Exhibit 10.1
ACCOUNT PURCHASE AGREEMENT
THIS
ACCOUNT PURCHASE AGREEMENT (such Account Purchase Agreement,
together with the Schedules, Riders and Exhibits hereto, as the
same may be amended and renewed from time to time, this
“
Agreement
”) by
and among COMMAND CENTER, INC., a Washington corporation having its
chief executive office at 3609 S. Wadsworth Blvd., Suite 250,
Lakewood, CO 80235 (the “
Client
”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“
WFB
”) is dated as of the Effective
Date. Except as set forth in Section 12.1 below, all capitalized
terms used in this Agreement are defined in Rider A annexed
hereto.
Client
has advised WFB that Client desires to offer to sell and assign to
WFB certain of Client’s Accounts that satisfy the
requirements of Acceptable Accounts hereunder. WFB may, in its sole
discretion, purchase certain Acceptable Accounts offered for sale
and assignment, and all such purchases shall be with full recourse
to Client. This Agreement, including the Schedules, Riders and
Exhibits annexed hereto, memorializes the terms and conditions
under which WFB shall purchase such Acceptable Accounts from
Client.
In
consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, Client
and WFB hereby agree as follows:
ARTICLE
1
PURCHASE AND
PRICING TERMS
Section
1.1
Purchase
and Assignment of Accounts
1.1.1
Purchase
and Assignment
. Client hereby agrees to assign and sell, and
does hereby assign and sell, to WFB, as absolute owner, and WFB
hereby agrees to purchase, and does hereby purchase, certain
Acceptable Accounts of Client selected by WFB for purchase
hereunder, without further act or instrument. All purchases of
Acceptable Accounts shall be with full recourse to Client.
Concurrently with the purchase of each Acceptable Account by WFB,
Client shall deliver to WFB an assignment schedule for such
Acceptable Account, together with copies of the assigned invoices
(or equivalent thereof if Client delivered such invoice to its
Customer electronically) and any other information or documentation
as requested by WFB in connection with such Acceptable
Account.
Section
1.2
Payment
of Purchase Price
.
As consideration for the assignment
and sale of an Acceptable Account to WFB, WFB shall pay to Client
the Purchase Price for such Acceptable Account on the date of
purchase thereof. WFB may withhold from the payment of any Purchase
Price such Reserves as WFB has established from time to time, in
its sole discretion. WFB shall remit to Client payment for an
Acceptable Account by crediting the Client Ledger
Account.
Section
1.3
Commercial
Disputes; Repurchase of Accounts
1.3.1
WFB
may settle any Commercial Dispute with any Customer; it being
acknowledged, that, WFB’s general policy is, absent the
occurrence of a Default or an Event of Default, to permit Client to
settle any such Commercial Dispute. Such settlement does not
relieve Client of any Obligation (including the obligation to pay
the Repurchase Price) under this Agreement with respect to the
Acceptable Account that is subject to the Commercial
Dispute.
1.3.2
Upon
the occurrence of a Commercial Dispute with respect to an
Acceptable Account, Client shall immediately repurchase such
Acceptable Account from WFB by remitting payment of the Repurchase
Price to WFB. Regardless of whether there is a Commercial Dispute,
in the event that an Acceptable Account is unpaid on the Maximum
Terms Date, Client shall immediately repurchase such Account by
remitting the Repurchase Price to WFB.
1.3.3
In
addition to and not in limitation of Section 1.3.2, upon
WFB’s demand, Client shall immediately repurchase an
Acceptable Account and remit the Repurchase Price to WFB in
accordance with this Agreement if (a) Client fails to timely
deliver to WFB an assignment schedule for such Acceptable Account,
together with copies of the assigned invoices (or equivalent
thereof if Client delivered such invoice to its Customer
electronically), the Ancillary Documents and such other information
or documentation as requested by WFB in connection with such
Account; (b) any representation or warranty made by Client
hereunder with respect to such Acceptable Account is untrue,
incorrect or misleading in any respect at any time; (c) any
covenant or agreement made by Client hereunder with respect to such
Acceptable Account is breached; (d) Client is required to
repurchase such Acceptable Account under any term or provision of
this Agreement; or (e) this Agreement is terminated by
Client.
1.3.4
If
at any time the aggregate Purchase Price of Accounts for which a
Settlement Date has not occurred, plus the aggregate face amount of
all outstanding letters of credit under the LC Supplement, exceeds
the Maximum Facility Amount, Client shall promptly repay the excess
to WFB, the amount of which repayment may be charged by WFB to the
Client Ledger Account.
ARTICLE
2
ADMINISTRATION
Section
2.1
Client
Ledger Account
2.1.1
WFB
shall record in the Client Ledger Account all debits, credits and
other entries for all transactions between Client and WFB hereunder
or under any Other Agreement, including, without limitation, all
purchases of Acceptable Accounts, payments of the Purchase Price of
each Acceptable Account purchased hereunder, collections of
Accounts, Reserves, and charges for all other Obligations,
including, without limitation, amounts due for any Repurchase
Price, accrued interest, discount, fees, costs and
expenses.
2.1.2
Absent
the occurrence of an Event of Default, WFB shall make available to
Client an internet accessible website which will permit Client to
view all debits, credits and other entries made by WFB to the
Client Ledger Account during specific periods.
2.1.3
Client
agrees to log on to the internet accessible website provided by WFB
no less frequently than monthly, and Client shall review all
transactions posted to the Client Ledger Account through the last
day of each month. All postings to the Client Ledger Account for
each month shall be subject to subsequent adjustment by WFB but
shall, absent manifest error, be conclusively presumed to be
correct and accurate and constitute an account stated between
Client and WFB unless, within 60 days after the last day of any
month, Client shall deliver to WFB written objection to the
postings for such month describing the error or errors contained in
any such statement.
2.1.4
Client
hereby unconditionally promises to pay to WFB all Obligations, as
and when due, without deduction or setoff, regardless of any
defense or counterclaim, in accordance with this Agreement. Client
hereby irrevocably authorizes WFB, from time to time and without
prior notice to Client, to charge all Obligations, including,
without limitation, the amount of any Repurchase Price, all
interest, discount, costs, fees, expenses and other charges payable
by Client hereunder or under any of the Other Agreements, to the
Client Ledger Account maintained by WFB.
Section
2.2
Payments
and Remittances
2.2.1
All
checks, remittances, other items of payment and other Proceeds of
Collateral shall be property of WFB. If any checks, remittances,
other items of payment or other Proceeds of Collateral are received
by Client, Client shall hold the same in trust for the benefit of
WFB and will immediately deliver to WFB all such checks,
remittances, other items of payment and other Proceeds of
Collateral in the same form as received by Client. Without limiting
WFB’s other rights and remedies, Client shall pay a
misdirected payment fee to WFB in the amount of fifteen percent
(15%) of the amount of any check, remittance, other item of payment
or other Proceeds of Collateral which has been received by Client
and not delivered to WFB on the next Business Day following receipt
by Client as required by the preceding sentence.
2.2.2
If
WFB is required to repay, refund or otherwise disgorge any payment
received by WFB for an Account, Client hereby indemnifies, saves
and holds WFB harmless with respect to such payment and the amount
of the repayment by WFB shall be part of the Obligations,
notwithstanding any termination of this Agreement, and such amount
may be charged by WFB to the Client Ledger Account.
2.2.3
In
the event Client at any time receives a payment from WFB with
respect to any Account to which Client has no rights, repayment of
such payment shall be part of the Obligations whether or not this
Agreement has been terminated, and may be charged by WFB to the
Client Ledger Account.
2.2.4
If
WFB receives a duplicate payment with respect to an Account or
other payment which is not identified as applicable to an
outstanding Account, WFB will account for such payment as an open
item and, in WFB’s discretion, WFB may return any duplicate
or unidentified payment to the Customer or apply such unidentified
payment pursuant to the terms hereof upon proper identification and
documentation acceptable to WFB.
Section
2.3
Settlement
Date
. WFB will credit the Client Ledger Account in the
amount of the Proceeds of any Account, less the Purchase Price of
such Account, on the Settlement Date for such Account. Provided
there is no Event of Default or Default hereunder, at
Client’s written request, subject to WFB’s right to
withhold Reserves, any credit balance in the Client Ledger Account
shall be released to the Client. Upon the occurrence of an Event of
Default or a Default, WFB may hold any credit balance in the Client
Ledger Account as a Reserve or as additional Collateral for the
Obligations. Should the Client Ledger Account at any time have a
deficit balance, Client shall immediately pay to WFB the amount of
such deficit plus accrued interest thereon at the Deficit
Rate.
ARTICLE
3
INTEREST, FEES AND
EXPENSES
Section
3.1
Interest
.
All Obligations (including Repurchase Obligations) hereunder shall
bear interest at the lesser of the Contract Rate or the Maximum
Rate;
except
,
that
, (a) at any
time that a Client Ledger Account Deficit exists, such Client
Ledger Account Deficit shall bear interest at the lesser of the
Deficit Rate or the Maximum Rate and (b) from and after the
occurrence of an Event of Default, and at all times during its
continuance, all Obligations hereunder shall bear interest at the
lesser of the Default Rate or the Maximum Rate. Interest hereunder
shall be accrued daily and shall be due and charged to the Client
Ledger Account monthly. All interest due and payable hereunder by
Client shall be calculated on the basis of a 360 day year, for
actual days elapsed. The Contract Rate shall be automatically and
immediately increased or decreased, as the case may be, as Daily
One Month LIBOR is increased or decreased and to the extent
thereof.
Section
3.2
Fees
.
Client agrees to timely pay all fees set forth on Schedule 1
annexed hereto, all of which fees shall be fully earned and payable
when due, may be charged by WFB to the Client Ledger Account and
shall not be subject to refund, rebate or proration for any reason
whatsoever.
Section
3.3
Reimbursement
of Costs, Fees and Expenses Incurred by WFB
. Client shall pay
to WFB all costs, fees and expenses, including attorneys’ and
other professional’s costs, fees and expenses, incurred by
WFB in connection with: (a) the preparation, execution, delivery,
administration and enforcement of this Agreement and all Other
Agreements; (b) any waiver, amendment, supplement, consent or
modification hereof or with respect to any of the Other Agreements;
and (c) the filing or perfecting of any security interest in any
Collateral. Client shall also reimburse WFB for all costs, fees and
expenses incurred by WFB, including attorneys’ costs, fees
and expenses, in connection with: (i) obtaining or enforcing
payment or performance of any Obligation; (ii) the prosecution or
defense of any action or proceeding concerning any matter arising
out of or connected with this Agreement, any Other Agreement or any
of the Collateral; (iii) any action or effort to inspect, examine,
verify, protect, collect, sell, liquidate or otherwise dispose of
any Collateral, including all Field Examination Fees; and (iv) the
employment of services of one or more individuals to perform
financial audits, business valuations or quality of earnings
analyses of Client, or to appraise or re-appraise the Collateral or
any portion thereof. In addition to the foregoing, Client shall pay
to WFB WFB’s standard and customary fees relating to bank
services, wire transfers, special or additional reports, remittance
expenses (including, without limitation, incoming wire charges,
currency conversion fees and stop payment fees), and other services
at such rates as shall be charged by WFB to its Clients from time
to time. All such costs, fees and expenses, together with all
filing, recording and search fees and taxes payable by Client to
WFB, shall be payable on demand and may be charged by WFB to the
Client Ledger Account.
