Document:

ex_247353.htm

REVOLVING PROMISSORY NOTE

 

$15,000,000.00         May 5, 2021

 

FOR VALUE RECEIVED, HARTE HANKS, INC., a Delaware corporation (“Borrower”), having an address at 9601 McAllister Freeway, Suite 610, San Antonio, Texas 78216, hereby promises to pay to the order of TEXAS CAPITAL BANK, NATIONAL ASSOCIATION, a national banking association (together with its successors and assigns and any subsequent holders of this Note, “Lender”), as hereinafter provided, the principal sum of FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) or so much thereof as may be advanced by Lender from time to time hereunder to or for the benefit or account of Borrower, together with interest thereon at the Note Rate (as hereinafter defined), and otherwise in strict accordance with the terms and provisions hereof.

 

	 	
			1.

				
			DEFINITIONS

			

 

1.1    Definitions. As used in this Note, the following terms shall have the following meanings:

 

“Applicable Margin” means the percent per annum set forth below:

 

	
			Applicable Margin for

			Base Rate Portion

				
			Applicable Margin 

			for LIBOR Portion

			
	
			-0.75 %

				
			1.95 %

			
	 	 

“Applicable Rate” means: (a) in the case of a Portion bearing interest based upon the Base Rate, the Base Rate plus the Applicable Margin; and (b) in the case of a Portion bearing interest based upon LIBOR, LIBOR plus the Applicable Margin.

 

“Base Rate” means for any day, a rate of interest equal to the Prime Rate for such day.

 

“Borrower” has the meaning set forth in the introductory paragraph of this Note.

 

“Business Day” means a weekday, Monday through Friday, except a legal holiday or a day on which banking institutions in Dallas, Texas are authorized or required by law to be closed. Unless otherwise provided, the term “days” when used herein means calendar days.

 

28528645v.2

 

 

 

 

 

“Change” means (a) any change after the date of this Note in the risk‐based capital guidelines applicable to Lender, or (b) any adoption of or change in any other law, governmental or quasi‐governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Note that affects capital adequacy or the amount of capital required or expected to be maintained by Lender or any entity controlling Lender; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change,” regardless of the date enacted, adopted or issued.

“Charges” means all fees, charges and/or any other things of value, if any, contracted for, charged, taken, received or reserved by Lender in connection with the transactions relating to this Note and the other Loan Documents, which are treated as interest under applicable law.

 

“Credit Agreement” means the Credit Agreement dated as of April 17, 2017, executed by Lender and Borrower, as amended by First Amendment to Credit Agreement dated as of January 9, 2018, Second Amendment to Credit Agreement dated as of May 7, 2019, Third Amendment to Credit Agreement dated as of May 11, 2020 and Fourth Amendment to Credit Agreement dated as of even date herewith and as further modified, amended, renewed, extended, and restated from time to time.

 

“Debtor Relief Laws” means Title 11 of the United States Code, as now or hereafter in effect, or any other applicable law, domestic or foreign, as now or hereafter in effect, relating to bankruptcy, insolvency, liquidation, receivership, reorganization, arrangement or composition, extension or adjustment of debts, or similar laws affecting the rights of creditors.

 

“Default Interest Rate” means a rate per annum equal to the Note Rate plus four percent (4%), but in no event in excess of the Maximum Rate.

 

“Event of Default” has the meaning set forth in the Credit Agreement.

 

“Funding Loss” means the amount (which shall be payable on demand by Lender) necessary to promptly compensate Lender for, and hold it harmless from, any loss, cost or expense incurred by Lender as a result of:

 

(a)    any payment or prepayment of any Portion bearing interest based upon LIBOR on a day other than the last day of the relevant LIBOR Interest Period (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

 

(b)    any failure by Borrower to prepay, borrow, continue or convert a Portion bearing or selected to bear interest based upon LIBOR on the date or in the amount selected by Borrower;

 

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. Borrower shall also pay any customary administrative fees charged by Lender in connection with the foregoing. For purposes of calculating amounts payable by Borrower to Lender hereunder, Lender shall be deemed to have funded the Portion based upon LIBOR by a matching deposit or other borrowing in the London inter‐bank market for a comparable amount and for a comparable period, whether or not such Portion was in fact so funded.

 

“Lender” has the meaning set forth in the introductory paragraph of this Note.

 

“LIBOR” means, with respect to each LIBOR Interest Period, the rate (expressed as a percentage per annum and adjusted as described in the last sentence of this definition of LIBOR) for deposits in United States Dollars (commonly known as “LIBOR”) for a term equal to the LIBOR Interest Period that is published or announced on Bloomberg BTMM as calculated by Intercontinental Exchange (ICE) Benchmark Administration Limited (“ICE”) (or any successor thereto) as of 11:00 a.m., London, England, time, on the related LIBOR Determination Date. If such rate shall cease to be published or announced on Bloomberg BTMM or if Lender determines (which determination shall be conclusive absent manifest error) that the rate calculated by ICE no longer accurately reflects the rate available to Lender in the London interbank market and, that such circumstance is likely to be temporary, LIBOR shall be determined by Lender to be the offered rate as announced by a recognized commercial service as representing the average LIBOR rate for deposits in United States dollars for a term equal to the LIBOR Interest Period as of 11:00 a.m. on the relevant LIBOR Determination Date.

 

LIBOR shall be adjusted on each LIBOR Determination Date by dividing LIBOR by a number determined by subtracting from 1.00 the then-stated maximum rate, expressed as a decimal, at which reserves (including any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained by member banks of the United States Federal Reserve System for eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D).

 

Notwithstanding anything herein to the contrary, in no event shall LIBOR (or any Alternative Rate) ever be less than one percent (1.00%). LIBOR and any Alternative Rate may be adjusted from time to time in Lender’s sole discretion for then-applicable, but actual, reserve requirements, deposit insurance assessment rates, marginal emergency, supplemental, special and other reserve percentages, and other actual regulatory costs.

 

“LIBOR Banking Day” means a day on which commercial banks in the City of London, England are open for business and dealing in offshore dollars.

 

“LIBOR Determination Date” means a day that is three (3) LIBOR Banking Days prior to the beginning of the relevant LIBOR Interest Period.

 

“LIBOR Interest Period” means a period of one (1) month. The first day of the interest period must be a LIBOR Banking Day. The last day of the interest period and the actual number of days during the interest period will be determined by Lender using the practices of the London inter‐bank market.

 

“Loan Documents” has the meaning set forth in the Credit Agreement.

 

 

 

 

“Maturity Date” means April 17, 2023.

