exv10w7



 





LOAN AND SECURITY AGREEMENT



THIS LOAN AND SECURITY AGREEMENT, dated as of the Acceptance Date (as defined in Exhibit B
attached hereto and incorporated into this Agreement by reference, paragraph 1) is entered into
between CAPITAL TEMPFUNDS, a division of Capital Factors LLC with its principal place of business
at 1700 Broadway, 19th Floor, New York, NY 10019, (hereinafter referred to as “Capital”), and
Borrower (as defined in Exhibit B, paragraph 2). Borrower and Capital agree as follows:




PURPOSE OF AGREEMENT




     1. Borrower
desires to obtain commercial financing from Capital. The purpose of this financing
is not for household, family, and for personal use.



DEFINITIONS




     2. “Accounts” means all accounts receivable due to Borrower, and other forms of
obligations now or hereafter owing to Borrower, whether arising from
the sale or lease of goods or the rendition of services by Borrower
{including, without limitation, any obligation that might be characterized as an account, contract
right, general Intangible or chattel paper under the Code), all of Borrower’s rights in, to and
under all purchase orders now or hereafter received by Borrower for goods and services, all monies
due or to become due to Borrower under all contracts for the sale or lease of goods or the
rendition of services by Borrower (whether or not yet earned) (including, without limitation, the
right to receive the proceeds of said purchase orders and contracts), and all collateral security
and guarantees of any kind given by any obligor with respect to any of the foregoing,



     3. “Acceptable Accounts” means and includes those Accounts (i) which have been
validly assigned to Capital, (ii) strictly comply with all of Borrower’s warranties and
representations to Capital, (iii) contain payment terms of not greater than the Term Days (as
defined on Exhibit B, paragraph 3) from invoice date,
(iv) are not past due more than the number
of Maximum Days (as defined on Exhibit B, paragraph 4), (v) are invoiced not later than ten (10)
days from the date of service or delivery and (vi) are invoiced on not greater than a monthly
cycle; provided, however, that Acceptable Accounts shall not include the
following: (a) Accounts with respect to which the Customer has common officers, employees,
directors or agents with Borrower, or is a subsidiary of, related to or affiliated with Borrower;
(b) Accounts with respect to which services or goods are on guaranteed sale or other terms by
reason of which the payment by the Customer may be conditional; (c) Accounts with respect to which
the Customer is not a resident of the United States; (d) Accounts with respect to which the
Customer is the United States or any department, agency or instrumentality of the United States;
provided, however, that an Account shall not be deemed ineligible by reason of
this clause if the aggregate amount of such Accounts does not exceed five percent (5%) of the
total of Borrower’s Accounts, or in the event the aggregate amount of such Accounts does exceed
five percent (5%) of the total of Borrower’s Accounts, that Borrower has completed all steps
necessary, in the opinion of Capital, to comply with the Federal Assignment of Claims Act of 1940
(31 U.S.C. Section 3727); (e) Accounts with respect to which the Customer is any state of the
United States or any city, town, municipality, county or division thereof; provided,
however, that an Account shall not be deemed ineligible by
reason of this clause (e) if
the aggregate amount of such Accounts does not exceed five percent (5%) of the total of Borrower’s
Accounts outstanding; (f) Accounts not previously approved by Capital where the expected dollar
value for such Customer is greater than ten (10%) percent of Borrower’s existing Accounts or the
Maximum Concentration Amount (as defined on Exhibit B, paragraph 5), whichever is less; (g) those
Accounts where Capital has notified Borrower that, in Capital’s sole discretion, which shall be
exercised in a commercially reasonable manner, the Account or Customer is not acceptable to
Capital; (h) all of the Accounts owed by on Customer where the Cross Aging Percentage (as defined
on Exhibit B, paragraph 6) or more of all of the Accounts owed by that Customer are past due more
than the Past Due Days (as defined on Exhibit B, paragraph 7)
from the invoice date; (i) Accounts
for which the services have not yet been rendered to the Customer or the goods sold have not yet
been delivered to the Customer (commonly referred to as “pre-billed accounts”), (j) Accounts
subject to a Customer Dispute, as defined below, and (k) Accounts, if any, specifically described
on Exhibit B, paragraph 8).



     4. “Agreement” means this Loan and Security Agreement and all amendments end
supplements thereto.



     5. “Customer”
means Borrower’s customer or the account debtor,



     6. “Customer
Dispute” means (i) a claim by any Customer against
Borrower of any kind
whatsoever, or (ii) financial inability of a Customer to pay its obligations as they become due,
including, without limitation, a Customer who is subject to any insolvency, including without
limitation, the appointment of a receiver or trustee, the filing by or against such Customer of a
bankruptcy proceeding or the making of an assignment for the benefit of creditors or (iii) any
mistaken, incorrect and/or erroneous Account submitted by Borrower to Capital.



          A “Customer Dispute” may arise from any kind of disagreement between Customer and Borrower
whatsoever, whether such disagreement is valid or invalid, and may also arise at any time, both
before and/or after the signing if this Agreement or the financing if the Account with Capital.



     7. “Ineligible Account’ means an Account that is not an Acceptable Account as
defined in Section 3.



     8. The term “warrant” or “warranty” as used this Agreement means
to guarantee, as a material element of this Agreement. Each separate warranty herein is also an
independent condition to Capitals duties under this Agreement.



WARRANTIES AND COVENANTS BY BORROWER




     As an inducement for Capital to enter into this Agreement with full knowledge that the truth
and accuracy of the warranties in this Agreement are being relied upon by Capital in entering into
this Agreement and in making the loans described herein, Borrower warrants and/or covenants that:



     9. Borrower’s name as of the date hereof, as it appears in the official filing the state of
its organization is as set forth In Exhibit B, paragraph 2.
Borrower’s only state of organization
or incorporation is in the Organizational State, as defined in Exhibit B, paragraph 9, Pursuant to
the Borrower’s bylaws, only one officer is required to execute this Agreement, and the party
signing this Agreement on behalf of the Borrower is an authorized officer.



     10. Borrower is duly organized and in good standing under the laws of its Organizational
State, and is properly licensed and authorized to operate as a for profit business in all states
in which such business is conducted.



     11. Borrower’s
trade name(s) listed in Exhibit B, paragraph 10 are the only names under which
the Borrower conducts business and all have been properly filed and published as required by applicable law.



     12. Borrower’s Federal Tax ID number is listed in Exhibit B, paragraph 11. Borrower’s
Organizational Number is listed in Exhibit B, paragraph 12.



     13. Borrower is in compliance with all laws, rules and regulations applicable to its
business. Furthermore, Borrower has in the past, is currently in compliance, and at all times will
comply with any and all federal, state and local statutes, laws and regulations concerning the
preservation of the environment and the use and disposal of hazardous and toxic materials and
substances (collectively the “Environmental Laws”),



     14. Borrower’s business is solvent, the value of its assets exceed the value of its
liabilities (excluding debt subordinated to Capital (“Subordinated Debt”) pursuant to a
subordination agreement acceptable to Capital in its sole discretion (a “Subordination
Agreement”)), and it is able to meet its obligations as they become due.



     15. Each
Customer’s business is solvent to the best of Borrower’s
information and knowledge.



     16. Borrower
is, at the time of assignment of any Account to Capital, the lawful owner of and
has good and undisputed title to the Accounts assigned to Capital, free end clear of any
encumbrances of any kind whatsoever.



COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 1 of 15




 









 





     17. Each Account offered as collateral to Capital is an accurate and undisputed statement of
indebtedness owing by a Customer to Borrower for a certain sum which is due and payable upon
receipt or within such time as is agreed to, in writing, by Capital and Borrower, and is not
subject to any defenses, setoffs or counterclaims of any kind whatsoever, and is not subject to
any discounts, deductions, allowances or other contra items unless so indicated on the invoice and
accepted by a duly authorized officer of Capital in writing, and is an accurate statement of a
bona fide sale, delivery and acceptance of merchandise or prescribed goods, or performance of
service by Borrower to a Customer.



     18. All financial records, statements, books or other documents shown or provided to
Capital by Borrower at any time, either before or after the signing of this Agreement, are true
and accurate.



     19. Borrower will not under any circumstances or in any manner whatsoever, Interfere with any
of Capitals rights under this Agreement.



     20. For as long as any indebtedness whatsoever remains owing by Borrower to Capital, Borrower
will not factor, assign, hypothecate, transfer pledge a security interest in, or sell Accounts. except for its assignment of Accounts to Capital.
Furthermore, Borrower will not file any financing statement or amendment or termination statement
with respect to any financing statement filed in favor of Capital, except with the prior written
consent of Capital.



     21. Borrower has not transferred, pledged or granted a security interest in any of Borrower’s
Accounts or other Collateral, as defined below, to any other party and Borrower will not transfer,
pledge or grant a security interest to any other party in said Accounts or other Collateral for
the term of this Agreement and for as long as Borrower is indebted to Capital hereunder, In
addition. Borrower has, and will have throughout the term of this Agreement, good title to the
Collateral.



     22. Borrower will not change or modify the terms of any Acceptable Account with any Customer
unless Capital first consents in writing to such change after receiving prior written notice of
such proposed change or modification from Borrower.



