Document:

Exhibit (b)(2)

BB&T

Loan
Agreement

 

	 	9700285081	 
	 	Account Number	 

 

This Loan Agreement (the “Agreement”)
is made this 11th day of July, 2019 by and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation
(“Bank”), and:

 

COMMAND CENTER, INC., a Washington corporation
(“HQI”) to be converted and to change its name to HIREQUEST, INC., a Delaware corporation, having its chief
executive office at Goose Creek, South Carolina.

 

COMMAND FLORIDA, LLC, a Florida limited
liability company (“CF”) having its chief executive office at Goose Creek, South Carolina.

 

HIRE QUEST, L.L.C., a Florida limited
liability company (“HQLLC”) having its chief executive office at Goose Creek, South Carolina.

 

HQ LTS CORPORATION, a Delaware corporation
(“HQLTS”) having its chief executive office at Goose Creek, South Carolina.

 

HQ REAL PROPERTY CORPORATION, a Delaware
corporation (“HQRP”) having its chief executive office at Goose Creek, South Carolina.

 

HQ INSURANCE CORPORATION, a Delaware
corporation (“HQINS”) having its chief executive office at Goose Cr eek, South Carolina.

 

HQ FINANCIAL CORPORATION, a Delaware
corporation (“HQFIN”) having its chief executive office at Goose Creek, South Carolina.

 

HQ FRANCHISING CORPORATION, a Delaware
corporation (“HQFRAN”) having its chief executive office at Goose Creek, South Carolina.

 

HQI, CF, HQLLC, HQLTS, HQRP, HQINS, HQFIN and
HQFRAN are hereinafter sometimes referred to, singularly or collectively as the context requires, as “Borrower” or
 “Borrowers”; HQI, HQLTS, HQRP, HQINS, HQFIN and HQFRAN are hereinafter sometimes referred to, singularly or collectively
as the context requires, as “Corporate Borrower” or “Corporate Borrowers”; and CF and HQLLC are hereinafter
sometimes referred to, singularly or collectively as the context requires, as “LLC Borrower” or “LLC Borrowers.”

 

Borrowers have applied to Bank for and Bank
has agreed to make, subject to the terms of and upon the reliance of each Borrower’s representations, warranties and agreements
made in this Agreement, the following line of credit:

 

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Line of Credit (“Line of Credit”
or “Loan”) in the maximum principal amount not to exceed $30,000,000 at any one time outstanding for the purpose of
working capital and expansion of current assets which shall be evidenced by Borrowers’ Promissory Note dated on or after
the date hereof which shall bear interest at the rate set forth in such note, the terms of which are incorporated herein by reference,
including all extensions, renewals, modifications, and substitutions thereto, (the “Line Note”). The Line of Credit
shall mature on May 31, 2024 (the “Maturity Date”), when the entire unpaid principal balance then outstanding plus
accrued interest thereon shall be paid in full. Prior to maturity or the occurrence of any Event of Default hereunder and subject
to Availability, as applicable, Borrowers may borrow, repay, and reborrow under the Line of Credit through the Maturity Date. The
principal balance from time to time outstanding under the Line of Credit shall bear interest at the rate set forth in the Line
Note. Bank shall make advances under the Line of Credit into a Borrower’s designated operating account or other designated
deposit account maintained with Bank upon receipt of the written or oral request (thereafter confirmed in writing) of a Borrower
or in accordance with any treasury management services agreement among Borrowers and Bank; provided that Bank shall not be required
to make any advance which would cause Borrowers to exceed Availability (as defined in section 10 hereof), if applicable. If at
any time the aggregate principal balance outstanding under the Line of Credit shall exceed Availability, Borrowers shall immediately
upon demand pay the amount necessary to bring the outstanding balance thereunder within Availability.

 

Reduction in Line of Credit Commitment Amount.
Borrowers may, upon written notice to Bank but not more than twice during the term of the Line of Credit, permanently reduce the
Line of Credit Commitment Amount; provided that (1) any such notice shall be received by Bank not later that five (5) business
days prior to the date of the reduction, (2) the maximum amount of all reductions may not exceed $20,000,000 in the aggregate,
(3) each reduction shall be in a minimum amount of $5,000,000 and in increments of $1,000,000 in excess thereof, (4) any reduction
in the Line of Credit Commitment Amount shall reduce the unused portion of the uncommitted accordion feature (described below)
by an equal amount, (5) Borrowers may not reduce the Line of Credit Commitment Amount if, after giving effect thereto, the total
principal outstanding under the Line of Credit plus the aggregate face amount of outstanding Letters of Credit, plus the aggregate
amount of drafts drawn under or purporting to be drawn under Letters of Credit that have been paid by Bank and for which Bank has
not been reimbursed would exceed the Line of Credit Commitment Amount, and (6) if the Line of Credit Commitment Amount is to be
reduced to an amount less than $15,000,000, the sublimit for Letters of Credit as more particularly described in Schedule DD shall
not exceed an amount established by Bank. Borrowers shall execute such documents as may be required by Bank in connection with,
and prior to, any such reductions of the Line of Credit Commitment Amount.

 

Uncommitted Accordion Feature. The Line
of Credit includes an uncommitted accordion feature permitting Borrowers to request increases in the Line
of Credit Commitment Amount by a maximum additional amount of up to $20,000,000 in the aggregate (subject to reduction as provided
above); provided that any such request shall be in a minimum amount of $5,000,000 and in increments of $1,000,000 in excess thereof.
Such increases may be effected from time to time after the date of this Agreement upon the written request of Borrowers, subject
to: (1) credit approval by Bank with respect to each such increase (for avoidance of doubt, the accordion feature is uncommitted,
therefore any requested increase is subject to full underwriting and credit approval at the time of Bank’s receipt of each
such request for an increase by Borrower), (2) payment of a non-refundable origination fee in the amount of 15 basis
points of the principal amount of each such increase, (3) such terms and conditions as may be established by Bank in connection
with each such increase, and (4) no Default or Event of Default exists at the time of any such increase.

 

Non-Use Fee: Borrowers shall pay Bank
a Non-Use Fee, quarterly in arrears on the last day of each fiscal quarter, equal to the Applicable Rate per annum on the average
daily unused amount of the Line of Credit for each fiscal quarter calculated on the basis of a year of 360 days for the actual
number of days elapsed.

 

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Yield Protection. If at any time a change
in any law or regulation (including without limitation all rules, guidelines, or directives promulgated by Bank for International
Settlements, the Basel Committee on Banking Supervision or other U.S. or foreign regulatory authorities pursuant thereto) or in
the interpretation thereof by any governmental authority having the authority to interpret or enforce the same shall make it unlawful
for Bank to make or maintain the Loan under the terms of this Agreement, Bank shall have the right to convert the applicable interest
rate on the Loan to a rate based on the Prime Rate. Similarly, should Bank incur increased costs or a reduction in the amounts
received or receivable on the Loan because of any change in any applicable law, regulation, rule, guideline or order, including
without limitation the imposition, modification or applicability of any reserves, deposits or capital adequacy then Borrowers shall
pay to Bank within ten (10) business days of demand, which demand shall contain the basis and calculations supporting such demand,
as may be required to compensate Bank for such increased costs or reductions in amounts to be received hereunder. Each determination
and calculation made by Bank shall, absent manifest error, be binding and conclusive on the parties hereto. All payments made by
Borrowers hereunder or the other Loan Documents shall be made free and clear and without deduction of any present or future taxes,
levies, imposts, charges or withholdings other than taxes based on net income and franchise taxes imposed on Bank by the law of
the jurisdiction in which Bank is organized or transacting business.

 

The Line Note is sometimes referred to herein
as the “Note” and shall include all extensions, renewals, modifications and substitutions thereof.

 

Section 1 Conditions Precedent

 

Bank shall not be obligated to make any disbursement
of loan proceeds until all of the following conditions have been satisfied by proper evidence, execution, and/or delivery to Bank
of the following documents and items in addition to this Agreement, all in form and substance satisfactory to Bank and Bank’s
counsel in their sole discretion:

USA Patriot
Act Verification Information: Information or documentation, including but not limited to the legal name, address, tax identification
number, driver’s license, and date of birth (if Borrower is an individual) of each Borrower sufficient for Bank to verify
the identity of such Borrower in accordance with the USA Patriot Act. Borrowers shall notify Bank promptly of any change in such
information. In addition, Borrowers shall provide such information about any other party as Bank shall request to allow Bank to
complete such due diligence as Bank shall deem appropriate.

Note: The
Note duly executed by Borrowers.

Security
Agreement(s): Security Agreement(s) (each a “Security Agreement” and collectively, the “Security Agreements”)
in which a Borrower and any other owner (a “Debtor”) of any Collateral (as defined in Section 10 hereof) shall grant
to Bank a first priority security interest in the personal property specified therein. If Bank has or will have a security interest
in any Collateral which is inferior to the security interest of another creditor, Borrowers must fully disclose to Bank any and
all prior security interests, and Bank must specifically approve in writing any such security interest which will continue during
the term of the Loan.

Franchise
Documents: Copies of franchise agreements.

UCC Financing
Statements: Copies of UCC Financing Statements duly filed in a Borrower’s or other owner’s state of incorporation,
organization or residence, and in all jurisdictions necessary, or in the reasonable opinion of Bank desirable, to perfect the security
interests granted in the Security Agreement(s), and certified copies of Information Requests identifying all previous financing
statements on record for a Borrower or other debtor, as appropriate from all jurisdictions indicating that no security interest
has previously been granted in any of the Collateral described in the Security Agreement(s), unless prior written approval has
been given by Bank.

Commitment
Fee: A commitment fee (or balance thereof) of $37,500.00 payable to Bank on the date of execution of the Loan Documents.

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Corporate
Resolution: A Certificate of Corporate Resolutions signed by the corporate secretary or other authorized officer containing
resolutions duly adopted by the Board of Directors of each of Corporate Borrower authorizing the execution, delivery, and performance
of the Loan Documents on or in a form provided by or acceptable to Bank.

Articles
of Incorporation: A copy of the Articles of Incorporation and all other charter documents of each of Corporate Borrower, all
filed with and certified by the Secretary of State of the state of the such Corporate Borrower’s incorporation.

By-Laws:
A copy of the By-Laws of each Corporate Borrower, certified by the Secretary of such Corporate Borrower as to their completeness
and accuracy.

Certificate
of Incumbency: A certificate of the Secretary or other authorized officer of each Corporate Borrower certifying the names and
true signatures of the officers of each Corporate Borrower authorized to sign the Loan Documents.

Certificate
of Existence: A certification of the Secretary of State (or other government authority) of the state of each Borrower’s
incorporation or organization as to its existence or good standing and its charter documents on file.

Opinion
of Counsel: An opinion of counsel for Borrowers reasonably satisfactory to Bank and Bank’s counsel and containing such
opinions as are standard and customary for transactions similar to the Loan.

Limited
Liability Company Operating Agreement: A copy of each of LLC Borrower’s Operating Agreement, certified by such LLC Borrower’s
managers and/or members, as applicable, as to its completeness and accuracy.

Declaration
of Limited Liability Company: A declaration or resolution from each of LLC Borrower’s’s manager(s) authorizing
the execution, delivery, and performance of the Loan Documents on a form provided by or acceptable to Bank.

Limited
Liability Company Articles of Organization: A copy of the Articles of Organization and all other organizational documents of
each LLC Borrower, all filed with and certified by the Secretary of State of the state of such LLC Borrower’s organization.

Additional
Documents: Receipt by Bank of other approvals, opinions, or documents as Bank may reasonably request.

Fees, Expenses
and Attorney’s Fees: Payment by Borrowers of all legal fees, lien search costs (including pre-closing and post-closing
searches), due diligence costs, recording fees, appraisal fees, documentary stamps, intangible taxes, and other costs incurred
by Bank in connection with the making, documenting and closing of the Loan.

Opening
Loan Base Report: An opening Loan Base Report reflecting Availability (on a pro forma basis, after giving effect to (i) the
issuance of a letter of credit to Chubb in the face amount of $9,759,534, (ii) advance(s) under the Line of Credit in the amount
of $9,000,000 to purchase stock of HQI in connection with the proposed voluntary tender offer and (iii) the initial advance under
the Line of Credit in an amount approved by Bank to retire outstanding debt of Borrowers and to pay costs and expenses of closing
of the Line of Credit, after application of excess cash of Borrower to the retirement of such debt) in an amount of not less than
10% of the of the lesser of (a) the Collateral Loan Value as determined by Bank from the opening Loan Base Report plus reserves
(including, but not limited to, the letter of credit exposure reserve) established by Bank, or (b) the Line of Credit Commitment
Amount.

Merger
Documents and Other Financial Reports: An organizational chart as of the first day of the Merger-Command and HQ; a pro forma
Opening Balance Sheet (the “Pro Forma Balance Sheet”); quarterly projections of (1) statements of cash flows and balance
sheets of Borrowers, on a consolidated basis, for the fiscal quarters ending September 30, 2019 and December 31, 2019 and (2) income
statements of Borrowers, on a consolidated basis, for the fiscal quarters ending September 30, 2019, December 31, 2019, March 31,
2020 and June 30, 2020; and copies of the Merger Agreement and other merger documents.

