SECURITY AGREEMENT
This Security Agreement ("Agreement") entered into as of the
30th day of May, 1997, by and between HLM DESIGN, INC. ("Borrower"), a Delaware
corporation, and PACIFIC CAPITAL, L.P. ("Pacific"), and EQUITAS, L.P.
("Equitas"), a Delaware limited partnership (Pacific and Equitas being sometimes
referred to herein, collectively as "Lender," with Equitas acting as collateral
agent for the Lender pursuant to that certain Intercreditor and Collateral Agent
Agreement of even date herewith by and between the Lender).
W I T N E S S E T H
WHEREAS, Lender has extended credit to Borrower, on certain
terms and conditions; and
WHEREAS, one condition to Lender's extension of credit to
Borrower is that Borrower must provide Lender a first priority security interest
in all of its personal property and fixtures;
NOW, THEREFORE, as an inducement to cause Lender to take the
aforementioned actions, and for other valuable consideration, the receipt and
sufficiency of which are acknowledged, it is agreed as follows:
1. Definition of Secured Indebtedness. As used herein, the
"Secured Indebtedness" shall mean all obligations and indebtedness of Borrower
under this Agreement, the Note Purchase Agreement of even date herewith by and
between Borrower, BBH Corp., Xxxxxx Xxxx Xxxxx Inc., and Lender (together with
any modifications or amendments thereof, the "Note Purchase Agreement") and
under those certain Promissory Notes of even date herewith in the aggregate
original principal amount of $2,000,000.00 made by Borrower payable to the order
of Lender, or each of them as the case may be, together with all modifications,
extensions and renewals thereof.
2. Grant of Security Interest. To secure the payment of the
Secured Indebtedness, Borrower hereby grants to Lender (including Equitas, L.P.,
as agent for the benefit of Lender) a security interest in all of Borrower's
presently owned and hereafter acquired personal property and fixtures,
including, but not limited to, all equipment, inventory, accounts, general
intangibles, instruments, documents, contract rights, chattel paper and
fixtures, and all products and proceeds thereof (all as defined in the UCC),
including insurance proceeds (collectively the "Collateral"). For purposes
hereof, "UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of Tennessee, as it may be amended from time to time;
provided that if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of a security interest in any Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other
than Tennessee, "UCC" means the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
3. Warranties. Borrower warrants to Lender the following:
(a) Title. Borrower is the sole legal and equitable
owner of the Collateral.
(b) No Other Encumbrances. None of the Collateral is
subject to any security interest, lien, option or other encumbrance, except for
the security interest provided for in this Agreement and Permitted Encumbrances.
As used herein, Permitted Encumbrances shall mean, and be limited solely to,
liens arising by operation of law evidencing accounts not past due, including ad
valorem tax liens and artisans liens.
(c) No Financing Statement. None of the Collateral is
covered by any financing statement executed by Borrower and not yet terminated,
except for financing statements executed in favor of Lender.
(d) Valid Security Interest. This Agreement grants to
Lender a valid security interest in the Collateral, subject only to Permitted
Encumbrances.
(e) No Leased Property. Borrower presently possesses
no property of a type included in the Collateral as lessee or on consignment or
as bailee for hire or otherwise.
(f) Collateral Not Leased. None of the Collateral is
presently subject to a lease, agreement to lease, option, or other such
obligation pursuant to which Borrower is lessor, optionor, or subject to such
other obligation.
(g) No Warehousing. None of the Collateral is
presently stored in a commercial warehouse, and none of the Collateral is
presently subject to a negotiable xxxxxxx'x xxxx or other negotiable document.
(h) Collateral Acquired in Ordinary Course of
Business. Borrower has acquired all the Collateral by purchases in the ordinary
course of business from sellers in the business of selling such property.
Without limiting the foregoing, Borrower warrants that none of the Collateral
has been purchased in a bulk sale or other purchase of a business.
4. Limitation on Assignment of General Intangibles and
Accounts. The security interest granted herein covering accounts and general
intangibles shall be effective only to the extent that rights thereunder may be
assigned under applicable laws without causing default under or termination of
any agreements giving rise thereto.