 

“Maximum Rate” means, at all times, the maximum rate of interest which may be charged, contracted for, taken, received or reserved by Lender in accordance with applicable Texas law (or applicable United States federal law to the extent that such law permits Lender to charge, contract for, receive or reserve a greater amount of interest than under Texas law). The Maximum Rate shall be calculated in a manner that takes into account any and all fees, payments, and other charges in respect of the Loan Documents that constitute interest under applicable law. Each change in any interest rate provided for herein based upon the Maximum Rate resulting from a change in the Maximum Rate shall take effect without notice to Borrower at the time of such change in the Maximum Rate.

 

“Note” means this Note.

 

“Note Rate” means the rate equal to the lesser of (a) the Maximum Rate or (b)  the Applicable Rate.

 

“Payment Date” means the first day of each and every calendar month during the term of this Note.

 

“Portion” means any principal amount bearing interest based upon the Base Rate or LIBOR.

 

“Prime Rate” means, for any day, the rate of interest announced from time to time by Lender as its “base” or “prime” rate of interest, which Borrower hereby acknowledges and agrees may not be the lowest interest rate charged by Lender and is set by Lender in its sole discretion, changing when and as said prime rate changes. Notwithstanding anything herein to the contrary, in no event shall the Prime Rate ever be less than three and one-fourth percent (3.25%). 

 

“Related Indebtedness” means any and all indebtedness paid or payable by Borrower to Lender pursuant to the Loan Documents or any other communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject matter of the Loan Documents, except such indebtedness which has been paid or is payable by Borrower to Lender under this Note.

 

1.2    Rules of Construction. Any capitalized term used in this Note and not otherwise defined herein shall have the meaning ascribed to such term in the Credit Agreement. All terms used herein, whether or not defined in Section 1.1 hereof, and whether used in singular or plural form, shall be deemed to refer to the object of such term whether such is singular or plural in nature, as the context may suggest or require. All personal pronouns used herein, whether used in the masculine, feminine or neutral gender, shall include all other genders; the singular shall include the plural and vice versa.

 

	 	
			2.

				
			PAYMENT TERMS

			

 

2.1    Payment of Principal and Interest; Revolving Nature. All accrued but unpaid interest on the principal balance of this Note outstanding from time to time shall be payable on each Payment Date. The then outstanding principal balance of this Note and all accrued but unpaid interest thereon shall be due and payable on the Maturity Date. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of the Credit Agreement; provided, however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this Note at any time shall be the total amount advanced hereunder by Lender less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by Lender or otherwise noted in Lender’s records, which notations shall be, absent manifest error, conclusive evidence of the amounts owing hereunder from time to time.

 

2.2    Application. Except as expressly provided herein to the contrary, all payments on this Note shall be applied in the following order of priority: (a) the payment or reimbursement of any expenses, costs or obligations (other than the outstanding principal balance hereof and interest hereon) for which either Borrower shall be obligated or Lender shall be entitled pursuant to the provisions of this Note or the other Loan Documents; (b) the payment of accrued but unpaid interest hereon; and (c) the payment of all or any portion of the principal balance hereof then outstanding hereunder, in the direct order of maturity. If an Event of Default exists under this Note or under any of the other Loan Documents, then Lender may, at the sole option of Lender, apply any such payments, at any time and from time to time, to any of the items specified in clauses (a), (b) or (c) above without regard to the order of priority otherwise specified in this Section 2.2 and any application to the outstanding principal balance hereof may be made in either direct or inverse order of maturity.

 

2.3    Payments. All payments under this Note made to Lender shall be made in immediately available funds at 745 E. Mulberry, Suite 300, San Antonio Texas 78212 (or at such other place as Lender, in Lender’s sole discretion, may have established by delivery of written notice thereof to Borrower from time to time), without offset, in lawful money of the United States of America, which shall at the time of payment be legal tender in payment of all debts and dues, public and private. Payments by check or draft shall not constitute payment in immediately available funds until the required amount is actually received by Lender in full. Payments in immediately available funds received by Lender in the place designated for payment on a Business Day prior to 11:00 a.m. (Dallas, Texas time) at such place of payment shall be credited prior to the close of business on the Business Day received, while payments received by Lender on a day other than a Business Day or after 11:00 a.m. (Dallas, Texas time) on a Business Day shall not be credited until the next succeeding Business Day. If any payment of principal or interest on this Note shall become due and payable on a day other than a Business Day, then such payment shall be made on the next succeeding Business Day. Any such extension of time for payment shall be included in computing interest which has accrued and shall be payable in connection with such payment.

 

 

 

 

2.4    Rate Selection, Etc. (a) Borrower may select, subject to the terms and conditions set forth below, a Note Rate based upon either LIBOR or the Base Rate for the entire principal amount of this Note then outstanding or any Portion thereof. Borrower’s ability to select a Note Rate based on LIBOR shall be subject to the definition of “LIBOR” in Section 1 and be suspended or terminated as provided for therein and in this Section 2.4. No more than three (3) LIBOR Interest Periods may be outstanding at any time, and each Portion bearing interest based on LIBOR shall be at least $100,000. Borrower may designate the Portion to bear interest based upon LIBOR by giving Lender written notice of its selection before 11:00 a.m. (Dallas, Texas time) on the LIBOR Determination Date, which selection shall be irrevocable, for each LIBOR Interest Period. If an Event of Default has occurred and is continuing, the option to select LIBOR as a basis for the Note Rate shall be terminated. No LIBOR Interest Period may extend beyond the Maturity Date. Any Portion for which LIBOR Interest Period is not selected shall bear interest at a Note Rate based upon the Base Rate. The determination by Lender of the Note Rate shall, in the absence of manifest error, be conclusive and binding in all respects.

 

(a)    Notwithstanding anything contained herein to the contrary and subject to clause (c) below, if at any time, Lender determines (which determination shall be conclusive in the absence of manifest error) that (i) ICE (or any other successor thereto) has ceased to calculate LIBOR, (ii) deposits in United States Dollars in the relevant amounts and of the relevant maturity are not being offered to banks in the London interbank market for the applicable amount and requested LIBOR Interest Period, (iii) adequate and reasonable means do not exist for determining LIBOR for any requested LIBOR Interest Period, (iv) LIBOR for any requested LIBOR Interest Period does not accurately reflect the rate available to Lender in the London interbank market, (v) any applicable law or regulation or any change therein on the interpretation or application thereof or compliance therewith by Lender prohibits, restricts, or makes impossible the charging of interest based on LIBOR or shall make it unlawful for Lender to make or maintain the indebtedness evidenced by this Note in Eurodollars, (vi) LIBOR does not adequately and fairly reflect the cost to Lender of making or maintaining the Loan, due to changes in administrative costs, fees, tariffs and taxes and other matters outside of Lender’s reasonable control, then Lender shall give Borrower prompt notice thereof, and this Note shall bear interest, and continue to bear interest until Lender determines that the applicable circumstance described in the foregoing clauses (b)(i), (ii), (iii), (iv), (v) or (vi) no longer pertains, at the Base Rate plus Applicable Margin.