Section
3.4
Nature
of Charges
. The Purchase
Price Rate, any and all other discounts, and any and all fees,
commissions or other charges payable hereunder constitute
consideration for WFB's services provided hereunder in connection
with making credit investigations, supervising the ledgering of
accounts purchased, supervising the collection of the accounts
purchased, assuming certain risks and other services provided by
WFB hereunder. Nothing contained herein shall be construed to
require the payment of interest for the use, forbearance, or
detention of money (except with respect to the interest that may be
charged by WFB under
Section 3.1
); however, should a
court of competent jurisdiction rule that any part of WFB’s
Purchase Price Rate, other discounts, fees, account purchase
commissions or any other charges hereunder are in fact or in law to
be treated as interest on funds advanced, in no event shall Client
be obligated to pay that interest at a rate in excess of the
maximum amount permitted by applicable law. Client and WFB
acknowledge that, for purposes of Section 306 of the Texas Finance
Code, the sale of Acceptable Accounts by Client to WFB pursuant to
this Agreement constitutes a purchase and sale transaction and not
a transaction for the use, forbearance or detention of
money.
Section
3.5
Maximum
Rate
(a)
No provision of
this Agreement or of any Other Agreements shall require the payment
or the collection of interest in excess of the maximum amount
permitted by applicable law. If any excess of interest in such
respect is hereby provided for, or shall be adjudicated to be so
provided, in this Agreement or any Other Agreement or otherwise in
connection with this Agreement, the provisions of this Section
shall govern and prevail and neither Client nor the sureties,
guarantors, successors, or assigns of Client shall be obligated to
pay the excess amount of such interest or any other excess sum paid
for the use, forbearance, or detention of sums owed pursuant
hereto. In the event WFB ever receives, collects, or applies as
interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the Obligations of Client
hereunder; and, if the principal of such Obligations has been paid
in full, any remaining excess shall forthwith be paid to Client. In
determining whether or not the interest paid or payable exceeds the
Maximum Rate, Client and WFB shall, to the extent permitted by
applicable law, (a) characterize any non-principal payment as an
expense, fee, or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the entire contemplated term of this
Agreement so that interest for the entire term does not exceed the
Maximum Rate.
(b)
If at any time the
rate of interest applicable to the Obligations of Client
hereunder
,
together with
any other fees and other amounts payable pursuant to this Agreement
and the Other Agreements and deemed interest under applicable law,
exceeds that amount that would have accrued at the Maximum Rate,
then the amount of interest and any such fees and other amounts to
accrue to WFB pursuant to this Agreement and the Other Agreements
shall be limited, notwithstanding anything to the contrary in this
Agreement or any Other Agreement, to that amount that would have
accrued at the Maximum Rate, but to the extent permitted by
applicable law, any subsequent reductions, as applicable, shall not
reduce the interest to accrue to WFB pursuant to this Agreement and
the Other Agreements below the Maximum Rate until the total amount
of interest accrued pursuant to this Agreement and the Other
Agreements and such fees and other amounts deemed to be interest
equals the amount of interest, fees and other amounts that would
have accrued to WFB but for the effect of this
Section 3.5
.
ARTICLE 4
SECURITY
INTERESTS
Section
4.1
Grant
of Security Interest
.
As security for the Obligations,
Client hereby grants to WFB, for itself and its affiliates, a
continuing security interest in and first priority Lien upon all of
the Collateral, subject only to such Liens of other Persons that
are party to an intercreditor agreement with WFB, or to which WFB
has otherwise consented in writing, in any such case, all in form
and content satisfactory to WFB.
Section
4.2
Perfection
.
Subject to the Liens described in
Section 4.1, Client shall take all actions requested by WFB from
time to time to cause the attachment, perfection and first priority
of, and WFB’s ability to enforce, WFB’s security
interest in any and all of the Collateral. Client irrevocably and
unconditionally authorizes WFB (or WFB’s agent) to complete
and file, and Client ratifies such filing, at any time and from
time to time, such financing statements with respect to the
Collateral naming WFB as the secured party and Client as debtor, as
WFB may require, together with all amendments and continuations
with respect thereto.
ARTICLE
5
CLIENT
REPRESENTATIONS AND WARRANTIES
Client
hereby makes all of the representations and warranties set forth on
Rider B annexed hereto.
ARTICLE 6
Until
the Obligations are repaid in full and this Agreement has been
terminated, Client agrees as follows:
Section
6.1
Recordkeeping,
Rights of Inspection, Audit, Etc.
(a)
Client shall
maintain a standard system of accounting in accordance with GAAP,
and proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in
relation to Client’s properties, business and activities,
including without limitation, immediately upon the sale of each
Acceptable Account to WFB.
(b)
(i) Prior to the
occurrence of a Default or an Event of Default, upon reasonable
notice and during Client’s normal business hours, and (ii)
after the occurrence of a Default or an Event of Default,
immediately upon WFB’s demand, Client shall permit authorized
representatives of WFB to perform field examinations, to visit and
inspect the properties of Client, to review, audit, check and
inspect the Collateral, to review, audit, check and inspect
Client’s books or records and to make abstracts and
photocopies thereof, and to discuss the affairs, finances and
accounts of Client, with the officers, directors, employees and
other representatives of Client and its accountants.
(c)
At any time prior
to Client’s payment and satisfaction in full of the
Obligations and termination of this Agreement, Client hereby
irrevocably authorizes and directs all accountants and auditors
employed by Client to execute and deliver to WFB copies of any and
all of the financial statements, trial balances, management
letters, or other accounting records of any nature of Client in the
accountant’s or auditor’s possession, and to disclose
to WFB any information they may have concerning the financial
status and business operations of Client.
Section
6.2
Notation
of Assignment and Remittance Information.
(a)
Client agrees that
WFB may, and Client irrevocably authorizes WFB to at any time,
notify Customers of the assignment to WFB of the Accounts,
including pursuant to a Notice of Assignment of Accounts. Without
limiting the foregoing, Client shall make the notation described
below on each original invoice (or the electronic equivalent of an
invoice) or other such documentation accepted by WFB for each
Account. Client shall promptly advise WFB if, for any reason,
Client is unable to place the notation required pursuant to this
clause (a) on any invoice and WFB, in its sole discretion, will
consider waiving such requirement. The notation shall one of the
following:
This
invoice is payable to:
Command
Center, Inc.
PO Box
932685
Atlanta,
GA 31193-2685
This
invoice is payable to:
Command
Center, Inc.
PO Box
79081
City of
Industry, CA 91716-9081
This
invoice is payable to:
Command
Center, Inc.
PO Box
951753
Dallas,
TX 75395-1753
In
addition, Client shall cause all payments by wire transfer or ACH
to be directed as follows:
Wells Fargo Bank, N.A.
San
Francisco, CA
ABA#
121000248
Beneficiary:
Wells Fargo Business Credit
Acct
#2000045334645
Reference:
Command Center, Inc.
(b)
Notwithstanding the
placement or non-placement of any such notation on invoices or
other documentation, Client shall cause all payments of Accounts to
be remitted, and shall take all necessary actions to ensure that
all Customers remit payment of Accounts, to the address or bank
account, as applicable, set forth Section 6.2(a) above or as
otherwise directed by WFB.
Section
6.3
Financial
Information
.
Client
shall cause to be prepared and shall timely deliver to WFB, in each
case certified by Client’s President, Chief Financial Officer
or other authorized officer at Client acceptable to WFB, and in
form and content satisfactory to WFB, all financial statements and
other financial information set forth on Schedule 2 annexed
hereto.
Section
6.4
Insurance
.
At Client’s expense, Client shall (a) maintain insurance of
types and amounts as is customary and adequate for businesses
similar to that of Client’s, and with carriers acceptable to
WFB, in its sole discretion and (b) cause WFB to be named as an
additional insured on all liability insurance policies of Client
and, at WFB’s request, as a lender’s loss payee on all
property insurance policies of Client, and deliver to WFB such
endorsements and certificates of insurance as WFB may request with
respect Client’s insurance policies.
Section
6.5
Notification of
Events of Default and Material Disputes
. Client shall
promptly notify WFB upon obtaining knowledge of the occurrence
of:
(a)
any Event of
Default or Default;
(b)
any material
dispute (including, without limitation, any Commercial Dispute)
between a Customer and Client or WFB or the return by or
repossession of Goods from any Customer;
(c)
the assertion,
filing, recording or perfection by any means of any Lien against
any of the Collateral, other than in favor of WFB;
(d)
the commencement of
any legal proceeding or service of any legal document affecting any
Obligor or the Collateral; and
(e)
the commencement of
an Insolvency Proceeding with respect to any Customer.
Section
6.6
Maintenance of
Collateral
. Client shall maintain the Collateral in good
working order, saving and excepting ordinary wear and tear, and
will not permit anything to be done to the Collateral that may
materially impair the value thereof.
Section
6.7
Taxes
.
Client shall pay and discharge all federal, state and local taxes
when due.
Section
6.8
USA PATRIOT Act,
Etc.
Client will (a) ensure, and cause each subsidiary to
ensure, that no equity owner shall be listed on the Specially
Designated Nationals and Blocked Person List or other similar lists
maintained by the Office of Foreign Assets Control, the Department
of the Treasury or included in any Executive Orders of the
President of the United States, (b) not use or permit the use of
the proceeds of any Acceptable Account purchased hereunder or any
other financial accommodation from WFB to violate any of the
foreign asset control regulations of the Office of Foreign Assets
Control or other applicable law, rule or regulation, (c) comply,
and cause each subsidiary to comply, with all applicable Bank
Secrecy Act laws and regulations, as amended from time to time, and
(d) otherwise comply with the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) as required by federal
law and WFB’s policies and practices.
Section
6.9
Communications with
Customers
. Client irrevocably authorizes WFB (in WFB’s
name or in the name of a nominee of WFB) to communicate with any
Customer obligated on an Account to disclose WFB’s interest
in such Account, to verify the balance of such Account, to confirm
Client’s sale of goods or rendition of services to such
Customer, to settle Commercial Disputes, and for all such other
purposes arising in connection with the Account.
Section
6.10
Financial
Covenant
.
The Client
shall maintain positive Adjusted Liquidity, measured quarterly as
of the last day of each quarter.
ARTICLE
7
NEGATIVE
COVENANTS
Until
the Obligations are repaid in full and this Agreement has been
terminated, Client agrees as follows:
Section
7.1
Negative
Covenants
. Client shall
not:
7.1.1
Without giving WFB
at least thirty (30) days prior written notice:
(a)
change
Client’s legal name or conduct business under a fictitious,
assumed or “d/b/a” name;
(b)
change
Client’s organizational identification number (or acquire an
organizational number if Client does not have one as of the
Effective Date);
(c)
change
Client’s type of organization;
(d)
change
Client’s jurisdiction of organization;
(e)
change
Client’s chief executive office, mailing address or any
location of Collateral;
(f)
change
Client’s Accountants; or
(g)
change
Client’s chief executive officer, chief financial officer or
chief operating officer, or any officer of similar title and
authority.