 

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2 Representations
and Warranties

 

Each Borrower
represents and warrants to Bank that:

 

2.01.    
Financial Statements. The balance sheet of Borrower and its subsidiaries, if any, and the related Statements of Income
and Retained Earnings of Borrower and its subsidiaries, the accompanying footnotes together with the accountant’s opinion
thereon, and all other financial information previously furnished to Bank, accurately, completely and fairly reflect the financial
condition of Borrower and its subsidiaries as of the dates thereof, including all contingent liabilities of every type, and the
financial condition of Borrower and its subsidiaries as stated therein has not changed materially and adversely since the date
thereof. Each Borrower’s fiscal year end is December 31.

2.02.    
Name, Capacity and Standing. Each Borrower’s exact legal name is correctly stated in the initial paragraph
of the Agreement. If a Borrower and any of its subsidiaries, if any, is a corporation, general partnership, limited partnership,
limited liability partnership, or limited liability company, it is duly organized and validly existing under the laws of its respective
state of incorporation or organization; that it and/or its subsidiaries, if any, are duly qualified and in good standing in every
other state in which the nature of their business shall require such qualification, and are each duly authorized by their board
of directors, general partners or member/manager(s), respectively, to enter into and perform the obligations under the Loan Documents.

2.03.    
No Violation of Other Agreements. The execution and delivery of the Loan Documents, and the performance by Borrowers,
by any and all pledgors (whether a Borrower or other owners of Collateral securing payment of the Loan (hereinafter sometimes referred
to as the “Pledgor”)) thereunder will not violate any provision, as applicable, of its articles of incorporation, by-laws,
articles of organization, operating agreement, agreement of partnership, limited partnership or limited liability partnership,
or, of any law, other agreement, indenture, note, or other instrument binding upon any Borrower, or give cause for the acceleration
of any of the respective obligations of any Borrower.

2.04.    
Authority. The execution, delivery and performance of this Agreement, the Note and the other Loan Documents have
been duly authorized by all necessary and proper corporate or equivalent action. All authority from and approval by any federal,
state, or local governmental body, commission or agency necessary to the making, validity, or enforceability of this Agreement
and the other Loan Documents has been obtained.

2.05.    
Asset Ownership. Each Borrower and each Pledgor has good and marketable title to all of the properties and assets
reflected on the balance sheets and financial statements furnished to Bank, and all such properties and assets are free and clear
of mortgages, deeds of trust, pledges, liens, security interests, and all other encumbrances except as otherwise disclosed by such
financial statements or otherwise in writing.

2.06.    
Discharge of Liens and Taxes. Each Borrower and its subsidiaries, if any, have filed, paid, and/or discharged all
taxes or other claims which may become a lien on any of their respective properties or assets, excepting to the extent that such
items are being appropriately contested in good faith and for which an adequate reserve (in an amount acceptable to Bank) for the
payment thereof is being maintained.

2.07.    
Regulations U and X. None of the Loan proceeds shall be used directly or indirectly for the purpose of purchasing
or carrying any margin stock in violation of the provisions of Regulation U and Regulation X of the Board of Governors of the Federal
Reserve System.

2.08.    
ERISA. Each employee benefit plan, as defined by the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), maintained by a Borrower or by any subsidiary of a Borrower meets, as of the date hereof, the minimum funding
standards of Section 302 of ERISA, all applicable requirements of ERISA and of the Internal Revenue Code of 1986, as amended, and
no “Reportable Event” nor “Prohibited Transaction” (as defined by ERISA) has occurred with respect to any
such plan.

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2.09.    
Litigation. Any litigation to which a Borrower is a party, which if adversely decided against such Borrower could
result in such Borrower becoming liable for damages, fees or costs in excess of $50,000 or injunctive or non-monetary relief against
such Borrower which could reasonably be expected to result in economic loss to Borrower in an amount in excess of $100,000, is
set forth on Schedule 2.09, and there is no litigation (including litigation set forth on Schedule 2.09) to which a Borrower is
a party, which if adversely decided against such Borrower, could have a material adverse effect in the financial condition, business
operations or prospects of such Borrower. There is no claim, action, suit or proceeding pending, threatened or reasonably anticipated
before any court, commission, administrative agency, whether State or Federal, or arbitration which will materially adversely affect
the financial condition, operations, properties, or business of a Borrower, its subsidiaries, if any, or any Pledgor, or affect
the ability of a Borrower or any Pledgor to perform its obligations under the Loan Documents.

2.10.    
Other Agreements. The representations and warranties made by each Borrower to Bank in the other Loan Documents are
true and correct in all respects on the date hereof.

2.11.    
Binding and Enforceable. The Loan Documents, when executed, shall constitute valid and binding obligations of each
Borrower and Pledgors respectively, and are enforceable in accordance with their terms, except as may be limited by bankruptcy,
insolvency, moratorium, or similar laws affecting creditors’ rights generally.

2.12.    
Commercial Purpose. The Loan is not a “consumer transactions”, as defined in the UCC, and none of the
Collateral was or will be purchased or held primarily for personal, family or household purposes.

2.13.    
Foreign Assets Control Regulations. It is not in violation of (i) the Trading with the Enemy Act (50 U.S.C. App.
Sec. 1 et seq), as amended, (ii) any of the foreign assets control regulations issued by the Office of Foreign Assets Control of
the United States Treasury Department (“OFAC”) and any executive order related thereto, or (iii) the U.S. Patriot Act,
and further that it (a) is not subject to sanctions administered by OFAC or the U.S. Department of State or (b) has not engaged
in any dealing or transactions with, or is otherwise associated with, any person subject to such sanctions.

2.14.    
No Related Party Loans. There are no loans, extensions of credit, or other financial accommodations (or commitments
relating thereto) to directors, officers, partners, members, shareholders, parent entities, subsidiaries or affiliates of a Borrower
outstanding on the date hereof, other than those disclosed in financial statements of a Borrower delivered to Bank. As of the consummation
of the Merger-Command and HQ, there will be no loans, extensions of credit, or other financial accommodations (or commitments relating
thereto) to directors, officers, partners, members, shareholders, parent entities, subsidiaries or affiliates of a Borrower outstanding,
other than those disclosed in the Pro Forma Balance Sheet

2.15.    
Benefit Received. Each Borrower will receive substantial direct and indirect benefits and value as a result of the
Loan advances made or to be made with respect thereto.

2.16.    
Survival of Representations and Warranties. Each Borrower agrees that in extending loan advances, Bank is relying
on all representations, warranties, and covenants made by Borrowers in this Agreement or in any certificate or other instrument
delivered by any Borrower to Bank under this Agreement or the other Loan Documents. Each Borrower further agrees that regardless
of any investigation made by Bank, all such representations, warranties and covenants will survive the making of each advance under
the Loan and delivery to Bank of the Loan Documents, shall be continuing in nature, shall be deemed made and reaffirmed by Borrowers
at the time each advance is made, and shall remain in full force and effect until such time as Borrowers’ indebtedness shall
be paid in full, or until this Agreement shall be terminated in the manner provided herein, whichever is the last to occur.

 

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Section
3 Affirmative Covenants

 

Each Borrower covenants and agrees that from
the date hereof and until payment in full of all indebtedness and performance of all obligations owed under the Loan Documents,
each Borrower shall:

3.01.    
Maintain Existence and Current Legal Form of Business.  (a) Maintain its existence and good standing in the state
of its incorporation or organization, except where the failure to maintain its good standing (i) shall exists for a period of less
than 30 days, (ii) shall not impact Borrower’s ability to perform its obligations under the Loan Documents, and (iii) could
not reasonably expected to have a material adverse effect on the financial condition, properties, or operations of Borrower, (b)
maintain its current legal form of business indicated above, and, (c), as applicable, qualify and remain qualified as a foreign
corporation, general partnership, limited partnership, limited liability partnership or limited liability company in each jurisdiction
in which such qualification is required; provided, CF may be dissolved so long as prior to such dissolution, Bank is provided written
evidence acceptable to Bank that the only assets owned by CF at the time of such dissolution will be equity interests in HQLLC.

3.02.    
Maintain Records. Keep adequate records and books of account, in which complete entries will be made in accordance
with GAAP consistently applied, reflecting all financial transactions of Borrower. If Borrower now or hereafter maintains any business
records in the possession of a third party, at the request of Bank, Borrower shall notify such third party to permit Bank free
access to such records at all reasonable times and to provide Bank with copies of any records it may request, all at Borrower’s
expense. On an after September 30, 2019, Borrowers shall maintain their books and business records at 111 Springhall Drive, Goose
Creek, South Carolina or such other location as approved in writing by Bank, such approval not to be unreasonably withheld.

3.03.    
Maintain Properties. Maintain, keep, and preserve all of its properties (tangible and intangible) including the Collateral
necessary or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted.

3.04.    
Conduct of Business. Continue to engage in an efficient, prudent and economical manner in a business of the same
general type as now conducted.

3.05.    
Maintain Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance
as Bank may reasonably require with respect to Borrower’s properties and operations, in form, amounts, and coverages and
with insurance companies acceptable to Bank. Borrower, upon request of Bank, will deliver to Bank from time to time the policies
or certificates of insurance in form satisfactory to Bank, including stipulations that coverages will not be cancelled or diminished
without at least thirty (30) days prior written notice to Bank. Each insurance policy also shall include an endorsement (NY long
form) providing that coverage in favor of Bank, as lender loss payee, will not be impaired in any way by any act, omission or default
of Borrower or any other person. In connection with all policies covering the Collateral, Borrower shall provide Bank with such
Bank’s lender loss payee or other endorsements as Bank may reasonably require, and shall furnish to Bank upon request, reports
on each existing insurance policy showing such information as Bank may reasonably request, including without limitation the following:
(1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties and assets insured; (5) the
current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6)
the expiration date of the policy. In addition, upon request of Bank (however not more often than once every two years); Bank may
require that an independent appraiser satisfactory to Bank determine, as applicable, the actual cash value or replacement cost
of any Collateral; provided, and for avoidance of doubt, nothing in this sentence shall limit the number of “field exams”
Bank may require. The cost of such appraisal shall be paid by Borrower. Should any or all of the Collateral become uninsured for
any reason, Bank without notice to Borrower, may, but shall not be obligated to, purchase insurance covering the Collateral, and
the amounts expended together with interest thereon at the Default Rate, shall become immediately due and payable to Bank. Borrower
shall have ten (10) days after receipt of notice from Bank to obtain replacement insurance on the Collateral satisfactory to Bank.
Borrower’s obligation to provide replacement coverage shall not be relieved by Bank purchasing coverage.

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3.06.    
Comply With Laws. Comply in all respects with all laws, rules, regulations, ordinances and orders applicable to each
Borrower’s business, operations and properties including without limitation, the Americans with Disabilities Act, federal
and state securities laws and regulations and rules and regulations of any exchanges in which the equity interests of a Borrower
is traded, paying before the delinquency thereof all taxes, assessments, and governmental charges imposed upon it or upon its income,
profits or property, and all Environmental Laws.

3.07.    
Right of Inspection. Permit the officers and authorized agents of Bank, at any reasonable time or times in Bank’s
sole discretion, to examine and make copies of the records and books of account of, to visit the properties of any Borrower, and
to discuss such matters with any officers, directors, managers, members or partners, limited or general, of such Borrower, and
with Borrower’s independent accountant as Bank deems necessary and proper.

3.08.    
Reporting Requirements. Furnish to Bank:

Financial Statements: As soon
as available and not more than forty-five (45) days after the end of each quarter, balance sheets, statements of income, cash flow,
and retained earnings for the period ended and a statement of changes in the financial position and quarterly Form 10-Q, all in
reasonable detail, and all prepared in accordance with GAAP consistently applied and certified as true and correct by an officer,
general partner or manager (or member(s)) of Borrower, as appropriate.

Annual Financial Statements: 
As soon as available and not more than one hundred twenty (120) days after the end of each fiscal year, balance sheets, statements
of income, and retained earnings for the period ended and a statement of changes in the financial position and annual Form 10-K,
all in reasonable detail, and all prepared in accordance with GAAP consistently applied. The financial statements must be of the
following quality or better: Audited.

Loan Base Report: As provided
and/or required in accordance with Schedule DD a Loan Base Report in a form acceptable to Bank signed by the president, chief financial
officer, general partner, or manager (or members), or other authorized officer of Borrower, as appropriate.

Officer’s Compliance Certificate:
An Officer’s Compliance Certificate (“OCC”) with respect to (a) Borrower’s compliance with the Affirmative,
Financial and Negative Covenants set forth in Sections 3, 5, and 6 of this Agreement, and (b) the calculation of Net Lendable Collateral
and the Applicable Rate. The OCC will be in the form of Schedule EE or other form acceptable to Bank, properly executed by an authorized
officer of Borrower, including calculations to support all Financial Covenants, and set forth any corrective action taken or proposed
to be taken with respect to any Default or Event of Default under such covenants. The OCC shall be provided by Borrower with the
quarterly Financial Statements (except for the last quarterly Financial Statement in a fiscal year) and with the Annual Financial
Statements, and the OCC with respect only to the calculation of Net Lendable Collateral and the Applicable Rate (and not with respect
to Borrower’s compliance with the Affirmative, Financial and Negative Covenants set forth in Sections 3, 5, and 6 of this
Agreement) as of the end of each fiscal year shall be provided by Borrower within forty-five (45) days after the end of each fiscal
year.

Notice of Litigation: Promptly
after the receipt by a Borrower, notice of any complaint, action, suit or proceeding before any court or administrative agency
or body of any type which, if determined adversely, could have a material adverse effect on the financial condition, properties,
or operations of a Borrower, as applicable.

