Loan and Security Agreement



 Exhibit 10.2 
  

 LOAN AND SECURITY AGREEMENT 
 by and between 
 SAMIR FINANCIAL II, L.L.C., 
 and 
 VSURANCE, INC. 

DATED As Of DECEMBER     , 2005 
  








 LOAN AND SECURITY AGREEMENT 
 THIS LOAN AND SECURITY AGREEMENT (as amended, modified or supplemented from time to time, this “Agreement”) made this 15 day of December, 2005,
by and between SAMIR FINANCIAL, L.L.C., an Illinois limited liability company (“Lender”), 20682 North Plumwood Drive, Kildeer, Illinois 60047, and VSURANCE, INC., a Nevada corporation, with its principal place of business at 4845
West lake Road, Erie, Pennsylvania 16505 (hereafter referred to as a “Borrower”). 
 WITNESSETH: 
 WHEREAS, Borrower has requested a $4,000,000.00 Loan from Lender, and the parties wish to provide for the terms and conditions upon which such Loan or
other financial accommodations, if made by Lender, shall be made; 
 NOW, THEREFORE, in consideration of any Loan (including any Loan by
renewal or extension) hereafter made to Borrower by Lender, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Borrower, the parties agree as follows: 
 1. DEFINITIONS. 
 “Account”, “Account Debtor”, “Chattel Paper”, “Commercial Tort Claims”, “Deposit Accounts”, “Documents”, “Electronic Chattel Paper”, “Equipment”,
“Fixtures”, “General Intangibles”, “Goods”, “Instruments”, “Inventory”, “Investment Property”, “Letter-of-Credit Right”, “Proceeds” and “Tangible Chattel
Paper” shall have the respective meanings assigned to such terms in the Illinois Uniform Commercial Code, as the same may be in effect from time to time. 
 “Affiliate” shall mean any Person (i) which directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, any Borrower, (ii) which
beneficially owns or holds five percent (5%) or more of the voting control or equity interests of any Borrower, or (iii) five percent (5%) or more of the voting control or equity interests of which is beneficially owned or held by any
Borrower. 
 “Business Day” shall mean any day other than a Saturday, Sunday, or any day that banks in Chicago, Illinois are
required or permitted to close. 
 “Capital Expenditures” shall mean with respect to any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including expenditures for capitalized lease obligations) by Borrowers and its Subsidiaries during such period that are required by generally accepted accounting principles,
consistently applied, to be included in or reflected by the property, plant and equipment or similar fixed asset accounts (or intangible accounts subject to amortization) on the balance sheet of Borrowers. 
  

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 “Collateral” shall mean all of the property of Borrower described in Section 5
hereof, together with all other real or personal property of any Obligor or any other Person now or hereafter pledged to Lender to secure, either directly or indirectly, repayment of any of the Liabilities. 
 “Environmental Laws” shall mean all federal, state, district, local and foreign laws, rules, regulations, ordinances, and consent
decrees relating to health, safety, hazardous substances, pollution and environmental matters, as now or at any time hereafter in effect, applicable to any Borrower’s business or facilities owned or operated by any Borrower, including laws
relating to emissions, discharges, releases or threatened releases of pollutants, contamination, chemicals, or hazardous, toxic or dangerous substances, materials or wastes into the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata) or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. 
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, modified or restated from time to time. 

“Event of Default” shall have the meaning specified in Section 15 hereof. 
 “Fiscal Year” shall mean each twelve (12) month accounting period of Borrower, which ends on December 31st of each year. 
 “Hazardous Materials” shall mean any hazardous, toxic or dangerous substance, materials and wastes, including, without limitation, hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including, without
limitation, materials which include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, or wastes and including any other substances, materials or wastes that are or become regulated
under any Environmental Law (including, without limitation any that are or become classified as hazardous or toxic under any Environmental Law). 
 “Indemnified Party” shall have the meaning specified in Section 18 hereof. 
 “Liabilities” shall mean any and all obligations, liabilities and indebtedness of Borrower to Lender or to any parent, affiliate or subsidiary of Lender of any and every kind and 
 “Liabilities” shall mean any and all obligations, liabilities and indebtedness of Borrower to Lender or to any parent, affiliate or
subsidiary of Lender of any and every kind and nature, howsoever created, arising or evidenced and howsoever owned, held or acquired, whether now or hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect,
absolute, contingent or otherwise (including, without limitation, obligations of performance), whether several, joint or joint and several, and whether arising or existing under written or oral agreement or by operation of law. 
  