7.1.2
At any
time:
(a)
interfere with any
of WFB’s rights under this Agreement or the Other
Agreements;
(b)
be a party to a
merger or consolidation unless Client shall be the surviving entity
of such merger or consolidation; or acquire all or substantially
all of the assets of any Person;
(c)
grant or permit to
exist any Lien or otherwise transfer any other interest in any of
the Collateral (other than the sale of Inventory in the ordinary
course of Client’s business and the Liens described in
Section 4.1) to any Person other than WFB, without WFB’s
prior written consent;
(d)
permit to exist or
remain outstanding any loans or advances to Client from any
officer, director or shareholder of Client or any subsidiary,
related entity or affiliate of Client, except to the extent any
such loans or advances are subordinate to the Obligations pursuant
to a duly executed subordination agreement containing terms and
conditions acceptable to WFB;
(e)
make any payment in
respect of the indebtedness described in clause (d) above
unless either
(i)
WFB has consented in writing to the same,
or
(ii) such payment is
permitted pursuant to any applicable subordination agreement, in
form and substance acceptable to WFB and duly executed by the
holders of such indebtedness;
(f)
make any loans,
advances, or intercompany transfers between Client and any
subsidiary, related entity or affiliate of Client, or with any
company that has common shareholders, officers or directors with
Client,
unless
either
(i) WFB has consented in writing to the same,
or
(ii) such
transactions are in the ordinary course of business, upon the same
terms and conditions as are applicable to ordinary course of
business transactions with unaffiliated parties;
(g)
permit the
aggregate face amount of all outstanding letters of credit under
the LC Supplement to exceed the LC Sublimit; or
(h)
permit the
aggregate Purchase Price for all Acceptable Accounts for which a
Settlement Date has not occurred, plus the aggregate face amount of
all outstanding letters of credit under the LC Supplement, to
exceed the Maximum Facility Amount.
ARTICLE 8
TERM
Section
8.1
Termination
and Autorenewal
. This Agreement
shall remain in full force and effect until terminated as
follows:
8.1.1
Client may
terminate this Agreement at any time upon thirty (30) days prior
written notice to WFB.
8.1.2
WFB may terminate
this Agreement at any time upon thirty (30) days prior written
notice; and
8.1.3
WFB may terminate
this Agreement without notice at any time after the occurrence of
an Event of Default, after giving effect to any applicable grace or
cure period.
8.1.4
Unless Client shall
have delivered to WFB, or WFB shall have delivered to Client,
written notice of its intention to terminate this Agreement at
least 60 days prior to and effective as of the end of the then
current Term, or this Agreement shall be sooner terminated in
accordance with the terms hereof, this Agreement shall
automatically renew for successive Renewal Terms;
Immediately upon
termination, all Obligations, including, without limitation, any
accrued but unpaid fees for the balance of the Term, shall become
immediately due and payable in full without further notice or
demand. Without limiting the foregoing, all of WFB’s Liens in
and to all Collateral shall remain in full force and effect until
such time that all the Obligations have been indefeasibly paid and
satisfied in full, as determined by WFB in its sole
discretion.
Section
8.2
Repurchase
of Acceptable Account
(a)
Immediately upon
termination of this Agreement, including at the end of the Term if
not renewed, or after the occurrence of an Event of Default, Client
shall repurchase any and all Acceptable Accounts purchased by WFB
hereunder, whether or not subject to a Commercial Dispute, as may
be requested by WFB, and WFB may charge the Repurchase Price
therefor to the Client Ledger Account, together with all other
Obligations.
(b)
Without limiting
WFB’s rights and Client’s obligations under Clause
8.2(a) above, if WFB notifies Client that WFB is unable to verify
the balance of any Acceptable Account or if WFB determines, in its
sole discretion, that any Account ceases to satisfy the criteria
for Acceptable Accounts hereunder, Client shall repurchase such
Acceptable Account and WFB may charge the Repurchase Price therefor
to the Client Ledger Account.
ARTICLE 9
INDEMNITIES
Section
9.1
Indemnification
.
Client hereby indemnifies and holds each Indemnified Person
harmless from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses of every kind and
nature (including attorneys’ costs, fees and expenses) which
may be instituted or asserted against or incurred by any such
Indemnified Person with respect to the execution, delivery,
enforcement, performance or administration of, or in any other way
arising out of or relating to, this Agreement or any Other
Agreement, and any actions or inactions with respect to any of the
foregoing, except to the extent that any such indemnified liability
is determined pursuant to a final, non-appealable order issued by a
court of competent jurisdiction to have resulted solely from such
Indemnified Person’s gross negligence or willful misconduct.
WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH
INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR
OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON. No
Indemnified Person shall be responsible or liable to Client or to
any other party for indirect, punitive, special, exemplary or
consequential damages which may be alleged as a result of the
purchase of any Acceptable Account or other financial accommodation
having been extended, denied, delayed, conditioned, suspended or
terminated under this Agreement or any Other Agreement or as a
result of any other event or transaction contemplated hereunder or
thereunder.
Section
9.2
Taxes
(a)
If any tax or fee
by any Governmental Authority (other than income and franchise
taxes owing by WFB) is or may be imposed on or as a result of any
transaction between Client and WFB, or with respect to sales or the
goods affected by such sales, which WFB is or may be required to
withhold or pay, Client acknowledges sole responsibility for such
fee or tax and agrees to indemnify and hold WFB harmless in respect
of such taxes. Client will pay to WFB, upon WFB’s demand, the
amount of any such taxes, which shall be charged to the Client
Ledger Account by WFB.
(b)
Client agrees to
pay any present or future stamp, value added or documentary taxes
or any other excise or property taxes, charges or similar levies
that arise from any payment made hereunder or from the execution,
delivery, performance, recordation, or filing of, or otherwise with
respect to this Agreement or any Other Agreement.
Section
9.3
No
Liability
. WFB
shall not be liable to Client or any other Person or in any manner
for declining, withholding or terminating the designation of any
Account as an Acceptable Account. If WFB declines, withholds or
terminates the designation of an Account as an Acceptable Account
and provides Client with any information regarding the Customer
obligated on such Account, Client agrees to hold such information
as confidential, and Client agrees not to disclose such information
to the Customer or any other Person.
ARTICLE
10
ARTICLE 9
DEFAULT
Section
10.1
Events
of Default
.
Any one or more of the following shall
constitute an “Event of Default” hereunder: (a) Client
shall fail to pay any of the Obligations when due; (b) any
statement, representation or warranty made by any Obligor orally or
in writing under or in connection with this Agreement or any Other
Agreement to which such Obligor is a party, or in connection with
the transactions contemplated hereby or thereby, shall be untrue,
incorrect or misleading when made or during the period covered
thereby; (c) any Obligor commits any breach or default in the
performance of any covenant or other agreement in this Agreement or
any Other Agreement to which such Obligor is a party which breach
or default is not cured within any applicable cure period or, if no
cure period is provided, within five (5) days of such
Obligor’s receipt of notice or knowledge thereof; provided
that such five (5) day period shall not apply in the case of (i)
any breach or default of Section 6.3 or Section 6.10 of this
Agreement, (ii) any breach or default of any such covenant which is
not capable of being cured at all or within such five (5) day
period or which has been the subject of a prior failure two (2) or
more times during the term of this Agreement, (iii) an intentional
breach by any Obligor of any such covenant or agreement, or (iv)
the occurrence of any event described in any other clause of this
Section 10.1, (d) any Obligor suspends or ceases operation of all
or a material portion or line of such Obligor’s business; (e)
any breach or default by an Obligor occurs under any document,
instrument or agreement to which it is a party or by which such
Obligor or any of its properties are bound, if the maturity of or
any payment with respect to such indebtedness may be accelerated or
demanded due to such breach or default; (f) there shall be issued
or filed against any Obligor any attachment, injunction, order,
writ, or judgment affecting Client or the Collateral; (g) an
Obligor is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its
business; (h) an Obligor suffers the loss, revocation or
termination of any material license, permit, lease or agreement
necessary to run its business; (i) any material portion of
Collateral or other property of an Obligor is taken or impaired
through condemnation; (j) an Obligor or any of its senior
management is or at any time has been criminally indicted or
convicted for a felony offense under any state or federal law; (k)
the results of any background investigation or report conducted by
WFB with respect to any of Client’s senior management or
financial personnel fail to be satisfactory to WFB, in WFB’s
sole discretion; (l) any Obligor becomes insolvent, becomes unable
to pay its debts as they mature, makes an assignment for the
benefit of creditors, or if a receiver is appointed for any of the
Collateral, or if a petition under any provision of Title 11 of the
United States Code, as amended or modified from time to time, is
filed by or against any Obligor; (m) any Obligor that is a natural
person shall die or be declared incompetent, any Person that is a
partner in a partnership or a member in a limited liability company
that is an Obligor shall die (if such Person is a natural person)
or withdraw from such partnership or limited liability company, or
any Obligor that is a corporation or a limited liability company
shall dissolve or merge or be consolidated with any other Person;
(n) any Obligor or Validity Guarantor shall challenge the validity,
enforceability or effectiveness of, terminate, seek or purport to
seek termination of such Payment Obligor’s Payment Guaranty
or such Validity Guarantor’s Validity Guaranty, as the case
may be; (o) any Validity Guarantor shall die or be declared
incompetent unless, within 30 days of the date of such death or
declaration of incompetence, a substitute Person, acceptable to WFB
in its discretion, executes a Validity Guarantor in favor of WFB;
or (p) the occurrence of a Change of Control.
ARTICLE 11
REMEDIES
Section
11.1
Remedies
.
Upon the occurrence of any Event of Default, WFB shall have all the
rights and remedies of a secured party under the UCC and other
applicable laws with respect to all Collateral, such rights and
remedies being in addition to all of WFB’s other rights and
remedies provided for herein, and all of which rights and remedies
may be exercised without notice to, or consent by, Client except as
such notice or consent is expressly provided for hereunder.
Notwithstanding anything to the contrary herein, upon the
occurrence of an Event of Default described in Section 10.1(l)
concerning Client, all Obligations shall be accelerated, and shall
be immediately due and payable, without notice or demand of any
kind, all of which is hereby waived by Client. WFB may for any
reason apply for the appointment of a receiver, ex parte without
notice, of the Collateral (to which appointment Client hereby
consents) without the necessity of posting a bond or other form of
security (which Client hereby waives). WFB may sell or cause to be
sold any or all of such Collateral, in one or more sales or
parcels, at such prices and upon such terms as WFB shall elect, for
cash or on credit or for future delivery, without assumption of any
credit risk, and at a public or private sale as WFB may deem
appropriate. Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a
recognized market, WFB will give Client reasonable notice of the
time and place of any public sale thereof or of the time after
which any private sale or any other intended disposition thereof is
to be made. At any such sale, WFB may disclaim warranties of title,
possession, quiet enjoyment, merchantability and the like and any
such disclaimer shall not affect the commercial reasonableness of
the sale. The requirements of reasonable notice shall be met if any
such notice is mailed, postage prepaid, to Client’s address
set forth on the signature page hereto, at least seven (7) days
before the time of the sale or disposition thereof. WFB may invoice
any such sale in WFB’s name or in Client’s name, as WFB
may elect, as the seller, and in such latter event such invoice
shall be marked payable to WFB as provided in Section 6.2 of this
Agreement. WFB may be the purchaser at any such public sale and
thereafter hold the property so sold at public sale, absolutely,
free from any claim or right of any kind, including any equity of
redemption. The proceeds of sale shall be applied first to all
costs and expenses of, and incident to, such sale, (including
attorneys’ costs, fees and expenses), and then to the payment
(in such order as WFB may elect in its sole discretion) of all
other Obligations. After application of the proceeds of any
Collateral to the Obligations, Client shall remain liable for any
deficiency.
