Exhibit 10.2

 

GUARANTY AND SECURITY AGREEMENT

 

This GUARANTY AND SECURITY AGREEMENT (this “Agreement”), dated as of March 10,
2016,  among the Persons listed on the signature pages hereof as “Grantors” and
those additional entities that hereafter become parties hereto by executing the
form of Joinder attached hereto as Annex 1 (each, a “Grantor” and collectively,
the “Grantors”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association (“Wells Fargo”), in its capacity as agent for each member of the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement of even date herewith (as
amended, restated, supplemented, or otherwise modified from time to time, the
“Credit Agreement”) by and among Harte Hanks, Inc., a Delaware corporation
(“Harte Hanks”), Trillium Software, Inc., a Delaware corporation (“Trillium”),
the other borrowers party thereto (together with Harte Hanks and Trillium, are
referred to hereinafter each individually as a “Borrower”, and individually and
collectively, jointly and severally, as the “Borrowers”), the lenders party
thereto as “Lenders”, Wells Fargo Bank, National Association, a national banking
association (“Wells Fargo”), as administrative agent for each member of the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”), Wells Fargo Bank, National
Association, a national banking association, as sole lead arranger (in such
capacity, together with its successors and assigns in such capacity, the “Sole
Lead Arranger”), and Wells Fargo Bank, National Association, a national banking
association, as sole book runner (in such capacity, together with its successors
and assigns in such capacity, the “Sole Book Runner”), the Lender Group has
agreed to make certain financial accommodations available to Borrowers from time
to time pursuant to the terms and conditions thereof; and

 

WHEREAS, Agent has agreed to act as agent for the benefit of the Lender Group
and the Bank Product Providers in connection with the transactions contemplated
by the Credit Agreement and this Agreement;

 

WHEREAS, in order to induce the Lender Group to enter into the Credit Agreement
and the other Loan Documents, to induce the Bank Product Providers to enter into
the Bank Product Agreements, and to induce the Lender Group and the Bank Product
Providers to make financial accommodations to Borrowers as provided for in the
Credit Agreement, the other Loan Documents and the Bank Product Agreements,
(a) each Grantor (other than Borrowers) has agreed to guaranty the Guarantied
Obligations, and (b) each Grantor has agreed to grant to Agent, for the benefit
of the Lender Group and the Bank Product Providers, a continuing security
interest in and to the Collateral in order to secure the prompt and complete
payment, observance and performance of, among other things, the Secured
Obligations; and

 

WHEREAS, each Grantor (other than Harte Hanks) is a Subsidiary of Harte Hanks
and, as such, will benefit by virtue of the financial accommodations extended to
Borrowers by the Lender Group.

 

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

 

1.                                     Definitions; Construction.

 

(a)                                 All initially capitalized terms used herein
(including in the preamble and recitals hereof) without definition shall have
the meanings ascribed thereto in the Credit Agreement (including Schedule 1.1
thereto).  Any terms (whether capitalized or lower case) used in this Agreement
that are defined in the Code shall be construed and defined as set forth in the
Code unless otherwise defined herein or in the Credit Agreement; provided that
to the extent that the Code is used to define any term used herein and if such
term is defined differently in different Articles of the Code, the definition of
such term contained in Article 9 of the Code shall govern.  In addition to those
terms defined elsewhere in this Agreement, as used in this Agreement, the
following terms shall have the following meanings:

 

(i)                                     “Activation Instruction” has the meaning
specified therefor in Section 7(l).

 

(ii)                                  “Agent” has the meaning specified therefor
in the preamble to this Agreement.

 

(iii)                               “Agreement” has the meaning specified
therefor in the preamble to this Agreement.

 

(iv)                              “Books” means books and records (including
each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s
assets (including the Collateral) or liabilities, each Grantor’s Records
relating to such Grantor’s business operations or financial condition, and each
Grantor’s goods or General Intangibles related to such information).

 

(v)                                 “Borrower” and “Borrowers” have the
respective meanings specified therefor in the recitals to this Agreement.

 

(vi)                              “Code” means the Illinois Uniform Commercial
Code, as in effect from time to time; provided, however, that in the event that,
by reason of mandatory provisions of law, any or all of the attachment,
perfection, priority, or remedies with respect to Agent’s Lien on any Collateral
is governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of Illinois, the term “Code” shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies.

 

(vii)                           “Collateral” has the meaning specified therefor
in Section 3.

 

(viii)                        “Collection Account” means a Deposit Account of a
Grantor which is used exclusively for deposits of collections and proceeds of
Collateral and not as a disbursement or operating account upon which checks or
other drafts may be drawn.

 

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(ix)                              “Collections” means all cash, checks, notes,
instruments, collections, wire transfers, electronic funds transfers, items of
payment and other cash proceeds of Accounts and all other payments (including
insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax
refunds).

 

(x)                                 “Commercial Tort Claims” means commercial
tort claims (as that term is defined in the Code), and includes those commercial
tort claims listed on Schedule 1.

 

(xi)                              “Commodity Exchange Act” means the Commodity
Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any
successor statute.

 

(xii)                           “Controlled Account” has the meaning specified
therefor in Section 7(l).

 

(xiii)                        “Controlled Account Agreements” means those
certain cash management agreements, in form and substance reasonably
satisfactory to Agent, each of which is executed and delivered by a Grantor,
Agent, and one of the Controlled Account Banks.

 

(xiv)                       “Controlled Account Bank” has the meaning specified
therefor in Section 7(l).

 

(xv)                          “Copyrights” means any and all rights in any works
of authorship, including (A) copyrights and moral rights, (B) copyright
registrations and recordings thereof and all applications in connection
therewith including those listed on Schedule 2, (C) income, license fees,
royalties, damages, and payments now and hereafter due or payable under and with
respect thereto, including payments under all licenses entered into in
connection therewith and damages and payments for past, present, or future
infringements thereof, (D) the right to sue for past, present, and future
infringements thereof, and (E) all of each Grantor’s rights corresponding
thereto throughout the world.

 

(xvi)                       “Copyright Security Agreement” means each Copyright
Security Agreement executed and delivered by Grantors, or any of them, and
Agent, in substantially the form of Exhibit A.

 

(xvii)                    “Credit Agreement” has the meaning specified therefor
in the recitals to this Agreement.

 

(xviii)                 “Excluded Swap Obligation” means any Swap Obligation if,
and to the extent that, with respect to any Guarantor, all or a portion of the
Guaranty of such Guarantor of such Swap Obligation (or any Guaranty thereof),
and with respect to any Grantor, all or a portion of the grant by such Grantor
of a security interest to secure such Swap Obligation (or any Guaranty thereof),
is or becomes illegal under the Commodity Exchange Act or any rule, regulation
or order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in
the Commodity Exchange Act and the regulations thereunder at the time the
Guaranty of such Guarantor or the grant of such security interest becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion

 

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of such Swap Obligation that is attributable to swaps for which such Guaranty or
security interest is or becomes illegal.

 

(xix)                       “Foreclosed Grantor” has the meaning specified
therefor in Section 2(i)(iv).

 

(xx)                          “General Intangibles” means general intangibles
(as that term is defined in the Code), and includes payment intangibles,
software, contract rights, rights to payment, rights under Hedge Agreements
(including the right to receive payment on account of the termination
(voluntarily or involuntarily) of such Hedge Agreements), rights arising under
common law, statutes, or regulations, choses or things in action,
goodwill, Intellectual Property, Intellectual Property Licenses, purchase
orders, customer lists, monies due or recoverable from pension funds, route
lists, rights to payment and other rights under any royalty or licensing
agreements, including Intellectual Property Licenses, infringement claims,
pension plan refunds, pension plan refund claims, insurance premium rebates, tax
refunds, and tax refund claims, interests in a partnership or limited liability
company which do not constitute a security under Article 8 of the Code, and any
other personal property other than Commercial Tort Claims, money, Accounts,
Chattel Paper, Deposit Accounts, goods, Investment Property, Negotiable
Collateral, and oil, gas, or other minerals before extraction.

 

(xxi)                       “Grantor” and “Grantors” have the respective
meanings specified therefor in the preamble to this Agreement.

 

(xxii)                    “Guarantied Obligations” means all of the Obligations
(including any Bank Product Obligations) now or hereafter existing, whether for
principal, interest (including any interest that accrues after the commencement
of an Insolvency Proceeding, regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), fees (including the
fees provided for in the Fee Letter), Lender Group Expenses (including any fees
or expenses that accrue after the commencement of an Insolvency Proceeding,
regardless of whether allowed or allowable in whole or in part as a claim in any
such Insolvency Proceeding), or otherwise, and any and all expenses (including
reasonable counsel fees and expenses) incurred by Agent, any other member of the
Lender Group, or any Bank Product Provider (or any of them) in enforcing any
rights under any of the Loan Documents.  Without limiting the generality of the
foregoing, Guarantied Obligations shall include all amounts that constitute part
of the Guarantied Obligations and would be owed by Borrowers to Agent, any other
member of the Lender Group, or any Bank Product Provider but for the fact that
they are unenforceable or not allowable, including due to the existence of a
bankruptcy, reorganization, other Insolvency Proceeding or similar proceeding
involving any Borrower or any guarantor; provided that, anything to the contrary
contained in the foregoing notwithstanding, the Guarantied Obligations shall
exclude any Excluded Swap Obligation.

 

(xxiii)                 “Guarantor” means each Grantor other than Borrowers.

 

(xxiv)                “Guaranty” means the guaranty set forth in Section 2
hereof.

 

(xxv)                   “Intellectual Property” means any and all Patents,
Copyrights, Trademarks, trade secrets, know-how, inventions (whether or not
patentable), algorithms,

 

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software programs (including source code and object code), processes, product
designs, industrial designs, blueprints, drawings, data, customer lists, URLs
and domain names, specifications, documentations, reports, catalogs, literature,
and any other forms of technology or proprietary information of any kind,
including all rights therein and all applications for registration or
registrations thereof.

 

(xxvi)                “Intellectual Property Licenses” means, with respect to
any Grantor, (A) any licenses or other similar rights provided to such Grantor
in or with respect to Intellectual Property owned or controlled by any other
Person, and (B) any licenses or other similar rights provided to any other
Person in or with respect to Intellectual Property owned or controlled by such
Grantor, in each case, including (x) any software license agreements (other than
license agreements for commercially available off-the-shelf software that is
generally available to the public which have been licensed to a Grantor pursuant
to end-user licenses), (y) the license agreements listed on Schedule 3, and
(z) the right to use any of the licenses or other similar rights described in
this definition in connection with the enforcement of the Lender Group’s rights
under the Loan Documents.

 

(xxvii)             “Investment Property” means (A) any and all investment
property, and (B) any and all of the following (regardless of whether classified
as investment property under the Code):  all Pledged Interests, Pledged
Operating Agreements, and Pledged Partnership Agreements.

 

(xxviii)          “Joinder” means each Joinder to this Agreement executed and
delivered by Agent and each of the other parties listed on the signature
pages thereto, in substantially the form of Annex 1.

 

(xxix)                “Lender” and “Lenders” have the respective meanings
specified therefor in the recitals to this Agreement.

 

(xxx)                   “Negotiable Collateral” means letters of credit,
letter-of-credit rights, instruments, promissory notes, drafts and documents (as
each such term is defined in the Code).

 

(xxxi)                “Patents” means patents and patent applications, including
(A) the patents and patent applications listed on Schedule 4, (B) all
continuations, divisionals, continuations-in-part, re-examinations, reissues,
and renewals thereof and improvements thereon, (C) all income, royalties,
damages and payments now and hereafter due or payable under and with respect
thereto, including payments under all licenses entered into in connection
therewith and damages and payments for past, present, or future infringements
thereof, (D) the right to sue for past, present, and future infringements
thereof, and (E) all of each Grantor’s rights corresponding thereto throughout
the world.

 

(xxxii)             “Patent Security Agreement” means each Patent Security
Agreement executed and delivered by Grantors, or any of them, and Agent, in
substantially the form of Exhibit B.

 

(xxxiii)          “Pledged Companies” means each Person listed on Schedule 5 as
a “Pledged Company”, together with each other Person, all or a portion of whose
Equity Interests are acquired or otherwise owned by a Grantor after the Closing
Date.

 

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(xxxiv)         “Pledged Interests” means all of each Grantor’s right, title and
interest in and to all of the Equity Interests now owned or hereafter acquired
by such Grantor (to the extent constituting Collateral), regardless of class or
designation, including in each of the Pledged Companies, and all substitutions
therefor and replacements thereof, all proceeds thereof and all rights relating
thereto, also including any certificates representing the Equity Interests, the
right to receive any certificates representing any of the Equity Interests, all
warrants, options, share appreciation rights and other rights, contractual or
otherwise, in respect thereof and the right to receive all dividends,
distributions of income, profits, surplus, or other compensation by way of
income or liquidating distributions, in cash or in kind, and all cash,
instruments, and other property from time to time received, receivable, or
otherwise distributed in respect of or in addition to, in substitution of, on
account of, or in exchange for any or all of the foregoing.

 

(xxxv)            “Pledged Interests Addendum” means a Pledged Interests
Addendum substantially in the form of Exhibit C.

 

(xxxvi)         “Pledged Note” has the meaning specified therefor in
Section 6(m).

 

(xxxvii)      “Pledged Operating Agreements” means all of each Grantor’s rights,
powers, and remedies under the limited liability company operating agreements of
each of the Pledged Companies that are limited liability companies.

 

(xxxviii)   “Pledged Partnership Agreements” means all of each Grantor’s rights,
powers, and remedies under the partnership agreements of each of the Pledged
Companies that are partnerships.

 

(xxxix)         “Proceeds” has the meaning specified therefor in Section 3.

 

(xl)                              “PTO” means the United States Patent and
Trademark Office.

 

(xli)                           “Qualified ECP Guarantor” means, in respect of
any Swap Obligation, each Guarantor that has total assets exceeding $10,000,000
at the time the relevant guaranty, keepwell, or grant of the relevant security
interest becomes effective with respect to such Swap Obligation or such other
person as constitutes an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder and can cause another
person to qualify as an “eligible contract participant” at such time by entering
into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

(xlii)                        “Real Property” means any estates or interests in
real property now owned or hereafter acquired by any Grantor or any Subsidiary
of any Grantor and the improvements thereto.

 

(xliii)                     “Record” means information that is inscribed on a
tangible medium or which is stored in an electronic or other medium and is
retrievable in perceivable form.

 

(xliv)                    [Intentionally omitted].

 

(xlv)                       “Secured Obligations” means each and all of the
following:  (A) all of the present and future obligations of each of the
Grantors arising from, or owing under or

 

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pursuant to, this Agreement (including the Guaranty), the Credit Agreement, or
any of the other Loan Documents, (B) all Bank Product Obligations, and (C) all
other Obligations of any Borrower and all other Guarantied Obligations of each
Guarantor (including, in the case of each of clauses (A), (B) and (C),
reasonable attorneys’ fees and expenses and any interest, fees, or expenses that
accrue after the filing of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any Insolvency
Proceeding); provided that, anything to the contrary contained in the foregoing
notwithstanding, the Secured Obligations of the Grantors shall exclude any
Excluded Swap Obligation.

 

(xlvi)                    “Security Interest” has the meaning specified therefor
in Section 3.

 

(xlvii)                 “Supporting Obligations” means supporting obligations
(as such term is defined in the Code), and includes letters of credit and
guaranties issued in support of Accounts, Chattel Paper, documents, General
Intangibles, instruments or Investment Property.

 

(xlviii)              “Swap Obligation” means, with respect to any Grantor, any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act.

 

(xlix)                    “Trademarks” means any and all trademarks, trade
names, registered trademarks, trademark applications, service marks, registered
service marks and service mark applications, including (A) the trade names,
registered trademarks, trademark applications, registered service marks and
service mark applications listed on Schedule 6, (B) all renewals thereof,
(C) all income, royalties, damages and payments now and hereafter due or payable
under and with respect thereto, including payments under all licenses entered
into in connection therewith and damages and payments for past or future
infringements or dilutions thereof, (D) the right to sue for past, present and
future infringements and dilutions thereof, (E) the goodwill of each Grantor’s
business symbolized by the foregoing or connected therewith, and (F) all of each
Grantor’s rights corresponding thereto throughout the world.

 

(l)                                     “Trademark Security Agreement” means
each Trademark Security Agreement executed and delivered by Grantors, or any of
them, and Agent, in substantially the form of Exhibit D.

 

(li)                                  “Triggering Event” means, as of any date
of determination, that (A) an Event of Default has occurred as of such date, or
(B) Excess Availability is less 15% of the Maximum Credit Amount.

 

(lii)                               “URL” means “uniform resource locator,” an
internet web address.

 

(liii)                            “VIN” has the meaning specified therefor in
Section 6(l).

 

(b)                                                        Unless the context of
this Agreement clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural and the terms “includes”
and “including” are not limiting.  The words “hereof,” “herein,” “hereby,”
“hereunder,” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement.  Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified.  Any reference in this

 

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Agreement to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein or in the Credit Agreement).  The
words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties.  Any reference herein to the satisfaction, repayment, or payment in
full of the Secured Obligations or the Guarantied Obligations shall mean (i) the
payment or repayment in full in immediately available funds of (A) the principal
amount of, and interest accrued with respect to, all outstanding Loans, together
with the payment of any premium applicable to the repayment of the Loans,
(B) all Lender Group Expenses that have accrued regardless of whether demand has
been made therefor, (C) all fees or charges that have accrued hereunder or under
any other Loan Document (including the Letter of Credit Fee and the Unused Line
Fee), (ii) in the case of contingent reimbursement obligations with respect to
Letters of Credit, providing Letter of Credit Collateralization, (iii) in the
case of obligations with respect to Bank Products (other than Hedge
Obligations), providing Bank Product Collateralization, (iv) the receipt by
Agent of cash collateral in order to secure any other contingent Secured
Obligations or Guarantied Obligations for which a claim or demand for payment
has been made at such time or in respect of matters or circumstances known to
Agent or a Lender at the time that are reasonably expected to result in any
loss, cost, damage or expense (including attorneys’ fees and legal expenses),
such cash collateral to be in such amount as Agent reasonably determines is
appropriate to secure such contingent Secured Obligations or Guarantied
Obligations, (v) the payment or repayment in full in immediately available funds
of all other Secured Obligations or Guarantied Obligations (as the case may be)
(including the payment of any termination amount then applicable (or which would
or could become applicable as a result of the repayment of the other
Obligations) under Hedge Agreements provided by Hedge Providers) other than
(A) unasserted contingent indemnification obligations, (B) any Bank Product
Obligations (other than Hedge Obligations) that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding without being
required to be repaid or cash collateralized, and (C) any Hedge Obligations
that, at such time, are allowed by the applicable Hedge Provider to remain
outstanding without being required to be repaid, and (vi) the termination of all
of the Commitments of the Lenders.  Any reference herein to any Person shall be
construed to include such Person’s successors and assigns.  Any requirement of a
writing contained herein shall be satisfied by the transmission of a Record.

 

(c)                                 All of the schedules and exhibits attached
to this Agreement shall be deemed incorporated herein by reference.

