MASTER REAFFIRMATION AGREEMENT Blocked Account Control Agreement dated as of , 200

Exhibit 10.3

MASTER REAFFIRMATION AGREEMENT

This MASTER REAFFIRMATION AGREEMENT (this “Agreement”) is made as of this 11th day of January, 2006, by and among PTHR HOLDINGS, INC., a Delaware corporation (the “Holdings”), PANTHER II TRANSPORTATION, INC., an Ohio corporation (the “Borrower”), PANTHER II, INC., an Ohio corporation f/k/a Sokolowski, Inc. (“Panther Sub”; Holdings, Borrower and Panther Sub are each referred to herein individually as an “Obligor” and together as the “Obligors”) and ANTARES CAPITAL CORPORATION, a Delaware corporation, as agent ( “Agent” ) for the Lenders party to the Amended and Restated Credit Agreement described below. All capitalized terms used but not elsewhere defined herein shall have the respective meanings ascribed to such terms in the Amended and Restated Credit Agreement.

W I T N E S S E T H:

A. Borrower, Agent and the Lenders have entered into that certain Credit Agreement dated as June 10, 2005 (as heretofore amended, modified and supplemented, including, without limitation, pursuant to that certain First Amendment to Loan Documents dated as of September 21, 2005, and as the same may hereafter be further amended, restated, supplemented or otherwise modified and in effect from time to time, collectively, the “Existing Credit Agreement”), pursuant to which the Lenders made loans and other financial accommodations to the Borrower, subject to the terms and conditions set forth therein.

B. The Obligors previously have reviewed, consented to and executed various agreements, documents and instruments in connection with the Existing Credit Agreement, including, without limitation, those agreements, documents and instruments described on Exhibit A hereto (collectively, the “Existing Collateral Documents”).

C. The Borrower, Agent and the Lenders have agreed to amend and restate the Existing Credit Agreement in its entirety, without constituting a novation, pursuant to that certain Amended and Restated Credit Agreement of even date herewith (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Amended and Restated Credit Agreement”) by and among the Borrower, Agent and the Lenders.

D. Each Obligor shall derive both direct and indirect benefits from the loans and other financial accommodations (collectively, the “Loans”) made pursuant to the provisions of the Amended and Restated Credit Agreement.

E. One of the conditions precedent to Agent and the Lenders entering into the Amended and Restated Credit Agreement is that each Obligor execute and deliver this Agreement to acknowledge and agree that the Existing Collateral Documents, and the liens, security interests and guarantees granted and issued thereunder, secure and guaranty the Obligations and all other obligations, liabilities and indebtedness (collectively, the “Liabilities”) of the Obligors under the Amended and Restated Credit Agreement and the other Loan Documents.

NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, each of the undersigned hereby agrees as follows:

1. References Contained in the Existing Collateral Documents . All references in the Existing Collateral Documents to the “Obligations” or any other obligations, liabilities or indebtedness of the Borrower owing from time to time and at any time to Agent and the Lenders shall be deemed to refer to, without limitation, the “Obligations” of the Borrower under, pursuant to and as defined in the Amended and Restated Credit Agreement. All references in the Existing Collateral Documents to the “Credit Agreement” shall be deemed to refer to the Amended and Restated Credit Agreement. All references in the Existing Collateral Documents to the “Loan Documents” shall be deemed to refer to and include, without limitation, the Existing Collateral Documents.

2. Reaffirmation. In connection with the execution and delivery of the Amended and Restated Credit Agreement, each Obligor, as borrower, debtor, grantor, mortgagor, pledgor, guarantor or assignor, or in any other similar capacities in which such Person grants Liens or security interests in its Property or otherwise acts as an accommodation party or guarantor, as the case may be, in any case under the Existing Collateral Documents, hereby (i) ratifies and reaffirms all of its payment, performance and observance obligations and liabilities, whether contingent or otherwise, under each of such Existing Collateral Documents, as amended hereby, to which it is a party, and (ii) to the extent such Person granted Liens on or security interests in any of its Property pursuant to any such Existing Collateral Documents as security for the Liabilities of such Person under or with respect to the Existing Collateral Documents or any of the other Loan Documents, ratifies and reaffirms such grant of security and confirms and agrees that such Liens and security interests hereafter secure all of the Liabilities of such Person and the other Obligors, as applicable, under the Existing Collateral Documents, as amended hereby, in each case including, without limitation, all additional obligations, indebtedness and liabilities resulting from the Amended and Restated Credit Agreement, and as if each reference in such Existing Collateral Documents, as amended hereby, to the obligations, indebtedness and liabilities secured thereby are construed hereafter to mean and refer to such obligations, indebtedness and liabilities under the Amended and Restated Credit Agreement and the other Loan Documents, including, without limitation, the Existing Collateral Documents, as amended hereby.

Each Obligor acknowledges receipt of a copy of the Amended and Restated Credit Agreement and the Loan Documents executed and delivered in connection therewith and acknowledges that each of the Existing Collateral Documents, as amended hereby, remains in full force and effect and hereby is ratified and confirmed. The execution and delivery of this Agreement, and the performance of the Obligors’ obligations hereunder, shall not (i) operate as a waiver of any right, power or remedy of the Agent or the Lenders, (ii) constitute a waiver of any provision of any of the Existing Collateral Documents, or (iii) constitute a novation of any of the Liabilities or other obligations under the Existing Credit Agreement or the Loan Documents (including, without limitation, the Existing Collateral Documents). Each Obligor agrees that this Agreement constitutes a “Loan Document” under the Amended and Restated Credit Agreement.

Master Reaffirmation

3. Representations and Warranties .

(a) Each Obligor hereby confirms to the Agent that the representations and warranties set forth in the Existing Collateral Documents, as amended by this Agreement, made by such Obligor are true and correct in all respects as of the date hereof (except to the extent such representations and warranties expressly refer to an earlier date, in which case they shall be true and correct as of such earlier date), and shall be deemed to be remade as of the date hereof. Each Obligor hereby represents and warrants to the Agent that: (i) such Person has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (ii) upon the execution and delivery hereof, this Agreement shall be valid, binding and enforceable upon such Person in accordance with its terms; (iii) the execution and delivery of this Agreement do not and shall not contravene, conflict with, violate or constitute a default under (A) the articles or certificate or incorporation, bylaws, code of regulations, partnership agreement, certificate of limited partnership or other constituent documents of such Person, if applicable, or (B) any applicable law, rule, regulation, judgment, decree or order or any agreement, indenture or instrument to which such Person is a party or is bound or which is binding upon or applicable to all or any portion of such Person’s Property and (iv) no Default or Event of Default exists.

(b) In connection herewith, the parties hereto desire to amend and restate the schedules to that certain Security Agreement dated as of June 10, 2005 among Holdings, Borrower, Panther Sub and Agent (the “Existing Security Agreement” ) in their entirety without constituting a novation. Each Obligor hereby represents and warrants to Agent that such schedules attached hereto as Exhibit B are true, correct and complete in all respects as of the date hereof. Delivery of such disclosures shall not relieve or otherwise constitute a waiver by the Agent or any Lender or a cure of any Default or Event of Default under the Existing Credit Agreement resulting in connection with the matters disclosed or a breach of the underlying covenant, representation or warranty (regardless of such disclosure).

4. No Further Amendments; Ratification of Liability; Effect . Except as amended hereby, each of the Existing Collateral Documents shall remain in full force and effect in accordance with their respective terms. Each Obligor hereby ratifies and confirms its liabilities, obligations and agreements under the Existing Collateral Documents, all as amended by this Agreement, and acknowledges that (i) it has no defenses, claims or set-offs to the enforcement by the Agent of such liabilities, obligations and agreements, (ii) Agent and the Lenders have fully performed all obligations to such Persons which Agent and the Lenders may have had or have on and as of the date hereof and (iii) the Agent does not waive, diminish or limit any term, condition or covenant contained in the Existing Collateral Documents.

5. Successors and Assigns . This Agreement shall be binding upon each Obligor and its successors and assigns and shall inure to the benefit of the Agent and the Lenders and their respective successors and assigns; all references herein to the Obligors shall be deemed to include their respective successors and assigns. The successors and assigns of such Persons shall include, without limitation, their respective receivers, trustees or debtors-in-possession.

Master Reaffirmation

6. Further Assurances . Each Obligor hereby agrees from time to time, as and when requested by the Agent, to execute and deliver or cause to be executed and delivered (or otherwise authorized), all such documents, instruments and agreements, including, without limitation, any UCC financing statements (including, without limitation, any initial financing statements or in lieu financing statements), and to take or cause to be taken such further or other action as the Agent may deem necessary or desirable in order to carry out the intent and purposes of this Agreement, the Amended and Restated Credit Agreement and the Loan Documents, in each case as amended hereby.

7. Definitions . All references to the singular shall be deemed to include the plural and vice versa where the context so requires.

8. Governing Law . THIS AGREEMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

9. Severability . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

10. Merger . This Agreement represents the final agreement of each Obligor with respect to the matters contained herein and may not be contradicted by evidence of prior or contemporaneous agreements, or prior or subsequent oral agreements, between any of the Obligors and the Agent.

11. Execution in Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

12. Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

13. No Amendment . Except as amended hereby, the Existing Collateral Documents remain unmodified and in full force and effect.