     23. Except for other security interests listed on Exhibit B, paragraph 13 as “Other Security
Interests”, there are no existing liens, security interests or encumbrances on any of Borrower’s
personal property, including, without limitation, the Collateral, and Borrower shall not consent
to the placement of any lien, security interest or encumbrance upon any of Borrower’s personal
property of any type and wherever located not otherwise pledged or assigned to Capital without
Capital’s prior written consent, and Borrower shall provide written notice to Capital within five
(5) days of Borrower obtaining any knowledge, from any source, of the filing, recording or
perfection by any means, of any non-consensual lien, claim or encumbrance against the
aforementioned property of Borrower.



     24. Borrower will maintain such insurance covering Borrower’s business and/or the property of
the Borrower as required by Capital and as indicated under Other Insurance, as provided in Exhibit
B, paragraph 14, and will maintain workers’ compensation insurance in accordance with applicable
law and will name Capital as certificate holder on all such workers’ compensation policies.



     25. Borrower will notify Capital in writing at least thirty (30) days prior to any change in
Borrower’s place(s) of business or change in location of any Collateral, or if Borrower has or
intends to acquire or add any additional place(s) of business, or any change in Borrower’s chief
executive office, the office or offices where Borrower’s books and records concerning Accounts are
kept, or in the event Borrower intends to change its Organizational State.



     26. Borrower will notify Capital in writing at least thirty days prior to any change of
Borrower’s name, identity, legal entity, corporate structure, use of additional trade name(s),
and/or any proposed change in any of the officers, principals, partners, and/or owners of
Borrower.



     27. Borrower will deliver to Capital within the Periodic Period, as defined in Exhibit B,
paragraph 15, if applicable and within the Annual Period, as defined in Exhibit B, paragraph 16, a
balance sheet together with related statements of income, retained earnings, and cash flow in
form and substance acceptable to Capital as more fully described in Exhibit B, paragraph 17 under
Financial Statements. Upon request by Capital, Borrower will also provide Capital with copies of
all of its income and payroll tax returns, federal, state and local, upon filing with the
appropriate authorities, Borrower Shall execute and deliver to Capital within five (5) days after
the end of each month during the term of this Agreement, reflecting the status as of the end of
each month, certified by any one of the officers of Borrower as being true and correct, (i) a
current detailed aging, by total and by customer, of Borrower’s Accounts. (ii) a current detailed
aging, by total and by vendor, of Borrower’s accounts payable and (iii) a Compliance Certificate
in the form of Exhibit “C” from one of the officers of Borrower certifying that no Default
currently exists under this Agreement, all of which shall be set forth in a form and shall contain
such information as is acceptable to Capital.



     28. Borrower’s assignment of any Accounts to Capital pursuant to this Agreement will not at
any time violate any federal, state and/or local law, rule or regulation, court or other governmental order or decree or terms of any
contract relating to such Accounts.



     29. Borrower possesses all necessary trademarks, trade names, copyrights, patents, patent
rights and licenses to conduct its business as now operated, without any known conflict with any trademarks, trade names,
copyrights, patents and license rights of any other person or entity.



FURTHER PROMISES




     30. SECURITY INTEREST/COLLATERAL: As a further inducement for Capital to enter into this
Agreement, and as collateral for all obligations of Borrower to Capital, now existing and
hereafter arising, whether direct or indirect, absolute or contingent, due or to become due
(collectively the “Obligations”). Borrower grants, assigns, conveys and transfers to Capital, a
security interest under the North Carolina Uniform Commercial Code (the “Code”), in the following
described property (hereinafter collectively called “Collateral”); All presently existing or
hereafter arising, now owned or hereafter acquired, including all additions, replacements,
accessions, substitutions, increases, profits, income, distributions, and proceeds thereof, (i)
Accounts, accounts receivable, contract rights, chattel paper (including electronic chattel
paper), documents, instruments (including promissory notes), reserves, reserve accounts,
commercial tort clams, rebates, refunds, and general intangibles (including tax refunds, payment
intangibles, software, lists, trademarks, tradenames, tradestyles, tradedresses, licenses,
licensing agreements, copyrights and patent rights) and all books and records relating to the
Accounts and all proceeds of the foregoing property, including insurance proceeds, and any
renewals, and extensions of the foregoing property and all proceeds thereof; (ii) all of
Borrower’s rights to receive payments from any source and for any reason (whether characterized as
accounts, accounts receivable, chattel paper, choses-in action, contract rights, general
intangibles, instruments, securities, notes or otherwise) including, without limitation,
Borrower’s right to receive payments for goods and other products sold or leased or for services
rendered, whether or not earned by performance or recognized or billed by Borrower; (iii) all of
Borrower’s contract rights including, without limitation, Borrower’s rights under distribution
contract, franchise agreements, including, without limitation, those certain franchise agreements
and loan facilitation agreements (collectively the “Franchise Agreement”) with those franchisees
as set forth on Exhibit D attached hereto and made a part hereof (collectively the “Franchisees”),
license agreements, sales contracts, unfilled customer orders, and lease agreements; (iv) all of
Borrower’s cash, drafts, certificates of deposit and deposit accounts; (v) all Of Borrower’s
assets, property and rights now or hereafter in the possession of Capital or its agents; (vi) all
of Borrower’s supporting obligations, investment property and letter of credit rights, as defined
in the Code; (vii) all inventory, wherever located, now owned or hereafter acquired, including
without limitation, raw materials, work in process, finished goods, materials and supplies,
computer software, programs, stored data, repossessions, deposits and credit balances relating
thereto and all leasehold improvements, furniture, fixtures, machinery and equipment, and computer
hardware along with all increases, substitutions, replacements, additions, accessions of Borrower
relating thereto, wherever situated, now owned by Borrower or hereafter acquired; and (viii) such
other assets of the same class or classes as the foregoing hereafter owned or acquired by
Borrower, but excluding (ix) any items of personal property described in Exhibit B, paragraph 18
under Excluded Collateral. Borrower shall be liable for, and Capital may charge Borrower’s account
with all reasonable Costs and Expenses as described in Exhibit B, paragraph 19 under Costs and
Expenses.



     31. PERFECTION OF SECURITY INTEREST: Borrower shall execute and deliver to Capital,
concurrent with Borrower’s execution of this Agreement, and at any time or times hereafter at the
request of Capital, all financing statements, continuation financing statements, security
agreements, assignments, endorsements, affidavits, reports, notices, schedules of accounts,
letters of authority and all other documents that Capital may request, in form and substance
satisfactory to Capital, to perfect or maintain perfection of Capital’s liens in the Collateral
and in order to fully consummate or give effect to all of the transactions contemplated under this
Agreement. Borrower does hereby authorize Capital to file financing statements, including, without
limitation, original financing statements, amendments and continuation statements against the
Borrower and authorizes Capital to file financing statements that describe the Collateral as all
assets of (he Borrower, or words of similar effect.



COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 2 of 15





 












 






     If
Borrower shall at any time acquire a commercial tort claim, as defined in the Code,
Borrower shall Immediately notify Capital in a writing signed by Borrower of the brief details
thereof and grant to Capital in such writing a security interest therein end in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance
satisfactory to Capital. In the event that any Collateral, including proceeds, is evidenced by or
consists of promissory notes, Borrower shall, immediately endorse and assign such promissory notes
over to Capital and deliver actual physical possession of the promissory notes to Capital.



     Borrower will cooperate with Capital in obtaining control with respect to Collateral
consisting of deposit accounts, investment property, letter of credit rights and electronic
chattel paper.



     32. NOTIFICATION: Capital may at any time and at its sole discretion notify any Customer of
Borrower or any third party payer to make payments directly to Capital. Capital may require
Borrower to place any legend or other statement on invoices
indicating the assignment of the invoice to Capital.



     33. ASSIGNMENT: Borrower shall from time to time present Accounts to Capital for approval and
approved Accounts shall be identified by separate and subsequent written assignments on a form to
be provided to Borrower by Capital known as “Schedule of Accounts”.



     34. ADVANCES:
Capital may advance funds to Borrower in an amount up to the Advance
Rate and
the Maximum Credit Facility, both as defined in Exhibit B, paragraphs 20 and 21 respectively.
Capital reserves the right to retain certain reserves against advances, including, without
limitation, the Dilution Reserve, as defined in Exhibit B, paragraph 22. Borrower
agrees to repay
to Capital the amount of each such advance, with interest and fees as set forth below and on
Exhibit A. As consideration for each such advance, Capital shall be paid in accordance
with the
rate schedule attached hereto as Exhibit A and incorporated into this Agreement by
reference (the
“Rate Schedule”). Borrower promises to repay each advance, and each such advance shall be due end
payable, if not sooner paid by Borrower or through collection of the assigned Account, on or before
the Maximum Days (the “Advance Period”). Unless otherwise
extended, all advances and any unpaid
interest and fees shall be paid by Borrower to Capital as aforesaid or, at Capital’s option, may be
charged to Borrower’s Loan Account (as defined in Exhibit B, paragraph 23) or may be withheld and
paid to Capital from any subsequent advance made to Borrower. In addition to the amounts set forth
on the Rate Schedule, Capital may charge interest at the rate of eighteen percent (18%) per annum
on any advances which remain unpaid after the occurrence of an event of Default and/or after
judgment All interest shall be computed for the actual number of days elapsed on the basis of a
year consisting of 360 days. Borrower acknowledges that Capital accrues interest on all advances on
a daily basis, however, such interest is due on a monthly basis, unless otherwise payable as
provided hereunder. In the event that, at any time and for any reason, the amount of advances made
pursuant to this Agreement exceed the Advance Rate and/or the Maximum Credit Facility (an “Over
Advance”), then Borrower, upon Capital election and demand, shall immediately pay to Capital, in
cash, the amount of such excess. In the event of the existence of an Over Advance, Borrower shall
pay to Capital, at Capital’s discretion, an Over Advance Fee of .0493 % of the amount of the Over
Advance for each day that the Over Advance is outstanding. Nothing provided herein shall constitute
consent by Capital to such Over Advance.