 

2.                                     Guaranty.

 

(a)                                 In recognition of the direct and indirect
benefits to be received by Guarantors from the proceeds of the Revolving Loans
and the Term Loan, the issuance of the Letters of Credit, and the entering into
of the Bank Product Agreements and by virtue of the financial accommodations to
be made to Borrowers, each of the Guarantors, jointly and severally, hereby
unconditionally and irrevocably guarantees as a primary obligor and not merely
as a surety the full and prompt payment when due, whether upon maturity,
acceleration, or otherwise, of all of the Guarantied Obligations.  If any or all
of the Obligations constituting

 

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Guarantied Obligations becomes due and payable, each of the Guarantors,
unconditionally and irrevocably, and without the need for demand, protest, or
any other notice or formality, promises to pay such indebtedness to Agent, for
the benefit of the Lender Group and the Bank Product Providers, together with
any and all expenses (including Lender Group Expenses) that may be incurred by
Agent or any other member of the Lender Group or any Bank Product Provider in
demanding, enforcing, or collecting any of the Guarantied Obligations (including
the enforcement of any collateral for such Guarantied Obligations or any
collateral for the obligations of the Guarantors under this Guaranty).  If claim
is ever made upon Agent or any other member of the Lender Group or any Bank
Product Provider for repayment or recovery of any amount or amounts received in
payment of or on account of any or all of the Guarantied Obligations and any of
Agent or any other member of the Lender Group or any Bank Product Provider
repays all or part of said amount by reason of (i) any judgment, decree, or
order of any court or administrative body having jurisdiction over such payee or
any of its property, or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including any Borrower or any
Guarantor), then and in each such event, each of the Guarantors agrees that any
such judgment, decree, order, settlement, or compromise shall be binding upon
the Guarantors, notwithstanding any revocation (or purported revocation) of this
Guaranty or other instrument evidencing any liability of any Grantor, and the
Guarantors shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.

 

(b)                                Additionally, each of the Guarantors
unconditionally and irrevocably guarantees the payment of any and all of the
Guarantied Obligations to Agent, for the benefit of the Lender Group and the
Bank Product Providers, whether or not due or payable by any Loan Party upon the
occurrence of any of the events specified in Section 8.4 or 8.5 of the Credit
Agreement, and irrevocably and unconditionally promises to pay such indebtedness
to Agent, for the benefit of the Lender Group and the Bank Product Providers,
without the requirement of demand, protest, or any other notice or other
formality, in lawful money of the United States.

 

(c)                                 The liability of each of the Guarantors
hereunder is primary, absolute, and unconditional, and is independent of any
security for or other guaranty of the Guarantied Obligations, whether executed
by any other Guarantor or by any other Person, and the liability of each of the
Guarantors hereunder shall not be affected or impaired by (i) any payment on, or
in reduction of, any such other guaranty or undertaking, (ii) any dissolution,
termination, or increase, decrease, or change in personnel by any Grantor,
(iii) any payment made to Agent, any other member of the Lender Group, or any
Bank Product Provider on account of the Obligations which Agent, such other
member of the Lender Group, or such Bank Product Provider repays to any Grantor
pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding (or any settlement or compromise of
any claim made in such a proceeding relating to such payment), and each of the
Guarantors waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding, or (iv) any action or inaction by
Agent, any other member of the Lender Group, or any Bank Product Provider, or
(v) any invalidity, irregularity, avoidability, or unenforceability of all or
any part of the Obligations or of any security therefor.

 

(d)                                This Guaranty includes all present and future
Guarantied Obligations including any under transactions continuing,
compromising, extending, increasing, modifying,

 

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releasing, or renewing the Guarantied Obligations, changing the interest rate,
payment terms, or other terms and conditions thereof, or creating new or
additional Guarantied Obligations after prior Guarantied Obligations have been
satisfied in whole or in part.  To the maximum extent permitted by law, each
Guarantor hereby waives any right to revoke this Guaranty as to future
Guarantied Obligations.  If such a revocation is effective notwithstanding the
foregoing waiver, each Guarantor acknowledges and agrees that (i) no such
revocation shall be effective until written notice thereof has been received by
Agent, (ii) no such revocation shall apply to any Guarantied Obligations in
existence on the date of receipt by Agent of such written notice (including any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (iii) no
such revocation shall apply to any Guarantied Obligations made or created after
such date to the extent made or created pursuant to a legally binding commitment
of any member of the Lender Group or any Bank Product Provider in existence on
the date of such revocation, (iv) no payment by any Guarantor, any Borrower, or
from any other source, prior to the date of Agent’s receipt of written notice of
such revocation shall reduce the maximum obligation of such Guarantor hereunder,
and (v) any payment by any Borrower or from any source other than such Guarantor
subsequent to the date of such revocation shall first be applied to that portion
of the Guarantied Obligations as to which the revocation is effective and which
are not, therefore, guarantied hereunder, and to the extent so applied shall not
reduce the maximum obligation of such Guarantor hereunder.  This Guaranty shall
be binding upon each Guarantor, its successors and assigns and inure to the
benefit of and be enforceable by Agent (for the benefit of the Lender Group and
the Bank Product Providers) and its successors, transferees, or assigns.

 

(e)                                 The guaranty by each of the Guarantors
hereunder is a guaranty of payment and not of collection.  The obligations of
each of the Guarantors hereunder are independent of the obligations of any other
Guarantor or Grantor or any other Person and a separate action or actions may be
brought and prosecuted against one or more of the Guarantors whether or not
action is brought against any other Guarantor or Grantor or any other Person and
whether or not any other Guarantor or Grantor or any other Person be joined in
any such action or actions.  Each of the Guarantors waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement hereof.  Any payment by any Grantor or
other circumstance which operates to toll any statute of limitations as to any
Grantor shall operate to toll the statute of limitations as to each of the
Guarantors.

 

(f)                                   Each of the Guarantors authorizes Agent,
the other members of the Lender Group, and the Bank Product Providers without
notice or demand, and without affecting or impairing its liability hereunder,
from time to time to:

 

(i)                                     change the manner, place, or terms of
payment of, or change or extend the time of payment of, renew, increase,
accelerate, or alter:  (A) any of the Obligations (including any increase or
decrease in the principal amount thereof or the rate of interest or fees
thereon); or (B) any security therefor or any liability incurred directly or
indirectly in respect thereof, and this Guaranty shall apply to the Obligations
as so changed, extended, renewed, or altered;

 

(ii)                                  take and hold security for the payment of
the Obligations and sell, exchange, release, impair, surrender, realize upon,
collect, settle, or otherwise deal with in any

 

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manner and in any order any property at any time pledged or mortgaged to secure
the Obligations or any of the Guarantied Obligations (including any of the
obligations of all or any of the Guarantors under this Guaranty) incurred
directly or indirectly in respect thereof or hereof, or any offset on account
thereof;

 

(iii)        exercise or refrain from exercising any rights against any Grantor;

 

(iv)        release or substitute any one or more endorsers, guarantors, any
Grantor, or other obligors;

 

(v)        settle or compromise any of the Obligations, any security therefor,
or any liability (including any of those of any of the Guarantors under this
Guaranty) incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of any Grantor to its creditors;

 

(vi)        apply any sums by whomever paid or however realized to any liability
or liabilities of any Grantor to Agent, any other member of the Lender Group, or
any Bank Product Provider regardless of what liability or liabilities of such
Grantor remain unpaid;

 

(vii)       consent to or waive any breach of, or any act, omission, or default
under, this Agreement, any other Loan Document, any Bank Product Agreement, or
any of the instruments or agreements referred to herein or therein, or otherwise
amend, modify, or supplement this Agreement, any other Loan Document, any Bank
Product Agreement, or any of such other instruments or agreements; or

 

(viii)      take any other action that could, under otherwise applicable
principles of law, give rise to a legal or equitable discharge of one or more of
the Guarantors from all or part of its liabilities under this Guaranty.

 

(g)             It is not necessary for Agent, any other member of the Lender
Group, or any Bank Product Provider to inquire into the capacity or powers of
any of the Guarantors or the officers, directors, partners or agents acting or
purporting to act on their behalf, and any Obligations made or created in
reliance upon the professed exercise of such powers shall be guarantied
hereunder.

 

(h)             Each Guarantor jointly and severally guarantees that the
Guarantied Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation, or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
member of the Lender Group or any Bank Product Provider with respect thereto. 
The obligations of each Guarantor under this Guaranty are independent of the
Guarantied Obligations, and a separate action or actions may be brought and
prosecuted against each Guarantor to enforce such obligations, irrespective of
whether any action is brought against any other Guarantor or whether any other
Guarantor is joined in any such action or actions.  The liability of each
Guarantor under this Guaranty shall be absolute and unconditional irrespective
of, and each Guarantor hereby irrevocably waives any defense it may now or
hereafter have in any way relating to, any or all of the following:

 

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(i)         any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;

 

(ii)         any change in the time, manner, or place of payment of, or in any
other term of, all or any of the Guarantied Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document, including any
increase in the Guarantied Obligations resulting from the extension of
additional credit;

 

(iii)        any taking, exchange, release, or non-perfection of any Lien in and
to any Collateral, or any taking, release, amendment, waiver of, or consent to
departure from any other guaranty, for all or any of the Guarantied Obligations;

 

(iv)        the existence of any claim, set-off, defense, or other right that
any Guarantor may have at any time against any Person, including Agent, any
other member of the Lender Group, or any Bank Product Provider;

 

(v)        any defense, set-off, counterclaim, or claim, of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guarantied Obligations or any
security therefor;

 

(vi)        any right or defense arising by reason of any claim or defense based
upon an election of remedies by any member of the Lender Group or any Bank
Product Provider including any defense based upon an impairment or elimination
of such Guarantor’s rights of subrogation, reimbursement, contribution, or
indemnity of such Guarantor against any other Grantor or any guarantors or
sureties;

 

(vii)       any change, restructuring, or termination of the corporate, limited
liability company, or partnership structure or existence of any Grantor; or

 

(viii)      any other circumstance that might otherwise constitute a defense
available to, or a discharge of, any Grantor or any other guarantor or surety.

 

(i)              Waivers.

 

(i)         Each of the Guarantors waives any right (except as shall be required
by applicable statute and cannot be waived) to require Agent, any other member
of the Lender Group, or any Bank Product Provider to (i) proceed against any
other Grantor or any other Person, (ii) proceed against or exhaust any security
held from any other Grantor or any other Person, or (iii) protect, secure,
perfect, or insure any security interest or Lien on any property subject thereto
or exhaust any right to take any action against any other Grantor, any other
Person, or any collateral, or (iv) pursue any other remedy in any member of the
Lender Group’s or any Bank Product Provider’s power whatsoever.  Each of the
Guarantors waives any defense based on or arising out of any defense of any
Grantor or any other Person, other than payment of the Guarantied Obligations to
the extent of such payment, based on or arising out of the disability of any
Grantor or any other Person, or the validity, legality, or unenforceability of
the Obligations or any part thereof from any cause, or the cessation from any
cause of the liability of any Grantor other than payment of the Obligations to
the extent of such payment.  Agent may, at the election of the Required Lenders,
foreclose upon any Collateral held by Agent by one or

 

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more judicial or nonjudicial sales or other dispositions, whether or not every
aspect of any such sale is commercially reasonable or otherwise fails to comply
with applicable law or may exercise any other right or remedy Agent, any other
member of the Lender Group, or any Bank Product Provider may have against any
Grantor or any other Person, or any security, in each case, without affecting or
impairing in any way the liability of any of the Guarantors hereunder except to
the extent the Guarantied Obligations have been paid.

 

(ii)         Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including notices of nonperformance, notices
of protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation, or incurring of new or additional
Obligations or other financial accommodations.  Each of the Guarantors waives
notice of any Default or Event of Default under any of the Loan Documents.  Each
of the Guarantors assumes all responsibility for being and keeping itself
informed of each Grantor’s financial condition and assets and of all other
circumstances bearing upon the risk of nonpayment of the Obligations and the
nature, scope, and extent of the risks which each of the Guarantors assumes and
incurs hereunder, and agrees that neither Agent nor any of the other members of
the Lender Group nor any Bank Product Provider shall have any duty to advise any
of the Guarantors of information known to them regarding such circumstances or
risks.

 

(iii)        To the fullest extent permitted by applicable law, each Guarantor
hereby waives:  (A) any right to assert against any member of the Lender Group
or any Bank Product Provider, any defense (legal or equitable), set-off,
counterclaim, or claim which each Guarantor may now or at any time hereafter
have against any Borrower or any other party liable to any member of the Lender
Group or any Bank Product Provider; (B) any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly from the present or
future lack of perfection, sufficiency, validity, or enforceability of the
Guarantied Obligations or any security therefor; (C) any right or defense
arising by reason of any claim or defense based upon an election of remedies by
any member of the Lender Group or any Bank Product Provider including any
defense based upon an impairment or elimination of such Guarantor’s rights of
subrogation, reimbursement, contribution, or indemnity of such Guarantor against
any Borrower or other guarantors or sureties; and (D) the benefit of any statute
of limitations affecting such Guarantor’s liability hereunder or the enforcement
thereof, and any act which shall defer or delay the operation of any statute of
limitations applicable to the Guarantied Obligations shall similarly operate to
defer or delay the operation of such statute of limitations applicable to such
Guarantor’s liability hereunder.

 

(iv)        No Guarantor will exercise any rights that it may now or hereafter
acquire against any Grantor or any other guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations
under this Guaranty, including any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of Agent, any other member of the Lender Group, or any Bank
Product Provider against any Grantor or any other guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including the right to take or receive from any Grantor
or any other guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security solely on account of such
claim, remedy or right, unless and until all of the Guarantied Obligations and
all other amounts payable under this Guaranty shall have been paid in full in

 

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cash and all of the Commitments have been terminated.  If any amount shall be
paid to any Guarantor in violation of the immediately preceding sentence, such
amount shall be held in trust for the benefit of Agent, for the benefit of the
Lender Group and the Bank Product Providers, and shall forthwith be paid to
Agent to be credited and applied to the Guarantied Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in accordance
with the terms of the Credit Agreement, or to be held as Collateral for any
Guarantied Obligations or other amounts payable under this Guaranty thereafter
arising.  Notwithstanding anything to the contrary contained in this Guaranty,
no Guarantor may exercise any rights of subrogation, contribution, indemnity,
reimbursement or other similar rights against, and may not proceed or seek
recourse against or with respect to any property or asset of, any other Grantor
(the “Foreclosed Grantor”), including after payment in full of the Obligations,
if all or any portion of the Obligations have been satisfied in connection with
an exercise of remedies in respect of the Equity Interests of such Foreclosed
Grantor whether pursuant to this Agreement or otherwise.

 

(v)        Each of the Guarantors hereby acknowledges and affirms that it
understands that to the extent the Guarantied Obligations are secured by Real
Property located in California, Guarantors shall be liable for the full amount
of the liability hereunder notwithstanding the foreclosure on such Real Property
by trustee sale or any other reason impairing such Guarantor’s right to proceed
against any Loan Party.  In accordance with Section 2856 of the California Code
of Civil Procedure or any similar laws of any other applicable jurisdiction,
each of the Guarantors hereby waives until such time as the Guarantied
Obligations have been paid in full:

 

(1)        all rights of subrogation, reimbursement, indemnification, and
contribution and any other rights and defenses that are or may become available
to the Guarantors by reason of Sections 2787 to 2855, inclusive, 2899, and 3433
of the California Code of Civil Procedure or any similar laws of any other
applicable jurisdiction;

 

(2)        all rights and defenses that the Guarantors may have because the
Guarantied Obligations are secured by Real Property located in California,
meaning, among other things, that:  (A) Agent, the other members of the Lender
Group, and the Bank Product Providers may collect from the Guarantors without
first foreclosing on any real or personal property collateral pledged by any
Borrower or any other Grantor, and (B) if Agent, on behalf of the Lender Group,
forecloses on any Real Property collateral pledged by any Borrower or any other
Grantor, (1) the amount of the Guarantied Obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price, and (2) the Lender Group may
collect from the Guarantors even if, by foreclosing on the Real Property
collateral, Agent or the other members of the Lender Group have destroyed or
impaired any right the Guarantors may have to collect from any other Grantor, it
being understood that this is an unconditional and irrevocable waiver of any
rights and defenses the Guarantors may have because the Guarantied Obligations
are secured by Real Property (including, without limitation, any rights or
defenses based upon Sections 580a, 580d, or 726 of the California Code of Civil
Procedure or any similar laws of any other applicable jurisdiction); and

 

(3)        all rights and defenses arising out of an election of remedies by
Agent, the other members of the Lender Group, and the Bank Product Providers,

 

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even though that election of remedies, such as a nonjudicial foreclosure with
respect to security for the Guarantied Obligations, has destroyed Guarantors’
rights of subrogation and reimbursement against any Grantor by the operation of
Section 580d of the California Code of Civil Procedure or any similar laws of
any other applicable jurisdiction or otherwise.

 

(vi)        Each of the Guarantors represents, warrants, and agrees that each of
the waivers set forth above is made with full knowledge of its significance and
consequences and that if any of such waivers are determined to be contrary to
any applicable law or public policy, such waivers shall be effective to the
maximum extent permitted by law.

 

(vii)       The provisions in this Section 2 which refer to certain sections of
the California Civil Code are included in this Guaranty solely out of an
abundance of caution and shall not be construed to mean that any of the
above-referenced provisions of California law are in any way applicable to this
Guaranty.

 

(j)              Keepwell.  Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Grantor
to guaranty and otherwise honor all Obligations in respect of Swap Obligations
(provided, however, that each Qualified ECP Guarantor shall only be liable under
this Section 2(j) for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 2(j), or otherwise
under the Loan Documents, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount).  The
obligations of each Qualified ECP Guarantor under this Section shall remain in
full force and effect until payment in full of the Guarantied Obligations.  Each
Qualified ECP Guarantor intends that this Section 2(j) constitute, and this
Section 2(j) shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Grantor for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

3.         Grant of Security.  Each Grantor hereby unconditionally grants,
assigns, and pledges to Agent, for the benefit of each member of the Lender
Group and each of the Bank Product Providers, to secure the Secured Obligations,
a continuing security interest (hereinafter referred to as the “Security
Interest”) in all of such Grantor’s right, title, and interest in and to the
following, whether now owned or hereafter acquired or arising and wherever
located (the “Collateral”):

 

(a)             all of such Grantor’s Accounts;

 

(b)             all of such Grantor’s Books;

 

(c)             all of such Grantor’s Chattel Paper;

 

(d)             all of such Grantor’s Commercial Tort Claims;

 

(e)             all of such Grantor’s Deposit Accounts;

 

(f)              all of such Grantor’s Equipment;

 

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(g)             all of such Grantor’s Farm Products;

 

(h)             all of such Grantor’s Fixtures;

 

(i)              all of such Grantor’s General Intangibles;

 

(j)              all of such Grantor’s Inventory;

 

(k)             all of such Grantor’s Investment Property;

 

(l)              all of such Grantor’s Intellectual Property and Intellectual
Property Licenses;

 

(m)            all of such Grantor’s Negotiable Collateral (including all of
such Grantor’s Pledged Notes);

 

(n)             all of such Grantor’s Pledged Interests (including all of such
Grantor’s Pledged Operating Agreements and Pledged Partnership Agreements);

 

(o)             all of such Grantor’s Securities Accounts;

 

(p)             all of such Grantor’s Supporting Obligations;

 

(q)             all of such Grantor’s money, Cash Equivalents, or other assets
of such Grantor that now or hereafter come into the possession, custody, or
control of Agent (or its agent or designee) or any other member of the Lender
Group; and

 

(r)              all of the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance or
Commercial Tort Claims covering or relating to any or all of the foregoing, and
any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment,
Fixtures, General Intangibles, Inventory, Investment Property, Intellectual
Property, Negotiable Collateral, Pledged Interests, Securities Accounts,
Supporting Obligations, money, or other tangible or intangible property
resulting from the sale, lease, license, exchange, collection, or other
disposition of any of the foregoing, the proceeds of any award in condemnation
with respect to any of the foregoing, any rebates or refunds, whether for taxes
or otherwise, and all proceeds of any such proceeds, or any portion thereof or
interest therein, and the proceeds thereof, and all proceeds of any loss of,
damage to, or destruction of the above, whether insured or not insured, and, to
the extent not otherwise included, any indemnity, warranty, or guaranty payable
by reason of loss or damage to, or otherwise with respect to any of the
foregoing (the “Proceeds”).  Without limiting the generality of the foregoing,
the term “Proceeds” includes whatever is receivable or received when Investment
Property or proceeds are sold, exchanged, collected, or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes proceeds of
any indemnity or guaranty payable to any Grantor or Agent from time to time with
respect to any of the Investment Property.