14. Release . Each Obligor, on its own behalf and on behalf of its representatives, partners, agents, employees, servants, officers, directors, shareholders, subsidiaries, affiliated and related companies, successors and assigns (collectively, the “ Obligor Group ”), hereby releases and forever discharges the Agent, the Lenders, and their respective officers, directors, subsidiaries, affiliated and related companies, agents, servants, employees, shareholders, representatives, successors, assigns, attorneys, accountants, assets and properties, as the case may be (collectively, the “ Lender Indemnified Group ”), of and from all manner of actions,

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cause and causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, specialities, covenants, contracts, controversies, agreements, promises, obligations, liabilities, costs, expenses, losses, damages, judgments, executions, claims and demands of whatsoever kind or nature, in law or in equity, whether known or unknown, concealed or hidden, foreseen or unforeseen, contingent or actual, liquidated or unliquidated, arising out of or relating to the Existing Credit Agreement or any of the agreements, documents and instruments executed and delivered in connection therewith or any related matter, cause or thing or any transaction contemplated thereby, that any of the Obligor Group, jointly or severally, has had, now has or hereafter can, shall or may have against the Lender Indemnified Group, or any member thereof, directly or indirectly, through the date hereof.

[Remainder of page intentionally left blank; signature page follows.]

Master Reaffirmation

IN WITNESS WHEREOF, this Agreement has been duly executed by each of the undersigned as of the day and year first set forth above.

 

Master Reaffirmation

IN WITNESS WHEREOF , this Agreement has been duly executed by each of the undersigned as of the day and year first set forth above.

Master Reaffirmation

ACKNOWLEDGED and AGREED to this 11 th day of January, 2006
ANTARES CAPITAL CORPORATION, as Agent and as a Lender
By:		/s/ Michael P. King
Name:		Michael P. King
Title:		Director

Master Reaffirmation

EXHIBIT A

Existing Collateral Documents

All capitalized terms used but not elsewhere defined in this Exhibit A shall have the respective meanings ascribed to such terms in the foregoing Agreement. Each of the following agreements, documents and instruments shall be deemed to include any and all amendments, modifications, supplements and restatements thereof.

 

1.

Guaranty dated as of June 10, 2005 by Holdings and Panther Sub in favor of Agent, for the benefit of the Lenders

 

2.

Security Agreement dated as of June 10, 2005 by and among Holdings, Borrower, Panther Sub and Agent, for the benefit of the Lenders

 

3.

Trademark Security Agreement executed by Borrower in favor of Agent, for the benefit of the Lenders, filed with USPTO, Trademark Division, on June      , 2005 at Reel              , Frame

 

4.

Holdings Pledge Agreement dated as of June 10, 2005 by and between Holdings and Agent, for the benefit of the Lenders

 

5.

Irrevocable Proxy Coupled with Interest issued under the Holdings Pledge Agreement described in #4

 

6.

Borrower Pledge Agreement dated as of June 10, 2005 by Borrower in favor of Agent, for the benefit of the Lenders

 

7.

Irrevocable Proxy Coupled with Interest issued under the Borrower Pledge Agreement described in #6

 

8.

Assignment of Contribution and Share Purchase Agreement dated as of June 10, 2005 by and among Holdings, Acquisition Co. and Agent, for the benefit of the Lenders

 

9.

Deposit Account Control Agreement dated as of June 10, 2005 by and among National City Bank, Borrower and Agent, for the benefit of the Lenders

 

10.

Deposit Account Control Agreement dated as of June 10, 2005 by and among JPMorgan Chase Bank, Holdings and Agent

 

11.

[Ohio Open-End Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing executed by Borrower in favor of Agent, for the benefit of the Lenders, recorded with the Office of the Recorder of Deeds of Medina County, Ohio, on                  , 2005 at Book                                  , Page      ]

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12.

UCC financing statements, as indicated on the chart below:

UCC Financing Statements

 

Master Reaffirmation

UPDATED SCHEDULES TO EXISTING SECURITY AGREEMENT

See Attached.

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Exhibit B

SCHEDULE I

TO

SECURITY AGREEMENT

UCC Financing Statements; Location of Equipment, Inventory, Goods and Books and

Records; Goods in Possession of Consignees, Bailees, Warehousemen, Agents and

Processors; Debtors’ Legal Names; State of Incorporation; Organizational Identification

Number; Chief Executive Office.

 

I.	DEBTOR: PTHR HOLDINGS, INC.

 

 

II.	DEBTOR: PANTHER II TRANSPORTATION, INC.

 

 

III.	DEBTOR: PANTHER II, INC.

 

 

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SCHEDULE II

TO

SECURITY AGREEMENT

Tradenames and Fictitious Names

(Present and Past Five Years)

 

 

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SCHEDULE III

TO

SECURITY AGREEMENT

U.S. Copyright Registrations; Foreign Copyright Registrations; U.S. Copyright

Applications; Foreign Copyright Applications; Copyright Licenses

U.S. Copyright Registrations

 

Foreign Copyright Registrations

 

U.S. Copyright Applications

 

Foreign Copyright Applications

 

 

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Copyright Licenses

 

 

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SCHEDULE IV

TO

SECURITY AGREEMENT

U.S. Patent Registrations; Foreign Patent Registrations; U.S. Patent Applications;

Foreign Patent Applications; Patent Licenses

U.S. Patent Registrations

 

Foreign Patent Registrations

 

U.S. Patent Applications

 

Foreign Patent Applications

 

 

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Patent Licenses

 

 

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SCHEDULE V

TO

SECURITY AGREEMENT

U.S. Trademark Registrations; Foreign Trademark Registrations; U.S. Trademark

Applications; Foreign Trademark Applications; Trademark Licenses

U.S. Trademark Registrations

 

Foreign Trademark Registrations

 

U.S. Trademark Applications

 

Foreign Trademark Applications

 

 

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Trademark Licenses

 

 

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SCHEDULE VI

TO

SECURITY AGREEMENT

Depository Accounts and Other Accounts

 

SCHEDULE VII

TO

SECURITY AGREEMENT

Commercial Tort Claims

None

 

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EXECUTION VERSION

GUARANTY

THIS GUARANTY (including all exhibits hereto, as the same may be amended, modified and/or restated from time to time, this “Guaranty”) is made as of this 10th day of June, 2005, by PTHR HOLDINGS, INC., a Delaware corporation (“Holdings”), PANTHER II TRANSPORTATION, INC., an Ohio corporation ( “Panther” ), and PANTHER II, INC., an Ohio corporation f/k/a/ Sokolowski, Inc. (“Panther Sub”; Holdings, Panther and Panther Sub, together with each other Person who becomes a party to this Agreement by execution of a joinder in the form of Exhibit A attached hereto, is referred to herein each individually as a “Guarantor” and collectively as the “Guarantors”) in favor of ANTARES CAPITAL CORPORATION, a Delaware corporation, as agent ( “Agent” ) on behalf of itself and certain financial institutions (the “Lenders” ) from time to time party to the Credit Agreement described below.

W I T N E S S E T H:

WHEREAS, Agent and Lenders have entered into that certain Credit Agreement dated as of even date herewith (as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement” ) with Panther Acquisition, Inc., an Ohio corporation (“Initial Borrower”; Initial Borrower, together with its permitted successors and assigns, including Panther from and after the consummation of the Panther Acquisition, is referred to herein as the “Borrower”);

WHEREAS, the Borrower will become liable for the “Obligations” (as that term is defined in the Credit Agreement) including, without limitation, loans and other financial accommodations from the Lenders (including Agent in its individual capacity) under the Credit Agreement and the other Loan Documents referred to therein; and

WHEREAS, (i) Holdings directly or indirectly owns one hundred percent (100%) of the issued and outstanding capital stock of Borrower and (ii) Panther Sub is a direct or indirect wholly-owned Subsidiary of the Borrower and therefor, each such Guarantor will derive substantial benefit and advantage from the loans and other financial accommodations available to the Borrower set forth in the Credit Agreement, and it will be to the interest and economic benefit of each Guarantor to assist the Borrower in procuring said loans and other financial accommodations from the Lenders and the Agent.

NOW, THEREFORE, for and in consideration of the premises and in order to induce the Agent and the Lenders to enter into the Credit Agreement and to make loans and financial accommodations to the Borrower thereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby agrees as follows:

1. Definitions: Capitalized terms used herein which are not otherwise defined herein are used with the meanings ascribed to such terms in the Credit Agreement.

 

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2. Guaranty of Payment.

(a) Each Guarantor hereby, jointly and severally, hereby unconditionally and irrevocably guaranties the full and prompt payment to the Agent and the Lenders, when due, whether upon demand, at maturity or by reason of acceleration or otherwise and at all times thereafter, of any and all of the Obligations.

(b) Each Guarantor acknowledges that valuable consideration supports this Guaranty, including, without limitation, the consideration set forth in the recitals above as well as any commitment to lend, extension of credit or other financial accommodation, whether heretofore or hereafter made by the Lenders or the Agent to the Borrower; any extension, renewal or replacement of any of the Obligations; any forbearance with respect to any of the Obligations or otherwise; any cancellation of an existing guaranty; any purchase of any of the Borrower’s assets by the Lenders or the Agent; or any other valuable consideration.

(c) Each Guarantor agrees that all payments under this Guaranty shall be made in United States currency and in the same manner as provided for the Obligations.