     Borrower irrevocably waives the right to direct the application of any and all payments and
collections at any time or times hereafter received by Capital from or on behalf of Borrower, and
Borrower does hereby irrevocably agree that Capital shall have the continuing exclusive right to
apply and reapply any and all such payments and collections received at any time or times
hereafter by Capital or its agent against the Obligations, in such manner as Capital may deem
advisable. The advances shall constitute one general Obligation of Borrower, and shall be secured
by Capital’s lien upon all of the Collateral.



     IT IS THE INTENTION OF THE PARTIES HERETO NOT TO MAKE ANY AGREEMENT IN VIOLATION OF THE LAWS
OF THE STATE OF NORTH CAROLINA OR THE UNITED STATES RELATING TO USURY. IN NO EVENT, THEREFORE,
SHALL ANY INTEREST DUE HEREUNDER BE AT A RATE IN EXCESS OF THE HIGHEST LAWFUL RATE, i.e., IN NO
EVENT SHALL CAPITAL CHARGE OR SHALL BORROWER BE REQUIRED TO PAY ANY INTEREST THAT, TOGETHER WITH
ANY OTHER CHARGES HEREUNDER THAT MAY BE DEEMED TO BE IN THE NATURE OF INTEREST, HOWEVER COMPUTED,
EXCEEDS THE MAXIMUM LAWFUL RATE OF INTEREST ALLOWABLE UNDER THE LAWS OF THE STATE OF NORTH
CAROLINA AND/OR OF THE UNITED STATES. SHOULD ANY PROVISION OF THIS AGREEMENT OR ANY OTHER
AGREEMENT BETWEEN BORROWER AND CAPITAL BE CONSTRUED TO REQUIRE THE PAYMENT OF INTEREST THAT
EXCEEDS SUCH MAXIMUM LAWFUL RATE, ANY SUCH EXCESS SHALL BE AND IS EXPRESSLY HEREBY WAIVED BY
CAPITAL. SHOULD ANY EXCESS INTEREST IN FACT BE PAID, SUCH EXCESS SHALL BE DEEMED TO BE A PAYMENT
OF THE PRINCIPAL AMOUNT OF OUTSTANDING INDEBTEDNESS OWING BY BORROWER TO CAPITAL AND SHALL BE
APPLIED TO SUCH PRINCIPAL.



     In order to satisfy any of the Obligations, Borrower authorizes Capital, or its agents,
affiliates, or depository bank(s) to initiate electronic debit or credit entries through the ACH
system to or from any deposit account maintained by Borrower (“ACH Transfers”).



     35. REQUIRED FORMS: Along with the Schedule of Accounts, Borrower shall provide Capital with
duplicate copies of all invoices, copies of the bills of lading, proofs of delivery, contracts or
purchase orders, and/or purchase order numbers which correspond with such Accounts and invoices,
and/or time tickets or other proofs of service as appropriate to the business of Borrower,
together with all those items set forth on the “Funding Procedures Memo” delivered by Capital to
the Borrower, as amended and/or updated from time to tine.



     36. NOTICE OF DISPUTE: Borrower will immediately notify Capital of any Customer Dispute and
of any litigation or proceeding, pending or threatened, by or against Borrower.



     37. INELIGIBLE ACCOUNTS AND RIGHT OF OFFSET: Upon notice of any Customer Dispute or in the
event that any Account becomes an ineligible Account, Capital may, in addition to any other
remedies under this Agreement, declare the Account to be ineligible for funding hereunder and
Borrower will immediately pay to Capital all amounts advanced to Borrower against such Account.
Capital may, at its sole discretion, charge such amounts to the Loan Account or offset against any
advances or remittances it would otherwise make to Borrower for any amounts owed to Capital
hereunder. Notwithstanding the foregoing, such Accounts shall remain as Collateral for Capital as
provided herein.



     38. CAPITAL STATEMENTS: From time to time, Capital shall provide Borrower with Borrower
ledgers and other reports. Such reports shall
be deemed final and conclusive between Borrower and Capital as to the contents of said reports
except for any errors of which Borrower shall have notified Capital in writing within thirty (30)
days after the date of receipt by Borrower of such reports and Capital, in its good faith and
discretion determines that such exceptions are accurate and makes an
appropriate adjustment.



     39. SOLE
PROPERTY: Once Capital has accepted assignment of an Account, the right to payment
from the Customer as to that Account is the sole property of Capital Any interference, including
but not limited to Borrower failing to comply with Section 40 below or Borrower’s
unauthorized
receipt end retention of Collateral proceeds will constitute a Default hereunder and may result
in, inter alia, termination of future advances to the Borrower.



     40. COLLECTIONS: Borrower will notify all of its Customers to forward all payments to the
lock box address indicated in Exhibit B, paragraph 24 (the “Lock Box”). In the event that any
payments from Customers come to Borrower’s possession Borrower will hold the same in trust and
safekeeping, as the property of Capital, and immediately turn over to Capital, the identical check
or other form of payment received by Borrower, properly endorsed, including electronic or wire
transfers. Should Borrower come into possession of a check or other form of payment which
constitutes payment of either Acceptable Accounts and/or Ineligible Accounts, Borrower shall
immediately remit such payments) to Capital.



     Any wire transfer of funds, check, or other item of payment received by Capital shall be
credited to Borrower when applied by Capital and will be applied to conditionally reduce
Borrower’s Obligations, but shall not be considered a payment on account unless and until such
check or other method or item of payment is honored when presented for payment. The receipt of any
check or other or method item of payment by Capital shall be deemed to have been paid to Capital
at the expiration of the Collection Day Period (as defined in Exhibit B, paragraph 25) after the
date Capital actually receives possession of such check or other
method or items of payment into the
Wire Account referred to in Exhibit B, paragraph 26. Absent legal process to the contrary and
provided that the outstanding indebtedness due Capital does not exceed the availability hereunder
and so long as there is not a Default hereunder, then; (i) amounts collected and applied to
Accounts in excess of outstanding obligations due Capital will be credited, without interest, to
Borrower, end (ii) payment of Accounts not assigned to Capital or against Ineligible Accounts will
be credited, without Interest, to Borrower.



     41. ACCESS TO BOOKS AND RECORDS, ACCOUNT AND FINANCIAL INFORMATION: Upon request, Borrower
will furnish Capital
with accounting records, financial information or other information pertaining to the
operation of Borrower’s business and will allow Capital to review financial



COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 3 of 15




 









 




records kept by Borrower with respect to its business. The foregoing right of access shall include,
without limitation, the right of Capital to conduct field examinations with access to Borrower’s
business facilities and the right to contact Customers and/or any third party payors for any
reason, including the confirmation of any or all invoices or statements. Borrower agrees to hold
Capital harmless from and against any costs, claims, expenses or liabilities incurred by Capital
arising out of or relating to any actions or omissions of Capital permitted by this Section 41 or
taken or refrained from being taken in reliance on any information received from Borrower hereunder.
Borrower shall promptly reimburse Capital for the expenses of each
field examination as provided in
Exhibit B, paragraph 27 under Field Examination Expenses.




     42. TAX COMPLIANCE: Borrower agrees to provide to Capital, as and when requested, evidence of
timely payment of all Federal, State and/or local taxes due in connection with Borrower’s business
enterprises whether related to this Agreement or not, including, payment of all employee
withholding taxes.



     43. NOTICE OF LEVY: Borrower will promptly notify Capital of any attachment, tax assessment,
tax lien or other legal process levied against Borrower or any of its assets or of any of
Customers assets.



     44. NO PLEDGE: Borrower will not pledge the credit of Capital to any person or business for
any purpose whatsoever.



     45. LICENSE AGREEMENTS: Borrower will keep each License Agreement, if any, in full force and
effect for so long as Borrower has any inventory the manufacture, sale or distribution of which is
in any manner governed by or subject to such License Agreement, and provide Capital, upon request,
with copies of each such License Agreement and all amendments, extensions or modifications thereto.
“License Agreement” as used herein shall mean any licenses held by the Borrower for the sale of
products.



     46. BOOK ENTRY: Borrower will, immediately upon assignment of Accounts to Capital, make
proper entries on its books and records disclosing the assignment of said Accounts to Capital.



