collection costs and expenses. (iv) Each of the Debtors hereby waives   presentment, demand, protest or any notice (to the extent permitted by   applicable law) of any kind in connection with this Security Agreement or any   Collateral. 13. Limitation on the Lender's Duty in Respect of Collateral.   Beyond the safe custody thereof and any other duties imposed by applicable   Law, the Lender shall not have any duty as to any Collateral in its   possession or control or in the possession or control of any agent or nominee   of it as to the preservation of rights against prior parties or any other   rights pertaining thereto. 14. Uniform Commercial Code. The Debtors and the   Lender hereby covenant and agree that any and all references to the terms   "Uniform Commercial Code" and/or "UCC" contained in the   Loan Agreement, the Security Agreement and/or in any other Loan Document   shall mean and refer to the Uniform Commercial Code, as adopted and enacted   and as in effect from time to time, of the applicable [SECOND AMENDED AND   RESTATED SECURITY AGREEMENT]

    

 

State or   States. To the extent that the definition of any category or type of   collateral is modified by any amendment, modification and/or revision to the   Uniform Commercial Code, such amended, modified and/or revised definition   will apply to the Loan Agreement, the Security Agreement and all of the other   Loan Documents automatically as of the effective date of such amendment,   modification and/or revision. 1 5 . No Lien Termination Without Release. In   recognition of the Lender's right to have its reasonable attorneys' fees and   other expenses incurred in connection with the Loan Facility, the Loan   Agreement, and all of the other Loan Documents secured by the Collateral,   notwithstanding the payment in full of all of the Obligations by the Debtors,   the Debtors and the Lender hereby agree that the Lender will not be required   to terminate any Uniform Commercial Code Financing Statements filed in its   favor against the Debtors and relating to the Collateral unless and until the   Debtors and any and all Persons which are secondarily liable on the   Obligations has executed and delivered to the Lender a general release, in   form and substance satisfactory to the Lender in its reasonable discretion,   covering claims both known and unknown. EACH OF THE DEBTORS UNDERSTANDS THAT   THIS PROVISION CONSTITUTES A WAIVER OF ITS RIGHTS UNDER SECTION 9-513 OF THE   UNIFORM COMMERCIAL CODE. 1 6 . Severability I ity. Any provision of this   Security Agreement which is prohibited or unenforceable in any jurisdiction   shall, as to such jurisdiction, be ineffective to the extent of such   prohibition or unenforceability without invalidating the remaining provisions   hereof and any such prohibition or unenforceability in any jurisdiction shall   not invalidate or render unenforceable such provision in any other jurisdiction.   17. No Waiver of Rights; Cumulative Remedies. Nothing herein contained, and   no act done or omitted by the Lender pursuant to the powers and rights   granted it herein, shall be deemed to be a waiver by the Lender of its rights   and remedies under the Loan Agreement and the other Loan Documents but this   Security Agreement is made and accepted without prejudice to any of the   rights and remedies possessed by the Lender under the terms thereof. The   right of the Lender to collect said indebtedness and to enforce any other   security therefor held by it may be exercised by the Lender either prior to,   simultaneously with or subsequent to any action taken by it hereunder. The   Lender shall not by any act, delay, omission or otherwise be deemed to have   waived any of its rights or remedies hereunder except pursuant to a writing   executed by the Lender and no waiver shall be valid unless in writing, signed   by the Lender, and then only to the extent therein set forth. A waiver by the   Lender of any right or remedy hereunder on any one occasion shall not be   construed as a bar to any right or remedy which the Lender would otherwise   have had on any future occasion. No failure to exercise nor any delay in   exercising on the part of the Lender, 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   future exercise thereof or the exercise of any other right, power or   privilege. The rights and remedies hereunder provided are cumulative and may   be exercised singly or concurrently, and are not exclusive of any rights and   remedies provided by law. 1 8. Successors and Assigns. This Security   Agreement and all obligations of the Debtors hereunder shall be binding upon   the successors and assigns of the Debtors and shall, together with the rights   and remedies of the Lender hereunder, inure to the benefit of the Lender and   its successors and assigns. 19. Further Indemnification. Each of the Debtors   hereby agrees to pay, and to save the Lender harmless from, any and all   liabilities with respect to, or resulting from any delay by the Debtors in   paying, any and all excise, sales or other taxes which may be payable or   determined to be payable with respect to any of the Collateral or in   connection with any of the transactions contemplated by this Security   Agreement. [SECOND AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