ARTICLE 12
MISCELLANEOUS
PROVISIONS
Section
12.1
UCC
Terms
. When used herein,
unless otherwise indicated herein, the terms “Account”,
“Chattel Paper”, “Commercial Tort Claim”,
“Deposit Account”, “Document”,
“Electronic Chattel Paper”, “Equipment”,
“General Intangible”, “Goods”,
“Instrument”, “Inventory”,
“Investment Property”, “Letter-of-Credit
Right”, “Proceeds”, “Record” and
“Supporting Obligation” shall have their respective
meanings set forth in the UCC.
Section
12.2
Purpose
.
The purpose of this Agreement is commercial in nature and not for
household, family and/or personal use.
Section
12.3
Power
of Attorney
.
In order to carry out this Agreement,
Client irrevocably appoints WFB, or any Person designated by WFB,
as its special attorney in fact, or agent, with power
to:
(a)
receive, open, read
and thereafter forward to Client (if appropriate) all mail
addressed to Client (including any trade name of Client) sent to
WFB’s address. Any payments received shall be processed in
accordance with this Agreement;
(b)
endorse the name of
Client or Client’s trade name on any checks or other items of
payment that may come into the possession of WFB with respect to
any Account and on any other documents relating to any of the
Accounts or to Collateral;
(c)
in Client’s
name, or otherwise, demand, sue for, settle, collect and give
releases for any and all moneys due or to become due on any
Account;
(d)
initiate electronic
debit or credit entries through any ACH system to the Client
account or any other deposit account maintained by Client wherever
located;
(e)
access, interface
and execute transactions in connection with Acceptable Accounts in
the name of Client or Client’s trade name through any on-line
or web-based exchange used or otherwise available to
Client;
(f)
sign the name of
Client on any notices to Customers of the assignment to WFB of the
Accounts, including on any Notice of Assignment of Accounts, to the
extent such notices are permitted hereunder.
(g)
do any and all
things necessary and proper to carry out this
Agreement.
This
power, being coupled with an interest, is irrevocable while this
Agreement remains in effect or any of the Obligations remain
outstanding. WFB, as attorney-in-fact, shall not be liable for any
errors of judgment or mistake of fact.
Section
12.4
Successors
and Assigns
.
This Agreement binds and is for the
benefit of the heirs, executors, administrators, successors and
assigns of the parties hereto,
except
that
Client shall not have the
right to assign its rights hereunder or any interest herein without
WFB’s prior written consent.
Section
12.5
Cumulative
Rights
.
The rights, powers and remedies
provided in this Agreement and in the Other Agreements are
cumulative, may be exercised concurrently, or separately, may be
exercised from time to time and in such order as WFB shall
determine, subject to the provisions of this Agreement, and are in
addition to, and not exclusive of, the rights, powers, and remedies
provided by existing or future applicable laws. WFB’s failure
or delay to exercise or enforce, in whole or in part, any right,
power or remedy under this Agreement or any Other Agreement, shall
not constitute a waiver thereof, nor preclude any other or further
exercise thereof.
Section
12.6
Waiver
.
WFB shall not waive any of its rights and remedies unless the
waiver thereof is in writing and signed by WFB. A waiver by WFB of
a right or remedy under this Agreement on one occasion shall not
constitute a waiver of the right or remedy on any subsequent
occasion.
Section
12.7
Amendment
.
Except as otherwise provided herein, this Agreement may not be
supplemented, changed, waived, discharged, terminated, modified or
amended, except by written instrument executed by WFB and
Client.
Section
12.8
Choice
of Law
.
This Agreement shall be governed by
and construed in accordance with the laws of the Applicable State,
without giving effect to the principles of conflicts of
laws.
Section
12.9
Severability
of Provisions
.
In the event any provision of this
Agreement (or any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall
not affect any other provision (or remaining part of the affected
provision) of this Agreement, but this Agreement shall be construed
as if such invalid, illegal or unenforceable provision (or part
thereof) had not been contained in this Agreement, but only to the
extent it is invalid, illegal or unenforceable.
Section
12.10
Survival
.
All covenants, representations and warranties made in this
Agreement continue in full force until this Agreement has been
terminated in accordance with its terms and all Obligations have
been indefeasibly paid and satisfied in full. The obligation of
Client in Article 9 to indemnify WFB shall survive until the
statute of limitations with respect to any such claim or cause of
action described in Article 9 shall have expired.
Section
12.11
Entire
Agreement
.
This Agreement, together with the
Other Agreements, is intended by WFB and Client to be a complete,
exclusive and final expression of the agreements contained herein.
Neither WFB nor Client shall hereafter have any rights under any
prior agreements pertaining to the matters addressed by this
Agreement or the Other Agreements but shall look solely to this
Agreement and the Other Agreements for definition and determination
of all of their respective rights, liabilities and responsibilities
under this Agreement and the Other Agreements. THIS AGREEMENT AND
THE OTHER AGREEMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Section
12.12
Data
Transmission
.
WFB assumes no responsibility for
privacy or security risks as a result of the method of data
transmission selected by Client. WFB only assumes responsibility
for data transmitted from Client once the data is received within
Wells Fargo Bank, National Association’s internal network.
WFB assumes no responsibility for privacy or security for data
transmitted from WFB to Client once the data is dispensed from
Wells Fargo Bank, National Association’s internal
network.
Section
12.13
Information
.
Without limiting WFB?s right to share information regarding Client
and its affiliates with WFB?s agents, accountants, lawyers and
other advisors, Client agrees that Wells Fargo & Co., and all
direct and indirect subsidiaries of Wells Fargo & Co., may,
among themselves, discuss or otherwise utilize any and all
information they may have in their possession regarding any
Obligor, and Client, for itself and each Payment Guarantor, waives
any right of confidentiality Client or any such Payment Guarantor
may have with respect to such exchange of such
information.
Section
12.14
Notice
.
Unless otherwise specified herein, all notices pursuant to this
Agreement shall be in writing and sent either (a) by hand, (b) by
certified mail, return receipt requested, or (c) by recognized
overnight courier service, to the other party at the address set
forth herein, or to such other addresses as a party may from time
to time furnish to the other party by notice. Any notice hereunder
shall be deemed to have been given on (i) the day of hand delivery,
(ii) the third Business Day after the day it is deposited in the
U.S. Mail, if sent as aforesaid, or (iii) the day after it is
delivered to a recognized overnight courier service with
instructions for next day delivery.
Section
12.15
Counterparts
.
This Agreement may be executed in any number of duplicate originals
or counterparts, each of which shall be deemed to be an original
and all taken together shall constitute but one and the same
instrument. Client agrees that a facsimile or electronic
transmission of any signature of Client shall be effective as an
original signature thereof. WFB agrees that a facsimile or
electronic transmission of this Agreement executed by WFB shall be
effective as an original signature thereof.
Section
12.16
Headings
.
The headings set forth herein are for convenience only and shall
not be deemed to define, limit or describe the scope or intent of
this Agreement.
Section
12.17
Retention
of Records
. WFB shall have no
obligation to maintain electronic records or retain any documents,
schedules, invoices, agings or other records delivered to WFB by
Client in connection with this Agreement or any other document or
agreement described in or related to this Agreement beyond the time
periods set forth for retention of records in WFB’s internal
policies.
Section
12.18
Arbitration
.
(a)
ARBITRATION
. THE PARTIES HERETO
AGREE, UPON DEMAND BY ANY PARTY, WHETHER MADE BEFORE THE
INSTITUTION OF A JUDICIAL PROCEEDING OR NOT MORE THAN 60 DAYS AFTER
SERVICE OF A COMPLAINT, THIRD PARTY COMPLAINT, CROSS-CLAIM,
COUNTERCLAIM OR ANY ANSWER THERETO OR ANY AMENDMENT TO ANY OF THE
ABOVE TO SUBMIT TO BINDING ARBITRATION ALL CLAIMS, DISPUTES AND
CONTROVERSIES BETWEEN OR AMONG THEM (AND THEIR RESPECTIVE
EMPLOYEES, OFFICERS, DIRECTORS, ATTORNEYS, AND OTHER AGENTS),
WHETHER IN TORT, CONTRACT OR OTHERWISE ARISING OUT OF OR RELATING
TO IN ANY WAY (I) ANY CREDIT SUBJECT HERETO, OR ANY OF THE OTHER
AGREEMENTS, AND THEIR NEGOTIATION, EXECUTION, COLLATERALIZATION,
ADMINISTRATION, REPAYMENT, MODIFICATION, EXTENSION, SUBSTITUTION,
FORMATION, INDUCEMENT, ENFORCEMENT, DEFAULT OR TERMINATION; OR (II)
REQUESTS FOR ADDITIONAL CREDIT; PROVIDED HOWEVER THAT THE PARTIES
AGREE THAT, NOTWITHSTANDING THE FOREGOING, EACH PARTY RETAINS THE
RIGHT TO PURSUE IN SMALL CLAIMS COURT ANY DISPUTE WITHIN THAT
COURT’S JURISDICTION. IN THE EVENT OF A COURT ORDERED
ARBITRATION, THE PARTY REQUESTING ARBITRATION SHALL BE RESPONSIBLE
FOR TIMELY FILING THE DEMAND FOR ARBITRATION AND PAYING THE
APPROPRIATE FILING FEE WITHIN THE 30 DAYS OF THE ABATEMENT ORDER OR
THE TIME SPECIFIED BY THE COURT. FAILURE TO TIMELY FILE THE DEMAND
FOR ARBITRATION AS ORDERED BY THE COURT WILL RESULT IN THAT
PARTY’S RIGHT TO DEMAND ARBITRATION BEING AUTOMATICALLY
TERMINATED.
