AMENDED LOAN AND PLEDGE AGREEMENT
This Amended Loan and Pledge Agreement, dated as of May 5, 1997,
is by and between Strategic Distribution, Inc., a Delaware corporation (the
"Company"), and Xxxx X. Xxxxxx ("Xxxxxx").
1. The Company hereby agrees to loan to Xxxxxx an amount equal to
$1,000,000, which is equal to (a) the purchase price of shares of common
stock, par value $0.10 per share, of the Company (collectively, the
"Shares") purchased by Xxxxxx pursuant to the Stock Purchase Agreement,
dated as of April 11, 1997, as amended, between Xxxxxx and the Company less
(b) $700,000.
2. The loan shall be evidenced by a non-recourse promissory note
dated the date of such loan in the form of Annex A attached hereto (the
"Note"). The Note shall be secured solely by a pledge of the Shares as set
forth below and the Company shall have no recourse to any other property or
assets of Xxxxxx.
3. The entire unpaid principal amount of the Note shall be due,
together with all interest accrued but unpaid thereon, on the fifth
anniversary of the issuance of the Note. Xxxxxx may prepay the Note in
whole or from time to time, in part, without premium or penalty.
4. In the event Xxxxxx xxxxx any Shares or otherwise realizes any
cash or other consideration in respect of such Shares prior to repayment in
full of the Note, whether pursuant to a dividend, private sale, public
offering, merger, recapitalization, liquidation or dissolution of the
Company (each, a "Realization Event"), Xxxxxx shall within ten days of the
Realization Event, make a mandatory prepayment of the Note in an amount
equal to the lesser of (i) 100% of the net after tax proceeds received by
or for the account of Xxxxxx in respect of the Realization Event and (ii)
the aggregate amount then outstanding under the Note, such amount to be
applied pro rata to accrued interest and principal on the Note.
5. Xxxxxx hereby grants to the Company a first priority security
interest in the Shares, as collateral security for the due and punctual
payment of the Note in accordance with its terms and the performance by
Xxxxxx of his obligations under the Note (which Shares shall include any
other securities or property receivable or distributable with respect
thereto after the date hereof). The certificates representing the Shares,
together with a stock power attached thereto in blank, shall be
1
delivered
to the Company and shall be retained by the Company until all obligations
under the Note have been paid in full. At such time, the Company shall
return to Xxxxxx the certificates representing the Shares, together with
the stock power attached thereto.
6. Upon the occurrence of an Event of Default, the Company shall
have and may exercise all rights and remedies afforded to a secured party
under the New York Uniform Commercial Code applicable thereto, including,
without limitation, the right to sell the Shares at a public or private
sale (provided that the Company shall give Xxxxxx at least 15 days prior
written notice of the date in which any public sale is to be held or the
date after which any private sale may be made), at which sale the Company
may purchase such Shares (free from any right of redemption by Xxxxxx,
which right is hereby waived and released) and have the right to retain the
Shares in partial or full satisfaction of Sergey's obligations under the
Note in accordance with the provisions of the New York Uniform Commercial
Code. The Company's recovery upon an Event of Default shall be limited to
the Shares, and no judgment, order or execution entered in any suit, action
or proceeding, whether legal or equitable, on this Agreement or the Note
shall be obtained or enforced against Xxxxxx or any other property or asset
of Xxxxxx. If there is a foreclosure of the Company's lien on the Shares,
by power of sale or otherwise, no judgment for any deficiency shall be
brought or obtained by the Company against Xxxxxx or any other property or
asset of Xxxxxx.
7. Each of Xxxxxx and the Company has all power and authority
necessary to enter into and consummate the transactions contemplated by
this Agreement and this Agreement is valid and enforceable against each of
the Company and Xxxxxx in accordance with its terms. Xxxxxx has not
created or permitted any lien or encumbrance to attach to the Shares, other
than the pledge set forth in this Agreement.
8. If any of the following events ("Events of Default") shall
occur:
(a) Xxxxxx shall default in the payment of interest or principal
on the Note when the same shall become due and payable, whether at
maturity, by acceleration or otherwise and such default continues for more
than ten days after receipt of written notice from the Company;
(b) Xxxxxx shall default in the performance or compliance with
any other term or provision contained in this Agreement and such default
continues for more than 30 days after receipt of written notice from the
Company; or
2
(c) If any of the Shares shall be encumbered, pledged, attached
or levied upon or seized at any legal proceeding, except as contemplated by
this Agreement, and such encumbrance, pledge, attachment or levy remains
uncured for more than 15 days;
then the holder of the Note may at any time by written notice to Xxxxxx (or
without such notice with respect to subsection (c) above), declare the
entire unpaid principal of and the interest then accrued on the Note to be
forthwith due and payable, without other notices or demands of any kind,
all of which are hereby waived by Xxxxxx.
9. Xxxxxx will do, execute, acknowledge, deliver, file and record
all such further acts, conveyances, transfers and assurances as the Company
may deem necessary or advisable to perform, preserve, protect and continue
the pledge granted by this Agreement.
10. All notices and communications provided for herein shall be
delivered or mailed by registered or certified mail, postage prepaid, or
telegraphed, addressed as follows:
If to the Company:
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
If to Xxxxxx:
Xxxx X. Xxxxxx
000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
or such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
11. All representations and warranties made by Xxxxxx and the
Company herein shall survive the making of the loan and the delivery of the
Note hereunder.
12. No delay on the part of the Company in exercising 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 other or further exercise thereof, or the exercise of any other
right, power or privilege.
3
13. This Agreement and the Note shall be governed by and
interpreted and enforced in accordance with the laws of the State of
Delaware without giving effect to the choice-of-law provisions thereof.
14. This Agreement shall be binding upon the successors and
assigns of the parties hereto.
15. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall
be considered on and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
STRATEGIC DISTRIBUTION, INC.
By: /s/ XXXXXX X. XXXXXX
----------------------------
Name:
Title:
/s/ XXXX X. XXXXXX
---------------------------
Xxxx X. Xxxxxx
4