 

(b)    If, at any time, Lender determines (which determination shall be conclusive absent manifest error) that (i) any circumstance described in clauses (b)(i)-(b)(vi) has arisen and is not likely to be temporary, or (ii) if (x) ICE or the Alternative Reference Rates Committee convened by the Board of Governors of the Federal Reserve System has announced a commercial loan index as an alternative to LIBOR and commercial banks in the United States are using such alternative loan index for new commercial loans, (y) LIBOR is no longer being widely used by commercial banks as a loan index in the United States for new commercial loans similar to the loan to Borrower, or (z) a governmental authority having jurisdiction over Lender has made a public statement identifying a specific date after which LIBOR shall no longer be used for determining interest rates for new commercial loans originated in the United States, then Lender may notify Borrower of such circumstance. Following such notice, any obligation of Lender to maintain any indebtedness under this Note at a rate based on LIBOR and Borrower’s option to elect a rate based on LIBOR shall terminate; provided, however, Lender may establish an alternate index rate of interest to LIBOR (and an interest rate margin) after giving due consideration to the then-prevailing market convention for determining an index rate of interest for new commercial loans originated by commercial banks in the United States as determined by Lender (the “Alternative Rate”). If requested by Lender, Borrower shall enter into an amendment to this Note to reflect the Alternative Rate and such other related changes to this Note as may be applicable. If no Alternative Rate has been established and Lender has notified Borrower that any circumstance under clauses (c)(i) or (c)(ii) has arisen, then any indebtedness under this Note shall bear interest (and continue to bear interest) at the Base Rate (with LIBOR no longer being used to determine the Base Rate) plus the Applicable Margin unless and until an Alternative Rate is established.

 

2.5    Computation Period. Interest on the indebtedness evidenced by this Note shall be computed on the basis of a three hundred sixty (360) day year and shall accrue on the actual number of days elapsed for any whole or partial month in which interest is being calculated. In computing the number of days during which interest accrues, the day on which funds are initially advanced shall be included regardless of the time of day such advance is made, and the day on which funds are repaid shall be included unless repayment is credited prior to the close of business on the Business Day received as provided in Section 2.3 hereof. Each determination by Lender of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

2.6    Prepayment. Borrower shall have the right to prepay, at any time and from time to time upon at least five (5) Business Days prior written notice to Lender, without fee, premium or penalty, all or any portion of the outstanding principal balance hereof; provided, however, that (a) such prepayment shall also include any and all accrued but unpaid interest on the amount of principal being so prepaid through and including the date of prepayment, plus any other sums which have become due to Lender under the other Loan Documents on or before the date of prepayment, but which have not been fully paid and (b) such prepayment shall also include any Funding Loss. Prepayments of principal shall be applied in inverse order of maturity.

 

2.7    Unconditional Payment. Borrower is and shall be obligated to pay all principal, interest and any and all other amounts which become payable under this Note or under any of the other Loan Documents absolutely and unconditionally and without any abatement, postponement, diminution or deduction whatsoever and without any reduction for counterclaim or setoff whatsoever. If at any time any payment received by Lender hereunder shall be deemed by a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under any Debtor Relief Law, then the obligation to make such payment shall survive any cancellation or satisfaction of this Note or return thereof to Borrower and shall not be discharged or satisfied with any prior payment thereof or cancellation of this Note, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof, and such payment shall be immediately due and payable upon demand.

 

2.8    Partial or Incomplete Payments. Remittances in payment of any part of this Note other than in the required amount in immediately available funds at the place where this Note is payable shall not, regardless of any receipt or credit issued therefor, constitute payment until the required amount is actually received by Lender in full in accordance herewith and shall be made and accepted subject to the condition that any check or draft may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance by Lender of any payment in an amount less than the full amount then due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an Event of Default in the payment of this Note.

 

2.9    Default Interest Rate. For so long as any Event of Default exists under this Note or under any of the other Loan Documents, regardless of whether or not there has been an acceleration of the indebtedness evidenced by this Note, and at all times after the maturity of the indebtedness evidenced by this Note (whether by acceleration or otherwise), and in addition to all other rights and remedies of Lender hereunder, interest shall accrue on the outstanding principal balance hereof at the Default Interest Rate, and such accrued interest shall be immediately due and payable. Borrower acknowledges that it would be extremely difficult or impracticable to determine Lender’s actual damages resulting from any late payment or Event of Default, and such late charges and accrued interest are reasonable estimates of those damages and do not constitute a penalty.

 

2.10    Late Charge.  At the option of Lender, Borrower will pay Lender, on demand, (i) a “late charge” equal to $2,500 (but not to exceed the Maximum Rate) when such installment is not paid within five (5) days following the date such installment is due and (ii) a processing fee in the amount of $25.00 for each check which is provided to Lender by Borrower in payment for an obligation owing to Lender under any Loan Document but is returned or dishonored for any reason, in order to cover the additional expenses involved in handling delinquent and returned or dishonored payments.

 

2.11    Change. If Lender determines that the amount of capital required or expected to be maintained by Lender or any entity controlling Lender, is increased as a result of a Change, then, within fifteen (15) days of demand by Lender, Borrower shall pay to Lender the amount necessary to compensate Lender for any shortfall in the rate of return on the portion of such increased capital that Lender determines is attributable to this Note or the principal amount outstanding hereunder (after taking into account Lender’s policies as to capital adequacy).

 

 

 

 

	 	
			3.

				
			EVENT OF DEFAULT AND REMEDIES

			

 

3.1    Remedies. Upon the occurrence of an Event of Default, Lender shall have the right to exercise any rights and remedies set forth in the Credit Agreement and the other Loan Documents.