(b)
GOVERNING RULES
. ANY
ARBITRATION PROCEEDING WILL (I) PROCEED IN A LOCATION IN THE
APPLICABLE STATE (AS DEFINED HEREIN) SELECTED BY THE AMERICAN
ARBITRATION ASSOCIATION (“
AAA
”); (II) BE GOVERNED
BY THE FEDERAL ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE),
NOTWITHSTANDING ANY CONFLICTING CHOICE OF LAW PROVISION IN ANY OF
THE DOCUMENTS BETWEEN THE PARTIES; AND (III) BE CONDUCTED BY THE
AAA, OR SUCH OTHER ADMINISTRATOR AS THE PARTIES SHALL MUTUALLY
AGREE UPON, IN ACCORDANCE WITH THE AAA’S COMMERCIAL DISPUTE
RESOLUTION PROCEDURES, UNLESS THE CLAIM OR COUNTERCLAIM IS AT LEAST
$1,000,000.00 EXCLUSIVE OF CLAIMED INTEREST, ARBITRATION FEES AND
COSTS IN WHICH CASE THE ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE AAA’S OPTIONAL PROCEDURES FOR LARGE,
COMPLEX COMMERCIAL DISPUTES (THE COMMERCIAL DISPUTE RESOLUTION
PROCEDURES OR THE OPTIONAL PROCEDURES FOR LARGE, COMPLEX COMMERCIAL
DISPUTES TO BE REFERRED TO HEREIN, AS APPLICABLE, AS THE
“
RULES
”). IF THERE IS ANY
INCONSISTENCY BETWEEN THE TERMS HEREOF AND THE RULES, THE TERMS AND
PROCEDURES SET FORTH HEREIN SHALL CONTROL. ANY PARTY WHO FAILS OR
REFUSES TO SUBMIT TO ARBITRATION FOLLOWING A DEMAND BY ANY OTHER
PARTY SHALL BEAR ALL COSTS AND EXPENSES INCURRED BY SUCH OTHER
PARTY IN COMPELLING ARBITRATION OF ANY DISPUTE.
(c)
NO WAIVER OF PROVISIONAL REMEDIES,
SELF-HELP AND FORECLOSURE
. THE ARBITRATION REQUIREMENT DOES
NOT LIMIT THE RIGHT OF ANY PARTY BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING TO (I) FORECLOSE AGAINST
REAL OR PERSONAL PROPERTY COLLATERAL; (II) EXERCISE SELF-HELP
REMEDIES RELATING TO COLLATERAL OR PROCEEDS OF COLLATERAL SUCH AS
SETOFF OR REPOSSESSION; OR (III) OBTAIN PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS REPLEVIN, WRIT OF POSSESSION, INJUNCTIVE RELIEF,
ATTACHMENT, GARNISHMENT OR THE APPOINTMENT OF A RECEIVER. THIS
EXCLUSION DOES NOT CONSTITUTE A WAIVER OF THE RIGHT OR OBLIGATION
OF ANY PARTY TO SUBMIT ANY DISPUTE TO ARBITRATION OR REFERENCE
HEREUNDER, INCLUDING THOSE ARISING FROM THE EXERCISE OF THE ACTIONS
DETAILED IN SECTIONS (I), (II) AND (III) OF THIS
PARAGRAPH.
(d)
ARBITRATOR QUALIFICATIONS AND
POWERS
. ANY ARBITRATION PROCEEDING IN WHICH THE AMOUNT IN
CONTROVERSY IS $5,000,000.00 OR LESS WILL BE DECIDED BY A SINGLE
ARBITRATOR SELECTED ACCORDING TO THE RULES, AND WHO SHALL NOT
RENDER AN AWARD OF GREATER THAN $5,000,000.00. ANY DISPUTE IN WHICH
THE AMOUNT IN CONTROVERSY EXCEEDS $5,000,000.00 SHALL BE DECIDED BY
MAJORITY VOTE OF A PANEL OF THREE ARBITRATORS; PROVIDED HOWEVER,
THAT ALL THREE ARBITRATORS MUST ACTIVELY PARTICIPATE IN ALL
HEARINGS AND DELIBERATIONS, EXCEPT THAT A SINGLE ARBITRATOR MAY
DECIDE PRE-HEARING DISCOVERY DISPUTES. THE ARBITRATOR(S) WILL BE A
NEUTRAL ATTORNEY LICENSED IN THE APPLICABLE STATE (AS DEFINED
HEREIN) OR A NEUTRAL RETIRED JUDGE OF THE STATE OR FEDERAL
JUDICIARY OF THE APPLICABLE STATE (AS DEFINED HEREIN), IN EITHER
CASE WITH A MINIMUM OF TEN YEARS EXPERIENCE IN THE SUBSTANTIVE LAW
APPLICABLE TO THE SUBJECT MATTER OF THE DISPUTE TO BE ARBITRATED.
THE ARBITRATOR(S) WILL DETERMINE WHETHER OR NOT AN ISSUE IS
ARBITRATABLE AND WILL GIVE EFFECT TO THE STATUTES OF LIMITATION OR
REPOSE IN DETERMINING ANY CLAIM. IN ANY ARBITRATION PROCEEDING THE
ARBITRATOR(S) WILL DECIDE (BY DOCUMENTS ONLY OR WITH A HEARING AT
THE ARBITRATOR'S DISCRETION) ANY PRE-HEARING MOTIONS WHICH ARE
SIMILAR TO MOTIONS TO DISMISS FOR FAILURE TO STATE A CLAIM OR
MOTIONS FOR SUMMARY ADJUDICATION. THE ARBITRATOR(S) SHALL RESOLVE
ALL DISPUTES IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE
APPLICABLE STATE (AS DEFINED HEREIN) AND MAY GRANT ANY REMEDY OR
RELIEF THAT A COURT OF SUCH STATE COULD ORDER OR GRANT WITHIN THE
SCOPE HEREOF AND SUCH ANCILLARY RELIEF AS IS NECESSARY TO MAKE
EFFECTIVE ANY AWARD. THE ARBITRATOR(S) SHALL ALSO HAVE THE POWER TO
AWARD RECOVERY OF ALL COSTS AND FEES, TO IMPOSE SANCTIONS AND TO
TAKE SUCH OTHER ACTION AS THE ARBITRATOR(S) DEEMS NECESSARY TO THE
SAME EXTENT A JUDGE COULD PURSUANT TO THE FEDERAL RULES OF CIVIL
PROCEDURE, THE APPLICABLE STATE’S (AS DEFINED HEREIN) RULES
OF CIVIL PROCEDURE OR OTHER APPLICABLE LAW. JUDGMENT UPON THE AWARD
RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION. THE INSTITUTION AND MAINTENANCE OF AN ACTION FOR
JUDICIAL RELIEF OR PURSUIT OF A PROVISIONAL OR ANCILLARY REMEDY
SHALL NOT CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING
THE PLAINTIFF, TO SUBMIT THE CONTROVERSY OR CLAIM TO ARBITRATION IF
ANY OTHER PARTY CONTESTS SUCH ACTION FOR JUDICIAL
RELIEF.
(e)
DISCOVERY.
IN ANY ARBITRATION
PROCEEDING, DISCOVERY WILL BE PERMITTED IN ACCORDANCE WITH THE
RULES. ALL DISCOVERY SHALL BE EXPRESSLY LIMITED TO MATTERS DIRECTLY
RELEVANT TO THE DISPUTE BEING ARBITRATED AND MUST BE COMPLETED NO
LATER THAN 20 DAYS BEFORE THE HEARING DATE. ANY REQUESTS FOR AN
EXTENSION OF THE DISCOVERY PERIODS, OR ANY DISCOVERY DISPUTES, WILL
BE SUBJECT TO FINAL DETERMINATION BY THE ARBITRATOR(S) UPON A
SHOWING THAT THE REQUEST FOR DISCOVERY IS ESSENTIAL FOR THE PARTY'S
PRESENTATION AND THAT NO ALTERNATIVE MEANS FOR OBTAINING
INFORMATION IS AVAILABLE.
(f)
CLASS PROCEEDINGS AND
CONSOLIDATIONS
. NO PARTY HERETO SHALL BE ENTITLED TO JOIN OR
CONSOLIDATE DISPUTES BY OR AGAINST OTHERS IN ANY ARBITRATION,
EXCEPT PARTIES WHO HAVE EXECUTED THIS AGREEMENT OR ANY OTHER
CONTRACT, INSTRUMENT OR DOCUMENT RELATED TO THE OBLIGATIONS, OR TO
INCLUDE IN ANY ARBITRATION ANY DISPUTE AS A REPRESENTATIVE OR
MEMBER OF A CLASS, OR TO ACT IN ANY ARBITRATION IN THE INTEREST OF
THE GENERAL PUBLIC OR IN A PRIVATE ATTORNEY GENERAL
CAPACITY.
(g)
PAYMENT OF ARBITRATION COSTS AND
FEES
. THE ARBITRATOR(S) SHALL AWARD ALL COSTS AND EXPENSES
OF THE ARBITRATION PROCEEDING.
(h)
MISCELLANEOUS
. TO THE MAXIMUM
EXTENT PRACTICABLE, THE AAA, THE ARBITRATOR(S) AND THE PARTIES
SHALL TAKE ALL ACTION REQUIRED TO CONCLUDE ANY ARBITRATION
PROCEEDING WITHIN 180 DAYS OF THE FILING OF THE DISPUTE WITH THE
AAA. NO ARBITRATOR(S) OR OTHER PARTY TO AN ARBITRATION PROCEEDING
MAY DISCLOSE THE EXISTENCE, CONTENT OR RESULTS THEREOF, EXCEPT FOR
DISCLOSURES OF INFORMATION BY A PARTY REQUIRED IN THE CONNECTION
WITH FINANCIAL REPORTING IN THE ORDINARY COURSE OF ITS BUSINESS OR
BY APPLICABLE LAW OR REGULATION. IF MORE THAN ONE AGREEMENT FOR
ARBITRATION BY OR BETWEEN THE PARTIES POTENTIALLY APPLIES TO A
DISPUTE, THE ARBITRATION PROVISION MOST DIRECTLY RELATED TO THE
SUBJECT MATTER OF THE DISPUTE SHALL CONTROL. THIS ARBITRATION
PROVISION SHALL SURVIVE TERMINATION, AMENDMENT OR EXPIRATION OF ANY
OF THIS AGREEMENT, THE OTHER AGREEMENTS OR ANY RELATIONSHIP BETWEEN
THE PARTIES.
(i)
WAIVER OF JURY TRIAL
. THE
PARTIES HERETO HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION THEY HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER AGREEMENT OR DOCUMENT DELIVERED IN CONNECTION HEREWITH, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THIS
AGREEMENT.
Section
12.19
Increased
Cost and Reduced Return
. After the date of
this Agreement, if the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental
authority charged with the interpretation or administration
thereof, or compliance by WFB with any request or directive
(whether or not having the force of law) of any such Governmental
Authority (a) subjects WFB to any charge or withholding on or in
connection with this Agreement or any Other Agreement or any
Acceptable Account or any Collateral, (b) changes the basis of
taxation of payments to WFB in respect of any amounts payable under
this Agreement or any Other Agreement (except for changes in the
rate of tax on the overall net income before tax of WFB), (c)
imposes, modifies or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or any credit
extended by WFB, (d) has the effect of reducing the rate of return
on WFB's capital to a level below that which WFB could have
achieved but for such adoption, change or compliance (taking into
consideration WFB's policies concerning capital adequacy, (e) WFB
is required to post or allocate additional capital or the
maintenance or allocation of capital by WFB is otherwise affected
by any of the following, to or from that which is maintained by
WFB, pursuant to any legal or regulatory requirement, request,
direction or guideline, or change in the interpretation or
administration thereof (including with respect to reserve, deposit,
capital adequacy, capital allocation or similar requirements) made
after the date hereof (or, in the case of The Dodd-Frank Wall
Street Reform and Consumer Protection Act adopted by the United
States Congress on July 21, 2010 or the Bank for International
Settlements or the Basel Committee on Banking Regulations and
Supervisory Practices (or any successor or similar authority to any
of them), any law, regulation, direction or guideline thereof or
thereunder or enacted thereby or pursuant to the terms thereof,
regardless of the date adopted, enacted or issued), from or by any
governmental authority or other similar body; or (f) imposes any
other condition, and the result of any of the foregoing is (x) to
impose a cost on, or increase the cost to WFB of its purchasing,
maintaining or funding any interest acquired under this Agreement
or any Other Agreement, (y) to reduce the amount of any sum
received or receivable by, or to reduce the rate of return of, WFB
under this Agreement or any related transaction document or (z) to
require any payment calculated by reference to the amounts received
by it hereunder, then, upon demand by WFB, the Client shall pay to
WFB (with respect to amounts owed to it) such additional amounts as
will compensate WFB for such increased cost or
reduction.