5. Maintenance of Collateral. Borrower shall take all
reasonable measures to protect the Collateral and to maintain all Collateral in
good condition. Borrower shall notify Lender of any event or condition that
materially impairs the value of any part of the Collateral.
6. Insurance. Borrower shall obtain and keep insurance against
"all risks of physical loss" (except flood and earthquake, unless Lender
specifically so requires) and such other insurance as Lender may require on all
tangible Collateral in an amount
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equal to its maximum insurable value, with insurers and insurance policies that
are acceptable to Lender. Borrower shall deliver copies of all insurance
policies covering the Collateral to Lender. All such policies shall name Lender
as insured mortgagee and loss payee and shall provide that coverage shall not be
terminated or amended without at least twenty (20) days prior written notice to
Lender. If Borrower fails to provide evidence that it has obtained the required
insurance or if Borrower fails to pay the premiums therefor, Lender may, at its
option, obtain or bring current insurance coverage on the Collateral. Any
insurance obtained by Lender may, at Lender's option, insure only its interest
in the Collateral. Borrower hereby assigns to Lender any claim settlements,
unearned premiums or other payments that may be made by or on behalf of an
insurer under any policy covering the Collateral, and Borrower hereby directs
such insurer(s) to pay Lender any amount so due. Lender is hereby irrevocably
appointed Borrower's attorney-in-fact to endorse with Borrower's name any draft
or check that may be issued by or on behalf of the issuer of any insurance
policy covering the Collateral. All proceeds, unearned premiums, or other sums
received by Lender as a result of said insurance policies may be applied by
Lender, at its option and in its sole discretion, and in whole or in part, to
the reduction of the Secured Indebtedness, in such manner as Lender may
determine, or may be paid to Borrower with or without restrictions.
7. Compliance With Law; Taxes. Borrower shall comply with all
laws, regulations and other requirements of governmental bodies or agencies
having jurisdiction pertaining to the ownership or operation of the Collateral,
and Borrower shall pay all taxes and fees assessed on account of the Collateral
as they become due.
8. Disposition or Encumbrance Prohibited. Borrower shall not
sell, lease, transfer, assign or otherwise dispose of title or possession of any
of the Collateral, except that, as long as no default exists hereunder,
inventory may be sold in the ordinary course of business. Borrower shall not
grant or allow any security interest, lien, attachment or other encumbrance to
attach to any part of the Collateral, except for Permitted Encumbrances and
encumbrances in favor of Lender, without the prior written consent of Lender.
9. Location of Collateral. Tangible Collateral shall be stored
only at Suite 2950, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000. No
material amount of Collateral shall be removed from said location(s), except for
repairs or other temporary purposes in the ordinary course of business, without
the prior written approval of Lender. In no event shall Collateral be moved
outside the State of North Carolina for any purpose or duration without Lender's
prior written consent. Notwithstanding the foregoing, nothing shall preclude
Borrower from owning tangible or intangible Collateral acquired in the future
which is not located within the State of North Carolina, provided that, Borrower
gives Lender ten (10) days written notice prior to Borrower's acquisition of
such Collateral, and at Lender's request, Borrower takes all reasonable actions
to perfect Lender's first priority security interest in such after-acquired
Collateral which is located outside the State of North Carolina.
10. Fixtures. Borrower warrants that the Collateral presently
affixed to real property as to become a fixture thereto is located at Suite
2950, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000. Borrower covenants
that none of the Collateral will be here after so affixed to real property
except at said location.
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11. Inspection; Inventory. Agents of Lender shall be allowed
to inspect the Collateral at any time. Additionally, Borrower shall prepare an
inventory of the Collateral and submit the same to Lender within five (5)
business days after Lender so requests.
12. Availability Upon Default. Borrower covenants that if
Lender declares a default hereunder and so requests, Borrower shall make all
Collateral and records pertaining thereto available to Lender at a reasonable
time and place.