 

3.2    Remedies. Upon the occurrence of an Event of Default, Lender shall have the immediate right, at the sole discretion of Lender and without notice, demand, presentment, notice of nonpayment or nonperformance, protest, notice of protest, notice of intent to accelerate, notice of acceleration, or any other notice or any other action (ALL OF WHICH BORROWER HEREBY EXPRESSLY WAIVES AND RELINQUISHES): (a) to declare the entire unpaid balance of the indebtedness evidenced by this Note (including, without limitation, the outstanding principal balance hereof, all sums advanced or accrued hereunder or under any other Loan Document, and all accrued but unpaid interest thereon) at once immediately due and payable (and upon such declaration, the same shall be at once immediately due and payable) and may be collected forthwith, whether or not there has been a prior demand for payment and regardless of the stipulated date of maturity; (b) to foreclose any Liens and security interests securing payment hereof or thereof (including, without limitation, any Liens and security interests); and (c) to exercise any of Lender’s other rights, powers, recourses and remedies under the Loan Documents or at law or in equity, and the same (i) shall be cumulative and concurrent, (ii) may be pursued separately, singly, successively, or concurrently against Borrower or others obligated for the repayment of this Note or any part hereof, or against any one or more of them, at the sole discretion of Lender, (iii) may be exercised as often as occasion therefor shall arise, it being agreed by Borrower that the exercise, discontinuance of the exercise of or failure to exercise any of the same shall in no event be construed as a waiver or release thereof or of any other right, remedy, or recourse, and (iv) are intended to be, and shall be, nonexclusive. All rights and remedies of Lender hereunder and under the other Loan Documents shall extend to any period after the initiation of foreclosure proceedings, judicial or otherwise, with respect to the Mortgaged Property or any portion thereof.

 

3.3    WAIVERS. EXCEPT AS SPECIFICALLY PROVIDED IN THE LOAN DOCUMENTS TO THE CONTRARY, BORROWER AND ANY ENDORSERS OR GUARANTORS HEREOF SEVERALLY WAIVE AND RELINQUISH PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF NONPAYMENT OR NONPERFORMANCE, PROTEST, NOTICE OF PROTEST, NOTICE OF INTENT TO ACCELERATE, NOTICE OF ACCELERATION OR ANY OTHER NOTICES OR ANY OTHER ACTION. BORROWER AND ANY ENDORSERS OR GUARANTORS HEREOF SEVERALLY WAIVE AND RELINQUISH, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO THE BENEFITS OF ANY MORATORIUM, REINSTATEMENT, MARSHALING, FORBEARANCE, VALUATION, STAY, EXTENSION, REDEMPTION, APPRAISEMENT, EXEMPTION AND HOMESTEAD NOW OR HEREAFTER PROVIDED BY THE CONSTITUTION AND LAWS OF THE UNITED STATES OF AMERICA AND OF EACH STATE THEREOF, BOTH AS TO ITSELF AND IN AND TO ALL OF ITS PROPERTY, REAL AND PERSONAL, AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED BY THIS NOTE OR BY THE OTHER LOAN DOCUMENTS.

 

 

 

 

	 	
			4.

				
			GENERAL PROVISIONS

			

 

4.1    No Waiver; Amendment. No failure to accelerate the indebtedness evidenced by this Note by reason of an Event of Default hereunder, acceptance of a partial or past due payment, or indulgences granted from time to time shall be construed (a) as a novation of this Note or as a reinstatement of the indebtedness evidenced by this Note or as a waiver of such right of acceleration or of the right of Lender thereafter to insist upon strict compliance with the terms of this Note, or (b) to prevent the exercise of such right of acceleration or any other right granted under this Note, under any of the other Loan Documents or by any applicable laws. Borrower hereby expressly waives and relinquishes the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing. The failure to exercise any remedy available to Lender shall not be deemed to be a waiver of any rights or remedies of Lender under this Note or under any of the other Loan Documents, or at law or in equity. No extension of the time for the payment of this Note or any installment due hereunder, made by agreement with any person now or hereafter liable for the payment of this Note, shall operate to release, discharge, modify, change or affect the original liability of Borrower under this Note, either in whole or in part, unless Lender specifically, unequivocally and expressly agrees otherwise in writing.

 

4.2    Interest Provisions.

 

(a)    Savings Clause. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply strictly with the applicable Texas law governing the Maximum Rate or amount of interest payable on the indebtedness evidenced by this Note and the Related Indebtedness (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, reserve or receive a greater amount of interest than under Texas law). If the applicable law is ever judicially interpreted so as to render usurious any amount (i) contracted for, charged, taken, reserved or received pursuant to this Note, any of the other Loan Documents or any other communication or writing by or between Borrower and Lender related to the transaction or transactions that are the subject matter of the Loan Documents, (ii) contracted for, charged, taken, reserved or received by reason of Lender’s exercise of the option to accelerate the maturity of this Note and/or the Related Indebtedness, or (iii) Borrower will have paid or Lender will have received by reason of any voluntary prepayment by Borrower of this Note and/or the Related Indebtedness, then it is Borrower’s and Lender’s express intent that all amounts charged in excess of the Maximum Rate shall be automatically canceled, ab initio, and all amounts in excess of the Maximum Rate theretofore collected by Lender shall be credited on the principal balance of this Note and/or the Related Indebtedness (or, if this Note and all Related Indebtedness have been or would thereby be paid in full, refunded to Borrower), and the provisions of this Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder; provided, however, that if this Note has been paid in full before the end of the stated term of this Note, then Borrower and Lender agree that Lender shall, with reasonable promptness after Lender discovers or is advised by Borrower that interest was received in an amount in excess of the Maximum Rate, either refund such excess interest to Borrower and/or credit such excess interest against this Note and/or any Related Indebtedness then owing by Borrower to Lender. Borrower hereby agrees that as a condition precedent to any claim seeking usury penalties against Lender, Borrower will provide written notice to Lender, advising Lender in reasonable detail of the nature and amount of the violation, and Lender shall have sixty (60) days after receipt of such notice in which to correct such usury violation, if any, by either refunding such excess interest to Borrower or crediting such excess interest against this Note and/or the Related Indebtedness then owing by Borrower to Lender. All sums contracted for, charged, taken, reserved or received by Lender for the use, forbearance or detention of any debt evidenced by this Note and/or the Related Indebtedness shall, to the extent permitted by applicable law, be amortized or spread, using the actuarial method, throughout the stated term of this Note and/or the Related Indebtedness (including any and all renewal and extension periods) until payment in full so that the rate or amount of interest on account of this Note and/or the Related Indebtedness does not exceed the Maximum Rate from time to time in effect and applicable to this Note and/or the Related Indebtedness for so long as debt is outstanding. Notwithstanding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration.

 

(b)    Ceiling Election. To the extent that Lender is relying on Chapter 303 of the Texas Finance Code to determine the Maximum Rate payable on the Note and/or any other portion of the Obligations, Lender will utilize the weekly ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent United States federal law permits Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law, Lender will rely on United States federal law instead of such Chapter 303 for the purpose of determining the Maximum Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender may, at its option and from time to time, utilize any other method of establishing the Maximum Rate under such Chapter 303 or under other applicable law by giving notice, if required, to Borrower as provided by applicable law now or hereafter in effect.