Tax Returns: If requested by
Bank, as soon as available each year, complete copies of all federal tax returns (including all Schedules thereto) filed by Borrower
or if an extension is filed, a copy of the extension upon filing by Borrower.

Notice of Default: Promptly
upon discovery or knowledge thereof, notice of the existence of any event of default under this Agreement or any other Loan Documents.

USA Patriot Act Verification Information:
Information or documentation, including but not limited to the legal name, address, tax identification number, driver’s
license, and date of birth (if Borrower is an individual) of Borrower sufficient for Bank to verify the identity of Borrower in
accordance with the USA Patriot Act. Borrower shall notify Bank promptly of any change in such information.

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Public Reporting Information: Promptly
when available, copies of each annual report, proxy, or financial statement sent to stockholders of any Borrower, and copies of
all annual, regular, periodic and special reports and registration statements which any Borrower may file or be required to file
with the SEC or with any national securities exchange, together with copies of any notice or other correspondence received from
the SEC concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational
results of any Borrower.

Other Information: Such other
information as set forth in Schedule DD and as Bank otherwise may from time to time reasonably request, including, but not limited
to, copies of all franchise agreements with its franchisees and originals or copies of documents related to Franchisee Loans.

3.09.       Deposit
Accounts. Maintain substantially all of its demand deposit/operating accounts with Bank and establish and maintain all treasury
management services and deposit accounts specified by Bank for the administration of the Loan, all at Borrowers’ expense.

3.10.       Appraisal(s).
If required by Bank, furnish at Borrowers’ expense an independent appraisal or update by an appraiser satisfactory to Bank
of the market value of any real or personal property Collateral securing the Loan, subject to any limitations expressly set forth
in the Loan Documents.

3.11.       Affirmative
Covenants from other Loan Documents. Comply with all affirmative covenants contained in any other Loan Documents which are
hereby incorporated by reference herein.

3.12.       Management.
Maintain Richard F. Hermanns as its Chief Executive Officer.

3.13.       Merchant
Services Account(s). Establish and maintain each Borrower’s merchant services account(s) with Bank.

3.14       Additional
Borrowers. Within thirty (30) days after the written request of Bank and at Borrowers’ expense, cause any direct or indirect
subsidiary of a Borrower to become a co-borrower under the Line of Credit and to execute and deliver to Bank substantially the
same Loan Documents and other diligence documents delivered by Borrowers to Bank in connection with the Loan. In connection with
the foregoing, each Borrower shall execute and deliver to Bank such documents and opinions as reasonably requested by Bank. For
purposes of this Section and for avoidance of all doubt, “subsidiary” of a Borrower means a corporation, partnership,
joint venture, limited liability company or other business entity of which a majority of the shares of the voting equity interest
is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Borrower, provided, however, that “subsidiary” shall not include any franchisee
of any Borrower that is owned directly or indirectly by any shareholder of HQI and is not owned directly or indirectly by any Borrower.

    	9

     

    

3.15       Merger-Command
and HQ; USA Patriot Act Matters. (a) Within three business day after the date of this Agreement, cause the Merger-Command and
HQ to be consummated, in all material respects, with the terms of the Merger Agreement and to deliver to Bank copies, including
filed copies as applicable, of all documents related to the Merger-Command and HQ. Notwithstanding anything to the contrary contained
in the Loan Documents, the following matters occurring in connection with the consummation of the Merger-Command and HQ shall not
violate the terms of the Loan Document: (1) HQI converting to a Delaware corporation and changing its name to HireQuest, Inc.;
(2) Hire Quest Holdings, LLC merging into CCNI One, Inc., (3) CCNI One, Inc. merging into CF, (4) the conversion of the equity
interest in Hire Quest Holdings, LLC to shares of stock in HQI and (5) any other Permtted Transfers or any other transction or
occurrence contemplated by the Merger Agreement not involving the transfer of Accounts, in each case as set forth in the Merger
Agreement. For avoidance of all doubt, all obligations of each Borrower under the Loan Documents shall survive the closing of the
Merger-Command and HQ. Borrower shall cause the Disposition described in clause (3) of the definition of “Permitted Transfers”
to occur no later than 1 business day of the consummation of the Merger-Command and HQ, and (b) without limiting the generality
of any other provisions in the Loan Documents related to USA Patriot Act and similar matters, within 30 days after the date of
this Agreement, deliver to Bank information or documentation in form and content acceptable to Bank, including but not limited
to the legal name, address, tax identification number, driver’s license, and date of birth (if Borrower is an individual)
of each Borrower sufficient for Bank to verify the identity of such Borrower in accordance with the USA Patriot Act. In addition,
Borrowers shall notify Bank promptly of any change in such information and shall provide such information about any other party
as Bank shall request to allow Bank to complete such due diligence as Bank shall deem appropriate.

 

Section
4 [Reserved].

 

Section
5 Financial Covenants

 

Each Borrower covenants and agrees that from
the date hereof until payment in full of the Loan and the performance of all obligations under the Loan Documents, it shall at
all times maintain the following financial covenants and ratios all in accordance with GAAP unless otherwise specified:

 

Fixed Charge Coverage Ratio. 
A Fixed Charge Coverage Ratio of not less than 1.10 to 1.00. The Fixed Charge Coverage Ratio is defined as the ratio of (i) EBITDAR
minus dividends, distributions, withdrawals by owners, unfunded capital expenditures, cash taxes paid and any non-operating
income (such as, but not limited to, capital gains and interest income from the sale of franchises) as determined by Bank in its
sole discretion, divided by (ii) the sum of interest expense, the prior period’s current portion of long-term
debt and capital leases, lease expense and rent expense minus amortization of capitalized debt expense, to the extent it
is included in interest expense. EBITDAR means the sum of net income, interest expense, income taxes, depreciation, amortization,
lease expense and rent expense.

 

This covenant will be tested quarterly,
on a rolling four quarter basis, commencing with the four quarter period ending September 30, 2020 and using the results of Borrowers
set forth in (a) Borrowers’ internally prepared financial statements for each four quarter period ending as of the end of
each of the first three fiscal quarters of each fiscal year of Borrowers, and (b) Borrowers’ audited annual financial statements
for each four quarter period ending as of the end of each fiscal year of Borrowers.

 

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Section
6 Negative Covenants

 

Each Borrower covenants and agrees that from
the date hereof and until payment in full of all indebtedness and performance of all obligations under the Loan Documents, such
Borrower shall not, without the prior written consent of Bank:

6.01.    
Liens. Create, incur, assume, or suffer to exist any lien or security interest upon or in any Collateral, any of
Borrower’s other properties, or the properties of any Pledgor securing payment of the Loan, whether now owned or hereafter
acquired, except Permitted Liens.

6.02.    
Debt.  Incur, assume, or suffer to exist any debt, except:

(a)          
Debt to Bank;

(b)          
Debt outstanding on the date hereof and shown on the most recent financial statements submitted to Bank;

(c)          
Accounts payable to trade creditors incurred in the ordinary course of business;

(d)          
Debt secured by purchase money security interests only in the property or assets acquired; and

(e)          
Additional, unsecured debt not to exceed $1,000,000.00 in the aggregate for Borrowers, as a whole, at any time.

6.03.    
[Reserved].

6.04.    
Change of Legal Form of Business; Purchase of Assets. Become a party to a merger or acquisition, or change a Borrower’s
name or the legal form of a Borrower’s business as shown above, whether by merger, consolidation, conversion or otherwise,
or purchase all or substantially all of the assets or business of any Person or change its fiscal year end.

6.05.    
[Reserved]. 

6.06.    
[Reserved]. 

6.07.    
[Reserved].

6.08.    
Guaranties. Assume, guarantee, endorse, or otherwise be or become directly or contingently liable for obligations
of any Person, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business.

6.09.    
 Loans and Advances. Make any loans or advances to any Person, except for Franchisee Loans.

6.10.    
Disposition of Assets. Sell, lease, or otherwise dispose of any of its assets or properties except in the ordinary
and usual course of its business and except for Permitted Transfers; provided, and for the avoidance of all doubt and notwithstanding
anything to the contrary contained in any Security Agreement, if the transferee in a Permitted Transfer is a Borrower and the assets
being transferred in such Permitted Transfer are part of the Collateral prior to such Permitted Transfer, a security interest in
favor of Bank to secure the Loan automatically shall attach to such assets being transferred upon the consummation of such Permitted
Transfer pursuant to the Security Agreement executed by such transferee Borrower.

6.11.    
Change of Control. Permit a Change of Control to occur.

6.12.    
Negative Covenants from Loan Documents. Violate any negative covenants contained in any Loan Document which are hereby
incorporated by reference herein.

6.13.    
Transactions with Affiliates. Directly or indirectly, sell, lease, transfer, or otherwise dispose of any of its property
to, or purchase any property from, or enter into any contract, agreement, understanding, loan, advance, guarantee or transaction
(including the rendering of services) with or for the benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”),
unless such Affiliate Transaction or series of Affiliate Transactions is (a) (i) in the best interest of Borrower and (ii) on terms
that are no less favorable to Borrower than those that would have been obtained in a comparable arm’s-length transaction
by Borrower with a person that is not an Affiliate or (B) a Permitted Transfer. For purposes of this section, “Affiliate”
shall mean any Borrower, any relative of any Borrower, or of an entity which is a parent, subsidiary or any person or entity controlled
by, or under the common control of, any Borrower or any Borrower’s parent or subsidiary.

 

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Section 7 Hazardous Substances and Compliance
with Environmental Laws

 

7.01.        Investigation.
Each Borrower hereby certifies that it has exercised due diligence to ascertain whether its real property is or has been affected
by the presence of asbestos, oil, petroleum or other hydrocarbons, urea formaldehyde, PCBs, hazardous or nuclear waste, toxic chemicals
and substances, or other hazardous materials, as defined in applicable Environmental Laws (collectively, “Hazardous Substances”).
Each Borrower represents and warrants that, to its actual knowledge, there are no Hazardous Substances contaminating its real property,
nor have any such materials been released on or stored on or improperly disposed of on its real property during its ownership,
occupancy or operation thereof except in strict compliance with Environmental Laws and any applicable permits. Each Borrower hereby
agrees that, except in strict compliance with applicable Environmental Laws, it shall not knowingly permit any release, storage
or contamination of its properties as long as any indebtedness or obligations to Bank under the Loan Documents remains unpaid or
unfulfilled. In addition, Borrower does not have or use any underground storage tanks on any of its real property, which is not
registered with the appropriate Federal and/or State agencies and which are not properly equipped and maintained in accordance
with all Environmental Laws. If requested by Bank, Borrower shall provide Bank with all necessary and reasonable assistance required
for purposes of determining the existence of Hazardous Substances on any real property owned by a Borrower, including allowing
Bank access to such real property, to Borrower’s employees having knowledge of, and to its files and records within Borrower’s
control relating to the existence, storage, or release of Hazardous Substances on such real property.

7.02.        Compliance.
Each Borrower agrees to comply with all applicable Environmental Laws, including, without limitation, all those relating to Hazardous
Substances. Each Borrower further agrees to provide Bank, and all appropriate Federal and State authorities, with immediate notice
in writing of any release of Hazardous Substances on its real property and to pursue diligently to completion all appropriate and/or
required remedial action in the event of such release. In addition, each Borrower shall within fifteen (15) days after receipt
thereof, provide Bank with a complete copy of any notice, summons, lien, citation, letter or other communication from any governmental
agency concerning any action or omission of such Borrower in connection with any environmental activity or issue.

7.03.        Indemnity:
Borrowers, jointy and severally, agree to indemnify and hold Bank harmless from any and all loss or liability arising out of any
violation of the representations, covenants, and obligations contained in this Section 7.

 

Section 8 Events of Default

 

The following shall constitute “Events
of Default”:

 

8.01.        Any
Borrower fails (a) to make payment of any installment of (ii) interest on the Note within 3 days after the same becomes due, or
(i) principal on the Note when due, or (b) to pay any fee or other amount payable under any of the Loan Documents within 3 days
after the same becomes due.

8.02.        Any
representation or warranty made by any Borrower in the Loan Documents proves to be false or misleading in any material respect
when made.

8.03.        Any
report, certificate, financial statement, or other document furnished by or on behalf of any Borrower or any Pledgor prior to the
execution of or pursuant to the terms of this Agreement proves to be false, incomplete or misleading in any material respect when
delivered or made.

8.04.        The
default by any Borrower in the payment or performance of any other loan, line of credit, indenture, mortgage instrument, security
agreement or other agreement with Bank or with another creditor or Person that may materially affect any Borrower’s property
or ability to perform their respective obligations under this Agreement or the other Loan Documents.

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8.05.        (a)
The breach by any Borrower or any Pledgor of any covenant, condition, or agreement made in (i) Sections 3.01(a), 3.01(b), 3.07,
3.08 (Notice of Litigation, Notice of Default and USA Patriot Act Verification Information subsections only), 3.09, 3.12, 3.15,
5 or 6 of this Agreement, (ii) Sections DD.02(e), DD.05, DD.09(b), DD.09(i) or DD.09(j) of Schedule DD attached to this Agreement,
or (iii) Sections 4.5, 4.9 or 6 of any of the Security Agreements executed by Borrower or Pledgor to secure the Loan; or (b) the
breach by any Borrower of any covenant, condition, or agreement made under any of the Loan Documents to which it is a party (not
specified in Section 8.05(a) or elsewhere in this Section 8) and such breach continues for 10 days after the earlier of the date
on which (i) any chief executive officer, president, vice president, chief financial officer, treasurer, assistant treasurer, controller
or manager of any Borrower has knowledge thereof, or (ii) any Borrower receives written notice thereof from Bank; provided, however,
that the opportunity to cure pursuant to this clause (b) shall not apply if (A) the breach or failure to perform is not capable
of being cured within such period or is a willful breach by Borrower, or (B) an Event of Default (or cure pursuant to this clause
(b)) has occurred within the preceding 12 months with respect to a breach of the same section of this Agreement or other Loan Document.