(d) Notwithstanding any provision of this Guaranty to the contrary, it is intended that this Guaranty, and any interests, liens and security interests granted by Guarantors as security for this Guaranty, not constitute a “ Fraudulent Conveyance ” (as defined below) in the event that this Guaranty or such interest is subject to the Bankruptcy Code or any applicable fraudulent conveyance or fraudulent transfer law or similar law of any state. Consequently, Guarantors and Agent agree that if this Guaranty, or any such interests, liens or security interests securing this Guaranty, would, but for the application of this sentence, constitute a Fraudulent Conveyance, this Guaranty and each such lien and security interest shall be valid and enforceable only to the maximum extent that would not cause this Guaranty or such interest, lien or security interest to constitute a Fraudulent Conveyance, and this Guaranty shall automatically be deemed to have been amended accordingly at all relevant times. For purposes hereof, “ Fraudulent Conveyance ” means a fraudulent conveyance under Section 548 of the Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the provisions of any applicable fraudulent conveyance or fraudulent transfer law or similar law of any state, as in effect from time to time.

3. Costs and Expenses.

Each Guarantor, jointly and severally, agrees to pay on demand, if not paid by the Borrower, all reasonable costs and expenses of every kind incurred by the Agent or the Lenders: (a) in enforcing this Guaranty, (b) in collecting any of the Obligations from the Borrower or any Guarantor, (c) in realizing upon or protecting any collateral for this Guaranty or for payment of any of the Obligations, and (d) for any other purpose related to the Obligations or this Guaranty. “Costs and expenses” as used in the preceding sentence shall include, without limitation, reasonable attorneys’ fees incurred by the Agent or any Lender in retaining counsel for advice, suit, appeal, any insolvency or other proceedings under the Bankruptcy Code or otherwise, or for any purpose specified in the preceding sentence.

4. Nature of Guaranty: Continuing. Absolute and Unconditional.

(a) This Guaranty is and is intended to be a continuing guaranty of payment of the Obligations, and not of collectibility, and is and is intended to be independent of and in

 

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addition to any other guaranty, indorsement, collateral or other agreement held by the Agent or the Lenders therefor or with respect thereto, whether or not furnished by any Guarantor. Neither Agent nor any Lender shall be required to prosecute collection, enforcement or other remedies against Borrower, any other Guarantor, or any other guarantor of the Obligations or any other Person, or to enforce or resort to any of the Collateral or other rights or remedies pertaining thereto, before calling on a Guarantor for payment. The obligations of each Guarantor to repay the Obligations hereunder shall be unconditional. No Guarantor shall have any right of subrogation with respect to any payments made by any Guarantor hereunder, and each Guarantor hereby waives any benefit of, and any right to participate in, any security or collateral given to the Agent or any Lender to secure payment of the Obligations and agrees that it will not take any action to enforce any obligations of the Borrower to any Guarantor, in each of the foregoing cases prior to the Obligations being finally and irrevocably paid in full and the termination of the Commitments under the Credit Agreement, provided that, in the event of the bankruptcy or insolvency of the Borrower, the Agent, on behalf of the Lenders, shall be entitled notwithstanding the foregoing, to file in the name of any Guarantor or in its own name a claim for any and all indebtedness owing to a Guarantor by the Borrower (exclusive of this Guaranty) and to apply the proceeds of any such claim to the Obligations.

(b) For the further security of the Agent and the Lenders and without in any way diminishing the liability of the Guarantors, following the occurrence and during the continuance of an Event of Default, all debts and liabilities, present or future of the Borrower to the Guarantors and all monies received from the Borrower or for its account by the Guarantors in respect thereof shall be received in trust for the Agent and the Lenders and forthwith upon receipt shall be paid over to the Agent, for the benefit of the Agent and the Lenders, until all of the Obligations have been paid in full. This assignment and postponement is independent of and severable from this Guaranty and shall remain in full effect whether or not any Guarantor is liable for any amount under this Guaranty.

(c) This Guaranty is absolute and unconditional and shall not be changed or affected by any representation, oral agreement, act or thing whatsoever, except as herein provided. This Guaranty is intended by the Guarantors to be the final, complete and exclusive expression of the guaranty agreement among the Guarantors and the Agent, for its own benefit and on behalf of the Lenders. No modification or amendment of any provision of this Guaranty shall be effective against Agent or a Guarantor unless in writing and signed by a duly authorized officer of the Agent, individually and on behalf of the Lenders, and by such Guarantor.

(d) Each Guarantor hereby releases the Borrower from all, and agrees not to assert or enforce (whether by or in a legal or equitable proceeding or otherwise) any “claims” (as defined in Section 101(5) of the Bankruptcy Code), whether arising under any law, ordinance, rule, regulation, order, policy or other requirement of any domestic or foreign government or any instrumentality or agency thereof, having jurisdiction over the conduct of its business or assets or otherwise, to which the Guarantors are or would at any time be entitled by virtue of its obligations hereunder, any payment made pursuant hereto or the exercise by Lender of its rights with respect to the Collateral, including any such claims to which such Guarantors may be entitled as a result of any right of subrogation, exoneration or reimbursement.

 

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5. Certain Rights and Obligations.

(a) Each Guarantor acknowledges and agrees that the Agent and the Lenders may, and, authorizes the Agent and the Lenders to, without notice, demand or any reservation of rights against such Guarantor and without affecting such Guarantor’s obligations hereunder, from time to time:

(i) renew, extend, increase, accelerate or otherwise change the time for payment of, the terms of or the interest on the Obligations or any part thereof or grant other indulgences to the Borrower or others;

(ii) accept from any Person and hold collateral for the payment of the Obligations or any part thereof, and modify, exchange, enforce or refrain from enforcing, or release, compromise, settle, waive, subordinate or surrender, with or without consideration, such collateral or any part thereof;

(iii) accept and hold any indorsement or guaranty of payment of the Obligations or any part thereof, and discharge, release or substitute any such obligation of any such indorser or guarantor, or discharge, release or compromise any Guarantor, or any other Person who has given any security interest in any collateral as security for the payment of the Obligations or any part thereof, or any other Person in any way obligated to pay the Obligations or any part thereof, and enforce or refrain from enforcing, or compromise or modify, the terms of any obligation of any such indorser, guarantor, or Person;

(iv) dispose of any and all collateral securing the Obligations in any manner as Agent or the Lenders, in their sole discretion, may deem appropriate, and direct the order or manner of such disposition and the enforcement of any and all endorsements and guaranties relating to the Obligations or any part thereof as the Agent or the Lenders in their sole discretion may determine;

(v) except as otherwise provided in the Credit Agreement, determine the manner, amount and time of application of payments and credits, if any, to be made on all or any part of any component or components of the Obligations (whether principal, interest, fees, costs, and expenses, or otherwise) including, without limitation, the application of payments received from any source to the payment of indebtedness other than the Obligations even though Agent or the Lenders might lawfully have elected to apply such payments to the Obligations to amounts which are not covered by this Guaranty; and

(vi) take advantage or refrain from taking advantage of any security or accept or make or refrain from accepting or making any compositions or arrangements when and in such manner as the Agent or the Lenders, in their sole discretion, may deem appropriate;

and generally do or refrain from doing any act or thing which might otherwise, at law or in equity, release the liability of such Guarantor as a guarantor or surety in whole or in part, and in no case shall the Agent or the Lenders be responsible or shall any Guarantor be released either in whole or in part for any act or omission in connection with the Agent or the Lenders having sold any security at less than its value.

 

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(b) Following the occurrence and during the continuance of an Event of Default, and upon demand by Agent, each Guarantor, jointly and severally, hereby agrees to pay the Obligations to the extent hereinafter provided:

(i) without deduction by reason of any setoff, defense (other than payment) or counterclaim of the Borrower or any other Guarantor;

(ii) without requiring presentment, protest or notice of nonpayment or notice of default to any Guarantor, to the Borrower or to any other Person;

(iii) without demand for payment or proof of such demand or filing of claims with a court in the event of receivership, bankruptcy or reorganization of the Borrower or any other Guarantor;

(iv) without requiring the Agent or the Lenders to resort first to the Borrower (this being a guaranty of payment and not of collection), to any other Guarantor, or to any other guaranty or any collateral which the Agent or the Lenders may hold;

(v) without requiring notice of acceptance hereof or assent hereto by the Agent or the Lenders; and

(vi) without requiring notice that any of the Obligations has been incurred, extended or continued or of the reliance by the Agent or the Lenders upon this Guaranty; all of which each Guarantor hereby waives.