 

Notwithstanding anything contained in this Agreement to the contrary, the term
“Collateral” shall not include:  (i) voting Equity Interests of any CFC, solely
to the extent that (y) such Equity Interests represent more than 65% of the
outstanding voting Equity Interests of

 

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such CFC, and (z) pledging or hypothecating more than 65% of the total
outstanding voting Equity Interests of such CFC would result in adverse tax
consequences or the costs to the Grantors of providing such pledge are
unreasonably excessive (as determined by Agent in consultation with Harte Hanks)
in relation to the benefits to Agent, the other members of the Lender Group, and
the Bank Product Providers of the security afforded thereby (which pledge, if
reasonably requested by Agent, shall be governed by the laws of the jurisdiction
of such Subsidiary); or (ii) any rights or interest in any contract, lease,
permit, license, or license agreement covering real or personal property of any
Grantor if under the terms of such contract, lease, permit, license, or license
agreement, or applicable law with respect thereto, the grant of a security
interest or lien therein is prohibited as a matter of law or under the terms of
such contract, lease, permit, license, or license agreement and such prohibition
or restriction has not been waived or the consent of the other party to such
contract, lease, permit, license, or license agreement has not been obtained
(provided, that, (A) the foregoing exclusions of this clause (ii) shall in no
way be construed (1) to apply to the extent that any described prohibition or
restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the
Code or other applicable law, or (2) to apply to the extent that any consent or
waiver has been obtained that would permit Agent’s security interest or lien to
attach notwithstanding the prohibition or restriction on the pledge of such
contract, lease, permit, license, or license agreement and (B) the foregoing
exclusions of clauses (i) and (ii) shall in no way be construed to limit,
impair, or otherwise affect any of Agent’s, any other member of the Lender
Group’s or any Bank Product Provider’s continuing security interests in and
liens upon any rights or interests of any Grantor in or to (1) monies due or to
become due under or in connection with any described contract, lease, permit,
license, license agreement, or Equity Interests (including any Accounts or
Equity Interests), or (2) any proceeds from the sale, license, lease, or other
dispositions of any such contract, lease, permit, license, license agreement, or
Equity Interests); or (iii) any United States intent-to-use trademark
applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or enforceability
of such intent-to-use trademark applications under applicable federal law,
provided that upon submission and acceptance by the PTO of an amendment to
allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision),
such intent-to-use trademark application shall be considered Collateral; or
(iv) assets for which a pledge thereof or a security interest therein is
prohibited by applicable law.

 

4.         Security for Secured Obligations.  The Security Interest created
hereby secures the payment and performance of the Secured Obligations, whether
now existing or arising hereafter.  Without limiting the generality of the
foregoing, this Agreement secures the payment of all amounts which constitute
part of the Secured Obligations and would be owed by Grantors, or any of them,
to Agent, the Lender Group, the Bank Product Providers or any of them, but for
the fact that they are unenforceable or not allowable (in whole or in part) as a
claim in an Insolvency Proceeding involving any Grantor due to the existence of
such Insolvency Proceeding.

 

5.         Grantors Remain Liable.  Anything herein to the contrary
notwithstanding, (a) each of the Grantors shall remain liable under the
contracts and agreements included in the Collateral, including the Pledged
Operating Agreements and the Pledged Partnership Agreements, to perform all of
the duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (b) the exercise by Agent or any other member of the
Lender

 

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Group of any of the rights hereunder shall not release any Grantor from any of
its duties or obligations under such contracts and agreements included in the
Collateral, and (c) none of the members of the Lender Group shall have any
obligation or liability under such contracts and agreements included in the
Collateral by reason of this Agreement, nor shall any of the members of the
Lender Group be obligated to perform any of the obligations or duties of any
Grantors thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.  Until an Event of Default shall occur and be
continuing, except as otherwise provided in this Agreement, the Credit
Agreement, or any other Loan Document, Grantors shall have the right to
possession and enjoyment of the Collateral for the purpose of conducting the
ordinary course of their respective businesses, subject to and upon the terms
hereof and of the Credit Agreement and the other Loan Documents.  Without
limiting the generality of the foregoing, it is the intention of the parties
hereto that record and beneficial ownership of the Pledged Interests, including
all voting, consensual, dividend, and distribution rights, shall remain in the
applicable Grantor until (i) the occurrence and continuance of an Event of
Default and (ii) Agent has notified the applicable Grantor of Agent’s election
to exercise such rights with respect to the Pledged Interests pursuant to
Section 16.

 

6.         Representations and Warranties.  In order to induce Agent to enter
into this Agreement for the benefit of the Lender Group and the Bank Product
Providers, each Grantor makes the following representations and warranties to
the Lender Group which shall be true, correct, and complete, in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof), as of the Closing Date, and shall be true,
correct, and complete, in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof), as of the
date of the making of each Revolving Loan (or other extension of credit) made
thereafter, as though made on and as of the date of such Revolving Loan (or
other extension of credit) (except to the extent that such representations and
warranties relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects (except that
such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text
thereof) as of such earlier date) and such representations and warranties shall
survive the execution and delivery of this Agreement:

 

(a)             The name (within the meaning of Section 9-503 of the Code) and
jurisdiction of organization of each Grantor and each of its Subsidiaries is set
forth on Schedule 7 (as such Schedule may be updated from time to time to
reflect changes resulting from transactions permitted under the Loan Documents).

 

(b)             The chief executive office of each Grantor and each of its
Subsidiaries is located at the address indicated on Schedule 7 (as such Schedule
may be updated from time to time to reflect changes resulting from transactions
permitted under the Loan Documents).

 

(c)             Each Grantor’s and each of its Subsidiaries’ tax identification
numbers and organizational identification numbers, if any, are identified on
Schedule 7 (as such Schedule may be updated from time to time to reflect changes
resulting from transactions permitted under the Loan Documents).

 

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(d)             As of the Closing Date, no Grantor and no Subsidiary of a
Grantor holds any commercial tort claims that exceed $1,000,000 in amount,
except as set forth on Schedule 1.

 

(e)             Set forth on Schedule 9 (as such Schedule may be updated from
time to time subject to Section 7(l)(iii)) hereof) is a listing of all of
Grantors’ Deposit Accounts and Securities Accounts, including, with respect to
each bank or securities intermediary (a) the name and address of such Person,
and (b) the account numbers of the Deposit Accounts or Securities Accounts
maintained with such Person.

 

(f)              Schedule 8 sets forth all Real Property owned by any of the
Grantors as of the Closing Date.

 

(g)             As of the Closing Date:  (i) Schedule 2 provides a complete and
correct list of all registered Copyrights owned by any Grantor, all applications
for registration of Copyrights owned by any Grantor, and all other Copyrights
owned by any Grantor and material to the conduct of the business of any Grantor;
(ii) Schedule 3 provides a complete and correct list of all Intellectual
Property Licenses entered into by any Grantor pursuant to which (A) any Grantor
has provided any license or other rights in Intellectual Property owned or
controlled by such Grantor to any other Person (other than non-exclusive
software licenses or “SaaS” usage rights granted in the ordinary course of
business) or (B) any Person has granted to any Grantor any exclusive license or
other exclusive or non-commercially available rights in Intellectual Property
owned or controlled by such Person that is material to the business of such
Grantor, including any Intellectual Property that is incorporated in any
Inventory, software, or other product marketed, sold, licensed, or distributed
by such Grantor, but specifically excluding licenses for commercially available
software and data, whether licensed for a Grantor’s own use, for a Grantor to
provide to a client, or for a Grantor to provide services to a client;
(iii) Schedule 4 provides a complete and correct list of all Patents owned by
any Grantor and all applications for Patents owned by any Grantor; and
(iv) Schedule 6 provides a complete and correct list of all Trademarks
registered in the PTO and owned by any Grantor, all applications for
registration in the PTO of Trademarks owned by any Grantor, and all unregistered
Trademarks owned by any Grantor and material to the conduct of the business of
any Grantor.

 

(h)             (i) (A) each Grantor owns exclusively or holds licenses in all
Intellectual Property that is necessary in or material to the conduct of its
business, and (B) all employees and contractors of each Grantor who were
involved in the creation or development of any Intellectual Property for such
Grantor that is necessary in or material to the business of such Grantor have
signed agreements containing assignment of Intellectual Property rights to such
Grantor and obligations of confidentiality;

 

(ii)         to each Grantor’s knowledge after reasonable inquiry, no Person has
infringed or misappropriated or is currently infringing or misappropriating any
Intellectual Property rights owned by such Grantor, in each case, that either
individually or in the aggregate could reasonably be expected to result in a
Material Adverse Effect;

 

(iii)        (A) to each Grantor’s knowledge after reasonable inquiry, (1) such
Grantor has never infringed or misappropriated and is not currently infringing
or misappropriating any Intellectual Property rights of any Person, and (2) no
product

 

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manufactured, used, distributed, licensed, or sold by or service provided by
such Grantor has ever infringed or misappropriated or is currently infringing or
misappropriating any Intellectual Property rights of any Person, in each case,
except where such infringement either individually or in the aggregate could not
reasonably be expected to result in a Material Adverse Effect, and (B) there are
no infringement or misappropriation claims or proceedings pending, or to any
Grantor’s knowledge after reasonable inquiry, threatened in writing against any
Grantor, and no Grantor has received any written notice or other communication
of any actual or alleged infringement or misappropriation of any Intellectual
Property rights of any Person, in each case, except where such infringement
either individually or in the aggregate could not reasonably be expected to
result in a Material Adverse Effect;

 

(iv)        to each Grantor’s knowledge after reasonable inquiry, all registered
Copyrights, registered Trademarks, and issued Patents that are owned by such
Grantor and necessary in or material to the conduct of its business are valid,
subsisting and enforceable and in compliance with all legal requirements,
filings, and payments and other actions that are required to maintain such
Intellectual Property in full force and effect;

 

(v)        each Grantor has taken reasonable steps to maintain the
confidentiality of and otherwise protect and enforce its rights in all trade
secrets owned by such Grantor that are necessary in or material to the conduct
of the business of such Grantor; and

 

(vi)        none of the proprietary software licensed or distributed by any
Grantor that is material to generating revenue for such Grantor is subject to
any “copyleft” or other obligation or condition (including any obligation or
condition under any “open source” license such as the GNU Public License, Lesser
GNU Public License, or Mozilla Public License) that would require, or condition
the use or distribution of such software, on the disclosure, licensing or
distribution of any source code of the proprietary software.

 

(i)              This Agreement creates a valid security interest in the
Collateral of each Grantor, to the extent a security interest therein can be
created under the Code, securing the payment of the Secured Obligations.  Except
to the extent a security interest in the Collateral cannot be perfected by the
filing of a financing statement under the Code, all filings and other actions
necessary or desirable to perfect and protect such security interest have been
duly taken or will have been taken upon the filing of financing statements
listing each applicable Grantor, as a debtor, and Agent, as secured party, in
the jurisdictions listed next to such Grantor’s name on Schedule 11.  Upon the
making of such filings, Agent shall have a first priority perfected security
interest (subject to Permitted Liens) in the Collateral of each Grantor to the
extent such security interest can be perfected by the filing of a financing
statement.  Upon filing of any Copyright Security Agreement with the United
States Copyright Office, filing of any Patent Security Agreement and any
Trademark Security Agreement with the PTO, and the filing of appropriate
financing statements in the jurisdictions listed on Schedule 11, all action
necessary or desirable to protect and perfect the Security Interest in and on
each Grantor’s Patents, Trademarks, or Copyrights has been taken and such
perfected Security Interest is enforceable as such as against any and all
creditors of and purchasers from any Grantor.

 

(j)              (i) Except for the Security Interest created hereby, each
Grantor is and will at all times be the sole holder of record and the legal and
beneficial owner, free and clear of all

 

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Liens other than Permitted Liens, of the Pledged Interests indicated on Schedule
5 as being owned by such Grantor and, when acquired by such Grantor, any Pledged
Interests acquired after the Closing Date; (ii) all of the Pledged Interests are
duly authorized, validly issued, fully paid and nonassessable and the Pledged
Interests constitute or will constitute the percentage of the issued and
outstanding Equity Interests of the Pledged Companies of such Grantor identified
on Schedule 5 as supplemented or modified by any Pledged Interests Addendum or
any Joinder to this Agreement; (iii) such Grantor has the right and requisite
authority to pledge, the Investment Property pledged by such Grantor to Agent as
provided herein; (iv) all actions necessary or desirable to perfect and
establish the first priority of, or otherwise protect, Agent’s Liens in the
Investment Property, and the proceeds thereof, have been duly taken, upon
(A) the execution and delivery of this Agreement; (B) the taking of possession
by Agent (or its agent or designee) of any certificates representing the Pledged
Interests, together with undated powers (or other documents of transfer
acceptable to Agent) endorsed in blank by the applicable Grantor; (C) the filing
of financing statements in the applicable jurisdiction set forth on Schedule 11
for such Grantor with respect to the Pledged Interests of such Grantor that are
not represented by certificates, and (D) with respect to any Securities
Accounts, the delivery of Control Agreements with respect thereto; and (v) each
Grantor has delivered to and deposited with Agent all certificates representing
the Pledged Interests owned by such Grantor to the extent such Pledged Interests
are represented by certificates, and undated powers (or other documents of
transfer acceptable to Agent) endorsed in blank with respect to such
certificates. None of the Pledged Interests owned or held by such Grantor has
been issued or transferred in violation of any securities registration,
securities disclosure, or similar laws of any jurisdiction to which such
issuance or transfer may be subject.

 

(k)                                 No consent, approval, authorization, or
other order or other action by, and no notice to or filing with, any
Governmental Authority or any other Person is required (i) for the grant of a
Security Interest by such Grantor in and to the Collateral pursuant to this
Agreement or for the execution, delivery, or performance of this Agreement by
such Grantor, or (ii) for the exercise by Agent of the voting or other rights
provided for in this Agreement with respect to the Investment Property or the
remedies in respect of the Collateral pursuant to this Agreement, except as may
be required in connection with such disposition of Investment Property by laws
affecting the offering and sale of securities generally and except for consents,
approvals, authorizations, or other orders or actions that have been obtained or
given (as applicable) and that are still in force. No Intellectual Property
License of any Grantor that is necessary in or material to the conduct of such
Grantor’s business requires any consent of any other Person that has not been
obtained in order for such Grantor to grant the security interest granted
hereunder in such Grantor’s right, title or interest in or to such Intellectual
Property License.

 

(l)                                     Schedule 12 sets forth all motor
vehicles owned by Grantors as of the Closing Date, by model, model year, and
vehicle identification number (“VIN”) to the extent that the aggregate fair
market value of all such motor vehicles exceeds $1,000,000.

 

(m)                             There is no default, breach, violation, or event
of acceleration existing under any promissory note (as defined in the Code)
constituting Collateral and pledged hereunder (each a “Pledged Note”) and no
event has occurred or circumstance exists which, with the passage of time or the
giving of notice, or both, would constitute a default, breach, violation, or
event of acceleration under any Pledged Note.  No Grantor that is an obligee
under a Pledged

 

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Note has waived any default, breach, violation, or event of acceleration under
such Pledged Note.

 

(n)                                 As to all limited liability company or
partnership interests, issued under any Pledged Operating Agreement or Pledged
Partnership Agreement, each Grantor hereby represents and warrants that the
Pledged Interests issued pursuant to such agreement (A) are not dealt in or
traded on securities exchanges or in securities markets, (B) do not constitute
investment company securities, and (C) are not held by such Grantor in a
Securities Account.  In addition, none of the Pledged Operating Agreements, the
Pledged Partnership Agreements, or any other agreements governing any of the
Pledged Interests issued under any Pledged Operating Agreement or Pledged
Partnership Agreement, provide that such Pledged Interests are securities
governed by Article 8 of the Uniform Commercial Code as in effect in any
relevant jurisdiction.

 

7.                                     Covenants.  Each Grantor, jointly and
severally, covenants and agrees with Agent that from and after the date of this
Agreement and until the date of termination of this Agreement in accordance with
Section 23:

 

(a)                                 Possession of Collateral.  In the event that
any Collateral, including Proceeds, is evidenced by or consists of Negotiable
Collateral, Investment Property, or Chattel Paper having an aggregate value or
face amount of $1,000,000 or more for all such Negotiable Collateral, Investment
Property, or Chattel Paper, the Grantors shall promptly (and in any event within
five (5) Business Days after acquisition thereof), notify Agent thereof, and if
and to the extent that perfection or priority of Agent’s Security Interest is
dependent on or enhanced by possession, the applicable Grantor, promptly (and in
any event within five (5) Business Days) after request by Agent, shall execute
such other documents and instruments as shall be requested by Agent or, if
applicable, endorse and deliver physical possession of such Negotiable
Collateral, Investment Property, or Chattel Paper to Agent, together with such
undated powers (or other relevant document of transfer acceptable to Agent)
endorsed in blank as shall be requested by Agent, and shall do such other acts
or things deemed necessary or desirable by Agent to protect Agent’s Security
Interest therein;

 

(b)                                Chattel Paper.

 

(i)                                     Promptly (and in any event within five
(5) Business Days) after request by Agent, each Grantor shall take all steps
reasonably necessary to grant Agent control of all electronic Chattel Paper in
accordance with the Code and all “transferable records” as that term is defined
in Section 16 of the Uniform Electronic Transaction Act and Section 201 of the
federal Electronic Signatures in Global and National Commerce Act as in effect
in any relevant jurisdiction, to the extent that the aggregate value or face
amount of such electronic Chattel Paper equals or exceeds $1,000,000;

 

(ii)                                  If any Grantor retains possession of any
Chattel Paper or instruments (which retention of possession shall be subject to
the extent permitted hereby and by the Credit Agreement), promptly upon the
request of Agent, such Chattel Paper and instruments shall be marked with the
following legend:  “This writing and the obligations evidenced or secured hereby
are subject to the Security Interest of Wells Fargo Bank, National Association,
as Agent for the benefit of the Lender Group and the Bank Product Providers”;

 

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(c)                                 Control Agreements.

