Exhibit 10.20

REIMBURSEMENT AND SECURITY AGREEMENT

THIS REIMBURSEMENT AND SECURITY AGREEMENT (“Agreement”) is made and entered into
as of the _____ day of May, 2011, by and among INUVO, INC., a Nevada Corporation
with a business address of address 15550 Lightwave Drive, Suite 330, Clearwater,
FL 33760 (“INUVO”) and Charles D. Morgan, an individual having an address of
2908 Hood Street, Dallas, Texas 75209 (“Morgan”).
 
1.           Credit Accommodation and Agreement to Reimburse.

(a)           INUVO has a Business Financing Agreement with Bridge Bank, N. A.,
dated effective February 15, 2011, which credit facility is secured by the
accounts receivable and other assets of INUVO (the “Bridge Bank Facility”).  As
of the date of this Agreement, INUVO is unable to obtain advances on the Bridge
Bank Facility because INUVO does not have sufficient qualifying accounts
receivable to qualify for additional advances on the Bridge Bank Facility.

(b)           Bridge Bank has agreed to provide INUVO with a $1,000,000 Letter
of Credit Secured Facility as a sublimit loan under the current Bridge Bank
Facility (the “LC Secured Facility”) in the event a standby letter of credit is
provided to secure such loan.  INUVO has requested that Morgan provide a
$1,000,000 standby letter of credit (the “SLC”) required by Bridge Bank to
secure the LC Secured Facility under the Bridge Bank Facility. Morgan is willing
to provide the SLC required by Bridge Bank in consideration for INUVO’s promise
and agreement to pay and reimburse Morgan for any amounts drawn by Bridge Bank
on the SLC and INUVO’s agreement to pledge collateral to secure such payment and
reimbursement obligation
 
2.           In consideration for the SLC provided by Morgan to secure the LC
Secured Facility provided by Bridge Bank to INUVO, INUVO hereby grants to Morgan
a security interest in, and a lien on, and assigns to Morgan the Collateral to
secure the payment to, and reimbursement of, Morgan for any advances on the SLC
and any expenses incurred by Morgan in connection with securing INUVO’s
obligations herein or the collection on the payment and reimbursement
obligations of the INUVO herein (the “Obligations”).
 
3.           Collateral.  The property securing the Obligations consists of the
property or interests in property and other rights of INUVO for that property
described in Exhibit A attached hereto (collectively, the “Collateral”),
together with all additions, accessories, attachments and accessions thereto and
all substitutions and replacements therefor, and all proceeds (including
insurance proceeds) from the sale or other disposition thereof.
 
To the extent that the Uniform Commercial Code does not apply to a part of the
Collateral, it is the intention of this Section that Morgan have a common law
pledge of, security interest in and/or collateral assignment of, that part of
the Collateral to which the Uniform Commercial Code does not apply.
 
 
 

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4.           Covenants and Warranties.  INUVO HEREBY WARRANTS AND COVENANTS
THAT:

(a)           The Collateral covered by this Agreement is owned by INUVO.

(b)           The Collateral is and will remain free and clear of all liens and
encumbrances, except:  (a) the prior lien of Bridge Bank to secure the Bridge
Bank Facility (until such time as Bridge Bank has been paid in full), (b) the
liens and encumbrances created by this Security Agreement, and (c) the liens and
encumbrances created by any other security agreement or pledge given or granted
by INUVO to Morgan, and INUVO will defend title to the Collateral against the
claims and demands of all other persons.

(c)           INUVO will preserve the Collateral and keep it in good condition
and shall keep accurate books and records pertaining to said Collateral, and
shall allow Morgan to inspect the Collateral and such books and records at all
reasonable times.
 
5.           Events of Default/Remedies.
 
(a)           The occurrence of any of the following events shall constitute,
and is hereby defined to be, an “Event of Default”, and, upon the occurrence of
an Event of Default, INUVO shall be in default under this Agreement:

(1)           A draw of any amount on the SLC by Bridge Bank.