     47. LEGAL
FEES: If, at any time or times regardless of whether or not a Default then exists,
Capital incurs legal expenses or any other costs or out-of-pocket expenses in connection with the
legal expenses described herein, including, without limitation: (i) the negotiation and
preparation
of this Agreement or any amendment of or modification of this Agreement or any of the other loan
documents in connection with this transaction (the “Loan Documents”); (ii) INTENTIONALLY
OMITTED;
(iii) any litigation, contest, dispute, suit, proceeding or action (whether instituted by
Capital,
Borrower or any other person) in any way relating to the Collateral, this Agreement or any of the
other Loan Documents or Borrower’s affairs, and including all actions in bankruptcy, appeal
and
probate; (iv) any attempt to enforce any rights of Capital against Borrower or any other
person
which may be obligated to Capital by virtue of this Agreement or any of the other Loan Documents,
including any account debtor, Customer or guarantor of Borrower’s obligations owing to Capital; (v)
any consultations regarding this Agreement or any other Loan Documents or preparation therefore, or
the financing extended hereunder or (vi) any attempt to inspect, verify, protect, preserve,
perfect
or continue the perfection of Capital’s liens upon, restore, collect, sell, liquidate or
otherwise
dispose of or realize upon the Collateral; then all such reasonable legal and accounting expenses
and other reasonable costs and out-of-pocket expenses of Capital shall be charged to Borrower.
Legal fees shall include all fees of Capital’s in house counsel. All such legal fees shall
be based
upon the usual and customary rates for services actually rendered and not upon any fixed percentage
of the outstanding balance hereunder. All amounts chargeable to Borrower under this Section 47
shall be Obligations secured by all of the Collateral, shall be payable on demand to Capital, and
shall bear interest from the date such demand is made until paid in full at the rate provided on
Exhibit A. In addition, in the event Borrower is in Default under this Agreement, Borrower
agrees
to pay any and all additional costs incurred by Capital in connection with such Default, including,
without limitation, the cost of additional field exams, additional legal fees, and the cost of
providing notices of Default, sale, or assignment, etc.



     48. POWER OF ATTORNEY: Borrower irrevocably appoints Capital, or any person or entity
designated by Capital, its special attorney in fact or agent, with power to:




     (a) strike out Borrower’s address on all Accounts mailed to Customers and put
Capital’s address on all Accounts.




     (b) after
the occurrence of a Default, receive, open and dispose of all mail addressed
to Borrower, or to Borrower’s fictitious trade name and to
notify the United States Postal
Service to change the address of Borrower to an address designated by Capital.




     (c) endorse
the name of Borrower or Borrower’s fictitious trade name on any checks or
other evidences of payment that may come into the possession of Capital or pursuant to
Default and on any other documents relating to any of the Accounts or to the Collateral.




     (d) in Borrower’s name, or otherwise, demand, sue for, collect, and give releases for
any and all monies due or to become due on Accounts.




     (e) compromise, prosecute, or defend any action, claim or proceeding as to said
Accounts, including making claims on any insurance policies.




     (f) deposit any checks or other remittances received on Accounts regardless of
notations or conditions placed thereon by Customers or deductions reflected thereby and to
change the amount of any such deduction to Borrower. However, in the event that a Customer
who has asserted a claim with respect to any Account makes a partial payment of that
Account, and such payment contains a statement to the effect that such partial payment
constitutes full satisfaction of the amount owed, then, Borrower agrees upon Capital’s
request to refund such partial payment to the Customer and reassign such Account to Capital.




     (g) place any legend or other statement on the Borrower’s invoices indicating the
assignment of the invoice to Capital.




     (h) file Uniform Commercial Code financing statements, including, without limitation,
original financing statements, amendments
and continuations.




     (i) draw and endorse any checks or promissory notes on any bank in which Borrower may
have an account and do any
and all matters and things connected with Borrower’s accounts in the said bank(s) in which
Borrower may have an account, which Borrower itself might or could do.




     (j) initiate ACH Transfer to or from any deposit account maintained by Borrower.




     (j) do any and all things necessary and proper to carry out the purpose intended by
this Agreement.


The authority granted Capital hereunder shall remain in full force and effect until all assigned
Accounts are paid in full and any Obligations are discharged in full in accordance with the terms
and conditions of this Agreement.




     49. INDEMNIFICATION: Borrower hereby indemnifies and holds Capital and its executive
committees, parent, affiliates, depository banks,
subsidiaries, agents, directors, officers, employees, agents, and their successors and
assigns (collectively the “Indemnified Parties”) harmless against any
damages or claims arising from Capital’s collecting or attempting to collect any Accounts
(except as a result of Capital’s gross negligence or willful misconduct)
and from any and all costs, claims, expenses, actions and liabilities, including fees of
attorneys and other professionals and experts, costs of suit and interest,
arising out of any failure by Borrower or Borrower’s documentation to comply with all
applicable laws, rules and regulations.



     Should
any excise, sales, documentary stamp, intangible, service or other tax be imposed by
state, federal or local authorities with respect to any of the transactions hereunder in such form that Capital is required to withhold,
collect or
pay such taxes, Borrower agrees to disclose such requirement to Capital and to indemnify the
Indemnified Parties with respect to such payments, and Capital shall be entitled to charge and
collect such payments from Borrower’s account. In addition, and if applicable, Borrower
agrees that
if the Department of Revenue of the State of Florida, at any time hereafter, including after the
termination of this Agreement, takes the position that documentary stamp taxes or nonrecurring
intangible taxes, or both, are applicable to this Agreement, or any renewals or extensions thereof,
or Capital make such determination, Capital will pay all such taxes, and any interest and penalties
or other liabilities in connection therewith. Capital expressly disclaims any obligation to
Borrower with respect to state, local or Federal income taxation and the



COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 4 of 15





 












 




preparation
of income tax reports or returns, except as agreed to between the
parties herein. It agreed that Capital shall not in any way be considered a “responsible party” in connection with the
payment of any taxes on behalf of Borrower.




     Borrower
hereby indemnifies and holds
Indemnified Parties harmless from any and all liability,
claims and damages, including fees of attorneys (including in-house counsel for the Indemnified
Parties) and other professionals and experts, costs of suit and interest which any of the
Indemnified Parties may incur as a result of the failure of Borrower to pay any taxes due and
payable to any taxing authority. Borrower does further agree to immediately notify Capital of any
failure to pay federal, state or local taxes due in connection with any of its business
enterprises. Borrower further agrees to provide to Capital true and accurate copies of any tax
liens or warning notices received by Borrower in connection with its business enterprises whether
related to this Agreement or not.



     Borrower hereby releases, discharges and holds harmless Indemnified Parties from all
liabilities, actions, suits, causes of action, costs, expenses, fines, penalties, claims, judgments
and demands whatsoever which the Borrower or any other person or entity had or may have now or in
the future against one or more of them under or arising out of this Agreement between Borrower and
Capital, or any acts or omissions in connection herewith (except as a result of Capital’s gross
negligence or willful misconduct); provided, however, that nothing herein shall preclude the
enforcement by Borrower and Capital of all rights and benefits conferred in this Agreement.



     Borrower does hereby warrant that
there has been no mortgage or loan broker involved in
connection with the transaction contemplated by this Agreement other than as set forth on Exhibit
B, paragraph 28, whose fees will be paid by Borrower, and Borrower agrees to Indemnify and hold
harmless the Indemnified Parties from any and all liability, claims and damages, including fees of
attorneys (including in-house counsel for Capital) and other professionals and experts, costs of
suit and interest which Capital may incur as a result of any claim of compensation payable to any
mortgage or loan broker in connection with the transaction contemplated by this Agreement.



     Borrower hereby indemnifies and holds Indemnified Parties harmless from any and all
liability, claims and damages, including fees of attorneys (including in-house counsel for Capital)
and other professionals and experts, costs of suit and interest which Capital may incur as a result
of the failure of Borrower to comply with the Environmental Laws.



     The indemnifications set forth herein shall survive the termination this Agreement.



     50. DEFAULTS: Any one or more of the following shall be a Default hereunder




     (a) Borrower shall fail to pay any indebtedness or perform any obligations to Capital (whether
arising hereunder or otherwise) when due.




     (b) Borrower shall breach any term, provision, covenant, warranty or representation under this
Agreement or under any other agreements or contracts, between Borrower and Capital or obligation of
Borrower to Capital.




     (c) The appointment of any receiver or trustee of all or a substantial portion of the assets of
Borrower.




     (d) Borrower shall become insolvent or unable to pay debts as they become due, shall make a
general assignment for the benefit of creditors or shall voluntarily file under any bankruptcy or
similar law.




     (e) Any involuntary petition in bankruptcy shall be filed against Borrower.




     (f) Any levies of attachment, executions, tax assessments, tax liens, judgments or similar
process shall be issued against the Collateral and shall not be released within ten days thereof.




     (g) Any financial statements, profit and loss statements, borrowing certificates or schedules,
or other statements or representations of any kind furnished or made by Borrower to Capital prove
false or incorrect, and the result of which might have a Material Adverse Effect.




     (h) Borrower shall terminate/cease assignments hereunder while Capital has unpaid Accounts
outstanding.