(c) Each Guarantor’s obligation hereunder shall not be affected by any of the following, all of which such Guarantor hereby waives:

(i) any failure to perfect or continue the perfection of any security interest in or other lien on any collateral securing payment of any of the Obligations or any Guarantor’s obligation hereunder;

(ii) the invalidity, unenforceability, propriety of manner of enforcement of, or loss or change in priority of any Loan Document or any such security interest or other lien or guaranty of the Obligations;

(iii) any failure to protect, preserve or insure any such collateral;

(iv) failure of a Guarantor to receive notice of any intended disposition of such collateral;

(v) any defense arising by reason of the cessation from any cause whatsoever of liability of the Borrower including, without limitation, any failure, negligence or omission by the Agent or the Lenders in enforcing their claims against the Borrower;

(vi) any release, settlement or compromise of any obligation of the Borrower or any other Guarantor;

 

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(vii) the invalidity or unenforceability of any of the Obligations;

(viii) any change of ownership of the Borrower or any other Guarantor or the insolvency, bankruptcy or any other change in the legal status of the Borrower or any other Guarantor;

(ix) any change in, or the imposition of, any law, decree, regulation or other governmental act which does or might impair, delay or in any way affect the validity, enforceability or the payment when due of the Obligations;

(x) the existence of any claim, setoff or other rights which such Guarantor, Borrower, any other Guarantor, or any other guarantor of the Obligations or any other Person may have at any time against the Agent, any Lender or the Borrower in connection herewith or any unrelated transaction;

(xi) any Lender’s election, in any case instituted under chapter 11 of the Bankruptcy Code, of the application of section 111 l(b)(2) of the Bankruptcy Code;

(xii) any use of cash collateral, or grant of a security interest by the Borrower, as debtor in possession, under sections 363 or 364 of the Bankruptcy Code;

(xiii) the disallowance of all or any portion of any of the Agent’s or the Lenders’ claims for repayment of the Obligations under sections 502 or 506 of the Bankruptcy Code; or

(xiv) any other fact or circumstance which might otherwise constitute grounds at law or equity for the discharge or release of a Guarantor from its obligations hereunder, all whether or not such Guarantor shall have had notice or knowledge of any act or omission referred to in the foregoing clauses (i) through (xiii) of this subsection 5(c).

6. Representations and Warranties.

Each Guarantor represents and warrants to the Agent and the Lenders that:

(a) such Guarantor is a corporation or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as applicable, and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged;

(b) such Guarantor has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty, and has taken all necessary action to authorize the guarantee hereunder on the terms and conditions of this Guaranty and to authorize the execution, delivery and performance of this Guaranty;

(c) this Guaranty has been duly executed and delivered by such Guarantor and constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, except to the extent that such enforceability is subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and moratorium laws and other laws of general application affecting enforcement of creditors’ rights generally, or the availability of equitable remedies, which are subject to the discretion of the court before which an action may be brought;

 

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(d) the execution, delivery and performance by such Guarantor of this Guaranty and any Related Agreement to which such Guarantor is a party do not and will not: (i) contravene the terms of any of such Guarantor’s Organization Documents; (ii) conflict with or result in any material breach or contravention of, or result of the creation of any lien under, any document evidencing any material Contractual Obligation to which such Guarantor is a party or any order, injunction, writ or decree of any Governmental Authority to which such Guarantor or its Property is subject; or (iii) violate any material Requirement of Law in any material respect;

(e) no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against such Guarantor of this Guaranty or any other Loan Document to which such Guarantor is a party or any Related Agreement except: (i) for recordings and filings in connection with the Liens granted to Agent under the Collateral Documents, (ii) those obtained or made on or prior to the Closing Date and (iii) those which, if not obtained or made, could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;

(f) there are no actions, suits, proceedings, claims or disputes pending, or to the knowledge of such Guarantor, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against such Guarantor;

(g) no injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Guaranty, any other Loan Document or any Related Agreement, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided;

(h) such Guarantor has filed all Federal and other material tax returns and reports required to be filed, and has paid all Federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon such Guarantor or its Properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently prosecuted and for which adequate reserves have been provided in accordance with GAAP and no notice of lien has been filed or recorded; and

(i) (i) neither such Guarantor nor any Subsidiary of such Guarantor (A) is a person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (B) engages in any dealings-or transactions prohibited by Section 2 of such executive order, or is otherwise associated with any such person in any manner violative of Section 2, or (C) is a person on the list of Specially Designated Nationals and Blocked Persons or subject to the limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order, and (ii) such Guarantor and each of its Subsidiaries is in compliance, in all material respects, with the Patriot Act.

 

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7. Negative Covenants.

(a) Holdings covenants with Agent and Lenders that:

(i) it will not grant any security interest in or permit any lien, claim or encumbrance upon any of its assets in favor of any Person other than liens and security interests in favor of Agent and Lenders and Permitted Liens;

(ii) it will not engage in any type of business activity other than: (A) prior to the consummation of the Closing Date Merger, ownership of Acquisition Co., and following the consummation of the Closing Date Merger, ownership of Panther; (B) activities incidental to maintenance of its corporate existence and activities described elsewhere in this section 7(a)(ii); and (C) the performance of its obligations under the Related Agreements, this Guaranty, the Holdings Pledge Agreement and any other instruments, documents or agreements entered into by Holdings in favor of the Agent and the Lenders;

(iii) it will not incur any indebtedness (other than under this Guaranty) and will not make any Investments (other than Investments in the Borrower);

(iv) upon receipt of any proceeds of any working capital or other purchase price adjustments, if any, and/or any indemnification claims, disbursements, reimbursement payments, any escrowed funds or any other amounts under or with respect to the Panther Purchase Agreement or any other purchase agreement entered into by Holdings from and after the Closing Date, it shall immediately contribute such proceeds to the Borrower;

(v) it will not amend any of its Organization Documents in any respect adverse to Agent or Lenders in their capacities as such under the Credit Agreement;

(vi) it will comply with any and all provisions in the Credit Agreement relating to Holdings and its business;

(vii) it will not accept any Restricted Payments, except to the extent permitted pursuant to Section 5.11 of the Credit Agreement and will use the funds from any such permitted Restricted Payment only for the purposes set forth in the Credit Agreement permitting such Restricted Payments;

(viii) it will preserve and maintain in full force and effect its organizational existence and good standing under the laws of its state or jurisdiction of incorporation, organization or formation, as applicable;

(ix) it will comply, and will cause each of its Subsidiaries to comply, in all material respects, with all Requirements of Law of any Governmental Authority having jurisdiction over it or its business, except (A)(l) such as may be contested in good faith by appropriate proceedings diligently prosecuted without risk of loss of any Collateral, (2) as to which a bona fide dispute exists, and (3) for which appropriate reserves have been established on the Borrower’s financial statements or (B) where the failure to comply could not reasonably be expected to have, either individually or in the aggregate,a Material Adverse Effect; and

 

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(x) it will maintain a system of accounting established and administered in accordance with sound business practices to permit the preparation of financial statements in conformity with GAAP (provided that monthly financial statements shall not be required to have footnote disclosure and are subject to normal year-end adjustments).

(b) Each Guarantor (other than Holdings) covenants with the Agent and the Lenders that such Guarantor (i) shall not grant any security interest in or permit any lien, claim or encumbrance upon any of its assets in favor of any Person other than liens and security interests in favor of the Agent and the Lenders and Permitted Liens and (ii) shall comply with any and all provisions in the Credit Agreement relating to such Guarantor and its business.

8. Termination.

This Guaranty shall remain in full force and effect until all of the Obligations shall be finally and irrevocably paid in full in cash and the commitments under the Credit Agreement shall have been terminated; provided , however , this Guaranty shall be terminated as to Panther after the consummation of the Closing Date Merger. Thereafter, but subject to the following, the Agent shall take such action and execute such documents as the Guarantors may request (and at the Guarantors’ cost and expense) in order to evidence the termination of this Guaranty. Payment of all of the Obligations from time to time shall not operate as a discontinuance of this Guaranty. Each Guarantor further agrees that, to the extent that the Borrower makes a payment or payments to the Agent or any of the Lenders on the Obligations, or the Agent or the Lenders receive any proceeds of collateral securing the Obligations or any other payments with respect to the Obligations, which payment or receipt of proceeds or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be returned or repaid to the Borrower, its estate, trustee, receiver, debtor in possession or any other Person, including, without limitation, the Guarantors, under any insolvency or bankruptcy law, state or federal law, common law or equitable cause, then to the extent of such payment, return or repayment, the obligation or part thereof which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the date when such initial payment, reduction or satisfaction occurred, and this Guaranty shall continue in full force notwithstanding any contrary action which may have been taken by the Agent or the Lenders in reliance upon such payment, and any such contrary action so taken shall be without prejudice to the Agent’s or the Lenders’ rights under this Guaranty and shall be deemed to have been conditioned upon such payment having become final and irrevocable.

9. Guaranty of Performance.

Each Guarantor also guaranties the full, prompt and unconditional performance of all obligations and agreements of every kind owed or hereafter to be owed by the Borrower to the Agent or the Lenders under the Credit Agreement and the other Loan Documents to which the Borrower is a party. Every provision for the benefit of the Agent or the Lenders contained in this Guaranty shall apply to the guaranty of performance given in this paragraph.

 

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10. Assumption of Liens and Obligations.

To the extent that a Guarantor has received or shall hereafter receive distributions or transfers from the Borrower of property or cash that are subject, at the time of such contribution, to liens and security interests in favor of the Agent or the Lenders in accordance with the Credit Agreement, such Guarantor hereby expressly agrees that (i) it shall hold such assets subject to such liens and security interests and subject to the terms of the Credit Agreement, and (ii) it shall be liable for the payment of the Obligations secured thereby. Each Guarantor’s obligations under this Section 10 shall be in addition to its obligations as set forth in other sections of this Guaranty and not in substitution therefor or in lieu thereof.