8.06.        (a)
The appointment of a custodian for or take possession of any or all of the assets of any Borrower; (b) any Borrower either voluntarily
or involuntarily becomes subject to (i) any insolvency proceeding, including becoming a debtor under the United States Bankruptcy
Code, (ii) any proceeding to dissolve any Borrower, (iii) any proceeding to have a receiver appointed; provided, if any of the
foregoing matters in this clause (b) is an involuntary proceeding, such involuntary proceeding continues undischarged or unstayed
for 30 days; (c) any Borrower makes an assignment for the benefit of creditors; or (d) there is an attachment, execution, or other
judicial seizure of all or any portion of any Borrower’s assets, including an action or proceeding to seize any Collateral
or any funds on deposit with Bank, and such seizure is not discharged within 30 days.

8.07.        A
final judgment for the payment of money is rendered against any Borrower which is not covered by insurance and remains undischarged
for a period of 30 days unless such judgment or execution thereon is effectively stayed.

8.08.        The
death of, or termination of existence of, or dissolution of, any Borrower or any Pledgor, except for the dissolution of CF in accordance
and compliance with Section 3.01 of this Agreement.

8.09.        Bank
determines that any Borrower has suffered a material adverse change in its financial condition or its business operations.

8.10.        (a)
Any lien or security interest in the Collateral terminates, fails for any reason to have the priority agreed to by Bank on the
date granted, or becomes unenforceable, unperfected or invalid for any reason, (b) the Collateral fails to be insured as required
herein, including after giving effect to Section 8.05, or (c) the market value of the Collateral (other than Accounts) declines
below the value anticipated or required in connection with the Loan and Borrower has not replaced such Collateral (other than Accounts)
with Collateral having a market value of at least the value anticipated or required in connection with the Loan within 10 days
after written demand by Bank.

8.11.        Any
Borrower defaults under any Hedge Agreement, as defined in Section 10.01.

8.12.        Any
Borrower asserts for any reason that this Agreement or any provision hereof or any other Loan Document is invalid or unenforceable.

8.13.        Any
Borrower or any officer, director or owner of 20% or more of the outstanding ownership interests of any Borrower, be indicted for
a felony offense under state or federal law, including without limitation any violation of any anti-money laundering, bribery,
OFAC or bank fraud, or any Borrower employs an executive officer or manager, or elect a director, who has been convicted of any
such felony offense, or any Person becomes an owner of 20% or more of the outstanding ownership interests of any Borrower who has
been indicted or convicted of any such felony offense.

8.14.       Default
by any Borrower under any lease or contract with a landlord or other third party owner of real property where any Collateral is
located and such default is not cured within 10 days.

 

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Section 9 Remedies Upon Default

 

Upon the occurrence of any of the above Events
of Default, Bank may at any time thereafter, at its option, take any or all of the following actions, at the same or at different
times:

9.01. Declare the outstanding balance(s)
of the Note to be immediately due and payable, both as to principal and interest, late fees, and all other amounts/expenditures
without presentment, demand, protest, or further notice of any kind, all of which are hereby expressly waived by each Borrower,
and such balance(s) shall accrue interest at the Default Rate as provided herein until paid in full;

9.02. Require any Borrower to pledge
additional collateral to Bank from such Borrower’s assets and properties to secure the Loan, the acceptability and sufficiency
of such collateral to be determined in Bank’s sole discretion;

9.03. Take immediate possession
of and/or foreclose upon any or all Collateral which may be granted to Bank as security for the indebtedness and obligations of
any Borrower under the Loan Documents;

9.04. Exercise any and all other
rights and remedies available to Bank under the terms of the Loan Documents and applicable law;

9.05. Any obligation of Bank to
advance funds to a Borrower or any other Person under the terms of under the Loan Documents and all other obligations, if any,
of Bank under the Loan Documents shall immediately cease and terminate unless and until Bank shall reinstate such obligation in
writing.

 

Section 10 Miscellaneous Provisions

 

10.01. Definitions.

“Applicable
Rate” shall mean, for any day, the rate per annum set forth below opposite the applicable Tier then in effect (based
on the Net Lendable Collateral), it being understood that the Applicable Rate for (1) the Loan shall be the percentage set forth
under the column “Applicable Margin”, (2) the Non-Use Fee shall be the percentage set forth under the column “Non-Use
Fee”, and (3) the letter of credit fee shall be the percentage set forth under the column “Letter of Credit Fee”:

 

 

	 	Net Lendable Collateral 	Applicable Margin	Non-Use Fee	Letter of Credit Fee
	Tier I	>$10,000,000	1.25%	0.125%	0.75%
	Tier II	$3,000,000-$10,000,000	1.50%	0.185%	1.00%
	Tier III	< $3,000,000	1.75%	0.250%	1.25%

 

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Any increase or decrease in the
Applicable Rate resulting from a change in the Net Lendable Collateral shall become effective (A) with respect to the Applicable
Margin, on the first business day immediately following the date an OCC is delivered pursuant to Section 3.08; provided, if an
OCC is not timely delivered in strict accordance with Section 3.08, the Applicable Margin shall be as set forth in Tier III from
the date such OCC was required to be delivered until the first business day immediately following the date on which such OCC is
delivered, and (B) with respect to the Non-Use Fee and the Letter of Credit Fee, as of the first day of the fiscal quarter in which
an OCC is delivered pursuant to Section 3.08 (by way of example and for avoidance of doubt, for purposes of calculating the Non-Use
Fee and the Letter of Credit Fee due as of any June 30, the Applicable Rate for the fiscal quarter ending June 30 is the Applicable
Rate based on the Net Lendable Collateral as of the immediately preceding March 31 and disclosed on the OCC delivered on or prior
to the May 15 following such March 31). Notwithstanding anything to the contrary contained in this definition, (a) if, as a result
of any restatement of or other adjustment to the financial statements of Borrowers or for any other reason, Borrowers or Bank determine
that (i) the Net Lendable Collateral as of any applicable date was inaccurate and (ii) a proper calculation of the Net Lendable
Collateral would have resulted in higher pricing for such period, Borrowers shall immediately and retroactively be obligated to
pay to Bank, promptly on demand by Bank (or, after the occurrence of an actual or deemed entry of an order for relief with respect
to a Borrower under the Bankruptcy Code of the United States, automatically and without further action by Bank), an amount equal
to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees
actually paid for such period, and (b) the initial Applicable Rate shall be set forth in Tier II until adjusted as provided above.
Any adjustment in the Applicable Rate shall be applicable to all outstanding advances under the Loan, Non-Used Fee and letters
of credit then existing or subsequently made, issued or calculated.

“Availability”
shall have the meaning as provided and/or determined in accordance with Schedule DD.

“Change
of Control” shall mean the HQ Board Members cease to be the majority of members of the board of directors of HQI.

“Collateral”
shall mean all property and assets granted as collateral security for the Loan, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage,
security deed, deed of trust, assignment, pledge, crop pledge, chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise.

“Collateral
Loan Value” shall have the meaning as provided and/or determined in accordance with Schedule DD.

“Default”
shall mean any condition, act, or event that, with the giving of any notice, the passage of time, or both, would be an Event of
Default

“Default
Rate” shall mean a rate of interest as set forth in the Promissory Note (not to exceed the legal maximum rate) from and
after the date of an Event of Default hereunder which shall apply, in Bank’s sole discretion, to all amounts owing, on such
date, calculated on the basis of the actual number of days elapsed over a year consisting of 360 days.

“Disposition”
means the sale, transfer, license, lease or other disposition of any property, excluding Accounts, by any Borrower (or the granting
of any option or other right to do any of the foregoing).

“Environmental
Laws” shall mean all federal and state laws and regulations which affect or may affect the real property of any Borrower,
including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Sections 9601
et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Act
(33 U.S.C. Sections 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), and all applicable environmental laws and regulations of the State of South Carolina, as such laws or regulations
have been amended or may be amended.

“Flex
Mode” shall mean each period of time commencing on the first day of a calendar month after the principal balance outstanding
under the Line of Credit has been equal to or less than $5,000,000 for 3 consecutive calendar months (excluding any days prior
to the date of this Agreement) and ending on the first day after any such commencement on which the principal balance outstanding
under the Line of Credit exceeds $5,000,000.

    	15

     

    

“Franchisee
Loans” shall mean loans made by Borrower to a franchisee of Borrower in the ordinary course of business (1) generally
in the amount of up to $100,000 to finance the operations of such franchisee, and (2) in the amount of up to $1,000,000 to finance
the purchase by such franchisee of the franchise business.

“Hedge
Agreement” shall mean an agreement between any Borrower and Bank, now existing or hereafter entered into, which provides
for an interest rate, credit, commodity, equity swap or other Swap Obligation, cap floor, collar, spot or forward foreign exchange
transaction, currency swap, cross-currency rate swap, currency option or any similar transaction or any combination of, or option
with respect to, these or similar transactions, for the purpose of hedging any Borrower’s exposure to fluctuations in interest
or exchange rates, loan, credit, exchange, security or currency valuations or currency prices.

“HQ
Board Members” shall mean members of the board of directors of HQI initially appointed by HQI and any subquent members
of the board of directorsof HQI endorsed by Richard Hermanns.

“Line
of Credit Commitment Amount” shall have the meaning as provided and/or determined in accordance with Schedule DD.

“Loan
Documents” shall mean this Agreement including any Schedule attached hereto, the Note, the Security Agreement(s), all
UCC Financing Statements, and all other documents, certificates, and instruments executed in connection therewith, and all renewals,
extensions, modifications, substitutions, and restatements thereof and therefore.

“Merger-Command
and HQ” shall mean the merger and other transactions contemplated by the Merger Agreement.

“Merger
Agreement” shall mean that certain Agreement and Plan of Merger dated as of April 8, 2019 among Hire Quest Holdings,
LLC, HQI, CCNI One, Inc., CF and Richard Hermanns, as the representative of the members of Hire Quest Holdings, LLC.

“Net
Lendable Collateral” shall mean, as of the date of determination, Collateral Loan Value reduced by the principal balance
outstanding under the Line of Credit plus unrestricted and unencumbered cash of Borrowers.

“Permitted
Liens”  shall mean (1) liens and security interest securing any indebtedness owed by any Borrower to Bank; (2) liens
for taxes, assessments, or similar charges either not yet due or being contested in good faith and for which appropriate reserves
are maintained; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course
of business and securing obligations which are not yet delinquent; (4) purchase money liens or purchase money security interests
upon or in any property acquired or held by any Borrower in the ordinary course of business to secure indebtedness outstanding
on the date of this Agreement or permitted to be incurred under Section 6.02; (5) liens and security interests which, as of the
date of this Agreement, have been disclosed to and approved by Bank in writing; and (6) those liens and security interests which
in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of a Borrower’s
assets.

“Permitted
Transfers” shall mean (1) any Disposition (A) made by a Borrower in connection with the sale of franchises by such Borrower,
(B) that do not interfere in any material respect with the business of each Borrower, (C) so long as no Default or Event of Default
then-exists, and (D) the consideration paid to such Borrower in connection therewith is cash, branch office assets or promissory
notes evidencing Franchisee Loans in an amount equal to fair market value of the property subject to such Disposition, (2) prior
to the consummation of the Merger-Command HQ, the transfer of Accounts in the face amount not to exceed $3,000,000 made by HQLLC
to Hire Quest Financial, LLC (the “Transferred Accounts”) in satisfaction of certain obligations owed by HQLLC to Hire
Quest Financial, LLC, (3) in connection with the consummation of the Merger-Command HQ, the Disposition of certain promissory notes
evidencing Franchisee Loans (the “Transferred Notes”) to Hire Quest Financial, LLC in exchange for the Transferred
Accounts and cash in an aggregrate amount not less than the principal amout of the Transferred Notes,(4) Dispositions contemplated
by Section 5.21 of the Merger Agreement such that Hire Quest Holdings, LLC’s Net Tangible Assets (as defined in the Merger
Agreement) equals at least the Target Net Tangible Assets (as defined in the Merger Agreement), (5) any other Dispositions described
in or required by the Merger Agreement, and (6) any transfer of assets among Borrowers which occurs within six months following
the consummation of the the Merger- Command and HQ.

    	16

     

    

“Person”
shall mean an individual, general or limited partnership, corporation, trust, unincorporated organization, limited liability company,
limited liability partnership, association, joint venture, or a government agency or political subdivision thereof.

“GAAP”
shall mean generally accepted accounting principles as established by the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants, as amended and supplemented from time to time.

“Prime
Rate” shall mean the rate of interest per annum announced by Bank from time to time and adopted as its Prime Rate, which
is one of several rate indexes employed by Bank when extending credit, and may not necessarily be Bank’s lowest lending rate.

“UCC”
shall mean the Uniform Commercial Code as adopted in the State of South Carolina and amended from time to time.