 

(i)                                   Except to the extent otherwise excused by
Section 7(l)(iv), each Grantor shall obtain an authenticated Control Agreement
(which may include a Controlled Account Agreement), from each bank maintaining a
Deposit Account or Securities Account for such Grantor;

 

(ii)                                Except to the extent otherwise excused by
Section 7(l)(iv), each Grantor shall obtain an authenticated Control Agreement,
from each issuer of uncertificated securities, securities intermediary, or
commodities intermediary issuing or holding any financial assets or commodities
to or for any Grantor, or maintaining a Securities Account for such Grantor; and

 

(iii)                             Except to the extent otherwise excused by
Section 7(l)(iv), each Grantor shall obtain an authenticated Control Agreement
with respect to all of such Grantor’s investment property;

 

(d)                                Letter-of-Credit Rights.  If the Grantors (or
any of them) are or become the beneficiary of letters of credit having a face
amount or value of $1,000,000 or more in the aggregate, then the applicable
Grantor or Grantors shall promptly (and in any event within five (5) Business
Days after becoming a beneficiary), notify Agent thereof and, promptly (and in
any event within five (5) Business Days) after request by Agent, enter into a
tri-party agreement with Agent and the issuer or confirming bank with respect to
letter-of-credit rights assigning such letter-of-credit rights to Agent and
directing all payments thereunder to Agent’s Account, all in form and substance
reasonably satisfactory to Agent;

 

(e)                                 Commercial Tort Claims.  If the Grantors (or
any of them) obtain Commercial Tort Claims having a value, or involving an
asserted claim, in the amount of $1,000,000 or more in the aggregate for all
Commercial Tort Claims, then the applicable Grantor or Grantors shall promptly
(and in any event within five (5) Business Days of obtaining such Commercial
Tort Claim), notify Agent upon incurring or otherwise obtaining such Commercial
Tort Claims and, promptly (and in any event within five (5) Business Days) after
request by Agent, amend Schedule 1 to describe such Commercial Tort Claims in a
manner that reasonably identifies such Commercial Tort Claims and which is
otherwise reasonably satisfactory to Agent, and hereby authorizes the filing of
additional financing statements or amendments to existing financing statements
describing such Commercial Tort Claims, and agrees to do such other acts or
things deemed necessary or desirable by Agent to give Agent a first priority,
perfected security interest in any such Commercial Tort Claim;

 

(f)                                   Government Contracts.  Other than Accounts
and Chattel Paper the aggregate value of which does not at any one time exceed
$1,000,000, if any Account or Chattel Paper arises out of a contract or
contracts with the United States of America or any department, agency, or
instrumentality thereof, Grantors shall promptly (and in any event within five
(5) Business Days of the creation thereof) notify Agent thereof and, promptly
(and in any event within five (5) Business Days) after request by Agent, execute
any instruments or take any steps reasonably required by Agent in order that all
moneys due or to become due under such contract or contracts shall be assigned
to Agent, for the benefit of the Lender Group and the Bank Product

 

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Providers, and shall provide written notice thereof under the Assignment of
Claims Act or other applicable law;

 

(g)                                Intellectual Property.

 

(i)                                   Upon the request of Agent, in order to
facilitate filings with the PTO and the United States Copyright Office, each
Grantor shall execute and deliver to Agent one or more Copyright Security
Agreements, Trademark Security Agreements, or Patent Security Agreements to
further evidence Agent’s Lien on such Grantor’s Patents, Trademarks, or
Copyrights, and the General Intangibles of such Grantor relating thereto or
represented thereby;

 

(ii)                                Each Grantor shall have the duty, with
respect to Intellectual Property that is necessary in or material to the conduct
of such Grantor’s business, to protect and diligently enforce and defend at such
Grantor’s expense its Intellectual Property, including (A) to diligently enforce
and defend, including promptly suing for infringement, misappropriation, or
dilution and to recover any and all damages for such infringement,
misappropriation, or dilution, and filing for opposition, interference, and
cancellation against conflicting Intellectual Property rights of any Person,
(B) to prosecute diligently any trademark application or service mark
application that is part of the Trademarks pending as of the date hereof or
hereafter until the termination of this Agreement, (C) to prosecute diligently
any patent application that is part of the Patents pending as of the date hereof
or hereafter until the termination of this Agreement, (D) to take all reasonable
and necessary action to preserve and maintain all of such Grantor’s Trademarks,
Patents, Copyrights, Intellectual Property Licenses, and its rights therein,
including paying all maintenance fees and filing of applications for renewal,
affidavits of use, and affidavits of noncontestability, and (E) to require all
employees, consultants, and contractors of each Grantor who were involved in the
creation or development of such Intellectual Property to sign agreements
containing assignment of Intellectual Property rights and obligations of
confidentiality.  Each Grantor further agrees not to abandon any Intellectual
Property or Intellectual Property License that is necessary in or material to
the conduct of such Grantor’s business.  Each Grantor hereby agrees to take the
steps described in this Section 7(g)(ii) with respect to all new or acquired
Intellectual Property to which it or any of its Subsidiaries is now or later
becomes entitled that is necessary in or material to the conduct of such
Grantor’s business;

 

(iii)                             Grantors acknowledge and agree that the Lender
Group shall have no duties with respect to any Intellectual Property or
Intellectual Property Licenses of any Grantor.  Without limiting the generality
of this Section 7(g)(iii), Grantors acknowledge and agree that no member of the
Lender Group shall be under any obligation to take any steps necessary to
preserve rights in the Collateral consisting of Intellectual Property or
Intellectual Property Licenses against any other Person, but any member of the
Lender Group may do so at its option from and after the occurrence and during
the continuance of an Event of Default, and all expenses incurred in connection
therewith (including reasonable fees and expenses of attorneys and other
professionals) shall be for the sole account of Borrowers and shall be
chargeable to the Loan Account;

 

(iv)                            On each date on which a Compliance Certificate
is to be delivered pursuant to Section 5.1 of the Credit Agreement in respect of
a fiscal quarter (or, if an Event of Default has occurred and is continuing,
more frequently if requested by Agent), each Grantor

 

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shall deliver to Agent a list in form satisfactory to Agent (including listing
such Copyrights sequentially based on the amount of revenue generated from
licensing the corresponding software programs, starting from the software
program that generates the highest amount of revenue to the software program
that generates the least amount of revenue) identifying all of its proprietary
software that is material to generating revenue of such Grantor, whether created
or acquired before, on, or after the Closing Date, and a certification, signed
by an officer of such Grantor, certifying that such list identifies all of its
proprietary software that is material to generating revenue of such Grantor and
indicating which of the Copyrights in such proprietary software have been filed
for registration with the United States Copyright Office.  Each Grantor shall
continue to register or not register, as the case may be, its Copyrights in
accordance with its historical practices as they existed as of the Closing
Date.  If an Event of Default has occurred and is continuing, and if requested
by Agent, each Grantor shall (A) file applications and take any and all other
actions necessary to register on an expedited basis (if expedited processing is
available in accordance with the applicable regulations and procedures of the
United States Copyright Office and any similar office of any other jurisdiction
in which Copyrights are used) each of such Grantor’s Copyrights in any
proprietary software that is material to generating revenue for such Grantor and
identifying such Grantor as the sole claimant thereof in a manner sufficient to
claim in the public record (or as a co-claimant thereof, if such is the case)
such Grantor’s ownership or co-ownership thereof, and (B) cause to be prepared,
executed, and delivered to Agent, with sufficient time to permit Agent to record
no later than three (3) Business Days following the date of registration of or
recordation of transfer of ownership, as applicable, to the applicable Grantor
of such Copyrights, (1) a Copyright Security Agreement or supplemental schedules
to the Copyright Security Agreement reflecting the security interest of Agent in
such Copyrights, which supplemental schedules shall be in form and content
suitable for recordation with the United States Copyright Office (or any similar
office of any other jurisdiction in which Copyrights are used) and (2) any other
documentation as Agent reasonably deems necessary and requests in order to
perfect and continue perfected Agent’s Liens on such Copyrights following such
recordation.

 

(v)                               On each date on which a Compliance Certificate
is to be delivered pursuant to Section 5.1 of the Credit Agreement in respect of
a fiscal quarter (or, if an Event of Default has occurred and is continuing,
more frequently if requested by Agent) (but without duplication of any notice
required by Section 7(g)(iv)), each Grantor shall provide Agent with a written
report of all new Patents, Trademarks or Copyrights that are registered with the
PTO or United States Copyright Office or the subject of pending applications for
registrations with the PTO or United States Copyright Office, and of all
Intellectual Property Licenses that are material to the conduct of such
Grantor’s business (other than non-exclusive software licenses or “SaaS” usage
rights granted in the ordinary course of business), in each case, which were
acquired, registered, or for which applications for registration were filed by
any Grantor during the prior period and any statement of use or amendment to
allege use with respect to intent-to-use trademark applications.  In the case of
such registrations or applications therefor, which were acquired by any Grantor,
each such Grantor shall file the necessary documents with the appropriate
Governmental Authority identifying the applicable Grantor as the owner (or as a
co-owner thereof, if such is the case) of such Intellectual Property.  In each
of the foregoing cases, the applicable Grantor shall promptly cause to be
prepared, executed, and delivered to Agent supplemental schedules to the
applicable Loan Documents to identify such Patent, Trademark and Copyright
registrations and applications therefor (with the exception of Trademark

 

25

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applications filed on an intent-to-use basis for which no statement of use or
amendment to allege use has been filed) and Intellectual Property Licenses as
being subject to the security interests created thereunder;

 

(vi)                            Anything to the contrary in this Agreement
notwithstanding, in no event shall any Grantor, either itself or through any
agent, employee, licensee, or designee, file an application for the registration
of any Copyright with the United States Copyright Office or any similar office
or agency in another country without giving Agent written notice thereof at
least five (5) Business Days prior to such filing and complying with
Section 7(g)(i).  In addition, Grantors acknowledge and agree that any such
application for the registration of any Copyright shall be filed on an
“expedited” basis.  Upon receipt from the United States Copyright Office of
notice of registration of any Copyright, each Grantor shall promptly (but in no
event later than five (5) Business Days following such receipt) notify (but
without duplication of any notice required by Section 7(g)(iv) or
Section 7(g)(v)) Agent of such registration by delivering, or causing to be
delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens
on such Copyright.  If any Grantor acquires from any Person any Copyright
registered with the United States Copyright Office or an application to register
any Copyright with the United States Copyright Office, such Grantor shall
promptly (but in no event later than five (5) Business Days following such
acquisition) notify Agent of such acquisition and deliver, or cause to be
delivered, to Agent, documentation sufficient for Agent to perfect Agent’s Liens
on such Copyright.  In the case of such Copyright registrations or applications
therefor which were acquired by any Grantor, each such Grantor shall promptly
(but in no event later than five (5) Business Days following such acquisition)
file the necessary documents (on an “expedited” basis) with the appropriate
Governmental Authority identifying the applicable Grantor as the owner (or as a
co-owner thereof, if such is the case) of such Copyrights;

 

(vii)                         Each Grantor shall take reasonable steps to
maintain the confidentiality of, and otherwise protect and enforce its rights
in, the Intellectual Property that is necessary in or material to the conduct of
such Grantor’s business, including, as applicable (A) protecting the secrecy and
confidentiality of its confidential information and trade secrets by having and
enforcing a policy requiring all current employees, consultants, licensees,
vendors and contractors with access to such information to execute appropriate
confidentiality agreements; (B) taking actions reasonably necessary to ensure
that no trade secret falls into the public domain; and (C) protecting the
secrecy and confidentiality of the source code of all software programs and
applications of which it is the owner or licensee by having and enforcing a
policy requiring any licensees (or sublicensees) of such source code to enter
into license agreements with commercially reasonable use and non-disclosure
restrictions;

 

(viii)                      No Grantor shall incorporate into any proprietary
software licensed or distributed by such Grantor that is material to generating
revenue for such Grantor any third-party code that is licensed pursuant to any
open source license such as the GNU Public License, Lesser GNU Public License,
or Mozilla Public License, in a manner that would require or condition the use
or distribution of such software on, the disclosing, licensing, or distribution
of any source code for any portion of the proprietary software that is licensed
or distributed by any Grantor; and

 

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(ix)                            No Grantor shall enter into any Intellectual
Property License material to the conduct of the business to receive any license
or rights in any Intellectual Property of any other Person unless such Grantor
has used commercially reasonable efforts to permit the assignment of or grant of
a security interest in such Intellectual Property License (and all rights of
Grantor thereunder) to Agent (and any transferees of Agent).

 

(h)                                 Investment Property.

 

(i)                                   If any Grantor shall acquire, obtain,
receive or become entitled to receive any Pledged Interests after the Closing
Date, it shall promptly (and in any event within five (5) Business Days of
acquiring or obtaining such Collateral) deliver to Agent a duly executed Pledged
Interests Addendum identifying such Pledged Interests;

 

(ii)                                Upon the occurrence and during the
continuance of an Event of Default, following the request of Agent, all sums of
money and property paid or distributed in respect of the Investment Property
that are received by any Grantor shall be held by the Grantors in trust for the
benefit of Agent segregated from such Grantor’s other property, and such Grantor
shall deliver it forthwith to Agent in the exact form received;

 

(iii)                             Each Grantor shall promptly deliver to Agent a
copy of each material notice or other material communication received by it in
respect of any Pledged Interests;

 

(iv)                            No Grantor shall make or consent to any
amendment or other modification or waiver with respect to any Pledged Interests,
Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any
agreement or permit to exist any restriction with respect to any Pledged
Interests if the same is prohibited pursuant to the Loan Documents;

 

(v)                               Each Grantor agrees that it will cooperate
with Agent in obtaining all necessary approvals and making all necessary filings
under federal, state, local, or foreign law to effect the perfection of the
Security Interest on the Investment Property or to effect any sale or transfer
thereof;

 

(vi)                            As to all limited liability company or
partnership interests, issued under any Pledged Operating Agreement or Pledged
Partnership Agreement, each Grantor hereby covenants that the Pledged Interests
issued pursuant to such agreement (A) are not and shall not be dealt in or
traded on securities exchanges or in securities markets, (B) do not and will not
constitute investment company securities, and (C) are not and will not be held
by such Grantor in a securities account.  In addition, none of the Pledged
Operating Agreements, the Pledged Partnership Agreements, or any other
agreements governing any of the Pledged Interests issued under any Pledged
Operating Agreement or Pledged Partnership Agreement, provide or shall provide
that such Pledged Interests are securities governed by Article 8 of the Uniform
Commercial Code as in effect in any relevant jurisdiction; and

 

(i)                                     With regard to any Pledged Interests
that are not certificated, any such Grantor of such non-certificated Pledged
Interests (i) agrees promptly to note on its books the security interests
granted to Agent and confirmed under this Agreement, (ii) agrees that after the
occurrence and during the continuation of an Event of Default, it will comply
with instructions of Agent or its nominee with respect to the applicable Pledged
Interests without further consent by

 

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the applicable Grantor, (iii) to the extent permitted by law, agrees that the
“issuer’s jurisdiction” (as defined in Section 8-110 of the UCC) is the State of
New York, (iv) agrees to notify Agent upon obtaining knowledge of any interest
in favor of any person in the applicable Pledged Interests that is materially
adverse to the interest of the Agent therein, other than any Permitted Liens and
(v) waives any right or requirement at any time hereafter to receive a copy of
this Agreement in connection with the registration of any Pledged Interests
hereunder in the name of Agent or its nominee or the exercise of voting rights
by Agent or its nominee.

 

(j)                                     Real Property; Fixtures.  Each Grantor
covenants and agrees that upon the acquisition of any fee interest in Real
Property having a fair market value in excess of $1,000,000 it will promptly
(and in any event within two (2) Business Days of acquisition) notify Agent of
the acquisition of such Real Property and will grant to Agent, for the benefit
of the Lender Group and the Bank Product Providers, a first priority Mortgage on
each fee interest in Real Property now or hereafter owned by such Grantor and
shall deliver such other documentation and opinions, in form and substance
satisfactory to Agent, in connection with the grant of such Mortgage as Agent
shall request in its Permitted Discretion, including title insurance policies,
financing statements, fixture filings and environmental audits and such Grantor
shall pay all recording costs, intangible taxes and other fees and costs
(including reasonable attorneys’ fees and expenses) incurred in connection
therewith.  Each Grantor acknowledges and agrees that, to the extent permitted
by applicable law, all of the Collateral shall remain personal property
regardless of the manner of its attachment or affixation to real property;

 

(k)                                 Transfers and Other Liens.  Grantors shall
not (i) sell, assign (by operation of law or otherwise) or otherwise dispose of,
or grant any option with respect to, any of the Collateral, except as expressly
permitted by the Credit Agreement, or (ii) create or permit to exist any Lien
upon or with respect to any of the Collateral of any Grantor, except for
Permitted Liens.  The inclusion of Proceeds in the Collateral shall not be
deemed to constitute Agent’s consent to any sale or other disposition of any of
the Collateral except as expressly permitted in this Agreement or the other Loan
Documents;

 

(l)                                     Controlled Accounts; Controlled
Investments.

 

(i)                                   Each Grantor shall (A) establish and
maintain cash management services of a type and on terms reasonably satisfactory
to Agent at one or more of the banks set forth on Schedule 10 (each a
“Controlled Account Bank”), in accordance with Section 5.14 of the Credit
Agreement and shall take reasonable steps to ensure that all of its Account
Debtors forward payment of the amounts owed by them directly to such Controlled
Account Bank, and (B) deposit or cause to be deposited promptly, and in any
event no later than the first Business Day after the date of receipt thereof,
all of their Collections (including those sent directly by their Account Debtors
to a Grantor) into a Collection Account of such Grantor (each, a “Controlled
Account”) at one of the Controlled Account Banks.

 

(ii)                                Each Grantor shall establish and maintain
Controlled Account Agreements with Agent and the applicable Controlled Account
Bank, in form and substance reasonably acceptable to Agent, (a) with respect to
Deposit Accounts with Wells Fargo or its Affiliates, within sixty (60) days
following the Closing Date and (b) with respect to any other

 

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Deposit Account owned on the Closing Date that has not been closed, within
ninety (90) days following the Closing Date.  Each such Controlled Account
Agreement shall provide, among other things, that (A) the Controlled Account
Bank will comply with any instructions originated by Agent directing the
disposition of the funds in such Controlled Account without further consent by
the applicable Grantor, (B) the Controlled Account Bank waives, subordinates, or
agrees not to exercise any rights of setoff or recoupment or any other claim
against the applicable Controlled Account other than for payment of its service
fees and other charges directly related to the administration of such Controlled
Account and for returned checks or other items of payment, and (C) upon the
instruction of Agent (an “Activation Instruction”), the Controlled Account Bank
will forward by daily sweep all amounts in the applicable Controlled Account to
the Agent’s Account.  Agent agrees not to issue an Activation Instruction with
respect to the Controlled Accounts unless a Triggering Event has occurred and is
continuing at the time such Activation Instruction is issued.  Agent agrees to
use commercially reasonable efforts to rescind an Activation Instruction with
respect to each Collection Account and other Deposit Account if after the
occurrence of the applicable Triggering Event (x) 60 consecutive days have
passed during which Excess Availability has exceeded 15% of the Maximum Credit
Amount and (y) no Event of Default has occurred and is continuing.