 

4.3    WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.3.

 

4.4    GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS; PROVIDED THAT LENDER SHALL RETAIN ALL RIGHTS UNDER FEDERAL LAW. THIS AGREEMENT HAS BEEN ENTERED INTO IN BEXAR COUNTY, TEXAS, AND IS PERFORMABLE FOR ALL PURPOSES IN BEXAR COUNTY, TEXAS. THE PARTIES HEREBY AGREE THAT ANY LAWSUIT, ACTION, OR PROCEEDING THAT IS BROUGHT (WHETHER IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED THEREBY, OR THE ACTIONS OF THE LENDER IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS SHALL BE BROUGHT IN A STATE OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN BEXAR COUNTY, TEXAS. BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS, (B) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH LAWSUIT, ACTION, OR PROCEEDING BROUGHT IN ANY SUCH COURT, AND (C) FURTHER WAIVES ANY CLAIM THAT IT MAY NOW OR HEREAFTER HAVE THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO AGREE THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED AT THE ADDRESS FOR NOTICES REFERENCED IN SECTION 11.11 OF THE CREDIT AGREEMENT.

 

 

 

 

4.5    Relationship of the Parties. Notwithstanding any prior business or personal relationship between Borrower and Lender, or any officer, director or employee of Lender, that may exist or have existed, the relationship between Borrower and Lender is solely that of debtor and creditor, Lender has no fiduciary or other special relationship with Borrower, Borrower and Lender are not partners or joint venturers, and no term or condition of any of the Loan Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor.

 

4.6    Successors and Assigns. The terms and provisions hereof shall be binding upon and inure to the benefit of Borrower and Lender and their respective heirs, executors, legal representatives, successors, successors‐in‐title and assigns, whether by voluntary action of the parties, by operation of law or otherwise, and all other persons claiming by, through or under them. The terms “Borrower” and “Lender” as used hereunder shall be deemed to include their respective heirs, executors, legal representatives, successors, successors‐in‐title and assigns, whether by voluntary action of the parties, by operation of law or otherwise, and all other persons claiming by, through or under them.

 

4.7    Time is of the Essence. Time is of the essence with respect to all provisions of this Note and the other Loan Documents.

 

4.8    Headings. The Section and Subsection titles hereof are inserted for convenience of reference only and shall in no way alter, modify, define, limit, amplify or be used in construing the text, scope or intent of such Sections or Subsections or any provisions hereof.

 

4.9    Controlling Agreement. In the event of any conflict between the provisions of this Note and the Credit Agreement, it is the intent of the parties hereto that the provisions of the Credit Agreement shall control. In the event of any conflict between the provisions of this Note and any of the other Loan Documents (other than the Credit Agreement), it is the intent of the parties hereto that the provisions of this Note shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of this Note and the other Loan Documents and that this Note and the other Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same.

 

4.10    Notices. Whenever any notice is required or permitted to be given under the terms of this Note, the same shall be given in accordance with Section 11.11 of the Credit Agreement.

 

4.11    Severability. If any provision of this Note or the application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable, then neither the remainder of this Note nor the application of such provision to other persons or circumstances nor the other instruments referred to herein shall be affected thereby, but rather shall be enforced to the greatest extent permitted by applicable law.

 

4.12    Right of Setoff. In addition to all Liens upon and rights of setoff against the money, securities, or other property of Borrower given to Lender that may exist under applicable law, Lender shall have and Borrower hereby grants to Lender a Lien upon and a right of setoff against all money, securities, and other property of Borrower, now or hereafter in possession of or on deposit with Lender, whether held in a general or special account or deposit, for safe-keeping or otherwise, and every such Lien and right of setoff may be exercised without demand upon or notice to Borrower. No Lien or right of setoff shall be deemed to have been waived by any act or conduct on the part of Lender, or by any neglect to exercise such right of setoff or to enforce such Lien, or by any delay in so doing, and every right of setoff and Lien shall continue in full force and effect until such right of setoff or Lien is specifically waived or released by an instrument in writing executed by Lender.

 

4.13    Costs of Collection. If any holder of this Note retains an attorney‐at‐law in connection with any Event of Default or at maturity or to collect, enforce, or defend this Note or any part hereof, or any other Loan Document in any lawsuit or in any probate, reorganization, bankruptcy or other proceeding, or if Borrower sues any holder in connection with this Note or any other Loan Document and does not prevail, then Borrower agrees to pay to each such holder, in addition to the principal balance hereof and all interest hereon, all costs and expenses of collection or incurred by such holder or in any such suit or proceeding, including, but not limited to, reasonable attorneys’ fees.

 

4.14    Statement of Unpaid Balance. At any time and from time to time, Borrower will furnish promptly, upon the request of Lender, a written statement or affidavit, in form satisfactory to Lender, stating the unpaid balance of the indebtedness evidenced by this Note and the Related Indebtedness and that there are no offsets or defenses against full payment of the indebtedness evidenced by this Note and the Related Indebtedness and the terms hereof, or if there are any such offsets or defenses, specifying them.

 

4.15    FINAL AGREEMENT. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

4.16    Renewal, Extension and Decrease. This Note is executed in renewal, extension and decrease of, and not in novation or discharge of, that certain promissory note dated May 11, 2020, executed by Borrower and payable to the order of Lender in the original principal amount of $19,000,000.00, which promissory note was executed in renewal, extension and decrease of, and not in novation or discharge of, that certain promissory note dated May 7, 2019, executed by Borrower and payable to the order of Lender in the original principal amount of $22,000,000.00, which promissory note was extended in renewal and extension of, but not in novation or discharge of, that certain promissory note dated January 9, 2018, executed by Borrower and payable to the order of Lender in the original principal amount of $22,000,000.00, which promissory note was executed in renewal, extension and increase of, and not in novation or discharge of, that certain promissory note dated April 17, 2017, executed by Borrower and payable to the order of Lender in the original principal amount of $20,000,000.00.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has duly executed this Note as of the day and year first written above.