11. Miscellaneous.

(a) The terms “Borrower” and the “Guarantor” as used in this Guaranty shall include: (i) any successor individual or individuals, association, partnership, limited liability company or corporation to which all or substantially all of the business or assets of the Borrower or such Guarantor shall have been transferred and (ii) any other association, partnership, limited liability company, corporation or entity into or with which the Borrower or such Guarantor shall have been merged, consolidated, reorganized, or absorbed.

(b) Without limiting any other right of the Agent or any of the Lenders, whenever the Agent or the Lenders have the right to declare any of the Obligations to be immediately due and payable (whether or not it has been so declared), Agent and the Lenders at their sole election without notice to the undersigned may appropriate and set off against the Obligations:

(i) any and all indebtedness or other moneys due or to become due to any Guarantor by the Agent or the Lenders in any capacity; and

(ii) any credits or other property belonging to any Guarantor (including all account balances, whether provisional or final and whether or not collected or available) at any time held by or coming into the possession of the Agent or any of the Lenders, or any affiliate of the Agent or any of the Lenders, whether for deposit or otherwise;

whether or not the Obligations or the obligation to pay such moneys owed by the Agent or the Lenders is then due, and the Agent or the Lenders shall be deemed to have exercised such right of set off immediately at the time of such election even though any charge therefor is made or entered on the Agent’s or the Lenders’ records subsequent thereto. The Agent or such Lender agrees to notify such Guarantor in a reasonably practicable time of any such set-off; however, failure to so notify such Guarantor shall not affect the validity of any set-off.

(c) Each Guarantor’s obligation hereunder is to pay the Obligations in full in cash when due according to the Credit Agreement to the extent provided herein, and shall not be affected by any stay or extension of time for payment by the Borrower or any other Guarantor resulting from any proceeding under the Bankruptcy Code or any similar law.

(d) No course of dealing between the Borrower or any Guarantor and the Agent or the Lenders and no act, delay or omission by the Agent or Lenders in exercising any right or remedy hereunder or with respect to any of the Obligations shall operate as a waiver thereof or of any other right or remedy, and no single or partial exercise thereof shall preclude any other or further exercise thereof or the exercise of any other right or remedy. TheAgent or

 

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the Lenders may remedy any default by the Borrower under any agreement with the Borrower or with respect to any of the Obligations in any reasonable manner without waiving the default remedied and without waiving any other prior or subsequent default by the Borrower. All rights and remedies of the Lenders hereunder are cumulative.

(e) This Guaranty shall inure to the benefit of the Agent and the Lenders under the Credit Agreement, and their respective successors and assigns.

(f) Captions of the sections of this Guaranty are solely for the convenience of the Agent, the Lenders and the Guarantors, and are not an aid in the interpretation of this Guaranty and do not constitute part of the agreement of the parties set forth herein.

(g) If any provision of this Guaranty is unenforceable in whole or in part for any reason, the remaining provisions shall continue to be effective.

(h) EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND EACH GUARANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT TO BRING PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GUARANTOR AGAINST AGENT OR ANY LENDER OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS GUARANTY SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.

(i) EACH GUARANTOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

(j ) THIS GUARANTY AND THE TRANSACTIONS EVIDENCED HEREBY SHALL BE CONSTRUED UNDER THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.

(k) Notices. All notices, approvals, requests, demands and other communications hereunder shall be in writing and delivered by hand or by nationally recognized overnight courier, or sent by first class mail or sent by telecopy (with such telecopy to be confirmed promptly in writing sent by first class mail), sent:

 

 

11

or to such other address or addresses or telecopy number or numbers as any party hereto may most recently have designated in writing to the other party by such notice. All such communications shall be deemed to have been given or made (i) if delivered in person, when delivered, (ii) if delivered by telecopy, on the date of transmission if transmitted on a Business Day before 4:00 p.m. Chicago time, otherwise on the next Business Day, (iii) if delivered by overnight courier, one (1) Business Day after delivery to the courier properly addressed and (iv) if mailed, three (3) Business Days after deposited in the United States mail, certified or registered.

12. WAIVERS.

(a) EACH GUARANTOR WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND EXEMPTION LAWS.

(b) UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT OR EVENT OF DEFAULT UNDER THE CREDIT AGREEMENT, EACH GUARANTOR HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE AGENT OR THE LENDERS OF THEIR RIGHTS TO REPOSSESS THE COLLATERAL WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING. EACH GUARANTOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS GUARANTY.

(c) EACH GUARANTOR WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY, OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY AGENT OR ANY LENDER. EACH GUARANTOR AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH GUARANTOR

 

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FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.

[Remainder of page intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first written above.

 

 

Guaranty

IN WITNESS WHEREOF, Guarantors have executed this Guaranty as of the date first written above.

 

 

Guaranty

EXECUTION VERSION

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (including all exhibits hereto, as the same may be amended, modified and/or restated from time to time, this “Agreement”) dated as of June 10, 2005 is by and among PTHR HOLDINGS, INC., a Delaware corporation (“Holdings”), PANTHER ACQUISITION, INC., an Ohio corporation (“Acquisition Co.”), PANTHER II TRANSPORTATION, INC., an Ohio corporation (“Panther”), and PANTHER II, INC., an Ohio corporation f/k/a/ Sokolowski, Inc. (“Panther Sub”; Holdings, Acquisition Co., Panther and Panther Sub, together with each other Person who becomes a party to this Agreement by execution of a joinder in the form of Exhibit A attached hereto, is referred to individually as a “Debtor” and, collectively, as the “Debtors” ), and ANTARES CAPITAL CORPORATION , a Delaware corporation (the “Secured Party”), as agent for the benefit of Agent and the “Lenders” (as such term is hereinafter defined).

W I T N E S S E T H:

WHEREAS, Acquisition Co. (Acquisition Co., together with its permitted successors and assigns, including Panther from and after the consummation of the Closing Date Merger, is referred to herein as the “Borrower”) has entered into that certain Credit Agreement of even date herewith (the same, as it may be amended, restated, supplemented or otherwise modified and in effect from time to time, being herein referred to as the “Credit Agreement”) with Secured Party, as agent for the benefit of all lenders and individually as a lender (together with all other “Lenders” thereunder as defined therein, the “Lenders”), and the other Lenders parties thereto, providing for the Lenders to make available to the Debtor certain term and revolving credit facilities on the terms and conditions set forth therein;

WHEREAS, Holdings, as the owner of one hundred percent (100%) of the issued and outstanding capital stock of the Borrower, will derive substantial benefit and advantage from the financial accommodations available to the Borrower set forth in the Credit Agreement, including the loans and advances made to the Borrower thereunder, and it will be to Holdings’ direct interest and economic benefit to assist the Borrower in procuring such financing accommodations from the Lenders;

WHEREAS, the Debtors (other than Holdings and Acquisition Co.) are direct or indirect Subsidiaries of the Borrower and, as such, will derive substantial benefit and advantage from the financial accommodations available to the Borrower set forth in the Credit Agreement, including the loans and advances made to the Borrower thereunder, and it will be to each Debtor’s direct interest and economic benefit to assist the Borrower in procuring such loans and other financial accommodations from the Lenders; and

WHEREAS, to induce the Secured Party and the Lenders to enter into the Credit Agreement and make the Loans thereunder, each Debtor (other than Acquisition Co.) has agreed to guaranty the Obligations of the Borrower pursuant to that certain Guaranty of

 

Panther Security Agreement

even date herewith by such Debtors to Secured Party (the same, as it may be amended, restated, modified or supplemented and in effect from time to time, the “ Guaranty ”) and each Debtor has agreed to pledge and grant a security interest in the Collateral (as hereinafter defined) as security for the Liabilities (as hereinafter defined).

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Definitions . Capitalized terms used herein without definition and defined in the Credit Agreement are used herein as defined therein. In addition, as used herein:

“ Accounts ” means any “account,” as such term is defined in the Uniform Commercial Code, and, in any event, shall include, without limitation, “supporting obligations” as defined in the Uniform Commercial Code and all Accounts as defined in the Credit Agreement.

“Chattel Paper” means any “chattel paper,” as such term is defined in the Uniform Commercial Code.

“Collateral” shall have the meaning ascribed thereto in Section 3 hereof.

“Commercial Tort Claims” means “commercial tort claims”, as such term is defined in the Uniform Commercial Code.

“Contracts” means all contracts, undertakings, or other agreements (other than rights evidenced by Chattel Paper, Documents or Instruments) in or under which any Debtor may now or hereafter have any right, title or interest, including, without limitation, with respect to an Account, any agreement relating to the terms of payment or the terms of performance thereof.

“Copyrights” means any copyrights, rights and interests in copyrights, works protectable by copyrights, copyright registrations and copyright applications, including, without limitation, the copyright registrations and applications listed on Schedule III attached hereto, and all renewals of any of the foregoing, all income, royalties, damages and payments now and hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing and the right to sue for past, present and future infringements of any of the foregoing.

“Deposit Accounts” means all “deposit accounts” as such term is defined in the Uniform Commercial Code, now or hereafter held in the name of Debtor.

“Documents” means any “documents,” as such term is defined in the Uniform Commercial Code, and shall include, without limitation, all documents of title (as defined in the Uniform Commercial Code), bills of lading or other receipts evidencing or representing Inventory or Equipment.

 

Panther Security Agreement

“Equipment” means any “equipment,” as such term is defined in the Uniform Commercial Code and, in any event, shall include, Motor Vehicles.