 

(iii)                             So long as no Default or Event of Default has
occurred and is continuing, and subject to compliance with Section 5.14 of the
Credit Agreement, Borrowers may amend Schedule 9 and Schedule 10 to add or
replace a Controlled Account Bank or Controlled Account and shall upon such
addition or replacement provide to Agent an amended Schedule 10; provided,
however, that (A) such prospective Controlled Account Bank shall be reasonably
satisfactory to Agent, and (B) prior to the time of the opening of such
Controlled Account, the applicable Grantor and such prospective Controlled
Account Bank shall have executed and delivered to Agent a Controlled Account
Agreement.  Each Grantor shall close any of its Controlled Accounts (and
establish replacement Controlled Account accounts in accordance with the
foregoing sentence) as promptly as practicable and in any event within
forty-five (45) days after notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Controlled
Account Bank with respect to Controlled Account Accounts or Agent’s liability
under any Controlled Account Agreement with such Controlled Account Bank is no
longer acceptable in Agent’s reasonable judgment.

 

(iv)                            Other than (i) an aggregate amount of not more
than $100,000 at any one time, in the case of Grantors and their Subsidiaries
(other than those Subsidiaries that are CFCs) (ii) amounts deposited into
Deposit Accounts specially and exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for any Grantor’s or its
Subsidiaries’ employees and (iii) amounts deposited into Deposit Accounts
specially and exclusively used for escrow, cash collateral, fiduciary or trust
accounts for unaffiliated third parties relating to rebates (collectively, the
foregoing clauses (i) through (iii), the “Excluded Accounts”), no Grantor will,
and no Grantor will permit its Subsidiaries (other than those Subsidiaries that
are CFCs) to, make, acquire, or permit to exist Permitted Investments consisting
of cash, Cash Equivalents, or amounts credited to Deposit Accounts or Securities
Accounts unless Grantor or its Subsidiary (other than those Subsidiaries that
are CFCs), as applicable, and the applicable bank or securities intermediary
have entered into Control Agreements with Agent governing such Permitted
Investments in order to perfect (and further establish) Agent’s Liens in such
Permitted Investments.

 

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(m)                             Name, Etc.  No Grantor will, nor will any
Grantor permit any of its Subsidiaries to, change its name, organizational
identification number, jurisdiction of organization or organizational identity,
except as otherwise expressly provided in the Credit Agreement; provided, that
Grantor or any of its Subsidiaries may change its name upon at least 10 days
prior written notice to Agent of such change.

 

(n)                                 Motor Vehicles.  If at any time the
aggregate value of all goods covered by a certificate of title exceeds
$1,000,000, promptly (and in any event within five (5) Business Days) after
request by Agent, with respect to all goods covered by a certificate of title
owned by any Grantor, such Grantor shall deliver to Agent or Agent’s designee,
the certificates of title for all such goods and promptly (and in any event
within ten (10) Business Days) after request by Agent, such Grantor shall take
all actions necessary to cause such certificates to be filed (with Agent’s Lien
noted thereon) in the appropriate state motor vehicle filing office.

 

(o)                                Pledged Notes.  Grantors (i) without the
prior written consent of Agent, will not (A) waive or release any obligation of
any Person that is obligated under any of the Pledged Notes, (B) take or omit to
take any action or knowingly suffer or permit any action to be omitted or taken,
the taking or omission of which would result in any right of offset against sums
payable under the Pledged Notes, except in connection with Permitted
Intercompany Advances to the extent permitted under the Credit Agreement, or
(C) other than Permitted Dispositions, assign or surrender their rights and
interests under any of the Pledged Notes or terminate, cancel, modify, change,
supplement or amend the Pledged Notes, and (ii) shall provide to Agent copies of
all material written notices (including notices of default) given or received
with respect to the Pledged Notes promptly after giving or receiving such
notice.

 

8.                                     Relation to Other Security Documents. 
The provisions of this Agreement shall be read and construed with the other Loan
Documents referred to below in the manner so indicated.

 

(a)                                 Credit Agreement. In the event of any
conflict between any provision in this Agreement and a provision in the Credit
Agreement, such provision of the Credit Agreement shall control.

 

(b)                                Patent, Trademark, Copyright Security
Agreements.  The provisions of the Copyright Security Agreements, Trademark
Security Agreements, and Patent Security Agreements are supplemental to the
provisions of this Agreement, and nothing contained in the Copyright Security
Agreements, Trademark Security Agreements, or the Patent Security Agreements
shall limit any of the rights or remedies of Agent hereunder.  In the event of
any conflict between any provision in this Agreement and a provision in a
Copyright Security Agreement, Trademark Security Agreement or Patent Security
Agreement, such provision of this Agreement shall control.

 

9.                                     Further Assurances.

 

(a)                                 Each Grantor agrees that from time to time,
at its own expense, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that Agent may
reasonably request, in order to perfect and protect the Security Interest
granted hereby, to create, perfect or protect the Security Interest purported to
be granted

 

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hereby or to enable Agent to exercise and enforce its rights and remedies
hereunder with respect to any of the Collateral.

 

(b)        Each Grantor authorizes the filing by Agent of financing or
continuation statements, or amendments thereto, and such Grantor will execute
and deliver to Agent such other instruments or notices, as Agent may reasonably
request, in order to perfect and preserve the Security Interest granted or
purported to be granted hereby.

 

(c)        Each Grantor authorizes Agent at any time and from time to time to
file, transmit, or communicate, as applicable, financing statements and
amendments (i) describing the Collateral as “all personal property of debtor” or
“all assets of debtor” or words of similar effect, (ii) describing the
Collateral as being of equal or lesser scope or with greater detail, or
(iii) that contain any information required by part 5 of Article 9 of the Code
for the sufficiency or filing office acceptance.  Each Grantor also hereby
ratifies any and all financing statements or amendments previously filed by
Agent in any jurisdiction.

 

(d)        Each Grantor acknowledges that it is not authorized to file any
financing statement or amendment or termination statement with respect to any
financing statement filed in connection with this Agreement without the prior
written consent of Agent, subject to such Grantor’s rights under
Section 9-509(d)(2) of the Code.

 

10.        Agent’s Right to Perform Contracts, Exercise Rights, etc.  Upon the
occurrence and during the continuance of an Event of Default, Agent (or its
designee) (a) may proceed to perform any and all of the obligations of any
Grantor contained in any contract, lease, or other agreement and exercise any
and all rights of any Grantor therein contained as fully as such Grantor itself
could, (b) shall have the right to use any Grantor’s rights under Intellectual
Property Licenses in connection with the enforcement of Agent’s rights
hereunder, including the right to prepare for sale and sell any and all
Inventory and Equipment now or hereafter owned by any Grantor and now or
hereafter covered by such licenses, and (c) shall have the right to request that
any Equity Interests that are pledged hereunder be registered in the name of
Agent or any of its nominees.

 

11.        Agent Appointed Attorney-in-Fact.  Each Grantor hereby irrevocably
appoints Agent its attorney-in-fact, with full authority in the place and stead
of such Grantor and in the name of such Grantor or otherwise, at such time as an
Event of Default has occurred and is continuing under the Credit Agreement, to
take any action and to execute any instrument which Agent may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including:

 

(a)        to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Accounts or any other Collateral of such Grantor;

 

(b)        to receive and open all mail addressed to such Grantor and to notify
postal authorities to change the address for the delivery of mail to such
Grantor to that of Agent;

 

(c)        to receive, indorse, and collect any drafts or other instruments,
documents, Negotiable Collateral or Chattel Paper;

 

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(d)        to file any claims or take any action or institute any proceedings
which Agent may deem necessary or desirable for the collection of any of the
Collateral of such Grantor or otherwise to enforce the rights of Agent with
respect to any of the Collateral;

 

(e)        to repair, alter, or supply goods, if any, necessary to fulfill in
whole or in part the purchase order of any Person obligated to such Grantor in
respect of any Account of such Grantor;

 

(f)         to use any Intellectual Property or Intellectual Property Licenses
of such Grantor, including but not limited to any labels, Patents, Trademarks,
trade names, URLs, domain names, industrial designs, Copyrights, or advertising
matter, in preparing for sale, advertising for sale, or selling Inventory or
other Collateral and to collect any amounts due under Accounts, contracts or
Negotiable Collateral of such Grantor; and

 

(g)        Agent, on behalf of the Lender Group or the Bank Product Providers,
shall have the right, but shall not be obligated, to bring suit in its own name
to enforce the Intellectual Property and Intellectual Property Licenses and, if
Agent shall commence any such suit, the appropriate Grantor shall, at the
request of Agent, do any and all lawful acts and execute any and all proper
documents reasonably required by Agent in aid of such enforcement.

 

To the extent permitted by law, each Grantor hereby ratifies all that such
attorney-in-fact shall lawfully do or cause to be done by virtue hereof.  This
power of attorney is coupled with an interest and shall be irrevocable until
this Agreement is terminated.

 

12.        Agent May Perform.  If any Grantor fails to perform any agreement
contained herein, Agent may itself perform, or cause performance of, such
agreement, and the reasonable expenses of Agent incurred in connection therewith
shall be payable, jointly and severally, by Grantors.

 

13.        Agent’s Duties.  The powers conferred on Agent hereunder are solely
to protect Agent’s interest in the Collateral, for the benefit of the Lender
Group and the Bank Product Providers, and shall not impose any duty upon Agent
to exercise any such powers.  Except for the safe custody of any Collateral in
its actual possession and the accounting for moneys actually received by it
hereunder, Agent shall have no duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.  Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its actual
possession if such Collateral is accorded treatment substantially equal to that
which Agent accords its own property.

 

14.        Collection of Accounts, General Intangibles and Negotiable
Collateral.  At any time upon the occurrence and during the continuance of an
Event of Default, Agent or Agent’s designee may (a) notify Account Debtors of
any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable
Collateral of such Grantor have been assigned to Agent, for the benefit of the
Lender Group and the Bank Product Providers, or that Agent has a security
interest therein, and (b) collect the Accounts, General Intangibles and
Negotiable Collateral of any Grantor directly, and any collection costs and
expenses shall constitute part of such Grantor’s Secured Obligations under the
Loan Documents.

 

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15.        Disposition of Pledged Interests by Agent.  None of the Pledged
Interests existing as of the date of this Agreement are, and none of the Pledged
Interests hereafter acquired on the date of acquisition thereof will be,
registered or qualified under the various federal or state securities laws of
the United States and disposition thereof after an Event of Default may be
restricted to one or more private (instead of public) sales in view of the lack
of such registration.  Each Grantor understands that in connection with such
disposition, Agent may approach only a restricted number of potential purchasers
and further understands that a sale under such circumstances may yield a lower
price for the Pledged Interests than if the Pledged Interests were registered
and qualified pursuant to federal and state securities laws and sold on the open
market.  Each Grantor, therefore, agrees that:  (a) if Agent shall, pursuant to
the terms of this Agreement, sell or cause the Pledged Interests or any portion
thereof to be sold at a private sale, Agent shall have the right to rely upon
the advice and opinion of any nationally recognized brokerage or investment firm
(but shall not be obligated to seek such advice and the failure to do so shall
not be considered in determining the commercial reasonableness of such action)
as to the best manner in which to offer the Pledged Interest or any portion
thereof for sale and as to the best price reasonably obtainable at the private
sale thereof; and (b) such reliance shall be conclusive evidence that Agent has
handled the disposition in a commercially reasonable manner.

 

16.        Voting and Other Rights in Respect of Pledged Interests.

 

(a)        Upon the occurrence and during the continuation of an Event of
Default, (i) Agent may, at its option, and in addition to all rights and
remedies available to Agent under any other agreement, at law, in equity, or
otherwise, exercise all voting rights, or any other ownership or consensual
rights (including any dividend or distribution rights) in respect of the Pledged
Interests owned by such Grantor, but under no circumstances is Agent obligated
by the terms of this Agreement to exercise such rights, and (ii) if Agent duly
exercises its right to vote any of such Pledged Interests, each Grantor hereby
appoints Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE
PROXY to vote such Pledged Interests in any manner Agent deems advisable for or
against all matters submitted or which may be submitted to a vote of
shareholders, partners or members, as the case may be.  The power-of-attorney
and proxy granted hereby is coupled with an interest and shall be irrevocable.

 

(b)        For so long as any Grantor shall have the right to vote the Pledged
Interests owned by it, such Grantor covenants and agrees that it will not,
without the prior written consent of Agent, vote or take any consensual action
with respect to such Pledged Interests which would materially adversely affect
the rights of Agent, the other members of the Lender Group, or the Bank Product
Providers, or the value of the Pledged Interests.

 

17.        Remedies.  Upon the occurrence and during the continuance of an Event
of Default:

 

(a)        Agent may, and, at the instruction of the Required Lenders, shall
exercise in respect of the Collateral, in addition to other rights and remedies
provided for herein, in the other Loan Documents, or otherwise available to it,
all the rights and remedies of a secured party on default under the Code or any
other applicable law.  Without limiting the generality of the foregoing, each
Grantor expressly agrees that, in any such event, Agent without demand of
performance or other demand, advertisement or notice of any kind (except a
notice specified

 

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below of time and place of public or private sale) to or upon any Grantor or any
other Person (all and each of which demands, advertisements and notices are
hereby expressly waived to the maximum extent permitted by the Code or any other
applicable law), may take immediate possession of all or any portion of the
Collateral and (i) require Grantors to, and each Grantor hereby agrees that it
will at its own expense and upon request of Agent forthwith, assemble all or
part of the Collateral as directed by Agent and make it available to Agent at
one or more locations where such Grantor regularly maintains Inventory, and
(ii) without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of Agent’s
offices or elsewhere, for cash, on credit, and upon such other terms as Agent
may deem commercially reasonable.  Each Grantor agrees that, to the extent
notification of sale shall be required by law, at least ten (10) days
notification by mail to the applicable Grantor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification and specifically such notification shall
constitute a reasonable “authenticated notification of disposition” within the
meaning of Section 9-611 of the Code.  Agent shall not be obligated to make any
sale of Collateral regardless of notification of sale having been given.  Agent
may adjourn any public sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.  Each Grantor agrees that (A) the
internet shall constitute a “place” for purposes of Section 9-610(b) of the Code
and (B) to the extent notification of sale shall be required by law,
notification by mail of the URL where a sale will occur and the time when a sale
will commence at least ten (10) days prior to the sale shall constitute a
reasonable notification for purposes of Section 9-611(b) of the Code.  Each
Grantor agrees that any sale of Collateral to a licensor pursuant to the terms
of a license agreement between such licensor and a Grantor is sufficient to
constitute a commercially reasonable sale (including as to method, terms,
manner, and time) within the meaning of Section 9-610 of the Code.

 

(b)        Agent is hereby granted a license or other right to use, without
liability for royalties or any other charge, each Grantor’s Intellectual
Property, including but not limited to, any labels, Patents, Trademarks, trade
names, URLs, domain names, industrial designs, Copyrights, and advertising
matter, whether owned by any Grantor or with respect to which any Grantor has
rights under license, sublicense, or other agreements (including any
Intellectual Property License), as it pertains to the Collateral, in preparing
for sale, advertising for sale and selling any Collateral, and each Grantor’s
rights under all licenses and all franchise agreements shall inure to the
benefit of Agent.

 

(c)        Agent may, in addition to other rights and remedies provided for
herein, in the other Loan Documents, or otherwise available to it under
applicable law and without the requirement of notice to or upon any Grantor or
any other Person (which notice is hereby expressly waived to the maximum extent
permitted by the Code or any other applicable law), (i) with respect to any
Grantor’s Deposit Accounts in which Agent’s Liens are perfected by control under
Section 9-104 of the Code, instruct the bank maintaining such Deposit Account
for the applicable Grantor to pay the balance of such Deposit Account to or for
the benefit of Agent, and (ii) with respect to any Grantor’s Securities Accounts
in which Agent’s Liens are perfected by control under Section 9-106 of the Code,
instruct the securities intermediary maintaining such Securities Account for the
applicable Grantor to (A) transfer any cash in such Securities Account to or for
the benefit of Agent, or (B) liquidate any financial assets in such Securities
Account that

 

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are customarily sold on a recognized market and transfer the cash proceeds
thereof to or for the benefit of Agent.

 

(d)        Any cash held by Agent as Collateral and all cash proceeds received
by Agent in respect of any sale of, collection from, or other realization upon
all or any part of the Collateral shall be applied against the Secured
Obligations in the order set forth in the Credit Agreement.   In the event the
proceeds of Collateral are insufficient to satisfy all of the Secured
Obligations in full, each Grantor shall remain jointly and severally liable for
any such deficiency.

 

(e)        Each Grantor hereby acknowledges that the Secured Obligations arise
out of a commercial transaction, and agrees that if an Event of Default shall
occur and be continuing Agent shall have the right to an immediate writ of
possession without notice of a hearing.  Agent shall have the right to the
appointment of a receiver for the properties and assets of each Grantor, and
each Grantor hereby consents to such rights and such appointment and hereby
waives any objection such Grantor may have thereto or the right to have a bond
or other security posted by Agent.

 

18.        Remedies Cumulative.  Each right, power, and remedy of Agent, any
other member of the Lender Group, or any Bank Product Provider as provided for
in this Agreement, the other Loan Documents or any Bank Product Agreement now or
hereafter existing at law or in equity or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power,
or remedy provided for in this Agreement, the other Loan Documents and the Bank
Product Agreements or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise by Agent,
any other member of the Lender Group, or any Bank Product Provider, of any one
or more of such rights, powers, or remedies shall not preclude the simultaneous
or later exercise by Agent, such other member of the Lender Group or such Bank
Product Provider of any or all such other rights, powers, or remedies.

 

19.        Marshaling. Agent  shall not be required to marshal any present or
future collateral security (including but not limited to the Collateral) for, or
other assurances of payment of, the Secured Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of its rights and remedies hereunder and in respect of
such collateral security and other assurances of payment shall be cumulative and
in addition to all other rights and remedies, however existing or arising.  To
the extent that it lawfully may, each Grantor hereby agrees that it will not
invoke any law relating to the marshaling of collateral which might cause delay
in or impede the enforcement of Agent’s rights and remedies under this Agreement
or under any other instrument creating or evidencing any of the Secured
Obligations or under which any of the Secured Obligations is outstanding or by
which any of the Secured Obligations is secured or payment thereof is otherwise
assured, and, to the extent that it lawfully may, each Grantor hereby
irrevocably waives the benefits of all such laws.

 

20.        Indemnity and Expenses.

 

(a)        Each Grantor agrees to indemnify Agent and the other members of the
Lender Group from and against all claims, lawsuits and liabilities (including
reasonable

 

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attorneys’ fees) growing out of or resulting from this Agreement (including
enforcement of this Agreement) or any other Loan Document to which such Grantor
is a party, except claims, losses or liabilities resulting from the gross
negligence or willful misconduct of the party seeking indemnification as
determined by a final non-appealable order of a court of competent
jurisdiction.  This provision shall survive the termination of this Agreement
and the Credit Agreement and the repayment of the Secured Obligations.

 

(b)        Grantors, jointly and severally, shall, upon demand, pay to Agent (or
Agent, may charge to the Loan Account) all the Lender Group Expenses which Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or, upon an Event of Default, the
sale of, collection from, or other realization upon, any of the Collateral in
accordance with this Agreement and the other Loan Documents, (iii) the exercise
or enforcement of any of the rights of Agent hereunder or (iv) the failure by
any Grantor to perform or observe any of the provisions hereof.