10.02.       Additional
Terms. Additional terms, conditions and covenants of this Agreement are described in Schedule DD, or other schedule attached
hereto, the terms of which are incorporated herein by reference.

10.03        Past Due Payments.
Bank may, at its sole discretion, effect payment of any sums past due under the Note and any fees or reimbursable expenses due
by debiting a Borrower’s operating or other deposit account maintained with Bank.

10.04.       Non-impairment.
If any one or more provisions contained in the Loan Documents shall be held invalid, illegal, or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired
thereby and shall otherwise remain in full force and effect.

10.05.       Applicable
Law; Assignment. The Loan Documents shall be construed in accordance with and governed by the laws of the State of South Carolina,
and shall bind each Borrower’s heirs, personal representatives, successors and assigns and inure to the benefit of Bank’s
successors and assigns. The Loan Documents may not be assigned by any Borrower without the prior written consent of Bank, which
may be withheld in its sole discretion.

10.06.       Waiver.
Neither the failure nor any delay on the part of Bank in exercising any right, power or privilege granted in the Loan Documents
shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise of any
other right, power, or privilege which may be provided by law. A waiver by Bank of a provision of this Agreement shall not prejudice
or constitute a waiver of Bank’s right otherwise to demand strict compliance with that provision or any other provision of
this Agreement. No prior waiver by Bank, nor any course of dealing between Bank and any Borrower shall constitute a waiver of any
of Bank’s rights or of any of a Borrower’s obligations as to any future transaction. Whenever the consent of Bank is
required under this Agreement, the granting of such consent by Bank in any instance shall not constitute continuing consent to
subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion
of Bank.

10.07.       Joint
and Several Obligations. The obligations of Borrowers hereunder and under the other Loan Documents are joint and several.
Notwithstanding any payment by any Borrower hereunder or any set-off or application of funds of any Borrower no Borrower shall
be entitled to be subrogated to any of the rights of Bank against any other Borrower or any collateral security or guaranty or
right of setoff held by Bank for the payment of the obligations, nor shall any Borrower seek or be entitled to see any contribution
or reimbursement from any other Borrower in respect of payments made by such Borrower hereunder, until all of the obligations
are paid in full. If any amount shall be paid to any Borrower on account of such subrogation rights at any time when all of the
obligations shall not have been paid in full, such amount shall be held by such party in trust for Bank, segregated from other
funds, and shall forthwith upon receipt, be turned over to Bank in the exact form received by such party (duly indorsed by such
party , if required), to be applied against the obligations, whether matured or unmatured, in such order Bank may determine.

10.08        Modification. Except
for those provisions which are subject to amendment by notice from Bank, no modification, amendment, or waiver of any provision
of any of the Loan Documents shall be effective unless in writing and signed by Borrowers and Bank.

    	17

     

    

10.09. Payment Amount Adjustment.
In the event that any Loan referenced herein has a fixed payment with a variable (floating) interest rate and, as a result
of an increase in such interest rate, accruals of interest are not fully paid, Bank, in its sole discretion, may at any time adjust
Borrower’s fixed payment amount(s) to prevent the amount of interest accrued in a given period exceeding the periodic payment
amount or to cause the affected Loan to be repaid within the same period of time as originally agreed upon.

10.10. Stamps and Other Fees.
Borrowers shall pay all federal or state stamp and recording taxes, or other fees or charges, if any are payable or are determined
to be payable by reason of the execution, delivery, or issuance of the Loan Documents or any security granted to Bank; and Borrowers
agree to indemnify and hold harmless Bank against any and all liability in respect thereof. Such taxes, fees and charges shall
be payable on demand, shall accrue interest at the default rate set forth in the Note following demand and shall be secured by
the security documents executed by any Borrower or any Pledgor. Borrowers expressly certify that Loan Documents are being executed
by Borrowers in a state other than the State of Florida and are being delivered by Borrowers to Bank in the State of South Carolina.

10.11. Attorneys’ Fees.
Borrowers, jointly and severally, agree to pay all reasonable attorneys’ fees incurred by Bank in connection with any modification,
renewal, extension or restatement of the terms of the Loan Documents or in connection with any request by any Borrower for a payoff
of the Loan and/or payoff letter. In the event any Borrower or any Pledgor shall default in any of its obligations in this Agreement
or in any Loan Document and Bank finds it necessary to employ an attorney to assist in the enforcement or collection of the indebtedness
of any Borrower to Bank, to enforce the terms and provisions of the Loan Documents, to modify the Loan Documents, or in the event
Bank voluntarily or otherwise should become a party to any suit or legal proceeding (including a proceeding conducted under the
Bankruptcy Code), Borrowers, jointly and severally, agree to pay all reasonable attorneys’ fees incurred by Bank and all
related costs of collection or enforcement that may be incurred by Bank. Borrowers shall be liable jointly and severally for such
attorneys’ fees and costs whether or not any suit or proceeding is actually commenced.

10.12. Bank Making Required Payments.
In the event any Borrower shall fail to maintain insurance, pay taxes or assessments, costs and expenses which any Borrower is,
under any of the terms hereof or of any Loan Documents, required to pay, or fail to keep any of the properties and assets constituting
Collateral free from new security interests, liens, or encumbrances, except as permitted herein, Bank may at its election make
expenditures for any or all such purposes and the amounts expended together with interest thereon at the Default Rate, shall become
immediately due and payable to Bank, and shall have benefit of and be secured by the Collateral; provided, however, Bank shall
be under no duty or obligation to make any such payments or expenditures.

10.13. Right of Offset. Any
indebtedness owing from Bank to any Borrower may be set off and applied by Bank on any indebtedness or liability of any Borrower
to Bank at any time and from time to time after maturity, whether by acceleration or otherwise, and without demand or notice to
Borrowers.

10.14. UCC Authorization.
Each Borrower authorizes Bank to file such UCC Financing Statements describing the Collateral, together with amendments and continuation
statements with respect thereto, in any location deemed necessary and appropriate by Bank.

10.15. Modification and Renewal
Fees. Bank may, at its option, charge any fees for modification, renewal, extension, or restatement of any terms of the Note
and the other Loan Documents not prohibited by applicable law.

10.16. Conflicting Provisions.
If provisions of this Agreement shall conflict with any terms or provisions of any of the Note, security document(s) or any schedule
attached hereto, the provisions of such Note, security document(s) or any Schedule attached hereto, as appropriate, shall take
priority over any provisions in this Agreement.

10.17. Notices. Any notice
permitted or required by the provisions of this Agreement shall be deemed to have been given when delivered in writing to BB&T
addressed to the Market President or any Vice President of Bank at its offices in Charleston, South Carolina, and to the Chief
Executive Officer and General Counsel of HQI at its offices at 111 Springhall Drive, Goose Creek, South Carolina 29445, or when
sent by certified mail and return receipt requested or by recognized courier; provided however, compliance with any method of notice
provided in any Schedule shall be deemed compliance with the requirements of this Section. Unless otherwise required by law, if
there is more than one Borrower, any notice given by Bank to any Borrower shall be deemed to be notice given to all Borrowers.

    	18

     

    

10.18. Consent to Jurisdiction.
Borrowers hereby irrevocably agree that any legal action or proceeding arising out of or relating to this Agreement may be instituted
in any state of Federal courth in South Carolina, or in such other appropriate court and venue as Bank may choose in its sole discretion.
Borrowers consent to the jurisdiction of such courts and waive any objection relating to the basis for personal or in rem jurisdiction
or to venue which a Borrower may now or hereafter have in any such legal action or proceedings.

10.19. Counterparts. This
Agreement may be executed by one or more parties on any number of separate counterparts and all of such counterparts taken together
shall be deemed to constitute one and the same instrument. Signature pages may be exchanged by facsimile or electronic mail and
each party hereto agrees to be bound by its facsimile or PDF signature.

10.20. Entire Agreement.
The Loan Documents embody the entire agreement among Borrowers and Bank with respect to the Loan, and there are no oral or parole
agreements existing between Bank and a Borrower with respect to the Loan which are not expressly set forth in the Loan Documents.

10.21. Indemnity. Borrowers
hereby jointly and severally agree to indemnify and hold Bank, its affiliates, their successors and assigns and their respective
directors, officers, employees and shareholders harmless from and against, any loss, damage, lawsuit, proceeding, judgment, cost,
penalty, expense (including all reasonable in-house and outside attorneys’ fees, whether or not suit is brought, accountants’
fees and/or consultants’ fees) or liability whatsoever arising from or otherwise relating to the closing, disbursement, administration
or repayment of the Loan, including without limitation: (i) a Borrower’s failure to comply with the terms of this Agreement
and the other Loan Documents (ii) the breach of any representation or warranty made to Bank in this Agreement or in any other Loan
Documents now or hereafter executed in connection with the Loan; (iii) the violation of any covenant or agreement contained in
this Agreement or any of the other Loan Documents; provided, however, that the foregoing indemnification shall not be deemed to
cover any such loss, damage, lawsuit, proceeding, cost, expense or liability which is finally determined by a court of competent
jurisdiction to result solely from Bank’s gross negligence or willful misconduct. This indemnity obligation shall survive
the payment of the Loan and the termination of this Agreement.

10.22. WAIVER OF JURY TRIAL.
UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE PARTIES HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING
OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN ANY BORROWER AND BANK,
IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. THE PARTIES AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THE WAIVER OF THE RIGHT TO TRIAL BY JURY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE THE LOAN AND ENTER INTO THIS AGREEMENT. FURTHER, BORROWERS HEREBY CERTIFY THAT
NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK
TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK’S COUNSEL, HAS THE
AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION. BORROWERS ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL REGARDING THIS PARAGRAPH, THAT THEY FULLY UNDERSTANDS ITS TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND KNOWINGLY
AGREE TO THE TERMS OF THIS PARAGRAPH.

    	19

     

    

10.23. Required Information for
a New Loan. To help the government fight the funding of terrorism and money laundering activities, federal law requires Bank
to obtain, verify and record information that identifies each person or entity obtaining a loan including each Borrower’s
legal name, address, tax identification number, date of birth, driver’s license, organizational documents or other identifying
documents. Failure to provide the required information will result in a violation of the U.S. Patriot Act and will constitute a
default under this instrument or agreement. In addition, no Borrower, any of its affiliates, or any of their respective directors,
officers, managers, partners, or any other authorized representatives is named as a “Specially Designated National and Blocked
Person”, on the list published by the U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) at its official
website.

10.24. Correction of Errors;
Further Assurances.  Each Borrower will and will cause any Pledgor to cooperate with Bank to correct any errors in this Agreement,
the Note or other Loan Documents and shall execute such documentation as is necessary to do so. In addition, each Borrower and
each Pledgor shall cooperate fully with Bank and execute such further instruments, documents and agreements, and shall do any and
all such further acts, as may be reasonably requested by Bank to better evidence and reflect the transactions described herein
and contemplated hereby and to carry into effect the intent purposes of this Agreement, the Note and the other Loan Documents,
including without limitation the granting and/or perfecting of a security interest in the Collateral.

10.25. Consent to Loan Participation.
Each Borrower agrees and consents to Bank’s sale or transfer, whether now or later, of one or more participation interests
in the Loan to one or more purchasers, whether related or unrelated to Bank. Bank may provide, without any limitation whatsoever,
to any one or more purchasers, or potential purchasers, any information or knowledge Bank may have about any Borrower or about
any other matter relating to the Loan, and each Borrower hereby waives any rights to privacy a Borrower may have with respect to
such matters. Each Borrower hereby waives any and all notices of sale of participation interests, as well as all notices of any
repurchase of such participation interests. Each Borrower agrees that the purchasers of any such participation interests will be
considered as the absolute owners of such interests in the Loan and will have all the rights granted under the participation agreement(s)
governing the sale of such participation interests. Each Borrower waives all rights of offset or counterclaim, whether now existing
or hereafter arising, against Bank or against any purchaser of such participation interest and unconditionally agrees that either
Bank or such purchaser may enforce each Borrower’s obligation under the Loan irrespective of the failure or insolvency of
any holder of any interest in the Loan. Each Borrower agrees that the purchaser of any such participation interest may enforce
its interest irrespective of any personal claims or defenses that a Borrower may have against Bank. Any purchaser of a participation
interest in the Loan may exercise a right of setoff against each Borrower to the same extent as Bank has such right.

10.26. Severability.  If
a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance,
such finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible,
the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision
cannot be so modified, it shall be considered deleted from this Agreement. Unless otherwise required by law, the illegality, invalidity,
or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision
of this Agreement.

10.27. Construction. Each
party hereto hereby acknowledges that all parties hereto participated equally in the drafting and/or negotiation of this Agreement
and that, accordingly, no court when interpreting this Agreement shall construe it more stringently against one party than the
other. The headings in this Agreement are included for convenience only and shall neither affect the construction or interpretation
of any provision in this Agreement nor affect any of the rights or obligations of the parties to this Agreement.

10.28. Time of the Essence.
Time is of the essence in the performance of this Agreement and the other Loan Documents.

    	20

     

    

10.29. Limitation of Damages.
BANK AND BORROWERS EXPRESSLY AND IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY ACTION RELATING TO THIS AGREEMENT, THE LOAN DOCUMENTS OR THE LOAN ANY INDIRECT, INCIDENTAL, SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR LOSS OF BUSINESS PROFITS OR REVENUE).