Section
12.20
USA
PATRIOT Act Notice
. WFB hereby
notifies Client that pursuant to the requirements of the USA
PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October
26, 2001)), it is required to obtain, verify and record information
that identifies Client, which information includes the name and
address of Client and other information that will allow WFB to
identify Client in accordance with the USA PATRIOT Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)).
Section
12.21
Marketing
Materials
. Client hereby irrevocably authorizes WFB to use
the name, logo and other insignia of Client in any
“tombstone” or comparable advertising, on its website
or in other marketing materials.
Section
12.22
Amendment
and Restatement; Ratification.
12.22.1
Client
acknowledges, confirms and agrees that (i) the security interests
and liens granted to WFB pursuant to the Existing Account Purchase
Agreement and Existing Other Agreements shall remain in full force
and effect and shall secure all Obligations hereunder, (ii) such
security interests and liens shall be deemed to be continuously
granted and perfected from the earliest date of the granting and
perfection of such security interests and liens, whether under the
Existing Account Purchase Agreements, the Existing Other Agreements
or otherwise, (c) the obligations owing by Client hereunder
represent, among other things, the amendment, restatement, renewal,
extension, consolidation and modification of the Existing
Obligations arising in connection with the Existing Account
Purchase Agreement and the Existing Other Agreements and (d) the
Existing Account Purchase Agreement and the Existing Other
Agreements have been duly executed and delivered by Client and are
in full force and effect as of the date hereof.
12.22.2
The terms,
conditions, agreements, covenants, representations and warranties
set forth in the Existing Account Purchase Agreement are, effective
as of the Effective Date, amended and restated in their entirety,
and as so amended and restated, replaced and superseded, by the
terms, conditions, agreements, covenants, representations and
warranties set forth in this Agreement;
provided
that
each of Client and WFB
acknowledges, confirms and agrees that such amendment and
restatement shall not, in any manner, (i) be construed to
constitute payment of, or impair, limit, cancel or extinguish, or
constitute a novation in respect of, the Existing Obligations
evidenced by or arising under the Existing Account Purchase
Agreement or the Existing Other Agreements, all such Existing
Obligations deemed obligations of Client under this Agreement or
(ii) adversely affect or impair the priority of security interests
and liens granted by the Existing Account Purchase Agreement and
the Existing Other Agreements.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.
|
|
CLIENT:
COMMAND CENTER, INC.
By:
/s/ Frederick J. Sandford
Name:
Frederick J. Sandford
Title:
President and CEO
|
|
|
Address:
3609 S. Wadsworth Blvd., Suite 250,
Lakewood, CO
80235
|
STATE/COMMONWEALTH
OF COLORADO, COUNTY OF JEFFERSON, TO WIT:
I
HEREBY CERTIFY, that on this 11th day of May, 2016, before me, a
Notary Public of said State, personally appeared Frederick
Sandford, who acknowledged himself to be the CEO of COMMAND CENTER,
INC., a Washington corporation, known to me (or satisfactorily
proven) to be the person whose name is subscribed to the foregoing
instrument and acknowledged that he executed the same for the
purposes therein contained as the duly authorized CEO of said
company by signing the name of the company by himself as Frederick
Sandford.
WITNESS
my hand and Notarial Seal.
/s/
Notary
Public
My
Commission Expires: Dec. 3, 2019
My
Notarial Registration No.:
ACCEPTED:
WELLS
FARGO BANK, NATIONAL ASSOCIATION
By: /s/
Angela Brown
Name:
Angela Brown
Title:
Vice President
Address:
14241 Dallas Parkway, Suite 900
Dallas,
Texas 75254
Effective
Date May 12, 2016.
Rider A
To
Account Purchase Agreement
Between
Wells Fargo Bank, National Association
And
Command Center, Inc.
DEFINITIONS
“
AAA
” shall have the meaning set
forth in Section 12.18(b) of this Agreement.
“
Acceptable Account
” means an
Account created by Client in the ordinary course of its business,
that arises out of Client’s sale of Goods or rendition of
services, that complies with each of the representations and
warranties respecting Acceptable Accounts made by Client in this
Agreement, is deemed to be acceptable by WFB in its sole
discretion, and that is not excluded as unacceptable by virtue of
one or more of the excluding criteria set forth below. Without
limiting the foregoing, Acceptable Accounts shall not include the
following:
(a) Accounts
that the Customer has failed to pay within 90 days of original
invoice;
(b) Accounts
with selling terms of more than 30 days;
(c) Accounts
with respect to which the Customer is an affiliate, employee, agent
or equity owner of Client;
(d) Accounts
arising in a transaction wherein Goods are placed on consignment or
are sold pursuant to a guaranteed sale, a sale or return, a sale on
approval, or any other terms by reason of which the payment by the
Customer may be conditional or contingent;
(e) Accounts
that are not payable in U.S. Dollars;
(f) Accounts
with respect to which the Customer either (i) does not maintain its
chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any state thereof,
or (iii) is the government of any foreign country or sovereign
state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public
corporation or other instrumentality thereof;
(g) Accounts
with respect to which the Customer is a creditor of Client, has or
has asserted a right of setoff or contra account, or has disputed
its obligation to pay all or any portion of the Account, to the
extent of such claim, right of setoff or contra account, or
dispute;
(h) Accounts
owing by a single Customer or group of affiliated Customers whose
total obligations owing to Client exceed the credit limit
established by WFB for such Customer;
(i) Accounts
with respect to which the Customer is subject to an Insolvency
Proceeding, is not solvent, has gone out of business, or as to
which Client has knowledge or has received notice of an imminent
Insolvency Proceeding or a material impairment of the financial
condition of such Customer;
(j) Accounts,
the collection of which, WFB, in its sole discretion, believes to
be doubtful by reason of the Customer’s financial
condition;
(k) Accounts
that are not subject to a valid and perfected first priority Lien
in favor of WFB or that are subject to any Lien other than in favor
of WFB;
(l) Accounts
with respect to which the obligation to pay is conditional or
subject to a repurchase obligation or right to return or with
respect to which the goods or services giving rise to such Accounts
have not been delivered (or performed, as applicable) or requiring
any additional performance subsequent to the date of sale and
assignment to WFB and accepted by the Customer or Person obligated
on such Account, including progress billings, bill and hold sales,
guaranteed sales, sale or return transactions, sales on approval or
consignments;
(m) Accounts
with respect to which the Customer is a Sanctioned Person or
Sanctioned Entity;
(n) that
portion of Accounts which represent finance charges, service
charges, sales taxes or excise taxes;
(o) Accounts
which have been restructured, extended, amended or otherwise
modified without the prior written consent of WFB;
(p) Accounts
which have not been invoiced;
(q) Accounts
for which Client has not indicated on the invoice evidencing such
Account that the Account has been assigned to and is payable only
to WFB at such address or location as set forth in Section 6.2, if
such notation is required by WFB in accordance with this
Agreement;
(r) Accounts
or that portion of Accounts otherwise deemed ineligible by WFB in
its sole discretion; or
(s) Those
Accounts or portion of Accounts that are not for services rendered
by the Client, including Accounts for the sale of software,
etc.;
Any
Accounts which are not Acceptable Accounts shall nonetheless
constitute Collateral.
“
Accountants
” means certified
public accountants selected by Client and acceptable to WFB in its
sole discretion.
“
Adjusted Liquidity
” means, as of
any date of determination, an amount equal to (a) unrestricted cash
of Client, plus (b) the face amount of all Accounts of Client net
of reserves for bad debt, minus (c) the Obligations, minus (d) all
accrued and unpaid payroll and payroll tax liability of
Client.
“
Agreement
” means this Account
Purchase Agreement, together with all schedules, riders and
exhibits annexed hereto, as amended, restated, renewed, replaced,
substituted, supplemented or otherwise modified from time to
time.
“
Ancillary Documents
” means, with
respect to any Account submitted by Client to WFB for sale, such
documents as may be required and in form and content satisfactory
to WFB in its sole discretion, including, without
limitation:
(a) an
assignment and schedule listing the Account, together with other
Accounts then being purchased by WFB from Client, signed by an
authorized representative of Client or uploaded to WFB
electronically in form and manner acceptable to WFB and
electronically signed by an authorized representative of
Client;
(b) a
copy of each contract for the sale of services or goods between
Client and each Customer, and all amendments, supplements and
modifications thereto;
(c) an
original invoice or an electronic equivalent thereof;
(d) a
copy of the bill of lading, if applicable;
(e) proof
of delivery of the Goods or completion of the services covered by
such Account;
(f) the
purchase order, or purchase order number, as applicable,
corresponding to such Account;
(g) the
Notice of Assignment of Accounts, if required by WFB in its sole
discretion; and
(h) any
other documentation WFB may require in its sole
discretion.
“
Applicable State
” means the State
of Texas.
“
Bank
Product Obligations
” shall have the meaning set forth
in the Bank Products Supplement to Account Purchase Agreement dated
the date hereof by and between WFB and Client, as amended and
modified from time to time.
“
Bank Product Provider
” shall have
the meaning set forth in the Bank Products Supplement to Account
Purchase Agreement dated the date hereof by and between WFB and
Client, as amended and modified from time to time.
“
Business Day
” means any day other
than a Saturday, Sunday or other day on which WFB is required by
law to close.
“
Change of Control
” means that (a)
any “person” or “group” (within the meaning
of Sections 13(d) and 14(d) of the Securities Exchange Act of
1934), other than Permitted Holders, becomes the beneficial owner
(as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of 25%, or more, of the stock of
Command Center having the right to vote for the election of members
of the Board of Directors of Command Center, or (b) Command Center
fails to own and control, directly or indirectly, 100% of the stock
or equity interest of each other corporate Obligor.
“
Client
” shall have the meaning set
forth in the introductory paragraph of this Agreement.
“
Client Ledger Account
” means,
collectively, one or more ledger accounts maintained by WFB in the
name of Client.
“
Client Ledger Account Deficit
”
means, as of any given date, the excess of the aggregate amount of
all debits and charges to the Client Ledger Account over the
aggregate amount of all credits to the Client Ledger Account as of
such date.