 

21.        Merger, Amendments; Etc.  THIS AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.  No waiver of
any provision of this Agreement, and no consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.  No
amendment of any provision of this Agreement shall be effective unless the same
shall be in writing and signed by Agent and each Grantor to which such amendment
applies.

 

22.        Addresses for Notices.  All notices and other communications provided
for hereunder shall be given in the form and manner and delivered to Agent at
its address specified in the Credit Agreement, and to any of the Grantors at
their respective addresses specified in the Credit Agreement or Guaranty, as
applicable, or, as to any party, at such other address as shall be designated by
such party in a written notice to the other party.

 

23.        Continuing Security Interest: Assignments under Credit Agreement.

 

(a)        This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the Obligations
have been paid in full in accordance with the provisions of the Credit Agreement
and the Commitments have expired or have been terminated, (ii) be binding upon
each Grantor, and their respective successors and assigns, and (iii) inure to
the benefit of, and be enforceable by, Agent, and its successors, transferees
and assigns.  Without limiting the generality of the foregoing clause (iii), any
Lender may, in accordance with the provisions of the Credit Agreement, assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
herein or otherwise.  Upon payment in full of the Secured Obligations in
accordance with the provisions of the Credit Agreement and the expiration or
termination of the Commitments, the Guaranty made and the Security Interest
granted hereby shall terminate and all rights to the Collateral shall revert to
Grantors or any other Person entitled thereto.  At such

 

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time, upon Harte Hank’s request, Agent will authorize the filing of appropriate
termination statements to terminate such Security Interest.  No transfer or
renewal, extension, assignment, or termination of this Agreement or of the
Credit Agreement, any other Loan Document, or any other instrument or document
executed and delivered by any Grantor to Agent nor any additional Revolving
Loans or other loans made by any Lender to Borrowers, nor the taking of further
security, nor the retaking or re-delivery of the Collateral to Grantors, or any
of them, by Agent, nor any other act of the Lender Group or the Bank Product
Providers, or any of them, shall release any Grantor from any obligation, except
a release or discharge executed in writing by Agent in accordance with the
provisions of the Credit Agreement.  Agent shall not by any act, delay, omission
or otherwise, be deemed to have waived any of its rights or remedies hereunder,
unless such waiver is in writing and signed by Agent and then only to the extent
therein set forth.  A waiver by Agent of any right or remedy on any occasion
shall not be construed as a bar to the exercise of any such right or remedy
which Agent would otherwise have had on any other occasion.

 

(b)        Each Grantor agrees that, if any payment made by any Grantor or other
Person and applied to the Secured Obligations is at any time annulled, avoided,
set, aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid, or the proceeds of any Collateral
are required to be returned by Agent or any other member of the Lender Group to
such Grantor, its estate, trustee, receiver or any other party, including any
Grantor, under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, any Lien or other
Collateral securing such liability shall be and remain in full force and effect,
as fully as if such payment had never been made. If, prior to any of the
foregoing, (i) any Lien or other Collateral securing such Grantor’s liability
hereunder shall have been released or terminated by virtue of the foregoing
clause (a), or (ii) any provision of the Guaranty hereunder shall have been
terminated, cancelled or surrendered, such Lien, other Collateral or provision
shall be reinstated in full force and effect and such prior release,
termination, cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of any such Grantor in respect of any
Lien or other Collateral securing such obligation or the amount of such payment.

 

24.        Survival.  All representations and warranties made by the Grantors in
this Agreement and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that Agent, Issuing Lender, or any Lender
may have had notice or knowledge of any Default or Event of Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any loan or any fee or any other amount payable under the
Credit Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.

 

25.        CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

(a)        THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES

 

37

--------------------------------------------------------------------------------

 

HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY
CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE
DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF ILLINOIS.

 

(b)        THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE
AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE
COUNTY OF COOK, STATE OF ILLINOIS; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN
THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH GRANTOR AND AGENT WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 25(b).

 

(c)        TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR AND
AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY
CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”).  EACH GRANTOR AND AGENT
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

 

(d)        EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS  LOCATED IN THE COUNTY OF
COOK AND THE STATE OF ILLINOIS, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. 
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY GRANTOR OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(e)        NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST AGENT, THE SWING LENDER,
ANY OTHER LENDER, ISSUING LENDER, OR THE UNDERLYING ISSUER, OR ANY AFFILIATE,
DIRECTOR, OFFICER, EMPLOYEE,

 

38

--------------------------------------------------------------------------------

 

COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT,
OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH, AND EACH GRANTOR HEREBY
WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER
OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

26.        New Subsidiaries.  Pursuant to Section 5.11 of the Credit Agreement,
certain Subsidiaries (whether by acquisition or creation) of any Grantor are
required to enter into this Agreement by executing and delivering in favor of
Agent a Joinder to this Agreement in substantially the form of Annex 1.  Upon
the execution and delivery of Annex 1 by any such new Subsidiary, such
Subsidiary shall become a Guarantor and Grantor hereunder with the same force
and effect as if originally named as a Guarantor and Grantor herein.  The
execution and delivery of any instrument adding an additional Guarantor or
Grantor as a party to this Agreement shall not require the consent of any
Guarantor or Grantor hereunder.  The rights and obligations of each Guarantor
and Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Guarantor or Grantor hereunder.

 

27.        Agent.  Each reference herein to any right granted to, benefit
conferred upon or power exercisable by the “Agent” shall be a reference to
Agent, for the benefit of each member of the Lender Group and each of the Bank
Product Providers.

 

28.        Miscellaneous.

 

(a)        This Agreement is a Loan Document.  This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement.  Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. 
Any party delivering an executed counterpart of this Agreement by telefacsimile
or other electronic method of transmission also shall deliver an original
executed counterpart of this Agreement but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Agreement.  The foregoing shall apply to each other Loan Document
mutatis mutandis.

 

(b)        Any provision of this Agreement which is prohibited or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof in that jurisdiction or
affecting the validity or enforceability of such provision in any other
jurisdiction.  Each provision of this Agreement shall be severable from every
other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.

 

39

--------------------------------------------------------------------------------

 

(c)        Headings and numbers have been set forth herein for convenience
only.  Unless the contrary is compelled by the context, everything contained in
each Section applies equally to this entire Agreement.

 

(d)        Neither this Agreement nor any uncertainty or ambiguity herein shall
be construed against any member of the Lender Group or any Grantor, whether
under any rule of construction or otherwise.  This Agreement has been reviewed
by all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to accomplish fairly the purposes and intentions
of all parties hereto.

 

[signature pages follow]

 

40

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to
be executed and delivered as of the day and year first above written.

 

GRANTORS:

HARTE HANKS, INC.

TRILLIUM SOFTWARE, INC.

HARTE-HANKS RESPONSE MANAGEMENT/BOSTON, INC.

HARTE-HANKS LOGISTICS, LLC

HARTE HANKS DIRECT MARKETING/BALTIMORE, INC.

HARTE-HANKS DIRECT, INC.

HARTE-HANKS DIRECT MARKETING/JACKSONVILLE, LLC

HARTE-HANKS DIRECT MARKETING/KANSAS CITY, LLC

HARTE-HANKS STRATEGIC MARKETING, INC.

HARTE-HANKS RESPONSE MANAGEMENT/AUSTIN, INC.

SALES SUPPORT SERVICES, INC.

3Q DIGITAL, INC.

HARTE-HANKS DATA SERVICES LLC

HARTE-HANKS DIRECT MARKETING/DALLAS, INC.

HARTE-HANKS DIRECT MARKETING/FULLERTON, INC.

NSO, INC.

HARTE-HANKS FLORIDA, INC.

HARTE-HANKS PRINT, INC.

HARTE-HANKS STS, INC.

 

 

By:

/s/ Douglas C. Shepard

 

Name:

Douglas C. Shepard

 

Title:

Authorized Officer

 

[SIGNATURE PAGE TO GUARANTY AND SECURITY AGREEMENT]

 

--------------------------------------------------------------------------------

 

AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association

 

 

 

 

 

By:

/s/ Samantha Alexander

 

Name:

Samantha Alexander

 

Title:

Director

 

[SIGNATURE PAGE TO GUARANTY AND SECURITY AGREEMENT]

 

--------------------------------------------------------------------------------

 

SCHEDULE 1

 

COMMERCIAL TORT CLAIMS

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE 2

 

COPYRIGHTS

 

Registrations:

 

OWNER

 

TITLE

 

REGISTRATION 
NUMBER

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Harte-Hanks Direct Marketing product & Services manual

 

TX0001912563

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Effective, interviewing-the front door to productivity

 

PA0000117710

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

10/9/78 column for Wednesday 10-11 or later

 

TX0000140289

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Editorial management program

 

TXu000043961

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

For Sunday 10-15 or later & 3 other titles

 

V1699P378

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

For Sunday 10/15 or later

 

TX0000140290

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Harte-Hanks direct marketing product and services manual

 

TX0001865480

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Harte-Hanks direct marketing product and services manual: Vol. II

 

TX0001903482

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Harte-Hanks newspapers prize pictures of ‘77

 

TX0000105523

 

--------------------------------------------------------------------------------

 

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Legislative contributions & 1 other title

 

V1719P314

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

One on one

 

V2057P174

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

One on one

 

TX0001342745

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Telemarketing West, a division of Harte-Hanks Communications, presents Training
module 1[-6] of The Shopper telemarketing series 1

 

TX0002152832

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Weatherhound

 

VAu000227983

Harte Hanks, Inc. (FKA Harte-Hanks Communications, Inc.)

 

Zipcom & 1 other title

 

V1984P349

Trillium Software, Inc. (FKA Harte-Hanks Data Technologies, LLC)

 

IRE main program

 

TXu000907404

Harte Hanks, Inc. (Harte-Hanks Direct Marketing)

 

How to (finally) meet your “type”

 

TX0003440056

Harte Hanks, Inc.

 

Harte-Hanks agent academy: an explosive training program equipped to prepare you
for all future missions

 

TX0005265797

Sales Support Services, Inc.

 

Outsourcing

 

PAu002001884

 

--------------------------------------------------------------------------------

 

SCHEDULE 3

 

INTELLECTUAL PROPERTY LICENSES

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE 4

 

PATENTS

 

Owned Patents: None.

 

Applications for Patents: Provisional patent for Data Refinery to be filed.

 

--------------------------------------------------------------------------------

 

SCHEDULE 5

 

PLEDGED COMPANIES

 

Name of 
Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Percentage
of Shares
Owned

 

Percentage 
of Shares 
Pledged

 

Certificate
Nos.

 

Harte Hanks, Inc.

 

3Q Digital, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte Hanks, Inc.

 

Harte-Hanks Direct Marketing/Cincinnati, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte Hanks, Inc.

 

Harte-Hanks Response Management/Boston, Inc.

 

5,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte-Hanks, Inc.

 

Harte Hanks Direct Marketing/Fullerton, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Trillium Software, Inc.

 

Harte-Hanks Pty. Limited

 

12 shares outstanding, 10,000,000 shares authorized

 

100%

 

65%

 

N/A

 

Harte Hanks, Inc.

 

Trillium Software, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Trillium Software, Inc.

 

Harte-Hanks Strategic Marketing, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte Hanks UK Limited

 

Harte Hanks Trillium UK Limited

 

10,000 Ordinary A Shares and 1,518,1000 Ordinary B Shares outstanding, 9,850,000
Ordinary A Shares and 1,650,000 Ordinary B Shares authorized

 

100%

 

0%

 

N/A

 

 

--------------------------------------------------------------------------------

 

Name of 
Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Percentage
of Shares
Owned

 

Percentage 
of Shares 
Pledged

 

Certificate
Nos.

 

Harte Hanks, Inc.

 

Harte-Hanks Florida, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte-Hanks GmbH

 

Harte-Hanks Trillium Software Germany GmbH

 

2 shares outstanding and 25,000 shares authorized

 

100%

 

0%

 

N/A

 

Harte Hanks, Inc.

 

Harte Hanks Direct Marketing/Baltimore, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

7

 

Trillium Software, Inc.

 

Harte-Hanks do Brazil Consultoria e Servicos Ltda.

 

R$7.660.644,00 (Quota Capital)

 

99.999% owned by Trillium Software, Inc. and 0.001% owned by Harte Hanks, Inc.

 

65%

 

N/A

 

Harte Hanks, Inc.

 

Harte-Hanks Data Services, LLC

 

100 membership units

 

100%

 

100%

 

N/A

 

Harte Hanks Europe B.V.

 

HHMIX SAS

 

10,000 shares of FRF 100

 

100%

 

0%

 

N/A

 

Harte Hanks Europe B.V.

 

Harte-Hanks GMBH

 

DM 500,000, divided into one share of DM 331,600, three shares of DM 50,000, two
shares of DM 6,700 and one share of DM 5,000

 

100%

 

0%

 

N/A

 

Harte-Hanks Print, Inc.

 

Harte-Hanks Direct, Inc.

 

200 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte-Hanks Florida, Inc.

 

Harte Hanks Logistics, LLC

 

100 membership units

 

100%

 

100%

 

N/A

 

 

--------------------------------------------------------------------------------

 

Name of 
Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Percentage
of Shares
Owned

 

Percentage 
of Shares 
Pledged

 

Certificate
Nos.

 

Harte Hanks, Inc.

 

Harte-Hanks Philippines, Inc.

 

₽ 11,200,00.00 shares outstanding and authorized

 

100%

 

65%

 

15

 

Harte Hanks, Inc.

 

Harte-Hanks Print, Inc.

 

1,000 shares outstanding and 20,000,000 shares authorized

 

100%

 

100%

 

HHP-1

 

Harte-Hanks Florida, Inc.

 

Harte Hanks Direct Marketing/Jacksonville, LLC

 

100 membership units

 

100%

 

100%

 

N/A

 

Sales Support Services, Inc.

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

100 membership units

 

100%

 

100%

 

N/A

 

Harte Hanks, Inc.

 

Harte Hanks Europe B.V.

 

NLG 40,000 outstanding and NLG 200,000 authorized

 

100%

 

65%

 

N/A

 

Harte Hanks, Inc.

 

Harte-Hanks Market Intelligence Espana LLC

 

100 membership units

 

100%

 

100%

 

1

 

Trillium Software, Inc.

 

Harte Hanks UK Limited

 

100 shares outstanding and authorized

 

100%

 

65%

 

N/A

 

Harte Hanks, Inc.

 

Harte-Hanks Direct Marketing/Dallas, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte Hanks, Inc.

 

NSO, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte Hanks, Inc.

 

Southern Comprint Co.

 

1,070 shares outstanding and 1,500 shares authorized

 

100%

 

100%

 

5

 

Harte Hanks UK Limited

 

Harte-Hanks SRL

 

60 at E6 outstanding and authorized

 

100%

 

0%

 

N/A

 

 

--------------------------------------------------------------------------------

 

Name of 
Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Percentage
of Shares
Owned

 

Percentage 
of Shares 
Pledged

 

Certificate
Nos.

 

Harte Hanks, Inc.

 

Harte-Hanks Shoppers, Inc.

 

15,174 shares outstanding and 250,000 shares authorized

 

100%

 

100%

 

101

 

Harte Hanks, Inc.

 

Harte-Hanks Response Management/Austin, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

1

 

Harte Hanks, Inc.

 

Sales Support Services, Inc.

 

5,617 shares outstanding and 10,000 shares authorized

 

100%

 

100%

 

1

 

Harte Hanks, Inc. and Harte-Hanks Direct, Inc.

 

Harte-Hanks Belgium N.V.

 

BEF 6,250,000 represented by registered shares having no par value and numbered
1 through 625

 

Harte Hanks, Inc. owns 624 shares and Harte-Hanks Direct, Inc. owns 1 share

 

65%

 

N/A

 

Harte Hanks, Inc.

 

Harte-Hanks STS, Inc.

 

1,000 shares outstanding and authorized

 

100%

 

100%

 

001

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 6

 

TRADEMARKS

 

Registrations:

 

OWNER

 

REGISTRATION 
NUMBER

 

TRADEMARK

Harte Hanks, Inc.

 

4452119

 

True Health and Wellness

Harte Hanks, Inc.

 

7314843

 

We Make Brands Personal

Harte Hanks, Inc.

 

4221651

 

Pretrak

Harte Hanks, Inc.

 

4056191

 

Momentium

Trillium Software, Inc.

 

4249482

 

Allink

Harte-Hanks Data Technologies, Inc.

 

4154645

 

Trilliumapps

Trillium Software, Inc.

 

3320127

 

ADQ Direct

Harte-Hanks Data Services LLC

 

3172720

 

Advanced Data Quality

Harte Hanks, Inc.

 

3967247

 

The Agency Inside

Harte Hanks, Inc.

 

3800527

 

Insight. Passion. Results.

Trillium Software, Inc.

 

2671358

 

Trillium Software

Trillium Software, Inc.

 

2550481

 

Allink

Harte-Hanks Direct, Inc.

 

2439475

 

Postfuture

Harte Hanks, Inc.

 

2150450

 

Harte Hanks

Trillium Software, Inc.

 

1903431

 

Trillium Software System

Harte-Hanks Direct, Inc.

 

1869882

 

Dimark

Harte-Hanks Direct Marketing/Kansas City, Inc.

 

1201476

 

Speed Gram

3Q Digital, LLC

 

4622226

 

3Q Digital

3Q Digital, LLC

 

4610939

 

Intended

Sales Support Services, Inc.

 

1620310

 

Action Inquiry

Sales Support Services, Inc.

 

1626232

 

Action Inquiry

Trillium Software, Inc.

 

3308244

 

TS Quality

Harte Hanks, Inc.

 

2152012

 

HARTE HANKS design

 

--------------------------------------------------------------------------------

 

Applications:

 

OWNER

 

APPLICATION
NUMBER

 

TRADEMARK

Harte Hanks, Inc.

 

86794616

 

Data Refinery

Harte Hanks, Inc.

 

86118883

 

HARTE HANKS squares design

Harte Hanks, Inc.

 

86106660

 

Connections Made. Impact Delivered.

Harte Hanks, Inc.

 

86828631

 

Total Customer Discovery

 

Unregistered Software:

 

·                  Trillium Software System (all versions, variants and modules)

·                  NexTouch fulfillment ordering system (all versions, variants
and modules, except custom extensions owned by clients as work for hire)

·                  PostFuture email platform (all versions, variants and
modules)

·                  HITS logistics management software (all versions, variants
and modules)

 

--------------------------------------------------------------------------------

 

SCHEDULE 7

 

NAME; CHIEF EXECUTIVE OFFICE; TAX IDENTIFICATION NUMBERS AND ORGANIZATIONAL
NUMBERS

 

Legal Name of Loan
Party/Subsidiary

 

Jurisdiction
of
Organization

 

Address of Chief Executive
Office

 

Tax ID Number

Harte Hanks, Inc.

 

DE

 

9601 McAllister Freeway,
Suite 610, San Antonio, TX
78216

 

74-1677284

Trillium Software, Inc.

 

DE

 

1700 District Avenue, Suite
300, Burlington, MA 01803

 

04-3493394

3Q Digital, Inc.