13. Rental Proceeds. Borrower acknowledges that the security
interest granted herein extends to all of Borrower's rights as lessor under any
future lease of any of the Collateral. Borrower acknowledges and agrees that all
rental proceeds of the Collateral constitute "cash collateral" under the
Bankruptcy Code. As provided above, Borrower must obtain Lender's prior consent
if Borrower wishes to lease any of the Collateral. Notwithstanding Lender's
consent to any proposed lease, such lease shall be subordinate to Lender's
security interest in the leased Collateral unless Lender specifically agrees to
the contrary in writing.
14. Warranties and Other Rights. Borrower acknowledges that
the security interest granted herein extends to all of Borrower's rights under
warranties pertaining to the Collateral and also includes all rights of Borrower
against any third party arising from damage to any Collateral. Borrower agrees
to give Lender prompt written notice of any warranty claim or other claim that
Borrower may have against a third party as a result of the condition or
performance of the Collateral or as a result of any damage caused thereto. No
such claim shall be settled without the written consent of Lender.
15. No Warehousing. None of the Collateral shall be stored by
a commercial warehouse or shipped under a negotiable document unless Lender is
given at least thirty (30) days prior notice to enable it to take such measures
as it may deem appropriate to protect its rights in the Collateral to be so
stored.
16. Notice of Subsequent Leases. Borrower agrees to give
Lender prompt written notice if Borrower hereafter leases from others property
of a type included in the Collateral or if Borrower accepts such property on
consignment or as bailee.
17. Chief Executive Office. Borrower warrants that Borrower's
chief executive and principal office is Suite 2950, 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000. Borrower shall not move Borrower's chief
executive office from that address without at least thirty (30) days prior
written notice to Lender; provided, however, this undertaking by Borrower does
not evidence Lender's consent to such a move if Lender's consent is required
therefor under any other document pertaining to the Secured Indebtedness.
18. Perfection. Borrower agrees to take such action as may be
requested by Lender at any time to perfect Lender's security interest in the
Collateral. Without limiting the foregoing, Borrower agrees (i) to immediately
deliver to Lender, upon receipt by Borrower, any instrument, chattel paper,
document or other Collateral (other than goods) in which a security interest may
be perfected or Lender's rights against purchasers protected by possession, with
any appropriate
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endorsement affixed, and (ii) to immediately notify Lender upon Borrower's
acquisition of an aircraft, copyright, trademark, patent titled vehicle, or
other Collateral in which a security interest may be perfected or Lender's
rights against purchasers protected by means other than possession or by the
filing of a financing statement with a government office located within the
state in which the Collateral, or any part thereof, is deemed located. A copy of
this Agreement may be filed as a financing statement.
19. Rights Against Prior Parties. Lender shall not be
obligated to take any steps to preserve rights against prior parties under any
instrument or chattel paper which is part of the Collateral and which is at any
time in Lender's possession.
20. Accounts.
(a) Records of Accounts. Borrower shall maintain
detailed records of its accounts, including an itemized list of each charge
giving rise to the accounts, the name and address of each account debtor, all
relevant charge and billing dates, and all other information that Lender may
deem necessary or which is ordinarily maintained with respect to such accounts.
All records of the accounts shall be maintained at Borrower's office at Suite
2950, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, and Lender may
require that they be plainly marked to the effect that they have been assigned
to Lender as Collateral for an outstanding obligation. Payments on Borrower's
accounts shall be received by mail at Borrower's principal address provided
herein. If Lender so requires, Borrower shall store its account records in an
appropriately fire-rated vault or Borrower shall store a duplicate set of
records of accounts at an off-premises location. Lender may inspect such records
at any time.
(b) Information Regarding Accounts. Upon demand,
Borrower shall furnish Lender any information that Lender may reasonably request
pertaining to Borrower's accounts, including, but not limited to, a detailed
listing of all account balances, arranged according to age of the accounts,
together with the invoices evidencing the transactions that gave rise to the
accounts, addresses, and phone numbers of all account debtors. Lender may cause
Borrower or an independent auditor (at Borrower's expense) to obtain audit
confirmations from Borrower's account debtors at any time.
(c) Specific Assignments. Upon Lender's request,
Borrower shall immediately execute and deliver to Lender additional specific
assignments of any or all of its accounts.