10.30. No Third Party Beneficiaries.
There are no third party beneficiaries to this Agreement or to any of the other Loan Documents. All conditions to Bank’s
obligations to make disbursements under this Agreement and the other Loan Documents are imposed solely and exclusively for the
benefit of Bank. Neither Borrowers nor any other Person shall have standing to require satisfaction of any such condition or be
entitled to assume that Bank will refuse to make disbursements in the absence of strict compliance with any or all such conditions,
and neither Borrowers nor any other Person shall, under any circumstances, be deemed to be a beneficiary of any conditions hereof,
any or all of which conditions may be waived freely, in whole or in part by Bank at any time if, in its sole discretion, Bank deems
it advisable so to do.

 

10.31. Hedge Agreements Separate
and Distinct. All Hedge Agreements, if any, between any Borrower and Bank or its affiliates are independent agreements governed
by the written provisions of said Hedge Agreements, which will remain in full force and effect, unaffected by any repayment, prepayment,
acceleration, reduction, increase or change in the terms of the Note, except as otherwise expressly provided in said written Hedge
Agreement, and any payoff statement from Bank relating to the Note shall not apply to said Hedge Agreements except as otherwise
expressly provided in such payoff statement.

 

10.32. Remedies Cumulative. No
right or remedy conferred upon Bank in this Agreement is intended to be exclusive of any other right or remedy contained in the
Note, this Agreement, or any other Loan Document, and every such right or remedy shall be cumulative and in addition to every other
right or remedy contained herein or therein or now or hereafter available to Bank at law, in equity, by statute or otherwise.

 

 

 

 

[Signatures
on Following Page]

 

    	21

     

    

Signature
Page

 

IN WITNESS WHEREOF, Bank and Borrowers have
caused this Agreement to be duly executed under seal all as of the date first above written.

 

	 	 	Borrowers	 
	WITNESS:	 	 	
        COMMAND
        CENTER, INC.
	 
	 	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	/s/ Richard K. Coleman, Jr.	(SEAL)
	 	 	 	Name:	 Richard K. Coleman, Jr.	 
	 	 	 	Title:	President & CEO	 
	 	 	 	 	 	 

 

	WITNESS:	 	 	COMMAND FLORIDA, LLC	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	/s/ Brendan Simaytis	(SEAL)
	 	 	Name:	 Brendan Simaytis	 
	 	 	Title:	Manager	 
	 	 	 	 	 

 

	WITNESS:	 	 	HIRE QUEST, L.L.C.	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ John McAnnar	 	By:	/s/ Richard Hermanns	(SEAL)
	 	 	Name:	 Richard Hermanns	 
	 	 	Title:	Manager	 
	 	 	 	 	 

 

	WITNESS:	 	 	HQ LTS CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	 /s/ Brendan Simaytis	(SEAL)
	 	 	Name:	 Brendan Simaytis	 
	 	 	Title:	Secretary	 
	 	 	 	 	 

 

	WITNESS:	 	 	HQ REAL PROPERTY CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	 /s/ Brendan Simaytis	(SEAL)
	 	 	Name:	 Brendan Simaytis	 
	 	 	Title:	Secretary	 
	 	 	 	 	 

 

    	22

     

    
	WITNESS:	 	 	HQ INSURANCE CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	/s/ Brendan Simaytis	(SEAL)
	 	 	Name:	Brendan Simaytis	 
	 	 	Title:	Secretary	 
	 	 	 	 	 

 

	WITNESS:	 	 	HQ FINANCIAL CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	/s/ Brendan Simaytis	(SEAL)
	 	 	Name:	Brendan Simaytis	 
	 	 	Title:	Secretary	 
	 	 	 	 	 

 

	WITNESS:	 	 	HQ FRANCHISING CORPORATION	 
	 	 	 	 	 
	 	 	 	 	 
	/s/ Joanne Edmunds	 	By:	/s/ Brendan Simaytis	(SEAL)
	 	 	Name:	Brendan Simaytis	 
	 	 	Title:	Secretary	 
	 	 	 	 	 

 

 

 

	WITNESS:	 	 	Branch Banking and Trust Company
	 	 
	 

/s/ Mitch McCoin

 	 	By:	

(SEAL) /s/ Trenton S. Holland
	 	 	 	Name:	Trenton S.  Holland
	 	 	 	Title:	Senior Vice President
	 	 	 	 	 	 	 

 

23Exhibit 10.1

 

AEROVIRONMENT PROPRIETARY INFORMATION

 

 

SPECIAL CONSULTING AGREEMENT

 

 

THIS AGREEMENT is executed and made effective as of July 13, 2019 (“Effective Date”) between AeroVironment, Inc., a Delaware corporation, and its subsidiaries, with offices at 900 Innovators Way, Simi Valley, CA  93065 (hereinafter referred to as “AV” or “Party”) and Kirk Flittie with offices at 2101 Via Montecito, Camarillo, CA  93012 (hereinafter referred to as “Consultant” or “Party”).  AV and the Consultant will be collectively referred to as “the Parties.”

 

WHEREAS, Consultant is engaged in providing consulting services and investigating and solving, to the best of consultant’s ability, specific problems presented; and

 

WHEREAS, AV desires to have the services of Consultant (“Services”) made available to it on the terms and conditions hereinafter set forth;

 

NOW THEREFORE, in consideration of the mutual promises and other good and valuable consideration, receipt of which is hereby acknowledged by each Party, the Parties hereto agree as follows:

 

1.    Consulting Services.  During the period of this Agreement, Consultant agrees to perform Services in a consulting capacity on a general basis and on the particular individual projects assigned and accepted in accordance with the provisions hereof.  Consultant agrees to provide such Services for the compensation provided in Section 4 for each task, which are based on the hours worked on the task unless provided otherwise in the Task Order (as defined in Section 3).

 

2.    Term.  Services will be performed between the Effective Date and July 12, 2020 (“Expiration Date”). This Agreement may be extended for additional increments of time by mutual written agreement between the Parties prior to the Expiration Date of the initial Term or any extension thereof.  If the Parties do not execute such a written agreement, this Agreement will expire and automatically terminate as of the Expiration Date. It is intended that the termination of employment and the commencement of the consulting arrangement occur contemporaneously at midnight on the Effective Date/12:01 a.m. July 14, 2019 to enable the continuity of service contemplated by AV’s 2006 Equity Incentive Plan, as amended and restated (the “2006 Plan”), so that a “Termination of Service” does not occur under the 2006 Plan.

 

3.    Task Orders.  AV shall submit any task, or of any task, upon which it desires the Services of Consultant in the form of a written task order (“Task Order”) in sufficient detail which shall include: the Task Order number, the Project Number and/or Charge Number for inclusion on all invoices submitted, the nature and scope of the work to be performed, the time period for performance, the identity and name of the AV Task Manager, the rate paid for each hour of labor, and the not to exceed dollar value of the estimated labor, and allowable expenses for any material or travel expenditures anticipated by Consultant. If the compensation to be provided to Consultant is on a basis other than based on labor hours worked (e.g., monthly retainer), the basis of that compensation must be detailed in the Task Order. Attachment A shall be the form of the Task Order.

 

4.    Specified Cost.  Subject to the terms and conditions of this Agreement, AV shall pay Consultant the compensation due Consultant for Services performed by Consultant as provided in the Task Order relating to those Services.  AV shall have the right to specify in a Task Order that the cost to AV of a requested task not exceed the stated amount.  When so specified in the Task Order, Consultant shall not perform Services exceeding the amount specified for the task that may sometimes be referred to as “Effort”.  If it becomes apparent during the performance of a task that the cost for completion of the task will exceed the amount limited in the Task Order, Consultant shall advise AV as far in advance as reasonably possible so that consideration may be given to an increase in the amount specified for said task.  AV may then, in its sole discretion, do any of the following:

i.      Authorize an increase in the amount of the Task Order to allow completion of the task, subject to Consultant’s right to decline;

ii.     Request continuation of the task up to the original dollar amount specified, at which time Consultant

 

Consultant Initial /s/ KF Date 7/11/2019

 

AV Initial /s/ WN Date 7/11/2019

 

 

AEROVIRONMENT PROPRIETARY INFORMATION

 

 

shall submit to AV any work or materials resulting from the unfinished task; and

iii.    Request immediate termination of the task, and cause Consultant to submit to AV any work or materials resulting from the unfinished task.

 

5.    Additional Compensation.

 

a.    Consultant will continue to be eligible to participate in the medical, hospitalization and prescription benefits under the medical benefits program in which Consultant currently participates until the Expiration Date.  Until the Expiration Date, AV will continue to pay the costs attributable to AV as the sponsor of the medical plan and will pay the medical plan premium but no other costs that are normally paid by plan participants (e.g., co-pays, deductibles, non-covered costs of medical treatment, out of network etc.).  After the Expiration Date, AV has advised that Consultant will be eligible to continue participation in the medical plan for up to 18 months pursuant to COBRA, at Consultant’s sole expense and without any financial contribution by AV.  If during the term of this Agreement, AV changes the medical plan options generally provided to employees and no longer makes available to employees the existing medical plan in which Consultant participates or if for any reason AV is unable to provide Consultant with the medical benefits contemplated above, AV shall make available to Consultant participation in a medical plan providing substantially similar benefits and coverages.

 

b.    For so long as Consultant remains engaged as a consultant with AV, Consultant shall be entitled to continued vesting of the restricted stock awards (“RSAs”) described on Exhibit A hereto. Upon a Termination of Service (as defined in the award agreement and 2006 Plan, the vesting of Consultant’s RSAs will cease and any unvested RSAs (i.e., Unreleased Shares) will terminate and be forfeited. Consultant’s Termination of Service will occur upon the earlier to occur of the following: (i) the expiration of this Agreement on July 12, 2020, unless extended by the Parties (ii) Consultant’s earlier death or Disability or (iii) the termination of Consultant’s employment or this Agreement for cause. The rights and obligations associated with Consultant’s RSAs are governed by the terms and conditions of the 2006 Plan and the applicable grant documents.  In the event of any inconsistency between this Agreement and such documents, the terms contained in the 2006 Equity Incentive Plan and the applicable grant documents shall govern.  Consultant voluntarily agrees to forfeit and cancel as of the Effective Date, and waive any rights to the continued vesting of, all of his outstanding performance restricted stock units (“PRSUs”) that remain unvested as of the Effective Date, regardless of the fact that no Termination of Service shall have occurred as of the effective time of this Agreement.

 

6.    Right to Decline.  Consultant shall have the right to decline the acceptance of any task requested by AV in the event that such task conflicts with other activity of Consultant or for any other good and sufficient reason.  In such events, Consultant shall give AV notice in writing that it declines to accept such task within five (5) working days of receipt of such request.

 

7.    Progress Reports.  Consultant is required by any Task Order to submit progress reports to AV, at reasonable intervals, but not more frequently than monthly unless otherwise specified in the Task Order, and in such a manner as is more specifically provided for and defined in each Task Order.

 

8.    Invoices and Payment.  Consultant shall submit separate invoices monthly for each Task Order and such invoices shall include a breakdown of all charges and expenses, if any, incurred during the month together with the Project Number and/or Charge Number shown on the Task Order as well as the name of the AV Task Manager identified on the Task Order.  Invoices shall be due and payable within thirty (30) days after receipt by AV’s Accounts Payable Group.  Invoices shall be sent to the attention of the Accounts Payable Group; AeroVironment, Inc., via e-mail to acp@avinc.com, and also reference the Task Order Number as well as your organization’s name in the subject line or by mail to P.O. Box 5031, Monrovia, CA  91107.  Unless otherwise

 

REV 05/2019

 

Consultant Initial /s/ KF Date 7/11/2019

 

AV Initial /s/ WN Date 7/11/2019

 

2

 

AEROVIRONMENT PROPRIETARY INFORMATION

 

 

agreed at the time individual Task Orders are accepted, all payments shall be made in US dollars.

 

9.    Confidential Information. It is recognized that in performing services covered by this Agreement the Consultant, including Consultant’s authorized subcontractors, may acquire from AV or AV’s representatives confidential information regarding the products, processes, operations, and present and contemplated activities of AV and/or its clients or customers. Such confidential information includes, but it not limited to, the existence of and terms of this Agreement, AV technical information included in or on tracings, drawings, field notes, calculations, specifications, legal, economic, business and engineering data and the like, and all information, documents and materials created by Consultant during the performance of the Services that reflect, include or incorporate in any way the confidential information disclosed by AV to the Consultant. Similarly, in connection with the Services performed by Consultant, Consultant may disclose information which it considers to be confidential to AV. Confidential information disclosed in writing by a Party to the other should be marked “confidential” or bear a similar marking. Confidential information disclosed orally by a Party to the other should be confirmed in writing within ten days of the oral disclosure. Consultant and AV each agree to hold in confidence, for a period of five (5) calendar years from the date of disclosure, all confidential information disclosed to a Party by the other Party, except for the following categories of Information:

i.       Information, which at the time of disclosure is in the public domain;

 

ii.      Information which, after its disclosure becomes part of the public domain by publication or otherwise through no fault of a Party, but in such case only after it is published or otherwise becomes part of the public domain;

 

iii.      Information which a Party can show was in that Party’s possession at the time of its receipt from the other Party and which was not acquired, directly or indirectly, from the other Party; and

 

iv.     Information which was received by a Party before or after the time of disclosure from a third party who did not require such Party to hold such information in confidence and who, to the best of that Party’s knowledge and belief, did not acquire it directly or indirectly from the other Party (including its clients) under an obligation of confidence.