 

DE

 

155 Bovet Road, Suite 480,
San Mateo, CA 94402

 

27-0958570

Harte-Hanks Data Services LLC

 

MD

 

4545 Annapolis Road,
Baltimore, MD 21227

 

52-2206203

Harte-Hanks Direct, Inc.

 

NY

 

3800 Horizon Blvd., Suite
500, Trevose, PA 19053

 

13-3520560

Harte Hanks Direct Marketing/Baltimore, Inc.

 

MD

 

4545 Annapolis Road,
Baltimore, MD 21227

 

52-1129017

Harte-Hanks Direct Marketing/Dallas, Inc.

 

DE

 

2750 114th Street, Suite 100,
Grand Prairie, TX 75050

 

75-2626529

Harte-Hanks Direct Marketing/Fullerton, Inc.

 

CA

 

2337 West Commonwealth
Avenue, Fullerton, CA
92833

 

33-0209712

Harte-Hanks Direct Marketing/Jacksonville, LLC

 

DE

 

7498 Fullerton Street, Bldg
600, Jacksonville, FL 32256

 

59-3759459

Harte-Hanks Direct Marketing/Kansas City, LLC

 

DE

 

7801 Nieman, Shawnee, KS
66214

 

48-1252793

Harte-Hanks Florida, Inc.

 

DE

 

1525 NW 3rd Street, Suite
21, Deerfield Beach, FL
33442

 

20-2495117

Harte-Hanks Logistics, LLC

 

FL

 

1525 NW 3rd Street, Suite
21, Deerfield Beach, FL
33442

 

30-0758173

Harte-Hanks Print, Inc.

 

NJ

 

9601 McAllister Freeway,
Suite 610, San Antonio, TX
78216

 

23-2676694

 

--------------------------------------------------------------------------------

 

Legal Name of Loan
Party/Subsidiary

 

Jurisdiction
of
Organization

 

Address of Chief Executive
Office

 

Tax ID Number

Harte-Hanks Response Management/Austin, Inc.

 

DE

 

2800 Wells Branch Pkwy,
Austin, TX 78728

 

74-2898255

Harte-Hanks Response Management/Boston, Inc.

 

MA

 

600 North Bedford Street,
East Bridgewater, MA 02333

 

04-2210147

Harte-Hanks Strategic Marketing, Inc.

 

DE

 

1700 District Avenue, Suite
300, Burlington, MA 01803

 

45-3987467

Harte-Hanks STS, Inc.

 

DE

 

9601 McAllister Freeway,
Suite 610, San Antonio, TX
78216

 

20-5779914

NSO, Inc.

 

OH

 

9601 McAllister Freeway,
Suite 610, San Antonio, TX
78216

 

31-1190424

Sales Support Services, Inc.

 

NJ

 

2750 114th Street, Suite
1001, Grand Prairie, TX
75050

 

22-1664923

Harte-Hanks Belgium N.V.

 

Belgium

 

Ekkelgaarden 6, Suite
542/H, 3500 Hasselt,
Belgium

 

98-1065119

Harte-Hanks Direct Marketing/Cincinnati, Inc.

 

OH

 

2950 Robertson Avenue,
Cincinnati, OH 45209

 

31-0969327

Harte-Hanks do Brazil Consultoria e Servicos Ltda.

 

Brazil

 

Avenida das Nacoes Unidas,
13797, 19th Floor, San
Paulo, Brazil 04795

 

JUCESP- 53.653/07-5 (Company Registration Number)

Harte-Hanks Europe B.V.

 

Netherlands

 

N/A

 

98-1084277

Harte-Hanks GmbH

 

Germany

 

De-Saint-Exupéry-Straße 8
60549 Frankfurt am Main
Deutschland / Germany

 

98-0216643

Harte-Hanks Market Intelligence Espana LLC

 

Colorado

 

CI Corazon de Maria, No. 6,
3rd Floor, Suites 4 & 5,
Madrid 28002, Spain

 

N/A

Harte-Hanks Philippines, Inc.

 

Philippines

 

Market Market Mall, 4th Floor
Fort Bonifacio Global City
Taguig (Manila), The Philippines

 

98-1081909

 

--------------------------------------------------------------------------------

 

Legal Name of Loan
Party/Subsidiary

 

Jurisdiction
of
Organization

 

Address of Chief Executive
Office

 

Tax ID Number

Harte-Hanks Pty. Limited

 

Australia

 

521 Toorak Road, Suite
C401 — Level 4
Toorak, Vic 3142
Australia

 

98-1082186

Harte-Hanks Shoppers, Inc.

 

CA

 

2830 Orbiter Street, Brea,
CA 92821

 

95-2269791

Harte-Hanks SRL

 

Romania

 

IDEO —
Sos Pacurari, nr 138,
Iasi, 700521, Romania

 

98-1082756

Harte-Hanks Trillium Software Germany GmbH

 

Germany

 

Otto-Lilienthal - Strabe 36,
Suite D144, D145, E146,
E147. E148
Boblingen 71034
Germany

 

98-1083293

Harte Hanks Trillium UK Limited

 

United Kingdom

 

The Pinnacle
20 Tudor Road, 3rd Floor
Reading, UK
RG1 1NH

 

98-1081022

Harte Hanks UK Limited

 

United Kingdom

 

Wyvern House
Wyvern Way, Rockingham
Road,
Uxbridge UB8 2XN
United Kingdom

 

98-1011966

HHMIX SAS

 

France

 

35 rue des Chantiers
Versailles, 78000, France

 

98-1084858

Southern Comprint Co.

 

CA

 

2830 Orbiter Street, Brea, CA
92821

 

77-0231595

 

--------------------------------------------------------------------------------

 

SCHEDULE 8

 

OWNED REAL PROPERTY

 

None.

 

--------------------------------------------------------------------------------

 

SCHEDULE 9

 

DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS

 

OWNER

 

TYPE OF
ACCOUNT

 

BANK OR
INTERMEDIARY

 

ACCOUNT
NUMBERS

Harte Hanks, Inc.

 

Parent Account

 

Chase Manhattan Bank

 

 

Harte Hanks, Inc.

 

E-Commerce Account

 

Chase Manhattan Bank

 

 

Harte Hanks, Inc.

 

Chase Direct Deposit Account

 

Chase Manhattan Bank

 

 

Harte Hanks, Inc.

 

Flexible Spending Account

 

Chase Manhattan Bank

 

 

Trillium Software, Inc.

 

HDT/MAC AP

 

Chase Manhattan Bank

 

 

Trillium Software, Inc.

 

HCA Operating Account (CAD)

 

Chase Manhattan Bank

 

 

3Q Digital, Inc.

 

3Q Checking

 

Chase Manhattan Bank

 

 

3Q Digital, Inc.

 

3Q Intended LLC

 

Chase Manhattan Bank

 

 

Harte-Hanks Response Management/Austin, Inc.

 

Harte Hanks ASA Program

 

Wells Fargo Bank

 

 

Harte-Hanks Response Management/Austin, Inc.

 

Harte Hanks Putnam Program

 

Wells Fargo Bank

 

 

Harte-Hanks Response Management/Austin, Inc.

 

Harte Hanks Samsung Program

 

Wells Fargo Bank

 

 

Harte-Hanks Response Management/Austin, Inc.

 

Harte Hanks TI Seminars

 

Wells Fargo Bank

 

 

Harte-Hanks Response Management/Austin, Inc.

 

Harte Hanks TI Fulfillment

 

Wells Fargo Bank

 

 

Harte Hanks, Inc.

 

Parent Account

 

Bank of America ABA

 

 

 

--------------------------------------------------------------------------------

 

Harte Hanks, Inc.

 

Corporate Savings

 

Bank of America ABA

 

 

Harte-Hanks Response Management/Austin, Inc.

 

HDM/Corporate Manual Paycheck

 

Bank of America ABA

 

 

Harte Hanks, Inc.

 

Individual Investor Account

 

Bank of America ABA

 

 

Harte Hanks, Inc.

 

Corporate Savings

 

Comerica

 

 

Harte Hanks, Inc.

 

Money Market Trader Account

 

Comerica

 

 

Harte Hanks, Inc.

 

Money Market

 

BBVA Compass ABA

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

HKC Operating Account

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Black & Decker

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco Bounceback

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco Reconcile Mailing

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco Triflexis Offense

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Norelco Cool Slim Shaver

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Ross Zone Perfect

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Sonicare Consumer

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Sonicare Professional

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Tri-Heart Plus

 

UMB

 

 

 

--------------------------------------------------------------------------------

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Walmart Optical

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Walmart Pharmacy

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco 2014 Rebate

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco High Value Program

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Elanco Loyalty Program

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

National Consumer Rebate

 

UMB

 

 

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Special Offers Rebate

 

UMB

 

 

Sales Support Services, Inc.

 

SSS Parent for Customer Accts

 

PNC

 

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 10

 

BANKS AND SECURITIES INTERMEDIARIES AT WHICH DEPOSIT ACCOUNTS AND SECURITIES
ACCOUNTS ARE MAINTAINED

 

Controlled Account Banks as of the Closing Date:

Chase Manhattan Bank

Wells Fargo Bank

Bank of America

Comerica

BBVA Compass

UMB

PNC

 

Controlled Account Bank on or before 60 days after the Closing Date:

Wells Fargo Bank, National Association

10 South Wacker Drive

13th Floor

Chicago, Illinois  60606

Account #: To be determined.

 

--------------------------------------------------------------------------------

 

SCHEDULE 11

 

LIST OF UNIFORM COMMERCIAL CODE FILING JURISDICTIONS

 

Grantor

 

Jurisdiction

Harte Hanks, Inc.

 

Delaware

Trillium Software, Inc.

 

Delaware

3Q Digital, Inc.

 

Delaware

Harte-Hanks Data Services LLC

 

Maryland

Harte-Hanks Direct, Inc.

 

New York

Harte-Hanks Direct Marketing/Baltimore, Inc.

 

Maryland

Harte-Hanks Direct Marketing/Dallas, Inc.

 

Delaware

Harte-Hanks Direct Marketing/Fullerton, Inc.

 

California

Harte-Hanks Direct Marketing/Jacksonville, Inc.

 

Delaware

Harte-Hanks Direct Marketing/Kansas City, LLC

 

Delaware

Harte-Hanks Florida, Inc.

 

Delaware

Harte Hanks Logistics, LLC

 

Florida

Harte-Hanks Print, Inc.

 

New Jersey

Harte-Hanks Response Management/Austin, Inc.

 

Delaware

Harte-Hanks Response Management/Boston, Inc.

 

Massachusetts

Harte-Hanks Strategic Marketing, Inc.

 

Delaware

Harte-Hanks STS, Inc.

 

Delaware

NSO, Inc.

 

Ohio

Sales Support Services, Inc.

 

New Jersey

 

--------------------------------------------------------------------------------

 

SCHEDULE 12

 

MOTOR VEHICLES

 

None.

 

--------------------------------------------------------------------------------

 

ANNEX 1 TO GUARANTY AND SECURITY AGREEMENT
FORM OF JOINDER

 

Joinder No.      (this “Joinder”), dated as of              20   , to the
Guaranty and Security Agreement, dated as of March 10, 2016 (as amended,
restated, supplemented, or otherwise modified from time to time, the “Guaranty
and Security Agreement”), by and among each of the parties listed on the
signature pages thereto and those additional entities that thereafter become
parties thereto (collectively, jointly and severally, “Grantors” and each,
individually, a “Grantor”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association (“Wells Fargo”), in its capacity as agent for the
Lender Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of March 10, 2016
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Harte Hanks, Inc., a Delaware corporation
(“Harte Hanks”) and Trillium Software, Inc., a Delaware corporation (“Trillium”;
together with Harte Hanks, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National
Association, a national banking association (“Wells Fargo”), as administrative
agent for each member of the Lender Group and the Bank Product Providers (in
such capacity, together with its successors and assigns in such capacity,
“Agent”), Wells Fargo Bank, National Association, a national banking
association, as sole lead arranger (in such capacity, together with its
successors and assigns in such capacity, the “Sole Lead Arranger”), and Wells
Fargo Bank, National Association, a national banking association, as sole book
runner (in such capacity, together with its successors and assigns in such
capacity, the “Sole Book Runner”), the Lender Group has agreed to make certain
financial accommodations available to Borrowers from time to time pursuant to
the terms and conditions thereof; and

 

WHEREAS, initially capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Guaranty and
Security Agreement or, if not defined therein, in the Credit Agreement, and this
Joinder shall be subject to the rules of construction set forth in
Section 1(b) of the Guaranty and Security Agreement, which rules of construction
are incorporated herein by this reference, mutatis mutandis; and

 

WHEREAS, Grantors have entered into the Guaranty and Security Agreement in order
to induce the Lender Group and the Bank Product Providers to make certain
financial accommodations to Borrowers as provided for in the Credit Agreement,
the other Loan Documents, and the Bank Product Agreements; and

 

WHEREAS, pursuant to Section 5.11 of the Credit Agreement and Section 26 of the
Guaranty and Security Agreement, certain Subsidiaries of the Loan Parties, must
execute and deliver certain Loan Documents, including the Guaranty and Security
Agreement, and the joinder to the Guaranty and Security Agreement by the
undersigned new Grantor or Grantors

 

Annex I-1

--------------------------------------------------------------------------------

 

(collectively, the “New Grantors”) may be accomplished by the execution of this
Joinder in favor of Agent, for the benefit of the Lender Group and the Bank
Product Providers; and

 

WHEREAS, each New Grantor (a) is a Subsidiary of Harte Hanks and, as such, will
benefit by virtue of the financial accommodations extended to Borrowers by the
Lender Group or the Bank Product Providers and (b) by becoming a Grantor will
benefit from certain rights granted to the Grantors pursuant to the terms of the
Loan Documents and the Bank Product Agreements;

 

NOW, THEREFORE, for and in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each New Grantor hereby agrees as follows:

 

1.         In accordance with Section 26 of the Guaranty and Security Agreement,
each New Grantor, by its signature below, becomes a “Grantor” and “Guarantor”
under the Guaranty and Security Agreement with the same force and effect as if
originally named therein as a “Grantor” and “Guarantor” and each New Grantor
hereby (a) agrees to all of the terms and provisions of the Guaranty and
Security Agreement applicable to it as a “Grantor” or “Guarantor” thereunder and
(b) represents and warrants that the representations and warranties made by it
as a “Grantor” or “Guarantor” thereunder are true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that are already qualified or modified by
materiality in the text thereof) on and as of the date hereof.  In furtherance
of the foregoing, each New Grantor hereby (a) jointly and severally
unconditionally and irrevocably guarantees as a primary obligor and not merely
as a surety the full and prompt payment when due, whether upon maturity,
acceleration, or otherwise, of all of the Guarantied Obligations, and
(b) unconditionally grants, assigns, and pledges to Agent, for the benefit of
the Lender Group and the Bank Product Providers, to secure the Secured
Obligations, a continuing security interest in and to all of such New Grantor’s
right, title and interest in and to the Collateral.  Each reference to a
“Grantor” or “Guarantor” in the Guaranty and Security Agreement shall be deemed
to include each New Grantor.  The Guaranty and Security Agreement is
incorporated herein by reference.

 

2.         Schedule 1, “Commercial Tort Claims”, Schedule 2, “Copyrights”,
Schedule 3, “Intellectual Property Licenses”, Schedule 4, “Patents”, Schedule 5,
“Pledged Companies”, Schedule 6, “Trademarks”, Schedule 7, Name; Chief Executive
Office; Tax Identification Numbers and Organizational Numbers, Schedule 8,
“Owned Real Property”, Schedule 9, “Deposit Accounts and Securities Accounts”,
Schedule 10, “Controlled Account Banks”, Schedule 11, “List of Uniform
Commercial Code Filing Jurisdictions”, and Schedule 12, “Motor Vehicles”
attached hereto supplement Schedule 1, Schedule 2, Schedule 3, Schedule 4,
Schedule 5, Schedule 6, Schedule 7, Schedule 8, Schedule 9, Schedule 10,
Schedule 11, and Schedule 12 respectively, to the Guaranty and Security
Agreement and shall be deemed a part thereof for all purposes of the Guaranty
and Security Agreement.

 

3.         Each New Grantor authorizes Agent at any time and from time to time
to file, transmit, or communicate, as applicable, financing statements and
amendments thereto (i) describing the Collateral as “all personal property of
debtor” or “all assets of debtor” or words of similar effect, (ii) describing
the Collateral as being of equal or lesser scope or with greater

 

Annex I-2

--------------------------------------------------------------------------------

 

detail, or (iii) that contain any information required by part 5 of Article 9 of
the Code for the sufficiency or filing office acceptance.  Each New Grantor also
hereby ratifies any and all financing statements or amendments previously filed
by Agent in any jurisdiction in connection with the Loan Documents.

 

4.         Each New Grantor represents and warrants to Agent, the Lender Group
and the Bank Product Providers that this Joinder has been duly executed and
delivered by such New Grantor and constitutes its legal, valid, and binding
obligation, enforceable against it in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium, or other similar laws affecting creditors’
rights generally and general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).

 

5.         This Joinder is a Loan Document.  This Joinder may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Joinder.  Delivery of an executed counterpart of this Joinder by telefacsimile
or other electronic method of transmission shall be equally as effective as
delivery of an original executed counterpart of this Joinder.  Any party
delivering an executed counterpart of this Joinder by telefacsimile or other
electronic method of transmission also shall deliver an original executed
counterpart of this Joinder but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Joinder.

 

6.         The Guaranty and Security Agreement, as supplemented hereby, shall
remain in full force and effect.

 

7.         THIS JOINDER SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF
LAW AND VENUE; JURY TRIAL WAIVER SET FORTH IN SECTION 25 OF THE GUARANTY AND
SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS
REFERENCE, MUTATIS MUTANDIS.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

Annex I-3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Guaranty
and Security Agreement to be executed and delivered as of the day and year first
above written.

 

NEW GRANTORS:

 

[NAME OF NEW GRANTOR]

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

[NAME OF NEW GRANTOR]

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

AGENT:

 

WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

[SIGNATURE PAGE TO JOINDER NO.          TO GUARANTY AND SECURITY AGREEMENT]

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

COPYRIGHT SECURITY AGREEMENT

 

This COPYRIGHT SECURITY AGREEMENT (this “Copyright Security Agreement”) is made
this       day of              , 20  , by and among Grantors listed on the
signature pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association (“Wells Fargo”), in its capacity as agent for each member of
the Lender Group and the Bank Product Providers (in such capacity, together with
its successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of March 10, 2016
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Harte Hanks, Inc., a Delaware corporation
(“Harte Hanks”) and Trillium Software, Inc., a Delaware corporation (“Trillium”;
together with Harte Hanks, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National
Association, a national banking association (“Wells Fargo”), as administrative
agent for each member of the Lender Group and the Bank Product Providers (in
such capacity, together with its successors and assigns in such capacity,
“Agent”), Wells Fargo Bank, National Association, a national banking
association, as sole lead arranger (in such capacity, together with its
successors and assigns in such capacity, the “Sole Lead Arranger”), and Wells
Fargo Bank, National Association, a national banking association, as sole book
runner (in such capacity, together with its successors and assigns in such
capacity, the “Sole Book Runner”), the Lender Group has agreed to make certain
financial accommodations available to Borrowers from time to time pursuant to
the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group and the Bank Product Providers are
willing to make the financial accommodations to Borrowers as provided for in the
Credit Agreement, the other Loan Documents, and the Bank Product Agreements, but
only upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Guaranty and Security Agreement, dated as of March 10,
2016 (including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Guaranty and
Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of the Lender Group and the
Bank Product Providers, this Copyright Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors hereby agree as follows:

 

--------------------------------------------------------------------------------

 

1.         DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Credit Agreement, and this
Copyright Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.