     (i) The insecurity of Capital with respect to Borrower’s performance of this Agreement, material
change in financial condition of Borrower or any guarantor of Borrower’s obligations under this Agreement or because of any other
event, circumstance or condition reasonably believed by Capital to put into question the ability of
Borrower to fulfill its obligations hereunder.




     (j) The public offering, after the date hereof, of the common stock of the Borrower, without the
prior written approval of Capital.




     (k) Borrower shall fail to pay when due any federal, state or local taxes or fail to make any
required tax withholding payment, or shall fail to maintain required workers’ compensation or other insurance coverage required by law or this
Agreement.




     (l) The attempted revocation of any guaranty of the obligations of Borrower hereunder by any
guarantor, the death of any such guarantor, or the non-compliance or Default under such guaranty.




     (m) The retention or attempted retention by Borrower of any payment, or partial payment, of any
Account




     (n) If Borrower is enjoined, restrained, or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of Borrower’s business; or




     (o) The loss, suspension or revocation of or failure to renew, any material license or permit
now held or hereafter acquired by Borrower, which toss, suspension, revocation or failure to renew
might have a Material Adverse Effect (which shall mean a material adverse effect upon the business,
operations, properties, assets or condition, financial or otherwise, of Borrower on an individual
basis or taken as a whole or the impairment of Borrower’s ability to perform in all material
respects Borrower’s obligations under this Agreement or Capital ability to enforce or collect any
obligations) and such loss, suspension, revocation or failure to renew continues for more than
thirty (30) days after such occurrence, provided that such grace period shall not apply, and such
event shall constitute an event of Default, if such event may not, in Capital’s reasonable
determination, be cured by Borrower during such thirty (30) day grace period.




     (p) If Borrower makes a payment on any Subordinated Debt in violation of any Subordination
Agreement in favor of Capital.




     (q) If Borrower is in default of the terms of any of its Franchise Agreements with Franchisees.




     (r) If any entity, which has common officers, directors and/or shareholders with the Borrower, is
in default of any agreement with Capital.



     51. REMEDIES AFTER DEFAULT. In the event of any Default Capital may do any one or more of the
following:




     (a) Declare any indebtedness including amounts advanced against outstanding Accounts immediately
due and payable.




     (b) Notify any Customers to make payment of Accounts directly to Capital or its agent and take
possession of Collateral and collect any Accounts without judicial process.




     (c) Require Borrower to assemble the Collateral and the records pertaining to Accounts and any
other Collateral and make them available to Capital at a place designated by Capital.




     (d) Enter the premises of Borrower and take possession of the Collateral and of the records
pertaining to the Accounts and any other Collateral.



COMMAND CENTER, INC. 

Loan and Security Agreement 

March 2006 

Page 5 of 15





 









 










     (e)
Grant extensions, compromise claims and settle Accounts for lees than face value, in its sole
discretion. Any such settlement or compromise agreed and/or accepted
by Capital does not relieve or constitute a waiver of
Borrower’s liability and obligation for the repayment in full of advances by Capital with respect
to such Accounts.




     (f) Use, in connection with any assembly or disposition of the Collateral, any trademark, trade
name, trade style, copyright, patent right or technical process used or utilized by Borrower.




     (g) Exercise all rights of a secured party under the Code. In the event any notice is required,
the parties agree that five (5) Business Days shall be a
reasonable notice. “Business Days” as used in this Agreement shall
mean a day on which Capital is open for business exclusive of weekends and legal holidays.




     (h)
Hold Borrower liable for any deficiency.




     (i) Withhold further advances pursuant to paragraph 34 above for such period as the Default
continues, without declaring immediately due or accelerating amounts previously advanced against outstanding Accounts or
otherwise availing itself of other remedies available, during which period of withholding further
advances fees shall continue to accrue on all monies previously advanced. Notwithstanding an
election to withhold further advances as provided above, Capital may at any time avail itself of
any or all of the other remedies listed above without further notice.




     (j)
Setoff against all sums standing to Borrower’s credit on
Capital’s books and all of Borrower’s
property in Capital’s possession, or upon or in which Capital
has a lien or security interest. In addition to and not in limitation of
the above, with respect to any deposits or property of Borrower in Capital’s possession or control.
Capital shall have the right to setoff all or any portion thereof.




     (k) Capital may settle or compromise any Customer Dispute in its sole discretion. Any such
settlement or compromise agreed and/or accepted by Capital does not relieve or constitute a waiver of Borrower’s liability and
obligation for the repayment in full of advances by Capital with respect to such Accounts.




     (l) Terminate this Agreement, which shall not terminate, extinguish, or remove any liens or
security interests granted to Capital hereunder until Borrower shall have fully paid and discharged any and all obligations and
indebtedness due Capital. From and after the effective date of termination, all amounts charged or
chargeable to Borrower and all Borrower’s obligations and indebtedness due Capital shall become
immediately due and payable without further notice or demand.



     52. TERM: This Agreement shall continue in full force and effect for the Term as defined in
Exhibit B, paragraph 29 but shall be automatically renewed for consecutive one (1) year terms unless terminated by written
notice of either party sixty (60) days prior to the end of the
initial Term or any renewal
Term, which termination shall be effective on the last day of the initial Term or any renewal Term.
In the event of termination by Borrower of this Agreement or
repayment in full of the Obligations
prior to the expiration of the first year of the Term, Borrower shall pay to Capital, as an early
termination fee, two percent (2%) of the Maximum Credit Facility (the
“First Year Percentage Fee”)
plus any unpaid Administration Fees through the end of the Terms plus and unpaid Facility Fees
through the end of the Term. In the event of termination by Borrower of this Agreement or repayment
in full of the Obligations after the first year of the Term and prior to the expiration of the
second year of the Term, Borrower shall pay to Capital, as an early termination fee, one percent (1%) of the Maximum Credit Facility (the “Second Year Percentage Fee”) plus any unpaid Administration
Fees through the end of the Terms plus and unpaid Facility Fees through the end of the Term.



     53. POST-TERMINATION: After termination Borrower shall continue to be liable to Capital for
the full and prompt performance and payment of the full amount of all Obligations to Capital which
for any reason remain, or otherwise are, then outstanding and unpaid, whether disputed or
undisputed. Capital will continue to have a security interest in the Collateral of Borrower until
any all Obligations are paid in full.



     54. BINDING
ON FUTURE PARTIES: This Agreement inures to the benefit of and is binding upon the
heirs, executors, administrators, successors and assigns of the parties thereto.



     55. CUMULATIVE
RIGHTS: All rights, remedies and powers granted to Capital in this Agreement,
or in any note or other agreement given by Borrower to Capital, are cumulative and may be
exercised singularly or concurrently with such other rights as Capital may have. These rights may
be exercised from time to time as to all or any part of the pledged Collateral as Capital in its
discretion may determine.



     56. WRITTEN
WAIVER: Capital may not waive its rights and remedies unless the
waiver is in
writing and signed by Capital. A waiver by Capital of a right or remedy under this Agreement on one
occasion is not a waiver of the right or remedy on any subsequent occasion.



     57. CHOICE OF LAW: The validity of this Agreement, its construction, interpretation and
enforcement, and the rights of the parties hereunder and concerning the Collateral, shall be
determined under, governed by, and construed in accordance with the laws of the State of North
Carolina. The parties agree that all actions or proceedings arising in connection with this
Agreement shall be tried and litigated in the state and federal courts located in the County of
Mecklenburg, State of North Carolina, or at Capital’s option, in
any court in which Capital shall
initiate legal or equitable proceedings and which has subject matter jurisdiction over the matter
in controversy. Borrower waives any right it may have to assert the doctrine of forum
non-conveniens or to object to any such venue and hereby consents to any court ordered relief.



     58. INVALID PROVISIONS: If any provision of this Agreement shall be declared illegal or
contrary to law, it is agreed that such provisions shall be disregarded and this Agreement shall
continue in force as though such provision had not been incorporated herein.



     59. ENTIRE AGREEMENT: This instrument contains the entire Agreement between the parties
relating to the matters set forth herein. Any addendum or modification hereto will be signed by
both parties and attached hereto.



     60. EFFECTIVE: This Agreement becomes effective when it is accepted in the State of North
Carolina and executed by an authorized officer of Capital.



     61. ASSIGNMENT BY CAPITAL: Capital may assign this Agreement to any party and such assignee
shall be entitled to all rights and privileges hereunder. Borrower may not assign this Agreement.



     62. RIGHT OF FIRST REFUSAL: In consideration of Capital entering into this Agreement and
making advances to Borrower, Borrower hereby agrees that it will, within five (5) days of receipt,
provide a copy of any letter of intent or commitment letter from any lender offering to Borrower a
refinance of the Obligations. Capital shall have the right of first
refusal to match the offer(s) of
such other lender(s), and if Capital advises Borrower that it intends to meet the financial terms
set forth in such offers, Borrower will be obligated to enter
into an amendment to this Agreement
extending the terms of this Agreement for at least the term proposed
in such other offer(s), and
amending the financial terms set forth in this Agreement. Notwithstanding the foregoing, Borrower
recognizes that this Agreement can only be terminated as provided herein.