“
Collateral
” means all properties,
assets and rights of Client, wherever located, whether now owned or
hereafter acquired or arising, and all Proceeds and products
thereof, including: all of Client’s Accounts (including,
without limitation, all Acceptable Accounts), Chattel Paper
(including Electronic Chattel Paper), Commercial Tort Claims,
Deposit Accounts, Documents, General Intangibles, Goods (including
Inventory (including all merchandise and other Goods, and all
additions, substitutions and replacements thereof, together with
all Goods and materials used or usable in manufacturing,
processing, packaging or shipping such Inventory) and Equipment),
Instruments, Investment Property, Letter-of-Credit Rights, Returned
Goods, and Supporting Obligations; all reserves, matured funds,
credit balances and other property of Client in WFB’s
possession; all rights of stoppage in transit, replevin,
repossession, reclamation and all other rights and remedies of an
unpaid vendor; all of Client’s Records; and all insurance
policies and Proceeds and rights relating thereto.
“
Commercial Dispute
” means any
dispute or claim in any respect, regardless of merit, (including,
without limitation, any alleged dispute as to price, invoice terms,
quantity, quality or late delivery and claims of release from
liability, counterclaim or any alleged claim of deduction, offset,
or counterclaim or otherwise) arising out of or in connection with
an Acceptable Account or any other transaction related
thereto.
“
Contract Rate
” means the Contract
Rate set forth on Schedule 1 annexed hereto.
“
Contract Year
” shall mean the
period commencing on the Effective Date through and including April
7, 2017, and each successive twelve (12) month period thereafter
during the Term.
“
Customer
” shall mean a Person that
purchases goods or services from Client.
“
Daily One Month LIBOR
” shall
mean, for any date of determination, the rate per annum for United
States dollar deposits with a maturity of one (1) month as reported
on Reuters LIBOR01 Screen (or any successor page) at approximately
11:00 am London time on such date of determination or, if such day
is not a London business day, then on the immediately preceding
London business day. If such rate is not so reported, such rate
shall be as determined by WFB from another recognized source or
interbank quotation. When interest or any fee hereunder is
determined in relation to Daily One Month LIBOR, each change in
such interest rate or fee shall become effective each Business Day
that WFB determines that Daily One Month LIBOR has
changed.
“
Default
” means, an event,
condition or occurrence which, with the giving of notice or lapse
of time, or both could or would constitute an Event of
Default.
“
Default Rate
” means the Default
Rate set forth on Schedule 1 annexed hereto.
“
Deficit Rate
” means the Deficit
Rate set forth on Schedule 1 annexed hereto.
“
Effective Date
” means the date on
which WFB executes this Agreement as set forth below WFB’s
signature block on the signature page of this
Agreement.
“
Event of Default
” shall have the
meaning set forth in Section 10.1 of this Agreement.
“
Existing Account Purchase
Agreement”
means the Account Purchase Agreement, dated
February 19, 2010, by and between Client and WFB, as amended,
refinanced, supplemented, or otherwise modified from time to
time.
“Existing Obligations
” shall
mean all indebtedness, obligations and liabilities of Client to WFB
under or pursuant to the Existing Account Purchase Agreement and
the Existing Other Agreements.
“Existing Other Documents
”
means, collectively, all agreements, documents and/or instruments
at any time executed or delivered in connection with the Existing
Account Purchase Agreements, including, without limitation, all
inventory supplements, letter of credit supplements, other
supplements and schedules thereto, in each instance, as amended,
refinanced, supplemented, or otherwise modified from time to
time.
“
Facility
Fee
” means the Facility Fee set forth on Schedule 1
annexed hereto.
“
Field Examination Fees
” means the
Field Examination Fees set forth on Schedule 1 annexed
hetero.
“
GAAP
” means generally accepted
accounting principles as in effect from time to time in the United
States of America, consistently applied.
“
Governmental Authority
” means any
federal, state, local, or other governmental or administrative
body, instrumentality, board, department, or agency or any court,
tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or
body.
“
Indemnified
Person
” means each of WFB and its affiliates, and
their respective shareholders, directors, officers, employees,
attorneys and agents.
“
Initial Term
” means the Initial
Term set forth on Schedule 1 annexed hereto.
“
Insolvency Proceeding
” means any
proceeding under Title 11 of the United States Code or under the
Bankruptcy and Insolvency
Act
(Canada) or the
Companies' Creditors Arrangement Act
(Canada) or any other federal, state or provincial proceeding
instituted by or against a Person seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or any
proceeding seeking the entry of an order for relief by the
appointment of a receiver, trustee, custodian or similar official
for its or a substantial part of its property.
“
LC Supplement
” means that certain
Letter of Credit and Security Agreement, dated on or about the date
hereof, by and between Client and WFB, as amended, restated,
renewed, replaced, substituted, supplemented or otherwise
modified.
“
LC Sublimit
” shall have the
meaning ascribed to such term on Schedule 1 annexed
hereto.
“
Lien
”
means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, easement,
lien (statutory or other), security interest, or other security
arrangement and any other preference, priority or preferential
arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale contract or other title retention
agreement, the interest of a lessor under a capital lease and any
synthetic or other financing lease having substantially the same
economic effect as any of the foregoing.
“
Material Adverse Change
” means (a)
a material adverse change in the business, prospects, operations,
results of operations, assets, liabilities or condition (financial
or otherwise) of Client, (b) a material impairment of
Client’s ability to perform its obligations under this
Agreement or the Other Agreements to which it is a party or of
WFB’s ability to enforce the Obligations or realize upon the
Collateral, (c) a material impairment of the enforceability or
priority of WFB’s Liens with respect to the Collateral as a
result of an action or failure to act on the part of Client or (d)
any claim against Client or threat of litigation which if
determined adversely to Client, would result in the occurrence of
an event described in clauses (a), (b) or (c) above.
“
Maximum Facility Amount
” means the
Maximum Facility Amount set forth on Schedule 1 annexed
hereto.
“
Maximum Rate
” means the maximum
rate of interest under applicable law that WFB may charge Client:
For purposes of determining the Maximum Rate under Texas law, the
applicable rate ceiling shall be the weekly ceiling described in,
and computed in accordance with, Chapter 303 of the Texas Finance
Code; provided, however, that to the extent permitted by applicable
law, WFB reserves the right to change, from time to time by further
notice and disclosure to Client by WFB, the ceiling on which the
Maximum Rate is based under the Texas Finance Code; and, provided
further, that the Maximum Rate for purposes of this Agreement shall
not be limited to the applicable weekly rate under the Texas
Finance Code if federal laws or other state laws now or hereafter
in effect and applicable to this Agreement (and the interest
contracted for, charged and collected hereunder) shall permit a
higher rate of interest.
“
Maximum Terms Date
” means the
Maximum Terms Date set forth on Schedule 1 annexed
hereto.
“
Notation Fee
” means the Notation
Fee set forth on Schedule 1 annexed hereto.
“
Notice of Assignment of Accounts
”
means a Notice of Assignment of Accounts executed and delivered by
Client to WFB in form and substance satisfactory to WFB in its sole
discretion.
“
Obligations
” means all charges,
debts, liabilities, obligations, guaranties, covenants, duties and
indebtedness of every nature at any time owing by Client to WFB or
WFB’s affiliates, whether evidenced by or arising under this
Agreement, any Other Agreement or any note or other instrument or
document, whether arising by law or otherwise, whether arising from
an extension of credit, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including all indebtedness
owing by Client for Goods and services purchased by Client from any
entity whose Accounts are factored or financed by WFB, and all
debts, liabilities and obligations acquired as a result of any
purchase of, assignment of, participation in or other acquisition
of Client’s debts, liabilities or obligations owing to other
entities), absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, now existing
or hereafter arising (whether before or after the filing of any
petition in bankruptcy by or against Client or the commencement of
any other insolvency proceedings with respect to Client) including
all interest, charges, expenses, fees, attorney’s fees,
consultant’s fees, expert witness fees, Field Examination
Fees, loan fees, termination fees, minimum interest charges, Bank
Product Obligations, Repurchase Obligations and any other sums
chargeable to Client or incurred by WFB under or in connection with
this Agreement, the Other Agreements or the transactions
contemplated hereby or thereby.
“
Obligor
” means, individually and
collectively, Client and all Payment Guarantors. Obligors do not
include any Person that is solely a Validity
Guarantor.
“
OFAC
” means The Office of Foreign
Assets Control of the U.S. Department of the Treasury.
“
Other Agreements
” means
collectively, this Agreement, and all schedules, exhibits and/or
riders attached hereto, any Ancillary Document and any supplement,
agreement, guaranty, security agreement, notes, subordination
agreement or other such instruments now or hereafter executed by
Client or any other Obligor for the benefit of WFB in connection
with this Agreement, all as amended, restated, renewed, replaced,
substituted, supplemented or otherwise modified.
“Payment Guarantor
” means
any Person that now or hereafter executes a Payment Guaranty in
favor of WFB including, without limitation, the Person or Persons
set forth on the Schedule 1 annexed hereto. The term Guarantor
shall not include any Person who executes a Validity Guaranty
unless such Person also executes a Payment Guaranty.
“
Payment Guaranty
” means each
guaranty of payment of the Obligations executed by a Payment
Guarantor for the benefit of WFB, as amended, restated, renewed,
replaced, substituted, supplemented or otherwise modified. The term
Payment Guaranty shall not include a Validity
Guaranty.
“
Person
” means and includes an
individual, a corporation, a partnership, a joint venture, a
limited liability company or partnership, a trust, an
unincorporated association, a Governmental Authority or any other
organization or entity.
“
Purchase Price
” means for any
Acceptable Account purchased under this Agreement the gross face
amount of such Acceptable Account, less any amount of any returns,
trade discounts (which may be calculated on the shortest or longest
terms, at WFB’s option), credits or allowances, reductions or
adjustments taken by or granted to the Customer, and any other
charges with respect to such Acceptable Account multiplied by the
Purchase Price Rate.
“
Purchase Price Rate
” means the
Purchase Price Rate set forth on Schedule 1 annexed hereto. The
Purchase Price Rate may be adjusted at any time and from time to
time by WFB in WFB’s sole discretion.
“
Renewal Term
” means the Renewal
Term set forth on Schedule 1 annexed hereto.
“
Repurchase Obligations
” shall mean
the obligation of Client to repurchase Accounts from WFB in
accordance with the terms hereof, the amount of which obligation,
as of any date of determination, is equal to the Repurchase Price,
calculated as of such date of determination, of all Accounts for
which a Settlement Date has not then occurred.
“
Repurchase Price
” means for any
Acceptable Account purchased hereunder, an amount equal to (a) the
Purchase Price paid by WFB with respect to such Acceptable Account,
minus
, (b) the
lesser of (i) such Purchase Price and (ii) any amounts collected by
WFB and retained from the Customer with respect to such Acceptable
Account, and
plus
(c) all interest, fees, costs or expenses associated with the
repurchase or collection of such Account.
“
Reserves
” means any amount, as
determined by WFB in its sole discretion from time to time, as WFB
deems necessary as security for the payment and performance of the
Obligations, including, without limitation, an amount equal to the
face amount of the letters of credit issued from time to time under
the LC Supplement.
“
Rules
”
shall have the meaning set forth in Section 12.18(b) of this
Agreement.