(2)           Insolvency or business failure of INUVO, appointment of a receiver
for any part of the Collateral, assignment for the benefit of any creditors of
(i) INUVO, or (ii) the commencement of any proceeding under any bankruptcy or
insolvency law by or against INUVO.

(3)           Except as provided for in this Agreement, the creation,
attachment, making or occurrence of a security interest, lien, attachment, levy,
seizure, garnishment, distraint or other encumbrance or other process of, in,
upon or against any of INUVO's assets.
 
(b)           Upon the occurrence of any Event of Default, Morgan may, at
Morgan’s option, in Morgan’s sole discretion and without demand or notice of any
kind, do any one or more of the following:
 
(1)           Acceleration.  Morgan may declare the entire balance of the
Obligations immediately due and payable, without presentment, protest or notice
of any kind (all of which are hereby expressly waived by INUVO).
 
(2)           Remedies Against Collateral/Guarantors.  Morgan may pursue any and
all security and Collateral relating to the Obligations, and may pursue all
rights and remedies and/or the foreclosure of all liens and security interests
Morgan under this Agreement and any other current or future agreements between
INUVO and Morgan, and may pursue all of Morgan's remedies at law (whether
arising under the Uniform Commercial Code or otherwise) or in equity, all in
such order and manner as Morgan may elect in its sole discretion, including,
without limitation, the following rights and remedies:
 
 
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(i)           Morgan may, without further notice or demand and without legal
process, take possession of any Collateral wherever it may be found, together
with all of INUVO's records identifying or relating to the Collateral so taken,
and for such purposes may enter upon any property occupied or controlled by
INUVO.  INUVO hereby waives all claims for damages due to or arising from any
such entry and/or taking.
 
(ii)           INUVO agrees that Morgan has the right to cause the appointment
of a receiver, ex parte, to take charge of the Collateral for the purpose of
making the Collateral immediately available to Morgan, and INUVO duly consents
to the ex parte appointment of a receiver for such purpose in such event.
 
(iii)           Morgan shall have the right to require INUVO to assemble the
Collateral and make it available to Morgan at a place designated by Morgan which
is reasonably convenient to the parties.

(iv)           Morgan may sell or otherwise dispose of any of the Collateral in
a commercially reasonable manner at public or private sale, with or without
having such Collateral at the place of sale, on such terms, for such
consideration, in such manner and in such order as Morgan may determine, and
Morgan may purchase all or any part of the Collateral offered at any such
sale.  Expenses for the taking, holding, preparing for sale, selling and the
like shall include Morgan's reasonable attorney's fees and legal expenses.
 
(v)           Any notification of sale or other disposition of the Collateral
required to be given by Morgan will be sufficient if given personally, or given
by United States Certified Mail - Return Receipt Requested, not less than five
(5) days prior to the day on which such sale or other disposition will be
made.  Such notice shall be deemed to be reasonable and to be received by INUVO
upon deposit by Morgan with the United States Postal Service.
 
(vi)           Morgan may set off the Obligations, or any portion thereof,
against any or all funds of INUVO on deposit with Morgan or represented by any
obligations owed or issued by Morgan to INUVO.
 
(vii)           Morgan may exercise any other rights or remedies of a Morgan
under applicable law or equity, including, without limitation, the Uniform
Commercial Code.
 
(viii)           Morgan shall have the right to enforce any or all of its rights
or remedies partially, successively or concurrently or in any order Morgan may
choose, and any such action shall not stop or prevent Morgan from pursuing any
further remedy that it may have under this Agreement or by law.  Morgan shall
have the right to proceed against any Collateral of INUVO in any manner or order
Morgan so chooses to satisfy all Obligations, and INUVO waives any right it may
have to require Morgan to proceed against INUVO or any or all of the Collateral
in any particular order, or to exhaust any of Morgan's rights or remedies
against any co-maker, any guarantor or any other liable party before enforcing
any other right or remedy.  To the fullest extent permitted by applicable law,
INUVO covenants that it will not at any time insist upon or plead or in any
manner whatever claim or take any benefit or advantage of any law requiring the
marshaling of assets.  Morgan is hereby granted a license or other right to use,
without charge, INUVO's labels, patents, copyrights, trade secrets, trade names,
trademarks or any property of a similar nature pertaining to the Collateral, and
INUVO's rights under all lease, license, franchise and software agreements shall
inure to the benefit of Morgan.
 