 

2.         GRANT OF SECURITY INTEREST IN COPYRIGHT COLLATERAL.  Each Grantor
hereby unconditionally grants, assigns, and pledges to Agent, for the benefit
each member of the Lender Group and each of the Bank Product Providers, to
secure the Secured Obligations, a continuing security interest (referred to in
this Copyright Security Agreement as the “Security Interest”) in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Copyright Collateral”):

 

(a)        all of such Grantor’s Copyrights and Copyright Intellectual Property
Licenses to which it is a party including those referred to on Schedule I;

 

(b)        all renewals or extensions of the foregoing; and

 

(c)        all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Copyright or any Copyright exclusively licensed under any Intellectual
Property License, including the right to receive damages, or the right to
receive license fees, royalties, and other compensation under any Copyright
Intellectual Property License.

 

3.         SECURITY FOR SECURED OBLIGATIONS.  This Copyright Security Agreement
and the Security Interest created hereby secures the payment and performance of
the Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Copyright Security Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Agent, the other
members of the Lender Group, the Bank Product Providers or any of them, whether
or not they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving any Grantor.

 

4.         SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Copyright Security Agreement is granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Guaranty and Security Agreement.  Each
Grantor hereby acknowledges and affirms that the rights and remedies of Agent
with respect to the Security Interest in the Copyright Collateral made and
granted hereby are more fully set forth in the Guaranty and Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.  To the extent there is any inconsistency between this
Copyright Security Agreement and the Guaranty and Security Agreement, the
Guaranty and Security Agreement shall control.

 

5.         AUTHORIZATION TO SUPPLEMENT.  Grantors shall give Agent prior written
notice of no less than five (5) Business Days before filing any additional
application for registration of any copyright and prompt notice in writing of
any additional copyright registrations granted therefor after the date hereof.
Without limiting Grantors’ obligations under

 

2

--------------------------------------------------------------------------------

 

this Section, Grantors hereby authorize Agent unilaterally to modify this
Copyright Security Agreement by amending Schedule I to include any future United
States registered copyrights or applications therefor of each Grantor. 
Notwithstanding the foregoing, no failure to so modify this Copyright Security
Agreement or amend Schedule I shall in any way affect, invalidate or detract
from Agent’s continuing security interest in all Collateral, whether or not
listed on Schedule I.

 

6.         COUNTERPARTS.  This Copyright Security Agreement is a Loan Document. 
This Copyright Security Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Copyright Security Agreement. 
Delivery of an executed counterpart of this Copyright Security Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Copyright
Security Agreement.  Any party delivering an executed counterpart of this
Copyright Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Copyright Security Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Copyright Security Agreement.

 

7.         CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.  THIS COPYRIGHT SECURITY
AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE;
JURY TRIAL WAIVER SET FORTH IN SECTION 25 OF THE GUARANTY AND SECURITY
AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

 

[signature page follows]

 

3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Copyright Security
Agreement to be executed and delivered as of the day and year first above
written.

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

AGENT:

WELLS FARGO BANK, NATIONAL

 

ASSOCIATION, a national banking association

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[SIGNATURE PAGE TO COPYRIGHT SECURITY AGREEMENT]

 

--------------------------------------------------------------------------------

 

SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT

 

Copyright Registrations

 

Grantor

 

Country

 

Copyright

 

Registration No.

 

Registration Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Copyright Licenses

 

--------------------------------------------------------------------------------

 

EXHIBIT B

 

PATENT SECURITY AGREEMENT

 

This PATENT SECURITY AGREEMENT (this “Patent Security Agreement”) is made this
      day of            , 20    , by and among the Grantors listed on the
signature pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association (“Wells Fargo”), in its capacity as agent for each member of
the Lender Group and the Bank Product Providers (in such capacity, together with
its successors and assigns in such capacity,  “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of March 10, 2016
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Harte Hanks, Inc., a Delaware corporation
(“Harte Hanks”) and Trillium Software, Inc., a Delaware corporation (“Trillium”;
together with Harte Hanks, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National
Association, a national banking association (“Wells Fargo”), as administrative
agent for each member of the Lender Group and the Bank Product Providers (in
such capacity, together with its successors and assigns in such capacity,
“Agent”), Wells Fargo Bank, National Association, a national banking
association, as sole lead arranger (in such capacity, together with its
successors and assigns in such capacity, the “Sole Lead Arranger”), and Wells
Fargo Bank, National Association, a national banking association, as sole book
runner (in such capacity, together with its successors and assigns in such
capacity, the “Sole Book Runner”), the Lender Group has agreed to make certain
financial accommodations available to Borrowers from time to time pursuant to
the terms and conditions thereof; and

 

WHEREAS, the members of Lender Group and the Bank Product Providers are willing
to make the financial accommodations to Borrowers as provided for in the Credit
Agreement, the other Loan Documents, and the Bank Product Agreements, but only
upon the condition, among others, that the Grantors shall have executed and
delivered to Agent, for the benefit of the Lender Group and the Bank Product
Providers, that certain Guaranty and Security Agreement, dated as of March 10,
2016 (including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Guaranty and
Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of the Lender Group and the
Bank Product Providers, this Patent Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

--------------------------------------------------------------------------------

 

1.         DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Credit Agreement, and this
Patent Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.

 

2.         GRANT OF SECURITY INTEREST IN PATENT COLLATERAL. Each Grantor hereby
unconditionally grants, assigns, and pledges to Agent, for the benefit each
member of the Lender Group and each of the Bank Product Providers, to secure the
Secured Obligations, a continuing security interest (referred to in this Patent
Security Agreement as the “Security Interest”) in all of such Grantor’s right,
title and interest in and to the following, whether now owned or hereafter
acquired or arising (collectively, the “Patent Collateral”):

 

(a)        all of its Patents and Patent Intellectual Property Licenses to which
it is a party including those referred to on Schedule I;

 

(b)        all divisionals, continuations, continuations-in-part, reissues,
reexaminations, or extensions of the foregoing; and

 

(c)        all products and proceeds of the foregoing, including any claim by
such Grantor against third parties for past, present or future infringement of
any Patent or any Patent exclusively licensed under any Intellectual Property
License, including the right to receive damages, or right to receive license
fees, royalties, and other compensation under any Patent Intellectual Property
License.

 

3.         SECURITY FOR SECURED OBLIGATIONS.  This Patent Security Agreement and
the Security Interest created hereby secures the payment and performance of the
Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Patent Security Agreement secures
the payment of all amounts which constitute part of the Secured Obligations and
would be owed by Grantors, or any of them, to Agent, the other members of the
Lender Group, the Bank Product Providers or any of them, whether or not they are
unenforceable or not allowable due to the existence of an Insolvency Proceeding
involving any Grantor.

 

4.         SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Patent Security Agreement is granted in conjunction with the security interests
granted to Agent, for the benefit of the Lender Group and the Bank Product
Providers, pursuant to the Guaranty and Security Agreement.  Each Grantor hereby
acknowledges and affirms that the rights and remedies of Agent with respect to
the Security Interest in the Patent Collateral made and granted hereby are more
fully set forth in the Guaranty and Security Agreement, the terms and provisions
of which are incorporated by reference herein as if fully set forth herein.  To
the extent there is any inconsistency between this Patent Security Agreement and
the Guaranty and Security Agreement, the Guaranty and Security Agreement shall
control.

 

5.         AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to
any new patent application or issued patent or become entitled to the benefit of
any patent application or patent for any divisional, continuation,
continuation-in-part, reissue, or

 

2

--------------------------------------------------------------------------------

 

reexamination of any existing patent or patent application, the provisions of
this Patent Security Agreement shall automatically apply thereto. Grantors shall
give prompt notice in writing to Agent with respect to any such new patent
rights.  Without limiting Grantors’ obligations under this Section, Grantors
hereby authorize Agent unilaterally to modify this Patent Security Agreement by
amending Schedule I to include any such new patent rights of each Grantor. 
Notwithstanding the foregoing, no failure to so modify this Patent Security
Agreement or amend Schedule I shall in any way affect, invalidate or detract
from Agent’s continuing security interest in all Collateral, whether or not
listed on Schedule I.

 

6.         COUNTERPARTS.  This Patent Security Agreement is a Loan Document. 
This Patent Security Agreement may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Patent Security Agreement. 
Delivery of an executed counterpart of this Patent Security Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Patent
Security Agreement.  Any party delivering an executed counterpart of this Patent
Security Agreement by telefacsimile or other electronic method of transmission
also shall deliver an original executed counterpart of this Patent Security
Agreement but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Patent Security
Agreement.

 

7.         CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.  THIS PATENT SECURITY
AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE;
JURY TRIAL WAIVER SET FORTH IN SECTION 25 OF THE GUARANTY AND SECURITY
AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

 

[signature page follows]

 

3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Patent Security
Agreement to be executed and delivered as of the day and year first above
written.

 

GRANTORS:

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

AGENT:

WELLS FARGO BANK, NATIONAL

ASSOCIATION, a national banking association

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[SIGNATURE PAGE TO PATENT SECURITY AGREEMENT]

 

--------------------------------------------------------------------------------

 

SCHEDULE I
to
PATENT SECURITY AGREEMENT

 

Patents

 

Grantor

 

Country

 

Patent

 

Application/
Patent No.

 

Filing Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Patent Licenses

 

--------------------------------------------------------------------------------

 

EXHIBIT C

 

PLEDGED INTERESTS ADDENDUM

 

This Pledged Interests Addendum, dated as of             , 20    (this “Pledged
Interests Addendum”), is delivered pursuant to Section 7 of the Guaranty and
Security Agreement referred to below.  The undersigned hereby agrees that this
Pledged Interests Addendum may be attached to that certain Guaranty and Security
Agreement, dated as of March 10, 2016, (as amended, restated, supplemented, or
otherwise modified from time to time, the “Guaranty and Security Agreement”),
made by the undersigned, together with the other Grantors named therein, to
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
Agent.  Initially capitalized terms used but not defined herein shall have the
meaning ascribed to such terms in the Guaranty and Security Agreement or, if not
defined therein, in the Credit Agreement, and this Pledged Interests Addendum
shall be subject to the rules of construction set forth in Section 1(b) of the
Guaranty and Security Agreement, which rules of construction are incorporated
herein by this reference, mutatis mutandis.  The undersigned hereby agrees that
the additional interests listed on Schedule I shall be and become part of the
Pledged Interests pledged by the undersigned to Agent in the Guaranty and
Security Agreement and any pledged company set forth on Schedule I shall be and
become a “Pledged Company” under the Guaranty and Security Agreement, each with
the same force and effect as if originally named therein.

 

This Pledged interests Addendum is a Loan Document.  Delivery of an executed
counterpart of this Pledged Interests Addendum by telefacsimile or other
electronic method of transmission shall be equally as effective as delivery of
an original executed counterpart of this Pledged Interests Addendum.  If the
undersigned delivers an executed counterpart of this Pledged Interests Addendum
by telefacsimile or other electronic method of transmission, the undersigned
shall also deliver an original executed counterpart of this Pledged Interests
Addendum but the failure to deliver an original executed counterpart shall not
affect the validity, enforceability, and binding effect of this Pledged
Interests Addendum.

 

The undersigned hereby certifies that the representations and warranties set
forth in Section 6 of the Guaranty and Security Agreement of the undersigned are
true and correct as to the Pledged Interests listed herein on and as of the date
hereof.

 

THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE PROVISIONS REGARDING
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER SET FORTH IN SECTION 25 OF THE
GUARANTY AND SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY
THIS REFERENCE, MUTATIS MUTANDIS.

 

[signature page follows]

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum
to be executed and delivered as of the day and year first above written.

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

2

--------------------------------------------------------------------------------

 

SCHEDULE I
to
PLEDGED INTERESTS ADDENDUM

 

Pledged Interests

 

Name of Grantor

 

Name of Pledged
Company

 

Number of
Shares/Units

 

Class of
Interests

 

Percentage
of Class
Owned

 

Certificate
Nos.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

EXHIBIT D

 

TRADEMARK SECURITY AGREEMENT

 

This TRADEMARK SECURITY AGREEMENT (this “Trademark Security Agreement”) is made
this     day of            , 20  , by and among Grantors listed on the signature
pages hereof (collectively, jointly and severally, “Grantors” and each
individually “Grantor”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national
banking association (“Wells Fargo”), in its capacity as agent for the Lender
Group and the Bank Product Providers (in such capacity, together with its
successors and assigns in such capacity, “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Credit Agreement dated as of March 10, 2016
(as amended, restated, supplemented, or otherwise modified from time to time,
the “Credit Agreement”) by and among Harte Hanks, Inc., a Delaware corporation
(“Harte Hanks”) and Trillium Software, Inc., a Delaware corporation (“Trillium”;
together with Harte Hanks, are referred to hereinafter each individually as a
“Borrower”, and individually and collectively, jointly and severally, as the
“Borrowers”), the lenders party thereto as “Lenders”, Wells Fargo Bank, National
Association, a national banking association (“Wells Fargo”), as administrative
agent for each member of the Lender Group and the Bank Product Providers (in
such capacity, together with its successors and assigns in such capacity,
“Agent”), Wells Fargo Bank, National Association, a national banking
association, as sole lead arranger (in such capacity, together with its
successors and assigns in such capacity, the “Sole Lead Arranger”), and Wells
Fargo Bank, National Association, a national banking association, as sole book
runner (in such capacity, together with its successors and assigns in such
capacity, the “Sole Book Runner”), the Lender Group has agreed to make certain
financial accommodations available to Borrowers from time to time pursuant to
the terms and conditions thereof; and

 

WHEREAS, the members of the Lender Group and the Bank Product Providers are
willing to make the financial accommodations to Borrowers as provided for in the
Credit Agreement, the other Loan Documents, and the Bank Product Agreements, but
only upon the condition, among others, that Grantors shall have executed and
delivered to Agent, for the benefit of Lender Group and the Bank Product
Providers, that certain Guaranty and Security Agreement, dated as of March 10,
2016 (including all annexes, exhibits or schedules thereto, as from time to time
amended, restated, supplemented or otherwise modified, the “Guaranty and
Security Agreement”); and

 

WHEREAS, pursuant to the Guaranty and Security Agreement, Grantors are required
to execute and deliver to Agent, for the benefit of Lender Group and the Bank
Product Providers, this Trademark Security Agreement;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees as
follows:

 

1

--------------------------------------------------------------------------------

 

1.         DEFINED TERMS.  All initially capitalized terms used but not
otherwise defined herein have the meanings given to them in the Guaranty and
Security Agreement or, if not defined therein, in the Credit Agreement, and this
Trademark Security Agreement shall be subject to the rules of construction set
forth in Section 1(b) of the Guaranty and Security Agreement, which rules of
construction are incorporated herein by this reference, mutatis mutandis.

 

2.         GRANT OF SECURITY INTEREST IN TRADEMARK COLLATERAL.  Each Grantor
hereby unconditionally grants, assigns, and pledges to Agent, for the benefit
each member of the Lender Group and each of the Bank Product Providers, to
secure the Secured Obligations, a continuing security interest (referred to in
this Trademark Security Agreement as the “Security Interest”) in all of such
Grantor’s right, title and interest in and to the following, whether now owned
or hereafter acquired or arising (collectively, the “Trademark Collateral”):

 

(a)        all of its Trademarks and Trademark Intellectual Property Licenses to
which it is a party including those referred to on Schedule I;

 

(b)        all goodwill of the business connected with the use of, and
symbolized by, each Trademark and each Trademark Intellectual Property License;
and

 

(c)        all products and proceeds (as that term is defined in the Code) of
the foregoing, including any claim by such Grantor against third parties for
past, present or future (i) infringement or dilution of any Trademark or any
Trademarks exclusively licensed under any Intellectual Property License,
including right to receive any damages, (ii) injury to the goodwill associated
with any Trademark, or (iii) right to receive license fees, royalties, and other
compensation under any Trademark Intellectual Property License.

 

3.         SECURITY FOR SECURED OBLIGATIONS.  This Trademark Security Agreement
and the Security Interest created hereby secures the payment and performance of
the Secured Obligations, whether now existing or arising hereafter.  Without
limiting the generality of the foregoing, this Trademark Security Agreement
secures the payment of all amounts which constitute part of the Secured
Obligations and would be owed by Grantors, or any of them, to Agent, the other
members of the Lender Group, the Bank Product Providers or any of them, whether
or not they are unenforceable or not allowable due to the existence of an
Insolvency Proceeding involving any Grantor.

 

4.         SECURITY AGREEMENT.  The Security Interest granted pursuant to this
Trademark Security Agreement is granted in conjunction with the security
interests granted to Agent, for the benefit of the Lender Group and the Bank
Product Providers, pursuant to the Guaranty and Security Agreement.  Each
Grantor hereby acknowledges and affirms that the rights and remedies of Agent
with respect to the Security Interest in the Trademark Collateral made and
granted hereby are more fully set forth in the Guaranty and Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.  To the extent there is any inconsistency between this
Trademark Security Agreement and the Guaranty and Security Agreement, the
Guaranty and Security Agreement shall control.

 

2

--------------------------------------------------------------------------------

 

5.         AUTHORIZATION TO SUPPLEMENT.  If any Grantor shall obtain rights to
any new trademarks, the provisions of this Trademark Security Agreement shall
automatically apply thereto. Grantors shall give prompt notice in writing to
Agent with respect to any such new trademarks or renewal or extension of any
trademark registration.   Without limiting Grantors’ obligations under this
Section, Grantors hereby authorize Agent unilaterally to modify this Trademark
Security Agreement by amending Schedule I to include any such new trademark
rights of each Grantor.  Notwithstanding the foregoing, no failure to so modify
this Trademark Security Agreement or amend Schedule I shall in any way affect,
invalidate or detract from Agent’s continuing security interest in all
Collateral, whether or not listed on Schedule I.

 

6.         COUNTERPARTS.  This Trademark Security Agreement is a Loan Document. 
This Trademark Security Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Trademark Security Agreement. 
Delivery of an executed counterpart of this Trademark Security Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Trademark
Security Agreement.  Any party delivering an executed counterpart of this
Trademark Security Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this
Trademark Security Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Trademark Security Agreement.

 

7.         CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.  THIS TRADEMARK SECURITY
AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE;
JURY TRIAL WAIVER SET FORTH IN SECTION 25 OF THE GUARANTY AND SECURITY
AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE,
MUTATIS MUTANDIS.

 

[signature page follows]

 

3

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this Trademark Security
Agreement to be executed and delivered as of the day and year first above
written.

 

GRANTORS:

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY:

 

 

 

 

 

 

AGENT:

WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[SIGNATURE PAGE TO TRADEMARK SECURITY AGREEMENT]

 

--------------------------------------------------------------------------------

 

SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT

 

Trademark Registrations/Applications

 

Grantor

 

Country

 

Mark

 

Application/
Registration No.

 

App/Reg Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade Names

 

Common Law Trademarks

 

Trademarks Not Currently In Use

 

Trademark Licenses

 

--------------------------------------------------------------------------------