20. 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:   Wayside Technology Group, Inc. Lifeboat Distribution, Inc. Techxtend, Inc.   Programmer's Paradise, Inc. ISP International Software Partners, 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 Attention: David J. Sorin, Esq. Telecopy No.: (732) 352-7751   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   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) Business 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 Debtors and/or the Lender. 21. Law   Applicable. The Uniform Commercial Code of the State or States having   jurisdiction with respect to all or any portion of the Collateral from time   to time shall govern the attachment, perfection and the effect of attachment   and perfection of the Lender's security interest in the 

    

 

 

Collateral, and   the rights, duties, and obligations of the Lender and the Debtors with   respect thereto. This Security Agreement shall be deemed to be a contract   under the laws of the State of New Jersey and the execution and delivery thereof   and, to the extent not inconsistent with the preceding sentence, the terms   and provisions hereof shall be governed by and construed in accordance with   the laws of the State of New Jersey. 22. Counterparts. This Security   Agreement may be executed by one or more parties to this Security Agreement   in any number of separate counterparts and all of said counterparts taken   together shall be deemed to constitute one and the same instrument. 23.   Further Assurances. Each of the Debtors agrees that at any time and from time   to time upon the written request of the Lender, that such Debtor will execute   and deliver such further documents and do such further acts and things as the   Lender may reasonably request in order to effect the purposes of this   Security Agreement. 24. Obligations Absolute. The Obligations of the Debtors   under this Security Agreement shall be absolute and unconditional and shall   remain in full force and effect without regard to, and shall not be released,   suspended, discharged, terminated or otherwise affected by, any circumstance   or occurrence whatsoever, including without limitation: (i) any renewal,   amendment or modification of or addition or supplement to or deletion from   the Obligations or any assignment or transfer thereof; (ii) any waiver,   extension, indulgence or other action or inaction under or in respect or any   of the Obligations of this Security Agreement; (iii) any furnishing of   additional security to the Lender or its assignee or any acceptance thereof   or any release of any security by the Lender or its assignee; (iv) any   limitation on any parties' liability or obligations under any of the   Obligations or any invalidity or inability, in whole or in part, of any of   the Obligations; or (v) any bankruptcy, insolvency, reorganization, composition,   adjustment, dissolution, liquidation or other like proceeding relating to the   Debtors, any partnership or any other Person or any action taken with respect   to this Lender by any trustee or custodian or receiver or by any court in any   such proceeding, whether or not the Debtors shall have notice or knowledge of   any of the foregoing. 25. Modifications in Writing. This Security Agreement   may not be changed, waived, discharged or terminated orally, but only by an   instrument in writing signed by the party against whom enforcement of the   change, waiver, discharge or termination is sought. 26. Security for the Loan   Facility. Notwithstanding any other term, covenant or condition contained in   this Security Agreement, the Debtors and the Lender hereby agree that the   Collateral shall secure only the Obligations arising in respect of the Loan   Facility and the Loan Agreement and that the Collateral is not offered as   security in connection with any other indebtedness due and owing from the   Debtors to the Lender in respect of any other credit facilities. 27. WAIVER   OF JURY TRIAL. THE DEBTORS AND THE LENDER MUTUALLY HEREBY KNOWINGLY,   VOLUNTARILY AND INTENTIONALLY (i) WAIVE ANY AND ALL RIGHTS THAT THEY MAY NOW   OR HEREAFTER HAVE UNDER THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE   THEREOF TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT   OF, UNDER OR IN CONNECTION WITH THIS SECURITY AGREEMENT OR ANY OF THE OTHER   LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY   COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN)   OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF   CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF THE LENDER RELATING TO   THE ADMINISTRATION OF THE LOAN [SECOND AMENDED AND RESTATED SECURITY   AGREEMENT]