“
Sanctioned Entity
” means (a) a
country or a government of a country, (b) an agency of the
government of a country, (c) an organization directly or indirectly
controlled by a country or its government, (d) a Person resident in
or determined to be resident in a country, in each case, that is
subject to a country sanctions program administered and enforced by
OFAC.
“
Sanctioned Person
” means a person
named on the list of Specially Designated Nationals maintained by
OFAC.
“
Settlement Date
” shall mean for
each Account, the number of Settlement Days after the Business Day
on which payment of such Acceptable Account is posted to the Client
Ledger Account by WFB.
“
Settlement Days
” means the
Settlement Days set forth on Schedule 1 annexed
hereto.
“
Term
”
means, collectively, the Initial Term and any Renewal
Term.
“
Termination Fee
” means the
Termination Fee set forth on Schedule 1 annexed
hereto.
“
UCC
” means, unless otherwise
provided with this Agreement, the Uniform Commercial Code as
adopted by and in effect from time to time in the Applicable State,
or in any other jurisdiction, as applicable.
“
Validity Guarantor
” means any
Person that now or hereafter executes a Validity Guaranty in favor
of WFB including, without limitation, the Person or Persons set
forth on the Schedule 1 annexed hereto.
“
Validity Guaranty
” means each
guaranty of (and limited to) the validity of, and certain
representations and warranties related to, the Accounts executed by
a Validity Guarantor for the benefit of WFB, as amended, restated,
renewed, replaced, substituted, supplemented or otherwise
modified.
“
WFB
” has the meaning set forth in
the introductory paragraph of this Agreement.
Rider B
To
Account Purchase Agreement
Between
Wells Fargo Bank, National Association
And
Command Center, Inc.
REPRESENTATIONS AND WARRANTIES
Client
hereby represents and warrants to WFB that at all times during the
Term:
1.
Organization
.
Client is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its
organization.
2.
Qualification
to do Business
. Client is duly qualified to do business and
is in good standing in each jurisdiction where its ownership of
property or the conduct of its business requires such
qualification.
3.
Compliance
with Laws
. Client operates its business in material
compliance with all applicable local, state and federal
laws.
4.
Power
and Authority
. Client has all power and authority under the
laws of Client’s jurisdiction of organization and its
articles of organization to conduct Client’s business and to
enter into, execute and deliver this Agreement and the Other
Agreements and to perform its Obligations hereunder and thereunder,
and has taken all necessary action to authorize the execution and
delivery of this Agreement and the Other Agreements and the
performance of its Obligations hereunder and
thereunder.
5.
Solvency
.
Client is solvent, is able to pay its debts as they mature, has
capital sufficient to carry on its business and all businesses in
which it is about to engage and the fair saleable value of its
assets (calculated on a going concern basis) is in excess of the
amount of its liabilities.
6.
Collateral
.
Client has good title to the Collateral, free and clear of any
Liens, except in favor of WFB, or as may be subject to an
intercreditor agreement with WFB or to which WFB has consented in
writing, in either case in form and content acceptable to
WFB.
7.
Accounts
.
Each Acceptable Account purchased by WFB hereunder (a) evidences an
absolute, bona fide sale and delivery of goods or rendition of
services in Client’s ordinary course of business and such
goods or services have been accepted by the Customer obligated
thereon; (b) is genuine, valid and enforceable against the Customer
obligated thereon in the full amount set forth on the invoice
evidencing such Account, without offset, defense, counterclaim,
deduction, recoupment or contra account; (c) is not subject to
Commercial Dispute (real or alleged); (d) is owing by a Customer
located in the United States and is payable in United States
dollars; (e) is owing by a Customer that is not an affiliate of
Client; (f) does not represent goods delivered upon “bill and
hold”, “consignment”, “guaranteed
sale”, “sale or return”, “payment on
reorder” or similar terms; (g) is legally saleable and
assignable by Client to WFB; (h) the invoice evidencing such
Account, all Ancillary Documents and all other documents delivered
to WFB in connection therewith are genuine and valid and are not
mistaken, misleading, fraudulent, incorrect, incomplete or
erroneous in any respect; (i) if arising from the sale of
Inventory, such Inventory is owned by Client and is not subject to
any consignment arrangement, encumbrance, security interest or Lien
other than in favor of WFB; (j) shall not be altered or in any way
modified without the prior written consent of WFB; and (k) has been
issued in the name of Client or a trade style of Client
specifically listed in the Ancillary Agreements Supplement, dated
of even date herewith, by Client in favor of WFB.
8.
Information
Generally
. All information submitted by Client to WFB,
including in any Certification of Officers executed by Client in
favor of WFB, is true, correct and complete.
9.
Financial
Information
. All financial information delivered by Client
to WFB from time to time regarding Client’s financial
condition accurately reflects such financial condition as of the
date of such information, and there has been no Material Adverse
Change in Client’s financial condition since the date of the
financial statements most recently delivered by Client to
WFB.
10.
Litigation
.
There are no actions or proceedings pending or, to Client’s
knowledge, threatened against or affecting Client, in which an
adverse decision could reasonably be expected to cause a Material
Adverse Change.
Schedule 1
to
Account Purchase Agreement
Between
Wells Fargo Bank, National Association
and
Command Center, Inc.
SELECTED ECONOMIC AND OTHER TERMS
|
Settlement
Days:
|
0
days
|
|
Maximum
Facility Amount:
|
$14,000,000
|
|
LC
Sublimit
|
$7,000,000
|
|
Purchase
Price Rate:
|
90%
|
|
Contract
Rate:
|
For
each month, an interest rate per annum which is equal to Daily One
Month LIBOR in effect from time to time plus 2.50%.
|
|
Deficit
Rate:
|
18% per
annum.
|
|
Default
Rate:
|
An
interest rate per annum which is equal to the then applicable
Contract Rate plus 50% of such Contract Rate.
|
|
Field
Examination Fees:
|
$900
per person per day, plus out-of-pocket costs.
|
|
Initial
Term:
|
The
period commencing on the Effective Date through and including April
7, 2018
|
|
Renewal
Term:
|
24
months, commencing on the first day after the last day of the
Initial Term or the immediately preceding Renewal Term, as
applicable.
|
|
Payment
Guarantors:
|
None
|
|
Validity
Guarantors:
|
Frederick
J. Sandford (validity)Ronald L. Junck (validity)Jeff Wilson
(validity)
|
|
Maximum
Terms Date:
|
With
respect to an Acceptable Account, the ninetieth (90
th
) day after the
invoice date of such Account.
|
|
Insurance:
|
Client
shall maintain insurance in such amounts and with such carriers as
is acceptable to WFB, it being acknowledged and agreed that such
insurance carriers and such insurance amounts maintained by Client
as of the date hereof are acceptable to WFB as of the date
hereof.
|
FEES
Client
shall pay to WFB each of the fees described below on the dates
provided below. Each fee shall be fully earned on the Effective
Date, may be charged by WFB to the Client Ledger Account when due
and shall not be subject to refund, rebate or proration for any
reason whatsoever. Client acknowledges, confirms and agrees that,
upon prior written notice to Client, WFB may, in WFB’s sole
discretion, reasonably exercised, increase any fee set forth herein
if WFB’s cost of funds increases for any reason. Such change
shall be effective upon the actual change in WFB’s cost of
funds.
1.
Facility
Fee
. On the Effective Date, and on each annual anniversary
of the Effective Date, Client shall pay WFB a facility fee in an
amount equal to 0.50% of the Threshold Amount (each, a
“
Facility Fee
”).
For purposes hereof, the term “
Threshold Amount
” shall mean
$10,000,000 provided that, if at any time the Adjusted Balance
exceeds the then applicable Threshold Amount, such then applicable
Threshold Amount shall be automatically increased, in minimum
increments of $1,000,000, until the Threshold Amount is not less
than such Adjusted Balance (the date of each such increase, an
“
Increase
Date
”). The Threshold Amount, once increased in
accordance with the foregoing, shall not be decreased except with
the written consent of WFB. In addition, upon each increase of the
Threshold Amount in accordance with the foregoing, Client shall pay
to WFB, on the Increase Date therefor, an additional fee equal to
0.50% of the amount of such increase (each, an “
Increase Fee
”). For purposes
hereof, the term “
Adjusted
Balance
” means, as of any date of determination, the
sum of (a) the aggregate Purchase Price of Acceptable Accounts for
which a Settlement Date has not occurred minus (b) the balance in
the Client Ledger Account. Each such Facility Fee and Increase Fee
shall be fully earned as of the Effective Date, anniversary of the
Effective Date or Increase Date, as the case may be. Any unpaid
portion of any Facility Fee or Increase Fee arising prior to the
termination of this Agreement shall be accelerated and be
immediately payable upon termination of this
Agreement.
2.
Notation
Fee
. In the event any invoice (or the electronic equivalent
of an invoice) is sent or transmitted to any Customer without the
notation required pursuant to Section 6.2, Client shall pay to WFB
a Notation Fee in an amount equal to two and one-half percent
(2.5%) of the face amount of such invoice, which Notation Fee shall
be immediately due and payable as of the date that the applicable
invoice was sent or transmitted to the Customer.
Schedule 2
to
Account Purchase Agreement
Between
Wells Fargo Bank, National Association
and
Command Center, Inc.
REPORTING REQUIREMENTS
Client
shall timely deliver the following financial documentation to
WFB:
(a)
Within 15 days
after the end of each month, Client’s accounts payable
aging;
(b)
Within 15 days
after the end of each month, Client’s accounts receivable
aging;
(c)
Within 30 days
after the end of each month, Client’s internally prepared
financial statements for such month, together with evidence,
satisfactory to WFB, of the payment and compliance by Client with
all federal, state and local tax obligations;
(d)
On a quarterly
basis, promptly upon the filing thereof with the Securities and
Exchange Commission (and in any event with 45 days after the end of
each quarter), Client’s internally prepared financial
statements for such quarter;
(e)
Within
90
days after the end
of each fiscal year, Client’s annual financial statements for
such year, audited by the Accountants;
(f)
Promptly after the
same are available, copies of all annual, regular, periodic and
special reports and registration statements which a Client may file
or be required to file with the Securities and Exchange Commission
under Section 13 or 15(d) of the Securities Exchange Act of
1934;
(g)
Promptly, and in
any event within five (5) Business Days after receipt thereof by
any Client, copies of each notice or other correspondence received
from the Securities and Exchange Commission (or comparable agency
in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation or other inquiry by such
agency regarding financial or other operational results of Command
Center or any subsidiary thereof;
(h)
On or before 30
days prior to the first day of each of Client’s fiscal years,
Client’s financial projections for such fiscal year;
and
(i)
Promptly, upon
WFB’s request from time to time, such other financial
information as WFB may request.
In
addition, Client shall cause each Payment Guarantor who is a
natural Person and who directly or indirectly holds 25% or more of
the equity interests in Client (or such other percentage as WFB may
establish from time to time in its discretion), and each Validity
Guarantor who is a natural Person and who directly or indirectly
holds 25% or more of the equity interests in Client (or such other
percentage as WFB may establish from time to time in its
discretion), to deliver to WFB, within 90 days after the end of
each year, updated certified personal financial statements for such
natural Person.
Account
Purchase Agreement
Schedule
2