 
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(ix)           If a sufficient sum is not realized from disposition of the
Collateral to pay all Obligations, INUVO promises and agrees to pay to Morgan
any deficiency, provided that nothing contained herein shall require Morgan to
proceed against the Collateral before demanding and collecting payment from
INUVO.
 
6.           Setoff/Counterclaim.  No setoff or counterclaim of any kind claimed
by any person liable under this Agreement shall stand as a defense to the
judicial enforcement of the Obligations secured hereby against any such person,
it being hereby specifically agreed and stipulated that any such setoff or
counterclaim shall be maintained by separate suit.
 
7.           Waiver.  No waiver by Morgan of any default shall operate as a
waiver of any other default.

8.           Financing Statements.  Morgan may prepare and file such financing
statements as Morgan deems necessary and appropriate to perfect the lien of
Morgan.  The contents of any such financing statements are incorporated herein
by reference and made a part hereof.

9.           Additional Instruments.  INUVO shall from time to time do whatever
Morgan may require by way of obtaining, executing, delivering and filing
financing statements, landlord's or mortgagee's waivers, collateral assignments,
durable powers of attorney, and other notices, agreements, documents,
instruments and amendments and renewals thereof, and INUVO will take any and all
steps and observe such formalities as Morgan may request, in order to create,
perfect and maintain a valid and enforceable lien upon, pledge of, and security
interest in, any and all of the Collateral.  Morgan is authorized to file
financing statements without INUVO's signature or to execute and file such
financing statements on INUVO's behalf as specified by the Uniform Commercial
Code to perfect or maintain its security interest in all of the
Collateral.  INUVO agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of any financing statement is sufficient as a
financing statement.  All charges, expenses and fees Morgan may incur in filing
any of the foregoing, together with costs and expenses of any lien search
required by Morgan, and any taxes relating thereto, shall be added to the
Obligations.

10.           Governing Law.  This Agreement and the transactions evidenced
hereby, shall be governed by, and construed under, the internal laws of the
State of Florida, without regard to principles of conflicts of law, as the same
may from time to time be in effect, except to the extent that the creation,
validity, perfection or enforcement of any liens or security interests securing
the Obligations are governed by the laws of another jurisdiction.

11           Binding Effect.  This Agreement shall be binding upon, and shall
inure to the benefit of, INUVO and Morgan and their respective heirs, executors,
administrators, legal representatives, successors and assigns.

 
 
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IN WITNESS WHEREOF, the parties have caused this Security Agreement to be
executed effective as of the day and year first written above.
 

 
INUVO:
           
By:
      Name:        Title:                        MORGAN:                      
Charles D. Morgan  

 
 
 
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Exhibit A

Collateral

INUVO’s rights and interest in any and all personal property, whether now
existing or hereafter acquired or created and wherever located, and all proceeds
thereof and accessions thereto, including, but not limited to: (a) all accounts
(including health care insurance receivables), accounts receivable, chattel
paper (including tangible and electronic chattel paper), inventory (including
all goods held for sale or lease or to be furnished under a contract for service
and including returns and repossessions), equipment (including all accessions
and additions thereto), instruments (including promissory notes), investment
property (including securities and securities entitlements), documents
(including negotiable documents), deposit accounts, letter of credit rights,
money, any commercial tort claim of INUVO which is now or hereafter identified
by INUVO or Morgan, general intangibles (including payment intangibles and
software, copyrights, trademarks, trade names, patents, or other intellectual
property rights of INUVO), goods (including fixtures) and all of INUVO’s books
and records with respect to any of the foregoing, and the computers and
equipment containing such books and records, and (b) any and all cash proceeds
and/or noncash proceeds thereof, including without limitation, insurance
proceeds, and all supporting obligations and the security therefore and for any
right to payment

 
 
 
 
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