 

Consultant agrees that, with the exception of providing the Services contemplated by this Agreement, Consultant will not utilize AV confidential information covered by this Section for any purpose, including the development or expansion of Consultant’s technology or the technology of any third person or entity, but Consultant shall be and remain free to exploit its own independent developments free of any obligation whatsoever to AV or its clients except as specifically set forth herein.

 

Each Party acknowledges that it is aware, and agrees to advise its employees and other representatives who may receive confidential information under this Agreement that the United States securities laws prohibit a Party, its representatives or any person or entity who has received material, non-public information concerning the other Party, from purchasing or selling securities of the other Party or from communicating such information to any other person or entity under circumstances in which it is reasonably foreseeable that such person or entity is likely to purchase or sell securities of a Party.

 

10.  AV’s Acceptable Use Policy.  If during the course of performing services covered by this Agreement the Consultant, including Consultant’s authorized subcontractors, stores or processes AV Confidential Information electronically, Consultant hereby agrees for itself and any authorized subcontractor to abide by AV’s Acceptable Use Policy (“AU Policy”). The AU Policy will be provided to Consultant, as necessary, by AV’s Information Security Officer prior to the performance of services covered by this Agreement.

 

11.  Proprietary Rights.  All materials prepared or developed by Consultant in the performance and completion of

 

REV 05/2019

 

Consultant Initial /s/ KF Date 7/11/2019

 

AV Initial /s/ WN Date 7/11/2019

 

3

 

AEROVIRONMENT PROPRIETARY INFORMATION

 

 

Task Orders hereunder, including documents, calculations, maps, sketches, notes, reports, data, models and samples, photographs including but not limited to digital photography, digital and film recordings in any media (including but not limited to digital and/or physical videotape and audiotape), and any and all inventions and copyrightable material contained therein, shall be and become the sole and exclusive property of AV without limitation, when first made or prepared, whether or not delivered to AV or whether such are subject to Consultant’s need to use in order to perform the tasks under this Agreement. Such materials, together with any materials furnished by AV to Consultant hereunder, shall be promptly delivered to AV upon request, and in any event upon completion or cancellation of this Agreement.  Consultant agrees to execute all documents and to take all steps requested by AV, at AV’s expense, which AV deems necessary or desirable to complete and perfect AV’s ownership and property rights in said inventions and copyrightable material. The Parties hereby agree that materials that are considered copyrights of the creator under this Agreement shall each and collectively be considered by the Parties a Work for Hire under the meaning of the U.S. Copyright Act of 1976, and the copyrights thereto shall be the sole property of AV.  Consultant hereby agrees, that upon request of AV, it will execute an assignment of such copyright or other intellectual property rights to further clarify the transfer of the copyright or other intellectual property rights to AV.

 

Consultant shall contribute the use of the intellectual property identified in Attachment B of this Agreement to the project for the term of this Agreement unless a longer period of time is expressly agreed to in writing by the Parties.  Except as may otherwise be provided for in the Agreement, and in order to carry out the obligations under this Agreement, no right title or interest in the material described in Attachment B shall pass to AV or any other party by this contribution of use.

 

12.  Termination.  By ten (10) days prior written notice to the other, either AV or Consultant may terminate this Agreement at any time.  In the event of such termination, Consultant shall be entitled to payment, under the provisions of this Agreement, for all charges and expenses actually earned or incurred with respect to all Task Orders in effect up to the time of the termination.  Termination for failure of the other Party to perform shall not prejudice said Party in any respect with regard to pursuing its rights and remedies, or otherwise. Any provision of this Agreement that imposes an obligation that should reasonably be expected to extend after termination or expiration of this Agreement shall survive the termination or expiration of this Agreement.  Such provisions include but are not limited to Sections 8, 9, 10, 15, 16, 17, 26 and 29 herein.

 

13.  Assignment.  Neither Party may assign this Agreement or any part thereof without the prior consent in writing of the other Party, which consent shall not be unreasonably withheld. The assignor shall remain responsible for its liabilities and obligations under this Agreement until an approved assignee has assumed such obligations.  When duly assigned in accordance with the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the assignee.

 

14.  Subcontract.  Consultant may not subcontract any portion of any Task Order hereunder without the prior written consent of AV.

 

15.  Warranty.  Consultant warrants that it shall perform Task Orders accepted hereunder using commercially best efforts and in conformance with recognized professional standards.

 

16.  Indemnity.  Each Party shall hold harmless and indemnify the other Party from and against all losses, damages, demands, claims, suits, and liabilities, including attorney fees and other expenses of litigation, arising out of or related to the performance or failure to perform their obligations under this Agreement; including agents, or employees, or permitted subcontractors.

 

17.  Arbitration.  Any controversy or claim arising out of this Agreement, including any Task Order accepted hereunder, or alleged breach thereof, shall be subject to binding arbitration in the City of Los Angeles, California, in accordance with the rules of the American Arbitration Association, and a judgment upon the award rendered

 

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by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. The prevailing party in the arbitration proceeding shall be entitled to recover from the non-prevailing party reasonable expenses, including without limitation reasonable attorneys’ fees.

 

18.  Governing Law.

a.    In any arbitration pursuant to Section 16, the Parties agree that the law of the State of California shall govern the interpretation, construction and enforcement of this Agreement. In the event that any matter pertaining to this Agreement must be heard by a court and cannot be arbitrated in accordance with Section 16, each Party hereby irrevocably submits to the law of the State of California, excluding its conflicts of law principles, and the jurisdiction of the U.S. District Court for the Central District of California located in Los Angeles County, California, in any action or proceeding arising out of or relating to this Agreement, and each Party irrevocably agrees that all claims with respect to such action or proceeding shall be heard and determined in such District Court.

 

b.    Each of the Parties hereto hereby waives any defense of lack of personal jurisdiction of said arbitration or courts and agrees that service of process in such action may be made upon each of them by mailing certified or registered mail to the other party at the address specified in Section 20.  In the event that any matter pertaining to this Agreement must be heard by a court and cannot be arbitrated in accordance with Section 16, both Parties hereby submit to the jurisdiction of the U.S. District Court for the Central District of California, to the exclusion of any other courts which might have had jurisdiction apart from this Section 17, and agree that the prevailing party shall be entitled to recover from the non-prevailing party reasonable expenses, including without limitation reasonable attorneys’ fees.

 

19.  Independent Contractor.  Nothing in this Agreement shall be deemed to constitute Consultant or any of Consultant’s employees or agents to be the agent, representative or employee of AV.  Consultant shall in all respects be an independent contractor and shall have responsibility for and control over the details and means of performing the Consulting Services and shall be subject to the directions of AV only with respect to the scope and general results required.  Consultant shall, prior to the start of work under this Agreement, provide AV with a fully executed W9 Form and other applicable tax forms including correct corporate name, EIN, and current address for use in meeting legal requirements for reporting all consulting agreements to the state of California and the Internal Revenue Service.

 

20.  No Employee Benefits.  Consultant understands and agrees that AV will not classify Consultant as an AV employee.  Accordingly, Consultant shall not be entitled to any of the benefits provided to AV employees including, but not limited to stock options, health or retirement benefits (other than as otherwise set forth in this Agreement), vacations, and paid holidays.  AV has not offered Consultant any such benefits (other than the benefits otherwise set forth in this Agreement) or rights as an employee, and Consultant hereby waives any claim Consultant might otherwise have to them, even in the event that Consultant is reclassified as an AV employee.

 

21.  Notice.  Any notice between the parties hereto required or permitted to be given under this Agreement shall be sufficient if in writing and sent by registered or certified mail, postage prepaid, or other delivery method, to the respective addresses set forth below or at such other address as either of the parties may from time to time designate in accordance with the provisions of this Section 20.

 

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AeroVironment, Inc.:
    	
Lawrence   Yang
    
	
 
    	
Senior   Counsel
    
	
 
    	
900   Innovators Way
    
	
 
    	
Simi   Valley, CA 93065
    
	
 
    	
 
    
	
 
    	
Telephone:
    	
805-520-8350   ext. 4296
    
	
 
    	
E-Mail:
    	
yangl@avinc.com
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
Consultant:
    	
Kirk   Flittie
    
	
 
    	
2101 Via   Montecito
    
	
 
    	
Camarillo,   CA 93012
    
	
 
    	
 
    
	
 
    	
Telephone:   805-341-3982
    
	
 
    	
E-Mail:   flittiekirk@gmail.com
    

 

 

22.  Subject Headings.  The subject headings in this Agreement have been used for the convenience of the parties and shall not be considered in any question of interpretation or construction of this Agreement.

 

23.  Integration.  This Agreement contains the entire understanding between the Parties, and there are no understandings or representations not set forth or incorporated by reference herein.  No subsequent modifications of this Agreement shall be of any force or effect unless in writing and signed by both Parties hereto.

 

24.  Facsimile/Email.  Each Party shall be authorized to rely upon the signatures of the other Party(ies) to this Agreement that are delivered by facsimile or email as constituting a duly authorized, irrevocable, actual delivery of this Agreement.

 

25.  Counterparts.  This Agreement may be executed in multiple counterparts, each of which will be deemed an original and all of which together will constitute a single Agreement.

 

26.  Preparation of This Agreement.  The terms and provisions of this Agreement were arrived at after arm’s length negotiations, and therefore, for the purposes of interpreting this Agreement, each Party shall be deemed to have participated and cooperated equally in the drafting and preparation of this Agreement.  This Agreement shall not be interpreted against any Party in favor of any other Party due to its drafting.

 

27.  Compliance with Laws.

a.    Consultant will comply with all applicable laws, including applicable anti-bribery laws, and AV’s Code of Ethics and Business Integrity.  In addition, whether or not applicable to Consultant, it will comply with the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), which prohibits corrupt offers of anything of value, either directly or indirectly, to a government official to obtain or keep business or to secure any other improper commercial advantage.

 

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b.    Consultant warrants and represents that it will not, directly or indirectly, offer, pay, give promise, or authorize the payment of any money, gift or anything of value to: (i) any Government Official (defined as any officer, employee or person acting in an official capacity for any government department, agency or instrumentality, including state-owned or -controlled companies, and public international organizations, as well as a political party or official thereof or candidate for political office), or (ii) any person while knowing or having reason to know that all or a portion of such money, gift or thing of value will be offered, paid or given, directly or indirectly, to any Government Official, for the purpose of (i) influencing an act or decision of the Government Official in his or her official capacity, (ii) inducing the Government Official to do or omit to do any act in violation of the lawful duty of such official, (iii) securing an improper advantage, or (iv) inducing the Government Official to use his influence to affect or influence any act or decision of a government or instrumentality, in order to assist AeroVironment or any of its affiliates in obtaining or retaining business.  Consultant represents and warrants that none of the Consultant’s officers, directors, or employees is currently an officer, agent or employee of a government department, agency or instrumentality nor a director, officer, employee or agent of a wholly or partially government-owned or controlled company or business.

 

c.    In connection with the performance of obligations under its agreement(s) with the AV, Consultant will not provide any business courtesies that: (i) violate any laws or regulations; (ii) are lavish or extravagant; (iii) might reasonably be perceived as an attempt to improperly influence official action to gain or keep business on behalf of AV, or to otherwise gain an unfair business advantage for AV; (iv) are provided secretly to a Government Official; (v) are provided for the spouse, children, or any other family member of any Government Official; (vi) might embarrass, or reflect negatively on, the reputation of AV; or (vii) is a gift of cash or a cash equivalent (e.g., gift cards or gift certificates).

 

d.    In all actions undertaken on behalf of AV, Consultant will not, directly or indirectly, make any improper payment to any commercial counterparty to obtain or retain business or to secure an improper advantage.  In addition, no payment shall be made to anyone for any reason on behalf of or for the benefit of AV that is not properly and accurately recorded in the Consultant’s books and records, including amount, purpose and recipient, all of which shall be maintained with supporting documentation.

 

e.    Consultant will not engage or retain any contractor, subcontractor, consultant, agent, representative or other third party (collectively, “Sub-Agents”) to work for, provide service or do anything in connection with the performance of AV’s obligations under its agreement(s) with AV without the prior written approval of AV and without first conducting sufficient due diligence to conclude with reasonable assurance that the Sub-Agent will conduct business ethically, in compliance with all applicable laws, including anti-bribery laws, and in compliance with the FCPA, whether or not applicable to such Sub-Agent.

 

f.     The Consultant further agrees to participate and complete training sessions with respect to the requirements of anti-corruption laws as requested by AV and shall promptly confirm compliance with the requirements of this Section 26 at the request of AV.

 

g.    AV may unilaterally stop work under this Agreement and/or suspend all payments to the Consultant as the result of any actual or apparent violation of the foregoing or for failure by the Consultant to promptly reaffirm, when requested, its compliance herewith. Should AV determine that any amounts payable to or the means of payment to the Consultant may be prohibited under applicable laws or under the provisions of a purchase order or contract awarded to AV, then and in such event, in addition to other available legal remedies, AV may suspend further payments to the Consultant, and the Parties shall meet to determine whether such payments may validly be paid.

 

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28.  Conflict of Interest.  Consultant warrants this Agreement does not at time of execution, nor shall it in the future, conflict with any other agreement existing with Consultant as a party nor any agreement anticipated to be entered into in the future by Consultant.  Consultant agrees to hold harmless AV in regard to any government or private party claim of such a conflict of interest.  Consultant shall timely and in advance of a conflict arising, make any disclosure necessary to AV to avoid the fact of or any impression that any such conflict exists or may soon exist.