“General Intangibles” means any “general intangibles,” as such term is defined in the Uniform Commercial Code, and, in any event, shall include, without limitation, all right, title and interest in or under any Contract, models, drawings, materials and records, claims, literary rights, goodwill, rights of performance, Copyrights, Trademarks, Patents, warranties, rights under insurance policies and rights of indemnification.

“Goods” means any “goods”, as such term is defined in the Uniform Commercial Code, including, without limitation, fixtures and embedded Software to the extent included in “goods” as defined in the Uniform Commercial Code.

“Instruments” means any “instrument,” as such term is defined in the Uniform Commercial Code and, in any event, shall include, without limitation, promissory notes, drafts, bills of exchange, trade acceptances, letters of credit, letter of credit rights (as defined in the Uniform Commercial Code) and Chattel Paper.

“Inventory” means any “inventory,” as such term is defined in the Uniform Commercial Code, and, in any event, shall include, without limitation, all Inventory as defined in the Credit Agreement.

“Investment Property” means any “investment property”, as such term is defined in the Uniform Commercial Code.

“Liabilities” shall mean, collectively, the Obligations and all obligations, liabilities and Indebtedness of each Debtor under or in respect of this Agreement and any other Loan Document to which it is a party.

“Motor Vehicles” means motor vehicles, tractors, trailers and other like property, whether or not the title thereto is governed by a certificate of title or ownership.

“Patents” means any patents and patent applications, including, without limitation, the inventions and improvements described and claimed therein, all patentable inventions and those patents and patent applications listed on Schedule IV attached hereto, and the reissues, divisions, continuations, renewals, extensions and continuations-in-part of any of the foregoing, and all income, royalties, damages and payments now or hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing and the right to sue for past, present and future infringements of any of the foregoing.

 

Panther Security Agreement

“Proceeds” means “proceeds,” as such term is defined in the Uniform Commercial Code and, in any event, includes, without limitation, (a) any and all proceeds of any insurance, indemnity, warranty or guaranty payable with respect to any of the Collateral, (b) any and all payments (in any form whatsoever) made or due and payable from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental body, authority, bureau or agency (or any person acting under color of Governmental Authority), and (c) any and all other amounts from time to time paid or payable under, in respect of or in connection with any of the Collateral.

“Representative” means any Person acting as agent, representative or trustee on behalf of the Secured Party from time to time.

“Software” means all “software” as such term is defined in the Uniform Commercial Code, now owned or hereafter acquired by any Debtor, other than software embedded in any category of Goods, including, without limitation, all computer programs and all supporting information provided in connection with a transaction related to any program.

“Trademarks” means any trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, other business identifiers, prints and labels on which any of the foregoing have appeared or appear, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, the trademarks and applications listed in Schedule V attached hereto and renewals thereof, and all income, royalties, damages and payments now or hereafter due and/or payable under or with respect to any of the foregoing, including, without limitation, damages and payments for past, present and future infringements of any of the foregoing and the right to sue for past, present and future infringements of any of the foregoing.

“Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of

New York; provided , that to the extent that the Uniform Commercial Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Uniform Commercial Code, the definition of such term contained in Article or Division 9 shall govern.

Section 2. Representations, Warranties and Covenants of Debtors . After giving effect to the Related Transactions, each Debtor represents and warrants to, and covenants with, the Secured Party, for the benefit of the Secured Party and the Lenders, as follows:

(a) such Debtor has rights in and the power to transfer the Collateral in which it purports to grant a security interest pursuant to Section 3 hereof (subject, with respect to after acquired Collateral, to such Debtor acquiring the same) and no Lien other than Permitted Liens exists or shall exist upon such Collateral at any time;

 

Panther Security Agreement

(b) this Agreement is effective to create in favor of Secured Party for the benefit of the Secured Party and the Lenders a valid security interest in and Lien upon all of such Debtor’s right, title and interest in and to the Collateral, and, upon the filing of appropriate Uniform Commercial Code financing statements in the jurisdictions listed on Schedule I attached hereto and, with respect to Patents, Trademarks and Copyrights, the filing with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, such security interest and Liens shall be duly perfected in all the Collateral (other than Instruments not constituting Chattel Paper), and upon delivery of the Instruments to the Secured Party or its Representative, duly endorsed by such Debtor or accompanied by appropriate instruments of transfer duly executed by such Debtor, the security interest and Liens in the Instruments shall be duly perfected;

(c) all of the Equipment (other than items in transit or under repair in the ordinary course of business), Inventory and Goods of such Debtor is located at the places as specified on Schedule I attached hereto. Except as disclosed on Schedule I , none of the Collateral is in the possession of any bailee, warehousemen, processor or consignee. Schedule I discloses such Debtor’s name as of the date hereof as it appears in official filings in the state of its incorporation, formation or organization, the type of entity of such Debtor (including corporation, partnership, limited partnership or limited liability company), organizational identification number issued by such Debtor’s state of incorporation, formation or organization (or a statement that no such number has been issued), such Debtor’s state of incorporation, formation or organization and the chief place of business, chief executive office and the office where Debtor keeps its books and records. Such Debtor has only one state of incorporation, formation or organization. No Debtor (including any Person acquired by such Debtor) does business nor has any Debtor done business during the past five (5) years under any trade name or fictitious business name except as disclosed on Schedule II attached hereto;

(d) no Copyrights, Patents or Trademarks listed on Schedules III, IV and V , respectively, if any, have been adjudged invalid or unenforceable or have been canceled, in whole or in part, or are not presently subsisting. Each of such Copyrights, Patents and Trademarks is valid and enforceable. Such Debtor is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to each of such Copyrights, Patents and Trademarks, free and clear of any liens, charges and encumbrances, including without limitation licenses, shop rights and covenants by such Debtor not to sue third persons. Such Debtor has adopted, used and is currently using, or has a current bona fide intention to use, all of such Trademarks and Copyrights. Such Debtor has no notice of any suits or actions commenced or threatened with reference to the Copyrights, Patents or Trademarks;

 

Panther Security Agreement

(e) each Debtor shall deliver to the Secured Party an updated Schedule I within five (5) days of any change thereto and an updated Schedule II, III, IV and/or V concurrently with the delivery of monthly financial statements under Section 4.1(b) of the Credit Agreement; provided , that delivery or receipt of such subsequent disclosure shall not relieve or otherwise constitute a waiver by the Secured Party or any Lender or a cure of any Default or Event of Default resulting in connection with the matters disclosed or a breach of the underlying covenant, representation or warranty (regardless of such disclosure);

(f) All depositary and other accounts maintained by each Debtor are described on Schedule VI hereto, which description includes for each such account the name of such Debtor maintaining such account, the name, address and telephone and telecopy numbers of the financial institution at which such account is maintained, the account number and the account officer, if any, of such account. No Debtor shall open any new accounts unless such Debtor shall have given Secured Party at least ten (10) Business Days’ prior written notice of its intention to open any such new accounts. Each Debtor shall deliver to Secured Party a revised version of Schedule VI showing any changes thereto within five (5) Business Days of any such change. Each Debtor hereby authorizes the financial institutions at which such Debtor maintains an account to provide Secured Party with such information with respect to such account as Secured Party from time to time reasonably may request, and each Debtor hereby consents to such information being provided to Secured Party; and

(g) such Debtor does not own any Commercial Tort Claim except for those disclosed on Schedule VII hereto. Each Debtor shall deliver to the Secured Party an updated Schedule VII concurrently with the delivery of monthly financial statements under Section 4.1(b) of the Credit Agreement.

Section 3. Collateral . As collateral security for the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the Liabilities, each Debtor hereby pledges and grants to the Secured Party, for the benefit of the Secured Party and the Lenders, a Lien on and security interest in and to all of such Debtor’s right, title and interest in all personal Property, fixtures and assets of such Debtor, whether now owned by such Debtor or hereafter acquired and whether now existing or hereafter coming into existence and wherever located (all being collectively referred to herein as “ Collateral ”), including, without limitation:

(a) all Instruments, together with all payments thereon or thereunder:

(b) all Accounts;

(c) all Inventory;

(d) all General Intangibles (including payment intangibles (as defined in the Uniform Commercial Code) and Software);

(e) all Equipment;

 

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(f) all Documents;

(g) all Contracts;

(h) all Goods;

(i) all Investment Property;

(j) all Deposit Accounts, including, without limitation, the balance from time to time in all bank accounts maintained by such Debtor;

(k) Commercial Tort Claims from time to time specified on Schedule VII ;

(1) Letter of Credit Rights and Supporting Obligations; and

(m) all other tangible and intangible Property of such Debtor (other than any equity interests in excess of sixty-five percent (65%) of the voting stock or other voting equity interests of any such Debtor if and to the extent any pledge of more than sixty-five percent (65%) of the voting stock or other voting equity securities of any such Debtor would result in adverse tax consequences to the Borrower under Section 956 of the Code), including, without limitation, all Proceeds, tort claims, products, accessions, rents, profits, income, benefits, substitutions, additions and replacements of and to any of the property of such Debtor described in the preceding clauses of this Section 3 (including, without limitation, any proceeds of insurance thereon, insurance claims and all rights, claims and benefits against any Person relating thereto), other rights to payments not otherwise included in the foregoing and all books, correspondence, files, records, invoices and other papers, including without limitation all tapes, cards, computer runs, computer programs, computer files and other papers, documents and records in the possession or under the control of such Debtor or any computer bureau or service company from time to time acting for such Debtor.