 

BORROWER:

HARTE HANKS, INC.ex_247354.htm

Execution Version

 

 

THIRD AMENDED AND RESTATED FEE, REIMBURSEMENT AND INDEMNITY

AGREEMENT

 

This Third Amended and Restated Fee, Reimbursement and Indemnity Agreement (the “Agreement”) is made and entered into effective as of the 5th day of May, 2021, by and between HHS GUARANTY, LLC, a Texas limited liability company (the “LLC”), and HARTE HANKS, INC., a Delaware corporation (“Harte Hanks”). All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the terms of that one certain Credit Agreement dated as of April 17, 2017 (together with all amendments thereto, including by that certain First Amendment to Credit Agreement dated January 9, 2018, that certain Second Amendment to Credit Agreement dated May 7, 2019, that certain Third Amendment to Credit Agreement dated as of May 11, 2020, and that certain Fourth Amendment to Credit Agreement (the “Fourth Amendment”) dated as of May 5, 2021) (collectively, the “Credit Agreement”) and related documents dated as of April 17, 2017, by and between Texas Capital Bank, N.A. (the “Bank”) and Harte Hanks, as amended on the date hereof, the Bank agreed to provide Harte Hanks a revolving line of credit (the “Loan”); and

 

WHEREAS, the Credit Agreement has been modified by the Fourth Amendment to reduce the amount of the Loan to $15,000,000.00; and

 

WHEREAS, at the request of Harte Hanks and as required by the Bank, the LLC agreed to guaranty all of the payment obligations of Harte Hanks under the Loan by pledging the Collateral (as hereinafter defined) to the Bank, (a) pursuant to the terms of that one certain Pledge Agreement, dated as of April 17, 2017 (together with all amendments thereto and replacements thereof, including by the Amended and Restated Pledge Agreement dated as of May 5, 2021, the “Pledge Agreement”); and (b) that one certain Note Purchase Agreement, dated as of April 17, 2017, which was amended and restated by that certain First Amended and Restated Note Purchase Agreement dated as of January 9, 2018, by that certain Second Amended and Restated Note Purchase Agreement dated as of May 7, 2019, by that certain Note Purchase Agreement dated as of May 11, 2020, and by that certain Note Purchase Agreement dated as of May 5, 2021 (collectively, the “Note Purchase Agreement”; the Pledge Agreement and Note Purchase Agreement are collectively referred to herein as the “Pledge Documents”); and

 

WHEREAS, pursuant to the Pledge Documents, the LLC will continue to pledge a minimum of $16,700,000.00 in cash and marketable securities to the Bank, and the Bank will continue to have custody and control over such cash and marketable securities (the “Collateral”); and

 

WHEREAS, Harte Hanks agreed to compensate the LLC for the LLC’s pledge of the Collateral to secure the Loan for the benefit of Harte Hanks, pursuant to the terms and conditions of that one certain Fee, Reimbursement and Indemnity Agreement, dated as of April 17, 2017 (as amended by that certain Second Amended and Restated Fee, Reimbursement and Indemnity Agreement dated as of May 11, 2020, and collectively with all other amendments thereto, the “Reimbursement Agreement”); and

 

WHEREAS, the LLC and Harte Hanks desire to amend and restate the Reimbursement Agreement by entering into this Agreement setting forth the terms and conditions governing the compensation of the LLC for the LLC’s pledge of the Collateral to secure the Loan for the benefit of Harte Hanks; and

 

WHEREAS, in exchange for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Harte Hanks and the LLC agree as follows:

 

 

 

 

1.    Payments, Performance, Covenants.

 

(a)    In the event the Bank makes any demand on Harte Hanks, or Harte Hanks is otherwise required to perform any obligations under the Loan (including without limitation, any payment obligation) or any Loan Documents (as hereafter defined), Harte Hanks shall promptly perform its obligations under the Loan or applicable Loan Document.

 

(b)    In the event any such amount is not timely paid or such obligation is not timely performed by Harte Hanks and the Bank seeks to enforce the LLC’s guaranty under the Pledge Documents, or, in the event the LLC is required to purchase the Loan from the Bank as set forth in the Loan Documents, Harte Hanks shall reimburse, within five days of receiving notice from the LLC, to the LLC the aggregate amount of all funds advanced by the LLC or paid to the Bank for the purchase of the Loan or otherwise, on account of such obligation, together with interest on such amount at an annual rate equal to the prime rate (as defined below) plus 6%, from the date of payment by the LLC until all such amounts have been repaid by Harte Hanks. For the purpose of this Agreement, “prime rate” shall mean the variable rate of interest, per annum, most recently announced by the Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available from such bank.

 

(c)    Harte Hanks will not agree to any amendment, modification, waiver or supplement to the Loan or any of the documents, instruments or agreements executed in connection therewith (collectively, the “Loan Documents”) without the prior written consent of the LLC. Harte Hanks will use reasonable best efforts to accommodate the LLC’s written request that any subsidiary of Harte Hanks become party to that certain Security Agreement dated as of April 17, 2017 between Harte Hanks and the Bank (as amended by that First Amendment to Security Agreement dated as of January 9, 2018 and as further amended on the date hereof, the “Security Agreement”), pursuant to Section 4.21 of the Security Agreement.

 

(d)    The LLC’s willingness to pledge the Collateral with respect to the Loan is contingent (the “Credit Support Contingency”) on the LLC having one representative (the “LLC Representative”) director on Harte Hanks’ Board of Directors (the “Board”). David L. Copeland (“Copeland”) is currently a Board director and the LLC acknowledges that so long as Copeland is a Board director, Copeland shall be deemed to be the LLC Representative and the Credit Support Contingency shall be deemed to be satisfied. If Copeland (or a successor LLC Representative elected or appointed in accordance with this paragraph) is no longer a Board director, whether by death, removal, incapacity, failure to be elected, or otherwise, Harte Hanks agrees to use its best efforts to cause, within 45 days after receipt of an LLC Representative Vacancy Notice (defined below), the successor designated by the LLC Representative in the LLC Representative Vacancy Notice to become a Board director, whether by creating a vacancy on the Board, obtaining a resignation of an incumbent Board director, removing an incumbent Board director, expanding the Board, or otherwise. The “LLC Representative Vacancy Notice” (so called herein) must (i) be in writing, (ii) be executed by a duly authorized representative of the LLC, (iii) be delivered in accordance with Section 8 of this Agreement and (iv) set forth the LLC’s designee (the “LLC Designee”) to be the successor LLC Representative. The LLC Designee, if appointed or elected, shall be deemed to be the LLC Representative and shall be deemed to satisfy the Credit Support Contingency. If the LLC Designee is not appointed or elected to the Board within 45 days after Harte Hanks’ receipt of the LLC Representative Vacancy Notice (such event being referred to herein as a “Credit Support Event”), LLC shall have the right to purchase the Loan in accordance with the terms of the Note Purchase Agreement, and upon the consummation of such purchase, the Credit Support Event shall automatically be deemed to be an Event of Default under the Credit Agreement (as defined in the Note Purchase Agreement) giving rise to the remedies set forth therein in favor of the LLC, as successor in interest to the Bank; provided, however, that no Credit Support Event shall have occurred if prior to the expiration of the 45-day period after Harte Hanks’ receipt of the LLC Representative Vacancy Notice, the Bank releases its security interest in and to the Collateral and the LLC has no further obligation to pledge collateral as security for the Loan.