 

29.  Evidence Of Citizenship Or Immigrant Status.  AV is required to obtain information concerning citizenship or immigrant status of Consultant personnel or Consultant’s subcontractor personnel entering the premises of AV when such entry will require access to areas containing “technical data” or prior to disclosure of controlled data to Consultant.  Consultant agrees to furnish this information before entry to AV premises or prior to disclosure of AV controlled information and at any time thereafter before substituting or adding new personnel to work on AV’s premises or prior to receipt of AV controlled information as noted above. Information to be provided shall be in accordance with the requirements of Attachment C attached hereto.  If Consultant has similar restrictions on data, AV shall meet the same standard prior to any disclosures to AV personnel.  The Consultant also shall execute the Certificate of Compliance with US Trade Control Laws attached hereto as Attachment D.

 

30.  Export Control.

a.    The Consultant shall comply with all applicable U.S. export control laws and regulations and economic sanctions laws and regulations, specifically including but not limited to the International Traffic in Arms Regulations (“ITAR”), 22 C.F.R. 120 et seq.; the Export Administration Regulations, 15 C.F.R. 730-774; and the Foreign Assets Control Regulations, 31 C.F.R. 500-598 (collectively, “Trade Control Laws”). Without limiting the foregoing, the Consultant, in its work on behalf of the AV, shall not transfer any export controlled item, technical data, technology, or service, including transfers to any non-US persons, as that term is defined under the applicable Trade Control Laws, unless authorized in advance by an export license (such as Technical Assistance Agreement (TAA) or Manufacturing License Agreement (MLA), license exception or license exemption, collectively, “Export Authorization”), as required.

 

b.    The Consultant hereby represents that neither Consultant nor any parent, subsidiary or affiliate of the Consultant is included on any of the restricted party lists maintained by the U.S. Government, including the Specially Designated Nationals List administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”); Denied Parties List, Unverified List or Entity List maintained by the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”); the List of Statutorily Debarred Parties maintained by the U.S. Department of State’s Directorate of Defense Trade Controls; or the consolidated list of asset freeze targets designated by the United Nations, European Union, and United Kingdom (collectively, “Restricted Party Lists”). The Consultant shall immediately notify AV if the Consultant, or any parent, subsidiary or affiliate of the Consultant becomes listed on any Restricted Party List or if Consultant’s privileges are otherwise denied, suspended or revoked in whole or in part by any U.S. or non-U.S. government entity or agency.

 

c.    If the Consultant is a US person (wherever located), a non-US person located in the United States, or a non-US person located outside of the United States but that is owned or controlled by a US person, as those terms are defined under he applicable Trade Control Laws, and is engaged in the business of exporting, manufacturing (whether exporting or not) or brokering defense articles or furnishing defense services in its work for AV, the Consultant represents that it is and will continue to be registered with the US Department of State, Directorate of Defense Trade Controls, as required by the ITAR, and it maintains an effective export/import compliance program in accordance with the ITAR.   If applicable, the Consultant will provide a copy of its broker registration certificate to AV upon execution of this Agreement. The

 

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Consultant will provide copies of the renewal of any such registration to AV during the Term of this Agreement at any time a renewal is required and issued by the US Department of State, Directorate of Defense Trade Controls. Failure to provide its broker registration certification or copies of the renewal of any such registration to AV during the Term of this Agreement will result in automatic termination of this Agreement.

 

d.    Where the Consultant is a party to or signatory under an AV Export Authorization, the Consultant shall provide prompt notification to AV in the event of: (1) changed circumstances including, but not limited to, ineligibility, a violation or potential violation of the ITAR or other applicable governmental restrictions, and the initiation or existence of a U.S. Government investigation, that could affect the Consultant’s performance under this Agreement; or (2) any change by the Consultant that might require AV to submit an amendment to an existing Export Authorization or request a new or replacement Export Authorization. The Consultant shall provide to AV all information and documentation as may reasonably be required for AV to prepare and submit any required export license applications. Delays on the Consultant’s part to submit the relevant information for export licenses shall not constitute an excusable delay under this Agreement.

 

e.    Consultant and AV agree not to: (1) export “Technical Data” or disclose to third parties; or (2) export “Confidential Information” obtained from the other party, without the express written consent of the other Party and without the required Export Authorization for any controlled item.  Any information relating to AeroVironment air vehicle systems is considered controlled data and Confidential Information.  “Confidential Information” is defined in Section 8 of this Agreement.  “Technical Data” is defined in the export regulations as “Information..., which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles.”

 

f.     Consultant and AV agree that the commitment not to export absent the required Export Authorization includes any “deemed export” (disclosure to non-US Persons that occurs in the United States) and this includes any “non-US Persons” that may be in the employ of, present in the facilities of or in contact with Consultant or AV outside their respective business facilities. Any person who is not a citizen of the United States, a Lawful Permanent Resident, or a person who holds political asylum in the United States is a non-US Person and cannot receive export controlled data absent the required Export Authorization. Any business entity that is not incorporated or organized to do business in the United States is also a non-US Person.  Execution of this Agreement is the certification of the Parties that they will take all reasonable measures to protect the technical data and Confidential Information of the other Party from disclosure to any non-US persons.

 

g.    Failure to obtain the necessary Export Authorization from the U.S. Government may result in criminal liability under U.S. laws. Express written consent from the disclosing Party, although required under this Agreement, does not constitute a governmental authorization, the required Export Authorization, nor an export license.

 

h.    The Consultant shall be responsible for all losses, costs, claims, causes of action, damages, liabilities and expense, including attorneys’ fees, all expense of litigation and/or settlement, and court costs, arising from any act or omission of the Consultant, its officers, employees, agents, suppliers, or subcontractors at any tier, in the performance of any of its obligations under this Section 29. The Consultant shall indemnify and hold harmless AV from and against all losses, costs, claims, causes of action, damages, liabilities, and expenses, including attorneys’ fees, all expenses of litigation and/or settlement, and court costs, arising from any act or omission of Consultant, its officers, employees, agents, suppliers, or subcontractors at any tier, in the performance of any of its obligations under this Section 29.

 

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31.    Waivers.  The failure of either Party to enforce any provision of this Agreement at any time or for any period shall not be construed as a waiver of such provision or of the right of such Party thereafter to enforce such provision.

 

32.    Electronic Signature Validity.  The Parties hereby agree that for their mutual convenience, and due to the geographic distance between them, original signatures will not be required on the execution of this Agreement or on notices or communications between the Parties under this Agreement.  The electronic transmission of executed documents shall be considered by the Parties as equal in status and validity to original documents as if the documents were signed in duplicate original by the Parties.

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date herein.

 

 

	
AeroVironment, Inc.
    	
 
    	
Consultant
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Wahid Nawabi
    	
 
    	
/s/ Kirk Flittie
    	
 
    
	
Signature
    	
 
    	
Signature
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Wahid   Nawabi
    	
 
    	
Kirk   Flittie
    	
 
    
	
Name   (Print)
    	
 
    	
Name   (Print)
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
President and CEO
    	
 
    	
 
    	
 
    
	
Title
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
7/11/2019
    	
 
    	
7/11/2019
    	
 
    
	
Date
    	
 
    	
Date
    	
 
    

 

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ATTACHMENT A - FORM OF TASK ORDER

 

(THIS IS AN EXAMPLE TEMPLATE ONLY)

 

STANDARD CONSULTING AGREEMENT

 

Consultant: (No name required – this is an example template)

 

	
TASK ORDER #_________
    	
Project   No. and/or Charge No.  __________
    

 

A.           Effort and/or Services to be provided by Consultant:

 

B.   Until otherwise designated in writing by AV with notice to Consultant, the AV Task Manager is:   __________________

 

C.           Target Performance Period:  ________  through _________

 

D.           Rates:

 

Authorized Days:  As required and authorized by AV Task Manager

 

Rate:  $ per hour

 

Total Not To Exceed Cost:  $ example only (including expenses)

 

 

E.           Expenses:

 

Maximum authorized expenses: $ example only

 

AV will reimburse Consultant for any AV related business travel expenses (transportation, lodging, meals, etc.) during “Target Performance Period” defined under Section C above, provided all travel expenses are pre-approved in writing by the AV Task Manager.

 

Travel and/or miscellaneous expenses shall be reimbursed in accordance with current AV standard travel procedures; receipts shall accompany invoices of $25 or more.

 

No labor or expense costs above those amounts shown here are to be incurred without the prior written approval of the AV Task Manager.

 

F.            SUBMITTING INVOICES:  This practice will support efficient processing and payment.

 

1.             INVOICES:  Reference shall be made to the correct Task Order No. and Project No. and/or Charge No. and the name of the AV Task Manager on all invoices.

 

2.             PROGRESS STATEMENT:  To stay in compliance with the Federal Acquisition Regulation (FAR), Part 31, each invoice should also be accompanied by a progress statement.

 

3.             INVOICES SHALL BE SENT TO: Accounts Payable Group, AeroVironment, Inc., via e-mail to acp@avinc.com, and also reference the correct Task Order Number and your organization’s name in the subject line of the email and copy the AV Task Manager, or by mail to P.O. Box 5031, Monrovia, CA  91107.

 

	
AeroVironment, Inc.
    	
Consultant
    
	
 
    	
 
    
	
No signature required – example only
    	
No signature   required – example only
    
	
Signature
    	
Signature
    
	
__________________________
    	
__________________________
    
	
Name   (Print)
    	
Name (Print)
    

 

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ATTACHMENT B

 

INTELLECTUAL PROPERTY

 

DECLARATION BY CONSULTANT

 

 

 

Consultant hereby contributes the intellectual property described below to the project that is the subject of this Agreement.  Such contribution of use is limited to the restrictions of Section 10 of this Agreement.

 

 

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Consulting Agreement

 

ATTACHMENT C

 

 

Consultant Security Review

 

Prior to entering any AV facility, any Consultant or Consultant’s subcontractor shall be required to provide the following:

 

U.S. Citizens

 

If you are a U.S. Citizen, you shall be required to provide AV’s Security Officer with your birth certificate with a raised seal [A photocopy will not be acceptable], or a government certified copy of your birth certificate, or your passport, and your driver’s license.  You may call AV’s Security Officer to make arrangements to handle these documents prior to sending them if you are not local.  If you are local you may call and arrange for an interview at which time you can provide the documents.

 

If you have held a Department of Defense security clearance, please provide your social security number to AV’s Security Officer to enable retrieval of your clearance. If you have provided this number on the W9 form with the Consulting Agreement you need not duplicate the effort.

 

 

 

Resident Aliens:

 

If you have been granted Resident Alien status, you will be required to produce this card before entering an AV facility.

 

This information is required due to government regulation(s).  Failure to provide all information will delay or suspend processing.  You must not begin work prior to compliance with the requests in this Attachment C.

 

If you are in the local area please call AV’s Security Officer and set up an interview time and bring all requested documentation.  If that is not possible, please call for a phone interview at

 

(805) 581-2198 Ext 1580.

 

 

	
Send all Attachment C documentation   to:
    	
Nancy Alvarez
    
	
 
    	
Interim Facilities Security   Manager
    
	
 
    	
AeroVironment Inc.
    
	
 
    	
900 Innovators Way
    
	
 
    	
Simi Valley, California 93065
    

 

 

For your protection, it is recommended that you overnight all information through a company that can track the package such as Fed-EX, DHL, or UPS.  AV will return all documentation by the same method.

 

Thank you for assisting AV in our compliance with the government regulations.

 

 

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Consulting Agreement

 

 

 

ATTACHMENT D

 

CERTIFICATION

 

OF

 

COMPLIANCE

 

WITH US TRADE CONTROL LAWS

 

Consultant: Kirk Flittie

 

This certification is executed by an authorized official of the business entity noted above or the consultant in his or her individual capacity where such consultant is not a legal entity.  It is the certification that the entity shall comply with all applicable U.S. export control laws and economic sanctions laws and regulations, specifically including but not limited to the International Traffic in Arms Regulations (“ITAR”), 22 C.F.R. 120 et seq.; the Export Administration Regulations, 15 C.F.R. 730-774; and the Foreign Assets Control Regulations, 31 C.F.R. 500-598 (collectively, “Trade Control Laws”), by taking reasonable steps to ensure that it shall not transfer any export controlled item, technical data, technology, or service, including transfers to any non-US persons, as that term is defined under the applicable Trade Control Laws, unless authorized in advance by an export license (such as Technical Assistance Agreement (TAA) or Manufacturing License Agreement (MLA), license exception or license exemption, collectively, “Export Authorization”), as required. This commitment includes a “deemed export” to the employees, vendors, or third party contacts of the entity signing this certification.

 

“Technical Data” is defined as information that is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles.

 

A “non-US Person” is any person who is not a citizen of the United States, a lawful Permanent Resident (e.g., “Green Card Holder”), or a protected individual as defined by 8 U.S.C. 1324b(a)(3). Any business entity that is not incorporated or organized to do business in the United States is also a “non-US Person.”

 

The certifying party also agrees, by making this certification that the entity’s personnel entering the premises of AeroVironment shall sign a personal certification when signing in and being issued a visitor’s badge.

 

 

 

Dated: _____7/11/2019_________________

 

 

Authorized Official: ______/s/ Kirk Flittie________________

 

                                       Signature

 

Printed Name: Kirk Flittie

 

 

 

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