    

 

FACILITY OR   ENFORCEMENT OF THIS SECURITY AGREEMENT, AND (ii) AGREE THAT NEITHER THE   DEBTORS NOR THE LENDER WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY   OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT   AS PROHIBITED BY APPLICABLE LAW, THE DEBTORS AND THE LENDER HEREBY KNOWINGLY,   VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR   RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL   DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE   DEBTORS AND THE LENDER HEREBY CERTIFY THAT NO REPRESENTATIVE, AGENT OR   ATTORNEY OF THE OTHER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER   WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS.   THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE LENDER TO MAKE THE LOAN   FACILITY AVAILABLE TO THE DEBTORS AND TO ACCEPT THIS SECURITY AGREEMENT. IT   IS INTENDED THAT SAID WAIVERS SHALL APPLY TO ANY AND ALL DEFENSES, RIGHTS,   AND/OR COUNTERCLAIMS IN ANY ACTION OR PROCEEDING. THE DEBTORS AND THE LENDER   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. 28. Attachment. The security interests created hereby are   intended to attach when this Security Agreement is executed by the Debtors   and delivered to the Lender and are intended to attach to the Collateral   acquired after the date hereof as soon as each Debtor has rights in such   Collateral. 29. Headings. The division of this Security Agreement into   sections and paragraphs and the insertion of headings are for convenience of   reference only and shall not affect the construction or interpretation of   this Security Agreement. 30. Acknowledgment. The Debtors hereby acknowledge   receipt of a copy of this Security Agreement. 31. Credit Support Document.   This Security Agreement is intended to act (i) as a "Credit Support   Document" (as such term is defined in the Hedging Agreement), with   respect to the Debtors 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 SECURITY AGREEMENT]

    

 

IN WITNESS   WHEREOF, the Lender and the Debtors have caused this Security Agreement to be   signed by their appropriate authorized corporate officers, all as of the day   and year first above written. DEBTORS: WAYSIDE TECHNOLOGY GROUP, INC., a   Delaware corporation Michael Vesey Chief Financial Officer LIFEBOAT   DISTRIBUTION, INC., a Delaware corporation „ By. Michael Vesey Chief   Financial Officer TECHXTEND, INC., a Delaware corporation By. Michael Vesey   Chief Financial Officer PROGRAMMER'S PARADISE, INC., a Delaware corporation A   By. Michael Vesey Chief Financial Officer ISP INTERNATIONAL SOFTWARE   PARTNERS, INC., a Delaware corporation By. Michael Vesey Chief Financial   Officer [SECOND AMENDED AND RESTATED SECURITY AGREEMENT]

    

 

LENDER:   CITIBANK, N.A. By: Craig Heal Senior Vice President [SECOND AMENDED AND   RESTATED SECURITY AGREEMENT]

    

 

SCHEDULE   "A" ATTACHED TO AND MADE A PART OF THAT CERTAIN SECOND AMENDED AND   RESTATED SECURITY AGREEMENT EXECUTED BY AND AMONG WAYSIDE TECHNOLOGY GROUP,   INC., LIFEBOAT DISTRIBUTION, INC., TECHXTEND, INC., PROGRAMMER'S PARADISE,   INC., AND ISP INTERNATIONAL SOFTWARE PARTNERS, INC., AS THE CO-BORROWERS, AND   CITIBANK, N.A., AS THE LENDER, DATED NOVEMBER 15, 2017 Location of Collateral   1, 4 Industrial Way, 3rd Floor, Eatontown, New Jersey 07724 2. 284 Old Deal   Road, Eatontown, New Jersey 07724 3. 6402 East Superstition Springs   Boulevard, Suite 116/118, Mesa, Arizona 85206 [SECOND AMENDED AND RESTATED   SECURITY AGREEMENT]

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