(d) Lock Box. Following an event of default, Lender
may at any time require that Borrower direct its account debtors to forward all
payments to a lock box under Lender's exclusive control, with all payment
proceeds to be applied in accordance with this Agreement.
(e) Collection Rights of Lender. Following an event
of default, Lender may notify any or all account debtors under the accounts to
make all payments due Borrower directly to Lender for the account of Borrower.
Borrower hereby directs account debtors so notified to comply with Lender's
instructions without the need of confirmation from Borrower.
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21. Capacity. Borrower warrants that its execution of and
performance under this Agreement and all related documents are permitted under
and will not violate any provision of Borrower's Charter or By-Laws. Borrower
further warrants that the execution of all necessary resolutions and other
prerequisites of corporate action have been duly performed so that the
individual executing this Agreement and related documents on behalf of Borrower
is duly authorized to bind Borrower by his signature. By signing below on behalf
of Borrower, the individual executing this Agreement on behalf of Borrower also
personally makes the warranties set forth in the preceding sentence.
22. Insurance. In addition to any specific insurance
requirements contained herein or in any other document pertaining to the Secured
Indebtedness, Borrower agrees to generally maintain adequate insurance against
casualty and liability losses in accordance with customary practices in
Borrower's field of enterprise. Borrower agrees to provide Lender with proof of
the existence of such insurance upon demand.
23. Recitals. Borrower warrants and agrees that the recitals
set forth at the beginning of this Agreement are true.
24. No Burdensome Agreements. Borrower warrants that Borrower
is not a party to any contract or agreement and is not subject to any contingent
liability that does or may impair Borrower's ability to perform under the terms
of this Agreement. Borrower further warrants that the execution and performance
of this Agreement will not cause a default, acceleration or other event under
any other contract or agreement to which Borrower or any property of Borrower is
subject, and will not result in the imposition of any charge, penalty, lien or
other encumbrance against any of Borrower's property except in favor of Lender.
25. Legal and Binding Agreement. Borrower warrants that the
execution and performance of this Agreement will not violate any judicial or
administrative order or governmental law or regulation, and that this Agreement
is valid, binding and enforceable in every respect according to its terms.
26. No Consent Required. Borrower warrants that Borrower's
execution, delivery and performance of this Agreement do not require the consent
of or the giving of notice to any third party including, but not limited to, any
other lender, governmental body or regulatory authority.
27. No Default. Borrower warrants that, as of the execution of
this Agreement, no default exists hereunder and no condition exists which, with
the giving of notice, the passing of time, or both, would constitute such a
default.
28. Security Interest; Setoff. In order to further secure the
payment of the Secured Indebtedness, Borrower hereby grants to Lender a security
interest and right of setoff against all of Borrower's presently owned or
hereafter acquired monies, items, credits, deposits and instruments (including
certificates of deposit) presently or hereafter in the possession of Lender. By
maintaining any such accounts or other property at Lender, Borrower acknowledges
that Borrower voluntarily subjects the property to Lender's rights hereunder.
Lender may exercise its rights under this
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Paragraph without prior notice following default. Borrower agrees that Lender
shall not be liable for the dishonor of any instrument resulting from Lender's
exercise of its rights under this Paragraph.
29. Default Defined. After applying the applicable cure
periods as forth in the Note Purchase Agreement, the occurrence of any one or
more of the following events shall constitute a default under this Agreement:
(a) Default under Note Purchase Agreement. The
occurrence of a default under the Note Purchase Agreement.
(b) Breach of Covenant. The failure of Borrower or
any other party to perform or observe any obligation or covenant made under this
Agreement or with respect to the Secured Indebtedness.
(c) Breach of Warranty. Lender's discovery that any
representation or warranty in connection with this Agreement or the Secured
Indebtedness is materially false.
30. Remedies Upon Default. Upon default, Lender may pursue any
or all of the following remedies, without any notice to Borrower except as
required below:
(a) Notice of Default. Lender may give written notice
of default to Borrower, following which Borrower shall not dispose of, conceal,
transfer, sell or encumber any of the Collateral (including, but not limited to,
cash proceeds) without Lender's prior written consent. Any such disposition,
concealment, transfer or sale after the giving of such notice shall constitute a
wrongful conversion of the Collateral. Lender may obtain a temporary restraining
order or other equitable relief to enforce Borrower's obligation to refrain from
so impairing Lender's Collateral.