Section 4. Covenants; Remedies . In furtherance of the grant of the pledge and security interest and Lien pursuant to Section 3 hereof, each Debtor hereby agrees with the Secured Party, for the benefit of the Secured Party and the Lenders, as follows:

4.1. Delivery and Other Perfection; Maintenance, etc .

(a) Delivery of Instruments, Documents, Etc. Each Debtor shall deliver and pledge to the Secured Party or its Representative any and all Instruments, negotiable Documents, Chattel Paper and certificated securities (accompanied by stock powers executed in blank) duly endorsed and/or accompanied by such instruments of assignment and transfer executed by such Debtor in such form and substance as the Secured Party or its Representative may request; provided , that so long as no Event of Default shall have occurred and be continuing, each Debtor may retain for collection in the ordinary course of business any Instruments, negotiable Documents and Chattel Paper received by

 

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such Debtor in the Ordinary Course of Business, and the Secured Party or its Representative shall, promptly upon request of a Debtor, make appropriate arrangements for making any other Instruments, negotiable Documents and Chattel Paper pledged by such Debtor available to such Debtor for purposes of presentation, collection or renewal (any such arrangement to be effected, to the extent deemed appropriate by the Secured Party or its Representative, against trust receipt or like document). If a Debtor retains possession of any Chattel Paper, negotiable Documents or Instruments pursuant to the terms hereof, such Chattel Paper, negotiable Documents and Instruments shall be marked with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest and Lien of Antares Capital Corporation, as secured party, for the benefit of itself and certain Lenders.”

(b) Other Documents and Actions . Each Debtor shall give, execute, deliver, file and/or record any financing statement, notice, instrument, document, agreement or other papers that may be necessary or desirable (in the reasonable judgment of the Secured Party or its Representative) to create, preserve, perfect or validate the security interest and Lien granted pursuant hereto or to enable the Secured Party or its Representative to exercise and enforce the rights of the Secured Party hereunder with respect to such pledge and security interest and Lien; provided , that notices to account debtors in respect of any Accounts or Instruments shall be subject to the provisions of clause (e) below. Notwithstanding the foregoing, each Debtor hereby irrevocably authorizes the Secured Party at any time and from time to time to file in any filing office in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of such Debtor 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 of New York or such jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by part 5 of Article 9 of the Uniform Commercial Code of the State of New York for the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether such Debtor is an organization, the type of organization and any organization identification number issued to such Debtor, and (ii) 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. Each Debtor agrees to furnish any such information to the Secured Party promptly upon request. Each Debtor also ratifies its authorization for the Secured Party to have filed in any Uniform Commercial Code jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.

(c) Books and Records . Each Debtor shall maintain at its own cost and expense complete and accurate books and records of the Collateral, including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and all other dealings with the Collateral. Upon the occurrence and during the continuation of any Event of Default, each Debtor shall

 

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deliver and turn over any such books and records (or true and correct copies thereof) to the Secured Party or its Representative at any time on demand. Each Debtor shall permit any representative of the Secured Party to inspect such books and records at any time during reasonable business hours and shall provide photocopies thereof at such Debtor’s expense to the Secured Party upon request of the Secured Party.

(d) Motor Vehicles . Each Debtor shall, promptly upon the request of the Secured Party or its Representative, cause the Secured Party to be listed as the lienholder on each certificate of title or ownership covering any items of Equipment, including Motor Vehicles.

(e) Notice to Account Debtors; Verification . Upon the occurrence and during the continuance of any Event of Default (or if any rights of set-off (other than set-offs against an Account arising under the Contract giving rise to the same Account) or contra accounts may be asserted), (i) upon request of the Secured Party or its Representative, each Debtor shall promptly notify (and each Debtor hereby authorizes the Secured Party and its Representative so to notify) each account debtor in respect of any Accounts or Instruments or other Persons obligated on the Collateral that such Collateral has been assigned to the Secured Party hereunder, and that any payments due or to become due in respect of such Collateral are to be made directly to the Secured Party, and (ii) the Secured Party and its Representative shall have the right at any time or times to make direct verification with the account debtors or other Persons obligated on the Collateral of any and all of the Accounts or other such Collateral.

(f) Intellectual Property . Each Debtor represents and warrants that the Copyrights, Patents and Trademarks listed on Schedules III, IV and V , respectively, constitute all of the registered Copyrights and all of the Patents and registered Trademarks now owned by such Debtor. If such Debtor shall (i) obtain rights to any new patentable inventions, any registered Copyrights, Patents or Trademarks, or (ii) become entitled to the benefit of any registered Copyrights, Patents or Trademarks or any improvement on any Patent, the provisions of this Agreement above shall automatically apply thereto and such Debtor shall give to Secured Party prompt written notice thereof. Each Debtor hereby authorizes Secured Party to modify this Agreement by amending Schedules III, IV and V , as applicable, to include any such registered Copyrights, Patents and Trademarks. Each Debtor shall have the duty (i) to prosecute diligently any patent, trademark, or service mark applications pending as of the date hereof or hereafter, (ii) to make application on unpatented but patentable inventions and on trademarks, copyrights and service marks, as appropriate, (iii) to preserve and maintain all rights in the Copyrights, Patents and Trademarks, to the extent material to the operations of the business of such Debtor and (iv) to ensure that the Copyrights, Patents and Trademarks are and remain enforceable, to the extent material to the operations of the business of such Debtor. Any expenses incurred in connection with each Debtor’s obligations under this Section 4.1(f) shall be borne by such Debtor. No Debtor shall abandon any right to file a patent, trademark or service

 

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mark application, or abandon any pending patent, application or any other Copyright, Patent or Trademark without the written consent of Secured Party, which consent shall not be unreasonably withheld.

(g) Further Identification of Collateral . Each Debtor shall, when and as often as requested by the Secured Party or its Representative, furnish to the Secured Party or such Representative, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Secured Party or its Representative may reasonably request, all in reasonable detail.

(h) Investment Property . Each Debtor shall take any and all actions required or requested by the Secured Party, from time to time, to (i) cause the Secured Party to obtain exclusive control of any Investment Property owned by Debtor in a manner reasonably acceptable to the Secured Party and (ii) obtain from any issuers of Investment Property and such other Persons, for the benefit of the Secured Party, written confirmation of the Secured Party’s control over such Investment Property; provided, however , that notwithstanding the foregoing, the Secured Party shall not exercise any remedies with regard to any such Investment Property unless an Event of Default shall have occurred and be continuing. For purposes of this Section 4.1(h), the Secured Party shall have exclusive control of Investment Property if (i) such Investment Property consists of certificated securities and any Debtor delivers such certificated securities to the Secured Party (with appropriate endorsements if such certificated securities are in registered form); (ii) such Investment Property consists of uncertificated securities and either (x) any Debtor delivers such uncertificated securities to the Secured Party or (y) the issuer thereof agrees, pursuant to documentation in form and substance reasonably satisfactory to the Secured Party, that it shall comply with instructions originated by the Secured Party without further consent by such Debtor, and (iii) such Investment Property consists of security entitlements and either (x) the Secured Party becomes the entitlement holder thereof or (y) the appropriate securities intermediary agrees, pursuant to the documentation in form and substance reasonably satisfactory to the Secured Party, that it shall comply with entitlement orders originated by the Secured Party without further consent by any Debtor.

(i) Compliance with Loan Documents . Each Debtor shall comply with the provisions of the Loan Documents applicable thereto, including, without limitation, maintenance of insurance, restrictions on Liens, Indebtedness, Restricted Payments and dispositions, and providing Secured Party and its representatives the right to inspections with respect to the Collateral.

(j) Commercial Tort Claims . Each Debtor shall promptly notify Secured Party of any Commercial Tort Claim (as defined in the Uniform Commercial Code) acquired by it and unless otherwise consented to by Secured Party, such Debtor shall enter into a supplement to this Agreement, granting to Secured Party a Lien on and security interest in such commercial tort claim.

 

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4.2 Other Liens . No Debtor shall create, permit or suffer to exist, and each Debtor shall defend the Collateral against and take such other action as is necessary to remove, any Lien on the Collateral except Permitted Liens, and shall defend the right, title and interest of the Secured Party in and to the Collateral and in and to all Proceeds thereof against the claims and demands of all Persons whatsoever.

4.3 Preservation of Rights . Whether or not any Event of Default has occurred or is continuing, the Secured Party and its Representative may, but shall not be required to, take any steps the Secured Party or its Representative deems necessary or appropriate to preserve any Collateral or any rights against third parties to any of the Collateral, including obtaining insurance of Collateral at any time when a Debtor has failed to do so, and each Debtor shall promptly pay, or reimburse the Secured Party for, all expenses incurred in connection therewith.

4.4 Good Standing; Name Change; Location: Bailees.

(a) Each Debtor shall, upon the request of the Secured Party, provide to Secured Party a certificate of good standing from its state of incorporation, formation or organization.

(b) Without limiting the prohibition on mergers involving the Debtors contained in the Credit Agreement, no Debtor shall (i) reincorporate or reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is incorporated or organized as of the date hereof without the prior written consent of Secured Party, or (ii) otherwise change its name, identity or corporate structure. Each Debtor shall notify Secured Party promptly in writing prior to any change in the proposed use by such Debtor of any tradename or fictitious business name other than any such name set forth on Schedule II attached hereto.