 

 

 

 

2.    Fees; Borrowing Base and Reimbursement of Expenses.

 

(a)    As consideration for the pledge of the Collateral, for so long the Collateral is pledged to and held by the Bank, Harte Hanks hereby agrees to pay to the LLC a quarterly fee (the “Quarterly Fee”) equal to 0.5% of the Collateral actually pledged (or if the Commitment has been reduced pursuant to Section 3.2(b) of the Credit Agreement or other agreement of Harte Hanks, then on such portion of the Collateral as is required by the Bank in respect of such Commitment) on the last day of the month prior to such Quarterly Fee’s due date. The Quarterly Fees due under this Agreement shall be due on the 17th day of January, April, July and October.

 

(b)    (i) For and in consideration for the pledge of the Collateral, Harte Hanks agrees to limit its borrowings under the Loan so that at no time shall the outstanding principal balance of the Loan exceed a borrowing base (the “Borrowing Base”) equal to, as of any date of determination, eighty percent (80%) of the amount of Eligible Accounts Receivables as of such date. An "Eligible Accounts Receivable" means any Account (as defined in the Security Agreement) of Harte Hanks and its Subsidiaries except: (a) each such Account that is unpaid 90 days or more after billing date thereof; provided, however, that Harte Hanks and the LLC may from time to time agree in writing (including via email) that Accounts owing by certain customers of Harte Hanks shall not be excluded pursuant to this clause (a), (b) all Accounts owing by Account debtors for which there has been instituted a proceeding in bankruptcy or reorganization under applicable bankruptcy law or who has made an assignment for the benefit of creditors or fails to pay its debts as they become due, (c) all Accounts owing by any affiliates of Harte Hanks, (d) that portion of all Account balances owing by any Account debtor (“Foreign Debtor”) whose principal place of business is located outside of the United States which exceed 10% of the aggregate of all Accounts which are owing to Harte Hanks by all Account debtors, (e) that portion of all Account balances owing by any single Account debtor which exceed 25% of the aggregate of all Accounts which are owing to Harte Hanks by all Account debtors, (f) if more than 25% of the then balance owing by any single Account debtor, other than such customers which Harte Hanks and the LLC have agreed shall be excepted pursuant to the proviso to clause (a) above, has not been paid within 90 days of its billing date, all Accounts owing by such Account debtor. For purposes of calculating the Borrowing Base, the amount of each Account shall be adjusted for (i) the amount of all discounts, allowances, rebates, credits and adjustments to such Accounts, (ii) the amount of all contra accounts, setoffs, defenses or counterclaims asserted by or available to the Account debtors and (iii) any amount with respect to which Harte Hanks has furnished a payment and/or performance bond and that portion of any Account for or representing retainage, if any, until all prerequisites to the immediate payment of retainage have been satisfied.

 

(ii)         Harte Hanks shall deliver to the LLC on a monthly basis on the 20th day of each month a Borrowing Base report (a “Borrowing Base Report”) for the preceding month in form and content reasonably acceptable to the LLC in its sole discretion . If on the last day of any month,  the outstanding principal of the Loan exceeds 80% of the Borrowing Base as evidenced by the Borrowing Base Report for such month, Harte Hanks shall within five (5) Business Days after delivery of such Borrowing Base Report pay to the LLC a fee in the amount of $27,500 unless the LLC agrees to waive such fee.

 

(c)    In addition to the Quarterly Fees due under this Agreement, Harte Hanks shall, within five days of receiving a request from the LLC, reimburse the LLC for all LLC costs and expenses incurred by the LLC in connection with this Agreement, the Loan, the Loan Documents, the Pledge Documents, and the pledge of the collateral (collectively, the “Reimbursed Expenses”). The Reimbursed Expenses shall include, but are not limited to, reasonable legal, accounting, custody and Bank fees, expenses, and costs incurred by the LLC in its formation, initial funding, and throughout the term of this Agreement (except to the extent related to LLC activities after the date hereof which are unrelated to this Agreement or the Loan Documents).

 

(d)    All payments made under this Agreement shall be paid by Harte Hanks in cash pursuant to a check or wire transfer made payable to the LLC.

 

3.    Obligations of Harte Hanks. The obligations of Harte Hanks under this Agreement shall be absolute, unconditional and irrevocable, shall apply to the fullest extent authorized or permitted by any applicable law, under and shall be paid and performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including, without limitation, the following circumstances:

 

(a)    Any lack of validity or enforceability of this Agreement;

 

(b)    the existence of any claim, set-off, defense or other rights which Harte Hanks may have at any time against the LLC or any other person or entity, whether or not in connection with this Agreement; or

 

(c)    Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

 

 

 

 

4.    Representations and Warranties of Harte Hanks. Harte Hanks hereby represents and warrants to the LLC as follows:

 

(a)    Organization and Standing. Harte Hanks is a corporation, duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to carry on its business as now being conducted.

 

(b)    Authority; Enforceability. Harte Hanks has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby.

 

(c)    Execution of Agreement. This Agreement has been duly executed and delivered by Harte Hanks. The execution, delivery and performance of this Agreement will not cause any default, breach or violation of any provision of any material agreement to which Harte Hanks is a party or by which any of Harte Hanks’s assets are bound.

 

(d)    Validity of Agreement. This Agreement constitutes the legal, valid and binding obligation of Harte Hanks, enforceable in accordance with its terms.

 

(e)    Approvals. No approval, authorization, consent or other order or action of or filing with any governmental or administrative entity or any other person is required for the execution and delivery by Harte Hanks of this Agreement or such other agreements and instruments required hereunder or for the consummation by Harte Hanks of the transactions contemplated hereby or thereby.

 

(f)    Violation of Laws or Agreements. The making and performance of this Agreement and the other documents, agreements and actions required hereunder or thereunder will not violate any provisions of any law, federal, state or local rule or regulation, or any judgment, decree, award or order of any court or other governmental entity, agency or arbitrator to which Harte Hanks is subject.

 

5.    Termination. This Agreement shall remain in full force and effect and shall terminate on the later to occur of (i) the date that the Pledge Documents are terminated or (ii) the date that all obligations of Harte Hanks to the LLC, and all obligations of Harte Hanks hereunder have been paid in full and satisfied and; in each case, after the expiration of the period during which any payment by Harte Hanks is or may be subject to rescission, avoidance or refund under the United States Bankruptcy Code (or any similar state statute).