(b) Repossession. Lender may take possession of any
or all of the Collateral. Borrower hereby consents to Lender's entry into any of
Borrower's premises to repossess Collateral, and specifically consents to
Lender's forcible entry thereto as long as Lender causes no significant damage
to the Premises in the process of entry (drilling of locks, cutting of chains
and the like do not in themselves cause "significant" damage for the purposes
hereof) and provided that Lender accomplishes such entry without a breach of the
peace.
(c) Disposition. Lender may dispose of the Collateral
at private or public sale. Any required notice of sale shall be deemed
commercially reasonable if given at least five (5) days prior to sale. Lender
may adjourn any public or private sale to a different time or place without
notice or publication of such adjournment, and may adjourn any sale either
before or after offers are received. The Collateral may be sold in such lots as
Lender may elect, in its sole discretion. Lender may take such action as it may
deem necessary to repair, protect, or maintain the Collateral pending its
disposition.
(d) Recovery of Proceeds of Accounts. Lender may
recover any or all proceeds of accounts from any bank or other custodian who may
have possession thereof. Borrower hereby authorizes and directs all custodians
of Borrower's assets to comply with any demand for
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payment made by Lender pursuant to this Agreement, without the need of
confirmation from Borrower and without making any inquiry as to the existence of
a default hereunder or any other matter. Lender may engage a collection agent to
collect accounts for a reasonable percentage commission or on any other
reasonable compensation arrangement.
(e) Notice to Account Debtors. Lender may notify any
or all account debtors that subsequent payments must be made directly to Lender
or its designated agent. Such notice may be made over Lender's signature or over
Borrower's name with no signature or both, in Lender's discretion. Borrower
hereby authorizes and directs all existing or future account debtors to comply
with any such notice given by Lender, without the need of confirmation from
Borrower and without making any inquiry as to the existence of a default
hereunder or as to any other matter.
(f) Enforcement of Rights of Collection. Lender may,
but shall not be obligated to, take such measures as Lender may deem necessary
in order to collect any or all of the accounts. Without limiting the foregoing,
Lender may institute any administrative or judicial action that it may deem
necessary in the course of collecting and enforcing any or all of the accounts.
Any administrative or judicial action or other action taken by Lender in the
course of collecting the accounts may be taken by Lender in its own name or in
Borrower's name. Lender may compromise any disputed claims and may otherwise
enter into settlements with account debtors or obligors under the accounts,
which compromises or settlements shall be binding upon Borrower. Lender shall
have no duty to pursue collection of any account, and may abandon efforts to
collect any account after such efforts are initiated.
(g) Action to Preserve Accounts and Other Contractual
Collateral. Lender may, with respect to any account involving uncompleted
performance by Borrower, and with respect to any general intangible or other
Collateral whose value may be preserved by additional performance on Borrower's
part, take such action as Lender may deem appropriate including, but not
limited, to performing or causing the performance of any obligation of Borrower
thereunder, the making of payments to prevent defaults thereunder, and the
granting of adequate assurances to other parties thereto with respect to future
performance. Lender's action with respect to any such accounts or general
intangibles shall not render Lender liable for further performance thereunder
unless Lender so agrees in writing.
(h) Setoff. Lender may exercise its lien upon and
right of setoff against any monies, items, credits, deposits or instruments that
Lender may have in its possession and which belong to Borrower or to any other
person or entity liable for the payment of any or all of the Secured
Indebtedness.
(i) Other Remedies. Lender may exercise any right
that it may have under any other document evidencing or securing the Secured
Indebtedness or otherwise available to Lender at law or equity.
(j) Attorney-in-Fact. Borrower hereby irrevocably
appoints Lender as Borrower's attorney-in-fact to take any action to facilitate
Lender's exercise of its remedies hereunder.