(c) Except for the sale of Inventory and use and repair of Equipment in the ordinary course of business and except as expressly permitted in the Credit Agreement, Debtors shall keep the Collateral at the locations specified in Schedule I. Each Debtor shall give Secured Party thirty (30) day’s prior written notice of any change in such Debtor’s chief place of business or of any new location for any of the Collateral.

(d) If any Collateral is at any time in the possession or control of any warehousemen, bailee, consignee or processor, each Debtor shall, upon the request of Secured Party or its Representative, notify such warehousemen, bailee, consignee or processor of the Lien and security interest created hereby and shall instruct such Person to hold all such Collateral for Secured Party’s account subject to Secured Party’s instructions; provided, however, that notwithstanding the foregoing, the Secured Party shall not issue any such instructions unless an Event of Default shall have occurred and be continuing.

(e) Each Debtor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any

 

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financing statement without the prior written consent of Secured Party and agrees that it shall not do so without the prior written consent of Secured Party, subject to such Debtor’s rights under Section 9-509(d)(2) to the Uniform Commercial Code.

(f) No Debtor shall enter into any Contract that restricts or prohibits the grant to Secured Party of a security interest in Accounts, Chattel Paper, Instruments or payment intangibles or the proceeds of the foregoing.

4.5 Bank Accounts.

(a) At Secured Party’s request, on or prior to the Closing Date, or at any time thereafter, the Secured Party and each Debtor shall enter into a bank agency agreement (“ Bank Agency Agreement ”), in a form reasonably specified by the Secured Party, with each financial institution with which such Debtor maintains from time to time any deposit accounts (general or special), which financial institutions are set forth on Schedule VI attached hereto. Pursuant to the Bank Agency Agreements and pursuant hereto, each Debtor grants and shall grant to the Secured Party a continuing lien upon, and security interest in, all such accounts and all funds at any time paid, deposited, credited or held in such accounts (whether for collection, provisionally or otherwise) or otherwise in the possession of such financial institutions, and each such financial institution shall act as the Secured Party’s agent in connection therewith. Following the Closing Date, no Debtor shall establish any deposit account with any financial institution unless prior thereto, at the request of Secured Party, the Secured Party and such Debtor shall have entered into a Bank Agency Agreement with such financial institution.

(b) Upon the Secured Party’s request after the occurrence and during the continuance of an Event of Default, each Debtor shall establish lock-box or blocked accounts (collectively, “Blocked Accounts” ) in such Debtor’s name with such banks as are acceptable to the Secured Party ( “Collecting Banks” ), subject to irrevocable instructions in a form reasonably specified by the Secured Party, to which the obligors of all Accounts shall directly remit all payments on Accounts and in which such Debtor shall immediately deposit all cash payments for Inventory or other cash payments constituting proceeds of Collateral in the identical form in which such payment was made, whether by cash or check. In addition, the Secured Party may establish one or more depository accounts at each Collecting Bank or at a centrally located bank (collectively, the “Depository Account” ). All amounts held or deposited in the Blocked Accounts held by such Collecting Bank shall be transferred to the Depository Account without any further notice or action required by Secured Party. Subject to the foregoing, each Debtor hereby agrees that all payments received by the Secured Party or any Lender whether by cash, check, wire transfer or any other instrument, made to such Blocked Accounts or otherwise received by the Secured Party or any Lender and whether in respect of the Accounts or as proceeds of other Collateral or otherwise shall be the sole and exclusive property of the Secured Party for the benefit of the Secured Party and the Lenders. Each Debtor, and any of its

 

Panther Security Agreement

Affiliates, employees, agents and other Persons acting for or in concert with such Debtor shall, acting as trustee for the Secured Party, receive, as the sole and exclusive property of the Secured Party, any moneys, checks, notes, drafts or other payments relating to and/or proceeds of Accounts or other Collateral which come into the possession or under the control of such Debtor or any Affiliates, employees, agent or other Persons acting for or in concert with such Debtor, and immediately upon receipt thereof, such Debtor or Persons shall deposit the same or cause the same to be deposited in kind, in a Blocked Account.

4.6 Events of Default, Etc . During the period during which an Event of Default shall have occurred and be continuing:

(a) each Debtor shall, at the request of the Secured Party or its Representative, assemble the Collateral and make it available to Secured Party or its Representative at a place or places designated by the Secured Party or its Representative which are reasonably convenient to Secured Party or its Representative, as applicable, and such Debtor;

(b) the Secured Party or its Representative may make any reasonable compromise or settlement deemed desirable with respect to any of the Collateral and may extend the time of payment, arrange for payment in installments, or otherwise modify the terms of, any of the Collateral;

(c) the Secured Party shall have all of the rights, claims and remedies with respect to the Collateral of a secured party under the Uniform Commercial Code (whether or not said Uniform Commercial Code is in effect in the jurisdiction where the rights and remedies are asserted) and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted, including, without limitation, the right, to the maximum extent permitted by law, to exercise all voting, consensual and other powers of ownership pertaining to the Collateral as if the Secured Party were the sole and absolute owner thereof (and each Debtor agrees to take all such action as may be appropriate to give effect to such right);

(d) the Secured Party or its Representative in their discretion may, in the name of the Secured Party or in the name of a Debtor or otherwise, demand, sue for, collect or receive any money or Property at any time payable or receivable on account of or in exchange for any of the Collateral, but shall be under no obligation to do so;

(e) the Secured Party, or its Representative, may take immediate possession and occupancy of any premises owned, used or leased by a Debtor and exercise all other rights and remedies of an assignee which may be available to the Secured Party; and

(f) the Secured Party may, upon ten (10) Business Days’ prior written notice to the Debtors of the time and place (which notice the Debtors hereby agree

 

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is commercially reasonable notification for purposes hereof), with respect to the Collateral or any part thereof which shall then be or shall thereafter come into the possession, custody or control of the Secured Party or its Representative, sell, lease, license, assign or otherwise dispose of all or any part of such Collateral, at such place or places as the Secured Party deems best, and for cash or for credit or for future delivery (without thereby assuming any credit risk), at public or private sale, without demand of performance or notice of intention to effect any such disposition or of the time or place thereof (except such notice as is required above or by applicable statute and cannot be waived), and the Secured Party or anyone else may be the purchaser, lessee, licensee, assignee or recipient of any or all of the Collateral so disposed of at any public sale (or, to the extent permitted by law, at any private sale) and thereafter hold the same absolutely, free from any claim or right of whatsoever kind, including any right or equity of redemption (statutory or otherwise), of any Debtor, any such demand, notice and right or equity being hereby expressly waived and released. The Secured Party may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned.

The proceeds of each collection, sale or other disposition under this Section 4.6 shall be applied in accordance with Section 4.9 hereof.

4.7 Deficiency . If the proceeds of sale, collection or other realization of or upon the Collateral are insufficient to cover the costs and expenses of such realization and the payment in full of the Liabilities, the Debtors shall remain liable for any deficiency.

4.8 Private Sale . Each Debtor recognizes that the Secured Party may be unable to effect a public sale of any or all of the Collateral consisting of securities by reason of certain prohibitions contained in the Securities Act of 1933, as amended (the “Act” ), and applicable state securities laws, but may be compelled to resort to one or more private sales thereof to a restricted group of purchasers who shall be obliged to agree, among other things, to acquire such Collateral for their own account for investment and not with a view to the distribution or resale thereof. Each Debtor acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Secured Party shall be under no obligation to delay a sale of any of the Collateral to permit Debtor to register such Collateral for public sale under the Act, or under applicable state securities laws, even if such Debtor would agree to do so. The Secured Party shall not incur any liability as a result of the sale of any such Collateral, or any part thereof, at any private sale provided for in this Agreement conducted in a commercially reasonable manner, and each Debtor hereby waives any claims against the Secured Party arising by reason of the fact that the price at which the Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale or was less than the aggregate amount of the Liabilities, even if the Secured Party accepts the first offer received and does not offer the Collateral to more than one offeree.

 

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Each Debtor further agrees to do or cause to be done all such other acts and things as may be necessary to make such sale or sales of any portion or all of any such Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Debtor’s expense, provided that the Debtors shall be under no obligation to take any action to enable any or all of such Collateral to be registered under the provisions of the Act. Each Debtor further agrees that a breach of any of the covenants contained in this Section 4.8 will cause irreparable injury to the Secured Party, that the Secured Party has no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 4.8 shall be specifically enforceable against the Debtors, and each Debtor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing.

4.9 Application of Proceeds . The proceeds of any collection, sale or other realization of all or any part of the Collateral, and any other cash at the time held by the Secured Party under this Agreement, shall be applied to the Liabilities in the manner set forth in Section 1.10 of the Credit Agreement.

4.10 Attorney-in-Fact . Each Debtor hereby irrevocably constitutes and appoints the Secured Party, 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, after the occurrence and during the continuance of an Event of Default, in the discretion of the Secured Party, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute and deliver any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement and, without limiting the generality of the foregoing, hereby gives the Secured Party the power and right, on behalf of such Debtor, without notice to or assent by such Debtor, to do the following upon the occurrence and during the continu