     63. COMPLIANCE: Borrower agrees that if requested by Capital or Capital’s counsel, it will
fully cooperate and execute and/or re-execute any document or documents due to clerical errors,
scrivener’s errors or relating to additional matters due to receipt and review of miscellaneous
required items post closing, using reasonable discretion of Capital and Capital’s Counsel, and
hereby authorize Capital and Capital’s Counsel to date this Agreement and any Loan Documents, and
to complete, on behalf of Borrower, any blanks in the Agreement and any Loan Documents.



     64. AUTHORIZED PARTIES: As an accommodation to Borrower, Capital may permit telephonic,
electronic or other transmittal of instructions or requests for advances, authorizations, agreements, assignment sheets,
assignment schedules, requests for advances or reports between Capital and Borrower, received from or sent by any one or more of the employees
(including contract or leased employees), officers, directors,
managers or consultants of the Borrower (collectively the “Authorized
Signatories”). Unless Borrower specifically directs Capital in writing not to accept or act upon telephonic, telecopied, electronic or other communications from
Borrower or to only accept instructions from certain specified employees or officers of Borrower, Capital shall have no liability to Borrower for any loss or
damage suffered by Borrower as a result of Capital



COMMAND CENTER, INC. 

Loan and Security Agreement 

March 2006 

Page 6 of 15





 












 




honoring
of any requests, execution of any instructions, authorizations or agreements or reliance
on any reports communicated to Capital and purporting to have been sent to Capital by Borrower and
Capital shall have no duty to verify the origin of any such communication or the authority of the
person sending it.




     Pursuant to the terms hereof, Borrower will deliver to Capital, from time to time, assignment schedules of Borrower’s Accounts on Capital form of Schedule of Assigned Accounts signed by one of the Authorized Signatories, all of which is subject to the procedures set forth herein and in the “Funding Procedures Memo” delivered by Capital to the Borrower as amended and/or updated from time to time (the “Procedures Manual). The Borrower specifically requests that Capital agree to accept any signature or facsimile signature on any Schedule of Assigned Accounts or any notice which Capital in its sole discretion believes to have been sent or forwarded to Capital by one of the Authorized Signatories. The Borrower hereby agrees to follow up any of said facsimile transmissions with the original of same no later than the next Business Day following any such facsimile transmission.



     In
addition to the other indemnifications set forth herein, the Borrower
hereby indemnifies and holds all Indemnified Parties harmless from and against any and all
claims, demands, losses, liabilities, actions, lawsuits and other
proceedings, judgments and awards, and from costs and expenses
(including without limitation reasonable attorney’s fees)
arising directly or indirectly, in whole or in part, out of the
negligence, willful misconduct, misuse or unlawful or unauthorized use of any facsimile message or, facsimile signature or signatures of any person or persons, including the Borrower or its
partners, officers, directors, agents or employees, whether within or beyond the scope of such individual’s duties or authority thereunder. Further, the Borrower agrees to assume full responsibility for any and all advances and actions taken by Capital in reliance upon any facsimile transmission or, facsimile signature or signatures of any person or persons, including the Borrower or its partners, officers, directors, agents or employees, signing on behalf of the Borrower.



     Borrower agrees that Capital shall not be responsible for any communication or miscommunication by any Individual claiming to or which Capital in its discretion believes to have proper authority to give any facsimile transmission.



     65. TRANSMITTAL OF FUNDS. Borrower understands that Capital charges a Wire Fee (as defined in Exhibit B, paragraph 30) for incoming and outgoing wire transfer of funds and that there is no fee for ACH transfers. Capital may initiate a wire or ACH for the approved amount of a transfer no later than the second Business Day after receipt of all necessary documentation in connection
with the assignment of Accounts and the advance. Borrower understands
and agrees that Capital cannot control the time it will take for Borrower’s bank to credit an ACH transfer to Borrower’s account. Accordingly, Borrower instructs Capital to send all transfers to Borrower’s account based upon the instructions set forth in Exhibit B, paragraph 31.



     66. WAIVER
OF JURY TRIAL. AS AN INDUCEMENT FOR CAPITAL TO ENTER INTO THIS
AGREEMENT AND TO MAKE ANY LOANS OR ADVANCES TO BORROWER, BORROWER AND CAPITAL HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND, OTHER DOCUMENTS OR TERMS AND CONDITIONS STIPULATED HEREIN OR EXECUTED IN CONNECTION THEREWITH.



     67. ARBITRATION. Notwithstanding anything to the contrary contained herein, any dispute arising out of or in connection with this Agreement shall, at Capital’s discretion, be settled exclusively and finally by arbitration conducted in the City of Charlotte. North Carolina, under the commercial arbitration rules of the American Arbitration Association (the “AAA”), such arbitration to apply the laws of the State of North Carolina (without giving effect to conflicts of law principles). The arbitration shall be conducted By
three (3) neutral arbitrators, each party selecting one arbitrator within thirty (30) days after the date either party receives a written demand for arbitration from the other; the two arbitrators shall then agree upon and appoint a third neutral arbitrator within thirty (30) days. Should a party fail to appoint an arbitrator within the initial thirty (30) day period, the arbitration shall be conducted by the sole arbitrator appointed; should both arbitrators fail to appoint the third arbitrator in the second thirty (30) day period, such arbitrator shall be appointed by the AAA. Nothing in this arbitration provision shall be deemed to (i) limit the applicability of any otherwise applicable statutes of limitation or repose and any waivers contained in this instrument, agreement or document; or (ii) be a waiver by Capital of the protection afforded to it by 12 U.S.C. sec. 91 or any substantially equivalent state law; or (iii) limit the right of Capital hereto (a) to exercise self help remedies such as (but not limited to) setoff, or (b) to foreclose against any real or personal property collateral, or (c) to obtain from a court provisional or ancillary remedies such as (but not limited to) injunctive relief, writ of possession or the appointment of a receiver. Capital may exercise such self-help rights, foreclose upon such property, or obtain such provisional or ancillary remedies before, during or after the pendency of any arbitration proceeding brought pursuant to this instrument, agreement or document. Neither this exercise of self help remedies nor the institution or maintenance of an action for foreclosure or provisional or ancillary remedies shall constitute a waiver of the right of any party, including the claimant in any such action, to arbitrate the merits of the controversy or claim occasioning resort to such remedies.



	 	 	 	 	 	 	 
	 	 	Executed under seal
this ___ day of March 2006	 	 
	 	 	COMMAND CENTER INC, a Washington corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Glenn Welstad	 	 
	 	 	 	 	 	 	 
	 	 	Signature
	 	 
	 	 	          Glenn Welstad, President
	 	 
	 	 	          Name and Title
	 	 






STATE OF WASHINGTON




COUNTY OF SPOKANE




     The foregoing instrument acknowledged before me this 4 day of April 2006, by Glenn Welstad,
as President of COMMAND CENTER, INC., a Washington corporation, on behalf of the
corporation. He is personally to Known to me or has produced            as identification and did (did
not) take an oath.



	 	 	 	 	 
	 

	 	/s/ ELAINE L. WILSON	 	 
	(NOTARY SEAL)

	 	 

(Notary Signature)
	 	 
	 
	 

	 	ELAINE L. WILSON	 	 
	 

	 	(Notary Name Printed)	 	 
	 

	 	NOTARY PUBLIC Commission No. 9/9/06	 	 






	 	 	 	 	 	 	 
	 	 	Accepted by Capital this 7 day of apr. 2006	 	 
	 	 	at Charlotte, North Carolina (hereinafter, the Acceptance Date.)	 	 
	 
	 	 	 	 	 	 
	 	 	CAPITAL TEMPFUNDS, a
division of Capital Factors LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Michael J. Sullivan	 	 
	 	 	 	 	 	 	 
	 	 	Signature: Michael J. Sullivan	 	 
	 

	 	 	 	(Corporate Seal)	 	 






STATE OF NORTH CAROLINA




COMMAND CENTER, INC.

Loan and Security Agreement

 March 2006

Page 7 of 15





 









 








COUNTY OF MECKLENBURG





     The forgoing instrument was acknowledged before me this 7 day of apr. 2006, by
Michael J. Sullivan, as E.V.P. of CAPITAL TEMPFUNDS, a division of Capital Factors LLC, a
Delaware-limited liability company, on behalf of the company. He is personally known to me or has
produced                                          as identification and did (did not) take an oath.



	 	 	 	 	 
	(NOTARY SEAL)

	 	/s/ Nancy M. Watson
 

(Notary Signature)	 	 
	 

	 	NANCY M. WATSON	 	 
	 

	 	(Notary Name Printed)	 	 
	 

	 	NOTARY PUBLIC Commission No.                     
	 	 






COMMAND CENTER, INC.