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(k) Application of Proceeds. All amounts received by
Lender for Borrower's account by exercise of its remedies hereunder shall be
applied as follows: First, to the payment of all expenses incurred by Lender in
exercising its rights hereunder, including attorney's fees, and any other
expenses due Lender from Borrower; Second, to the payment of all interest
included in the Secured Indebtedness, in such order as Lender may elect; Third,
to the payment of all principal included in the Secured Indebtedness, in such
order as Lender may elect; and Fourth, surplus to Borrower or other party
entitled thereto.
31. Notices. Any communications concerning this Guaranty or
the credit described herein shall be addressed as follows:
As to Borrower:
HLM Design, Inc.
Suite 2950
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
With a copy to:
Xxxxxxxxx Xxxxxx Xxxxxx & Xxxxxx PA
Xxxxxxxxx Xxxxx Xxxxxxxx
Xxxxx 0000
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxx
As to Lender:
Pacific Capital, L.P.
Suite 1070
0000 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx III
Equitas, L.P.
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx XxXxx
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With a copy to:
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Communications to be given to Lender shall only be effective when set forth in
writing and actually received by an officer of Lender at the address indicated
above. Communications to be given to Borrower shall be effective when actually
or constructively received by Borrower or when set forth in writing and mailed
or delivered to Borrower's address stated above. Lender or Borrower may change
its address for receipt of notices by submitting the change in writing to the
other party.
32. Incorporation of Exhibits. All Exhibits referred to in
this Agreement are incorporated herein by this reference.
33. Indulgence Not Waiver. Lender's indulgence in the
existence of a default hereunder or any other departure from the terms of this
Agreement shall not prejudice Lender's rights to declare a default or otherwise
demand strict compliance with this Agreement.
34. Cumulative Remedies. The remedies provided Lender in this
Agreement are not exclusive of any other remedies that may be available to
Lender under any other document or at law or equity.
35. Amendment and Waiver in Writing. No provision of this
Agreement can be amended or waived, except by a statement in writing signed by
the party against which enforcement of the amendment or waiver is sought.
36. Assignment. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, successors and assigns of Borrower and
Lender, except that Borrower shall not assign any rights or delegate any
obligations arising hereunder without the prior written consent of Lender. Any
attempted assignment or delegation by Borrower without the required prior
consent shall be void.
37. Entire Agreement. This Agreement and the other written
agreements between Borrower and Lender represent the entire agreement between
the parties concerning the subject matter hereof, and all oral discussions and
prior agreements are merged herein.
38. Severability. Should any provision of this Agreement be
invalid or unenforceable for any reason, the remaining provisions hereof shall
remain in full effect.
39. Time of Essence. Time is of the essence of this Agreement,
and all dates and time periods specified herein shall be strictly observed,
except that Lender may permit specific deviations therefrom by its written
consent.
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40. Applicable Law. The validity, construction and enforcement
of this Agreement and all other documents executed with respect to the Secured
Indebtedness shall be determined according to the laws of Tennessee applicable
to contracts executed and performed entirely within that state, in which state
this Agreement has been executed and delivered.
41. Gender and Number. Words used herein indicating gender or
number shall be read as context may require.
42. Captions Not Controlling. Captions and headings have been
included in this Agreement for the convenience of the parties, and shall not be
construed as affecting the content of the respective paragraphs.
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IN WITNESS WHEREOF, this Security Agreement has been executed
as of the date first written above.
THE UNDERSIGNED ACKNOWLEDGE A THOROUGH
UNDERSTANDING OF THE TERMS OF THIS
AGREEMENT AND AGREE TO BE BOUND THEREBY:
Borrower:
HLM DESIGN, INC.
By: /s/ Xxxxxx X. Xxxxxx
Title: President
Lender:
PACIFIC CAPITAL, L.P.
By: Pacific Capital Corporation
Its: General Partner
By: /s/ J. Xxxxx Xxxxxxxx
Title: Secretary-Treasurer
EQUITAS, L.P., in its capacity as a
Lender and agent for the benefit of
Lender
By: Tennessee Business Investments, Inc.
Its: General Partner
By: /s/ Xxxxxxx XxXxx
Title: President
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