 

 

 

 

6.    Indemnification.

 

(a)    Harte Hanks hereby agrees to indemnify, protect, defend and hold harmless the LLC and its officers, managers, members, directors, employees, successors and assigns, (collectively, the “Indemnified Parties”), from and against any and all claims, damages, losses, liabilities, costs or expenses of any kind or nature and from any suits, claims or demands, including reasonable attorney’s fees incurred in investigating or defending such claim, suffered by any of them and caused by, relating to, arising out of, resulting from, or in any way connected with this Agreement or the transactions contemplated hereby (unless determined by a final judgment of a court of competent jurisdiction to have been caused solely by the gross negligence or willful misconduct of the Indemnified Parties) including without limitation:

 

	 	
			(i)

				
			by reason of any breach of any representation or warranty of Harte Hanks in this Agreement;

			

 

	 	
			(ii)

				
			by reason of, in connection with, or as a consequence of any default by Harte Hanks, in the performance or observance of any term, condition, covenant, or undertaking contained in this Agreement or any other document to be observed or performed by Harte Hanks in connection with the Loan;

			

 

	 	
			(iii)

				
			by reason of or in connection with any litigation or other proceeding in any way restraining, enjoining, questioning or affecting performance or obligation hereunder; and

			

 

	 	
			(iv)

				
			by reason of or in connection with its obligations under the Loan Documents and its obligation to pay fees and reimburse expenses to the LLC pursuant to this Agreement.

			

 

(b)    In case any action shall be brought against the LLC or any other Indemnified Party in respect to which indemnity may be sought against Harte Hanks, the LLC or such other Indemnified Party shall promptly notify Harte Hanks and Harte Hanks shall assume the defense thereof, including the employment of counsel selected by Harte Hanks and satisfactory to the LLC, the payment of all costs and expenses, and the right to negotiate and consent to settlement. The failure of the LLC to so notify Harte Hanks shall not relieve Harte Hanks of any liability it may have under the foregoing indemnification provisions or from any liability which it may otherwise have to the LLC or any of the other Indemnified Parties. The LLC shall have the right, at its sole option, to employ separate counsel in any such action and to participate in the defense thereof and retain its own counsel, and the fees and expenses of such counsel shall be reimbursed to the LLC pursuant to Section 2(c) hereof. Harte Hanks shall not be liable for any settlement of any such action effected without its consent, which consent shall not be unreasonably withheld, delayed or conditioned, but if settled with Harte Hanks’s consent, or if there shall be a final judgment for the claimant in any such action, Harte Hanks agrees to indemnify and hold harmless the LLC from and against any loss or liability by reason of such settlement or judgment.

 

(c)    The provisions of this Section 6 shall survive the repayment or other satisfaction of the obligations of Harte Hanks hereunder.

 

7.    Information Reporting and Confidentiality. During the term of this Agreement, Harte Hanks agrees to provide all information required to be provided to the Bank pursuant to the Loan Documents, to the LLC, pursuant to the same reporting deadlines as set forth in the Loan Documents (collectively, the “Reporting Information”). The LLC hereby agrees to maintain all Reporting Information provided to the LLC hereunder in strict confidence, and to use the same degree of care in protecting the Reporting Information as the LLC uses to protect its own confidential information; provided, however, that the LLC’s confidentiality obligations hereunder shall not apply to any Reporting Information which, (a) at the time of disclosure by Harte Hanks to the LLC is in the public domain, as evidenced by printed publication or otherwise; (b) after disclosure by Harte Hanks to the LLC becomes part of the public domain, by publication or otherwise, through no fault of the LLC; or (c) the LLC can show by reasonably convincing evidence that the Reporting Information already was in the LLC’s possession at the time of disclosure by Harte Hanks to the LLC hereunder and was not previously acquired, directly or indirectly, from Harte Hanks by the LLC on a confidential basis.

 

 

 

 

8.    Notices. All notices, requests, demands and other communications that this Agreement requires or permits shall be in writing and shall be sent by overnight courier providing delivery receipt, or by certified mail, return receipt requested, or by telecopy or hand delivery to the following addresses:

 

If to Harte Hanks:         Harte Hanks, Inc.

9601 McAllister Freeway, Suite 610

San Antonio, Texas 78216

Attention: Robert Munden, General Counsel

Telephone: 210-829-9135

Fax: 210-829-9139

 

If to the LLC:         HHS Guaranty, LLC

273 Walnut Street

Abilene, Texas 79601

Attention: David L. Copeland, Manager

Telephone: 325-676-7724

Fax: 325-676-9908

 

All notices, requests, demands and other communications provided in accordance with the provisions of this Agreement shall be effective: (i) if sent by overnight courier or facsimile, when received, (ii) if sent by certified mail, return receipt requested, the third day after sending, or (iii) if given by hand delivery, when delivered.

 

9.    Amendments. The provisions of this Agreement may be amended only by a written agreement signed by Harte Hanks and the LLC.

 

10.    Governing Law and Jurisdiction. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas, without regard to the conflicts of laws provisions.

 

11.    Continuing Obligation. This Agreement is a continuing obligation and shall (a) be binding upon Harte Hanks and its respective its successors and assigns, and (b) inure to the benefit of and be enforceable by the LLC against Harte Hanks (and its successors, transferees and assigns); provided, that Harte Hanks may not assign all or any part of its obligations hereunder without the prior written consent of the LLC.

 

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

 

13.    Severability. In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the validity of any other provision of this Agreement, and such provision(s) shall be deemed modified to the extent necessary to make it enforceable.

 

14.    Survival of Representations and Warranties. All representations and warranties contained or incorporated herein or made in writing in connection herewith shall survive the execution and delivery of this Agreement.

 

15.    Counterparts. This Agreement may be executed in more than one counterpart, including by facsimile signature, all of which, together, constitute one and the same instrument.

 

16.    No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto; there are no third-party beneficiaries of this Agreement other than the Indemnified Parties for purposes of indemnification hereunder.

 

17.    Entire Agreement. This Agreement embodies and reflects the entire agreement between the parties with respect to the matters set forth herein, and there are no other agreements, understandings, representations or warranties between the parties other than those set forth in this Agreement.

 

18.    Amendment and Restatement. This Agreement represents an amendment and restatement in its entirety of the Reimbursement Agreement. This Agreement shall not in any manner constitute or be construed as a novation, discharge, forgiveness, extinguishment or release of any obligation for amounts due under the Reimbursement Agreement, which obligations are amended and restated by this Agreement and shall remain in full force and effect.

 

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

 

 

 

 

Wherein this Agreement is executed and effective as of the date set forth above.

 

LLC:

HHS GUARANTY, LLC,

a Texas limited liability company

 

 

 

 

 

HARTE HANKS:

HARTE HANKS, INC.,

a Delaware corporation

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00327-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00327-of-00352.parquet"}]]