Loan and Security Agreement
 March 2006

Page 8 of 15




 









 





EXHIBIT “A” RATE SCHEDULE



As
consideration for advances made by Capital to Borrower under this Agreement, Capital shall be paid the following Fees and Interest:



(a) Interest upon the daily net balance of any advances to Borrower and Interest applicable to the charges or to the expenses referred to in this Agreement, shall be charged as of the last day of each month at a rate the greater of six and one-quarter percent (6.25%) per annum or at a rate of interest designated by the Wall Street Journal as the ‘Prime Rate’ plus three percent (3.0%).
The Prime Rate shall mean, at any time, the rate of interest quoted
in the Well Street Journal, Money Rates Section as the “Prime
Rate” (currently defined as the base rate on corporate loans posted by at
least 75% of the nation’s thirty (30) largest banks). In the event that
the Wall Street Journal quotes more than one rate, or a range of
rates as the Prime Rate, then the Prime Rate shall mean the highest
of the quoted rates. In the event that the Wall Street Journal ceases to publish a Prime Rate, then the Prime Rate shall
be the average of the three largest U.S. money center commercial banks, as determined by Capital TempFunds, a division of Capital Factors LLC. Notwithstanding the foregoing, interest shall be paid on the greater of $2,000,000.00 (in determining the minimum loan of $2,000,000.00 amounts outstanding from the Franchisees to Capital shall be included in such calculation), or the actual loan balance outstanding, regardless of whether a lesser amount is outstanding hereunder. Any adjustment In Capital’s interest rate, whether downward or upward, will become effective on the first day of the month following the month in which the Prime Rate of interest is reduced or increased. HOWEVER, in no event shall the rate of interest agreed to or charged to Borrower hereunder exceed the maximum rate of interest permitted to be agreed to or charged to Borrower under applicable law.



(b) On April 4, 2006, and yearly thereafter, Borrower shall pay to TEMPFUNDS a Facility Fee in an amount equal to one percent (1%) of the Maximum Credit Facility, which fee shall be fully earned by TEMPFUNDS on each anniversary of the date hereof and will not be refundable for any reason. As an accommodation to the Borrower, such facility fees may be payable in twelve (12) monthly equal installments commencing on April 4, 2006, and continuing on the first day of every month thereafter.



(c) For TEMPFUNDS services hereunder, Borrower shall pay and TEMPFUNDS shall be entitled to receive an administrative fee (the “Administrative Fee”) equal to $1,500.00 per month, which fee shall be due and payable on the first day of each month.



(d) Borrower
shall pay to Capital a Lock Box Fee in the amount of $200.00 per month per location, which may be increased by Capital from time to time.



THIS EXHIBIT A IS MADE A PART OF AND INCORPORATED INTO THE LOAN AND SECURITY AGREEMENT.




COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 9 of 15





 












 





EXHIBIT “B”





	1.	 	The Acceptance Date referred to in the opening paragraph of this Agreement means the
date signed and accepted by a duly authorized officer of Capital.
	 
	2.	 	Borrower referred to in the opening paragraph means COMMAND CENTER, INC., a Washington
corporation with its principal place of business and chief executive office at 3773 W.
5th Avenue, Post Falls,
 ID 83854 hereinafter referred to as “Borrower”.
Borrower is the assignor of the Accounts and debtor under the Code. Borrower may also
sometimes be referred to as Client.
	 
	3.	 	“Term Days” as referred to in Section 3 (iii) thirty (30) days.
	 
	4.	 	“Maximum Days” as referred to in
Sections 3 (iv) and 34 means; sixty (60)
days from date of invoice provided
the invoice date is not greater than
ten (10) days from the last date of
service.
	 
	5.	 	“Maximum Concentration Amount” as referred to in Section 3 (f) means: $100,000
	 
	6.	 	“Cross Aging Percentage” as referred to in Section 3 (h) means: fifty percent (50%).
	 
	7.	 	“Past Due Days” as referred to in Section 3 (h) means: 60 days.
	 
	8.	 	“Permanent Placement Accounts” which mean any Accounts which arise from the permanent
placement of an employee who will be hired by a Customer and will be an addition to the
ongoing payroll of the Customer (hereinafter “PPA”). Notwithstanding the foregoing, PPAs
may be considered Acceptable Accounts provided they are otherwise in compliance with the
provisions of Sections 2 and 3 of the Agreement and the employee, which is the subject of
the Account, has reported to the Customer’s place of employment (which may be verified by
Capital in its sole discretion), and the total of such Accounts are less than ten percent
(10%) of the total amount of the Acceptable Accounts. Capital shall also maintain a
dilution reserve on Acceptable Accounts which are the result of PPAs of ten percent (10%)
of the invoice amount plus actual Dilution.
	 
	9.	 	“Organizational State” as referred to in Section 9 means: Washington
	 
	10.	 	Borrower’s Trade names as referenced in Section 11 are as follows: COMMAND CENTER
	 
	11.	 	Borrower’s Federal Identification Number as referenced in Section 12 is, 91-2079472
	 
	12.	 	Borrowers Organizational Number as referenced in Section 12 is; 602071264
	 
	13.	 	“Other Security Interest” as referred to in Section 23 means; None
	 
	NOTE:  	 	As to the interests listed above, the listing thereof in this Loan and Security
Agreement shall not, in any manner whatsoever, be deemed to be an acknowledgement by
Capital as to the perfection, priority, validity or enforceability thereof.
	 
	14.	 	“Other Insurance” as referred to in Section 24 means; General Liability with Capital named
as additional insured.
	 
	15.	 	“Periodic Period” as described in Section 27 means; 45 days after each calendar quarter.
	 
	16.	 	“Annual Period” as described in Section 27
means; one hundred twenty (120) days after the end
of each Borrower’s fiscal years.
	 
	17.	 	“Financial Statement” means: (i) at the end of each calendar quarter internally
prepared financial statements certified by Borrower’s management; (ii) at the end of each
fiscal year audited financial statements prepared by a Certified Public Accountant
acceptable to TEMPFUNDS.
	 
	18.	 	“Excluded Collateral” as referred to in Section 30
means; None
	 
	19.	 	“Costs and Expenses” as referred to in
Section 30 means; Borrower is liable for, and
Capital may charge Borrowers account with, all customary and usual out of pocket wire
charges and overnight delivery expenses, and all reasonable costs and
expenses of filling
financing statements (including any filing or recording taxes), making lien searches, and
any attorney’s fees and expenses that may be incurred by Capital in perfecting, protecting,
preserving, modifying, or enforcing its security interest and rights hereunder,
	 
	20.	 	“Advance Rate” as referred to in Section 34
means; eighty-five percent (85%) of the
face amount of each Acceptable Account approved by Capital and assigned by Borrower on a
Schedule of Accounts.
	 
	21.	 	“Maximum Credit Facility” as referred to in Section 34 means; Seven
 Million ($7,000,000.00)
dollars.
	 
	22.	 	“Dilution Reserve” referred to in Section 34 means the
Dilution Percentage less the
Base Dilution. The Dilution Percentage is defined as: (i) uncollected sales (as determined
by Capital in its sole discretion, exercised in a commercially reasonable manner, and
including all sales subject to a Customer Dispute) excluding Accounts
that remain unpaid
but are collectable, divided by (ii) total sales and (iii) stated as a percentage. Base
Dilution means: five percent (5%).
	 
	23.	 	“Loan Account” as referred to in Section 34 means that account established on Capital’s
books, upon which Capital shall enter all advances
as debits to the Loan Account and shall also record in the Loan Account all payments made by
Borrower on any Obligations and all proceeds of Collateral which are finally paid to
Capital, and may record therein, In accordance with customary accounting practice, other
debits and credits, including interest and all charges and expenses properly chargeable to
Borrower.
	 
	24.	 	Lock box address as referenced in Section 40 shall be
one of the following:





	 	 	 	 	 
	OPERATIONS CENTER

	 	OPERATIONS CENTER
	 	OPERATIONS CENTER
	P.O. BOX 951753

	 	PO BOX 932665
	 	PO BOX 79081
	Dallas, TX 75395-1753

	 	Atlanta, GA 31193-2685
	 	City of Industry, CA 91716-9081







	25.	 	“Collection Day Period” as referenced in
Section 40 means; 3 days.






	26.	 	“Wire Account” referred to in Section 40 shall mean:





Wachovia National Bank

CHARLOTTE, NC 28256-3970

For the account of Capital TempFunds, a division of Capital Factors LLC

Account #200015252540

ABA#053207766

For Further Credit (COMMAND CENTER, INC.)

For proper credits, please be sure your customers indicate their name and invoice

numbers being paid by in the text of the wire.




COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 10 of 15




 









 






	27.	 	“Field Examination Expenses” as referred to in Section 41 means: Out of pocket expenses
including, but not limited to, transportation, hotel, parking, and meals plus $800 per
Capital’s representative per day for each day of the field examination including preparation of
the field examination report.
	 
	28.	 	The broker, if any, referred to in Section 49 is: None

	 
	29.	 	“Term” as referred to in Section 52 means: Twenty-four (24) months.
	 
	30.	 	“Wire Fee” as referred to in Section 65 means
$20.00 per wire, ACH shall be no charge.

	 
	31.	 	In accordance with Section 65, please send all our
transfers via: (circle one)





	 	 	 	 	 
	Instructions are as follows:

	 	          Wire          /          ACH
	 	 
	 
	Bank Name
	 	 	 	 
	 

	 	 
	 	 
	Bank Address
	 	 	 	 
	 

	 	 
	 	 
	 
	 

	 	 
	 	 
	 
	 

	 	 
	 	 
	Bank Phone Number
	 	 	 	 
	 

	 	 
	 	 
	Bank Contact
	 	 	 	 
	 

	 	 
	 	 
	Transit Number (ABA#)
	 	 	 	 
	 

	 	 
	 	 
	Company Name (on Bank Account)
	 	 	 	 
	 

	 	 
	 	 
	Address
	 	 	 	 
	 

	 	 
	 	 
	 
	 

	 	 
	 	 
	 
	 

	 	 
	 	 
	Account Number
	 	 	 	 
	 

	 	 
	 	 
	Type of Account (circle one)

	 	Operating                    Other	 	 







	32.	 	Borrower to maintain a Working Capital ratio of not less than 1:1. “Working Capital Ratio”
for the purposes of this Agreement shall mean the
ratio of current assets to current liabilities, as determined in accordance with generally
accepted accounting principals, consistently applied
(“GAAP”).





THIS EXHIBIT B IS MADE A PART OF AND INCORPORATED INTO THE LOAN AND SECURITY AGREEMENT.




COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 11 of 15




 









 





EXHIBIT “C”




COMMAND CENTER, INC.



[Letterhead of Borrower]


APRIL 4, 2006


CAPITAL TEMPFUNDS,

a division of CAPITAL FACTORS LLC

1799 W. Oakland Park Blvd

FL Lauderdale, Florida 33134




     The undersigned,
 the CFO of COMMAND CENTER, INC., a Washington corporation
(“Borrower”), gives this certificate to CAPITAL TEMPFUNDS, a division of CAPITAL FACTORS LLC
(“Lender”) in accordance with the requirements of that
certain Loan and Security Agreement dated as of March _____, 2006, between Borrower
and Lender (“Loan Agreement”). Capitalized terms used in this Certificate, unless otherwise defined herein, shall have the
meanings ascribed to them in the Loan Agreement.



     No Event of Default exists on the date hereof, other than: None (if none, so state).



Borrower’s Working
Capital ratio for the period ending NA is equal to           :1.




     As of the date hereof, Borrower is current in its payment of all accrued rent and other
charges to persons who own or lease any premises where any of the Collateral is located, and there
are no pending disputes or claims regarding Borrower’s failure to pay or delay in payment of any
such rent or other charges.



	 	 	 	 
	 

	 	Yours truly	 
	 
	 

	 	/s/
C.E. Olsen	 
	 	 	C.E. Olsen, CFO

Name/title	 





COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 12 of 15





 











 





EXHIBIT “D”




LIST OF FRANCHISEES




Aardvark Staffing LLC

AQRS LLC

Awesome Possum Staffing LLC

Broadway Gardens, LLC

Central Texas Staffing, Ltd.

Dogwood Staffing Services LLC

Harbor Bay Staffing Services LLC

Inland Empire Temporary Staffing Services LLC

Labor Force of Minnesota, Inc.

Midwest Holdings, L.L.C.

Rascals, LLC

Rocky Mountain Temporary Services, Inc.

San Antonio Armadillo LLC

Shreveport Staffing LLC

Southwest Temporary Development LLC

Temp Services of Arkansas, LLC

Temps Unlimited of Memphis, LLC

Temps Unlimited of Tulsa, LLC

Temps Unlimited of Oklahoma, LLC

Temps Unlimited of Washington DC, LLC

Valley Staffing Services of South Texas, LLC

Viken Management, Inc.

ZAZ, LLC

ZMP Associates, LLC




COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 13 of 15




 









 





SECRETARY’S CERTIFICATE



RESOLVED, that President, any of the Vice Presidents, the Secretary, the Treasurer, the Chief
Financial Officer and each other officer and each agent of this corporation, or any one or more
of them, be and they are hereby authorized and empowered on behalf of this corporation: to obtain
from CAPITAL TEMPFUNDS, a division of CAPITAL FACTORS LLC (hereinafter referred to as the
“Lender”) loans and advances in such amounts and on such terms and conditions as such officer or
agent deems proper; to execute notes and other evidences of this corporation’s indebtedness with
respect thereto; to guaranty the obligations of third parties; to enter into the Loan and
Security Agreement and all other financing and other agreements with the Lender relating to the
terms and conditions upon which any such loans and advances may be obtained and to the
collateral security to be furnished by this corporation therefore; from time to time to modify,
supplement or amend any such agreements, any such terms or conditions and any such collateral
security; from time to time to pledge, assign, guaranty, mortgage, consign, grant security
interests in and otherwise transfer to the Lender as collateral security for any and all debts
and obligations of this corporation to the Lender, whenever and however arising, any and all
accounts and other forms of obligations receivable, chooses in action, merchandise inventories,
warehouse receipts, machinery, equipment, land, buildings and other real, personal or mixed
property now or hereafter belonging to or acquired by this corporation; for said purposes to
execute and deliver any and all assignments, schedules, transfers, endorsements, contracts,
guarantees, agreements, designations, consignments, deeds of trust, mortgages, instruments of
pledge or other instruments in respect thereof and to make remittances and payments in respect
thereof by checks, drafts or otherwise; and to do and perform all other acts and things deemed
by such officer or agent necessary, convenient or proper to carry out any of the foregoing;
hereby ratifying, approving and confirming all that any said officers or agents have done or may
do in the premises.



I, Brad E. Herr, do hereby certify that I am the Secretary of COMMAND CENTER, INC., a
corporation organized and existing under and by virtue of the laws of the state of Washington;
that I am the keeper of the corporate records and the seal of said corporation; that the
foregoing is a true and correct copy of a resolution duly adopted and ratified at a special
meeting of the Board of Directors of said corporation duly convened and held in accordance with
its bylaws and the laws of said State at the office of said corporation, on or before the day of
the execution of the Loan and Security Agreement, as taken and transcribed by me from the
minutes of said meeting and compared by me with the original of said resolution recorded in said
minutes, and that the same has not in any way been modified, repeated or rescinded but is in
full force and effect, that the within and foregoing agreement is one of the agreements referred
to in said resolution and was duly executed pursuant thereto. I do further certify that the
following are the names and specimen signatures of the officers and agents of said corporation,
so empowered and authorized, namely (may be signed in more than one counterpart, which together
will form one original document):




	 	 	 	 	 
	Chief Executive Officer and President

	 	Glenn Welstad
	 	/s/ Glenn Welstad
	 

	 	 
	 	 
	 

	 	(Print Name)
	 	(Signature)
	 
	 	 	 	 
	Chief Financial Officer and Treasurer

	 	C. Eugene Olsen
	 	/a/ C. Eugene Olsen
	 

	 	 
	 	 
	 

	 	(Print Name)
	 	(Signature)
	 
	 	 	 	 
	Chief Operating Officer

	 	Tom Gilbert
	 	/s/ Tom Gilbert
	 

	 	 
	 	 
	 

	 	(Print Name)
	 	(Signature)
	 
	 	 	 	 
	Secretary

	 	Brad E. Herr
	 	 
	 

	 	 
	 	 
	 

	 	(Print Name)
	 	(Signature)





Witness my
hand and the seal of said corporation, this            day of March 2006.



[SEAL]




 






Brad E. Herr, Secretary




COMMAND CENTER, INC.

Loan and Security Agreement

March 2006

Page 14 of 15





 









 






STATE OF NORTH CAROLINA                                       )



COUNTY OF MECKLENBURG                                          )



AFFIDAVIT OF OUT-OF-STATE DELIVERY



     BEFORE ME, the undersigned authority, personally appeared the undersigned Michael J.
Sullivan (the “Affiant”), who being first duly sworn upon oath, deposes and says that:



     1. The Affiant is a E.V.P. of CAPITAL TEMPFUNDS, a division of Capital Factors LLC, a Delaware
limited liability company (“Capital”), and the Affiant is duly authorized to and does make this
affidavit in said capacity on behalf of Capital.



     2. That on the
7 day of APR. 2006, I executed on behalf of Capital on the date referenced below
that certain Loan and Security Agreement (the “Agreement”), which Agreement is between
           COMMAND CENTER, INC.,
a Washington
corporation, as borrower, and CAPITAL TEMPFUNDS, a division of Capital Factors LLC, as lender.



     3. That the execution of the Agreement by Capital took place in Charlotte,
North Carolina.



	 	 	 	 	 
	FURTHER AFFIANT SAYETH NAUGHT.
 	 	 
	 	
/s/ Michael  J. Sullivan 	 
	 	Michael  J. Sullivan  	Affiant 
	 	Exec. Vice Pres. 	Title 
	 




     SWORN TO AND SUBSCRIBED before me this 7 day of APR. 2006 by Michael J. Sullivan who
personally appeared before me, and who is personally known to one.



	 	 	 	 	 
	 	 	 
	 	/s/ Nancy M. Watson
 	 
	 	[NOTARIAL SEAL]
 	 
	 	Notary Public, State of North Carolina

Print Name: NANCY M. WATSON

My Commission Expires: June 23, 2006 	 
	 



COMMAND CENTER, INC.

Loan and Security Agreement

 March 2006

Page 15 of 15