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 “Loan” or “Loans” shall mean all loans and advances made by Lender to
or on behalf of Borrowers hereunder. 
 “Lock Box” and “Lock Box Account” shall have the meanings specified
in subsection 8(a) hereof. 
 “Material Adverse Effect” shall mean a material adverse effect on the business,
property, assets, prospects, operations or condition, financial or otherwise, of a Person. 
 “Obligor” shall mean each
Borrower and each other Person who is or shall become primarily or secondarily liable for any of the Liabilities. 
 “Original
Term” shall have the meaning specified in Section 10 hereof. 
 “Other Agreements” shall mean all
agreements, instruments and documents, other than this Agreement, including, without limitation, guaranties, mortgages, trust deeds, pledges, powers of attorney, consents, assignments, contracts, notices, security agreements, leases, financing
statements and all other writings heretofore, now or from time to time hereafter executed by or on behalf of any Borrower or any other Person and delivered to Lender or to any parent, affiliate or subsidiary of Lender in connection with the
Liabilities or the transactions contemplated hereby, as each of the same may be amended, modified or supplemented from time to time. 
 “Parent” shall mean any Person now or at any time or times hereafter owning or controlling (alone or with any other Person) at least a majority of the issued and outstanding equity of Borrower and, if Borrower is a
partnership, the general partner of a Borrower. 
 “PBGC” shall have the meaning specified in subsection 12(b)(v)
hereof. 
 “Permitted Liens” shall mean (i) statutory liens of landlords, carriers, warehousemen, processors,
mechanics, materialmen or suppliers incurred in the ordinary course of business and securing amounts not yet due or declared to be due by the claimant thereunder or amounts which are being contested in good faith and by appropriate proceedings and
for which the applicable Borrower has maintained adequate reserves; (ii) liens or security interests in favor of Lender; (iii) zoning restrictions and easements, licenses, covenants and other restrictions affecting the use of real property
that do not individually or in the aggregate have a material adverse effect on any Borrower’s ability to use such real property for its intended purpose in connection with any Borrower’s business; (iv) liens in connection with
purchase money indebtedness and capitalized leases otherwise permitted pursuant to this Agreement, provided, that such liens attach only to the assets the purchase of which was financed by such purchase money indebtedness or which is the subject of
such capitalized leases; (v) existing, specific liens on equipment; (vi) involuntary liens securing amounts less than $50,000 and which are released or for which a bond acceptable to Lender in its sole discretion has been posted within ten
days of its creation; and, (vii) liens specifically permitted by Lender in writing in accordance with an intercreditor or subordination agreement satisfactory to Lender. 
  

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 “Person” shall mean any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability company, institution, entity, party or foreign or United States government (whether federal, state, county, city, municipal or otherwise), including, without limitation,
any instrumentality, division, agency, body or department thereof. 
 “Plan” shall have the meaning specified in
subsection 12(b)(v) hereof. 
 “Subsidiary” shall mean any corporation of which more than fifty percent (50%) of
the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time stock of any other class of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or indirectly, owned by Borrower, or any partnership, joint venture or limited liability company of which more than fifty percent (50%) of the outstanding equity interests are
at the time, directly or indirectly, owned by any Borrower or any partnership of which any Borrower is a general partner. 
 2.
LOANS. 
 (a) Loan. 
 Subject to the terms and conditions of this Agreement and the Other Agreements, Lender shall make a Loan to Borrower in the aggregate amount of Four Million Dollars ($4,000,000). 
 (b) Repayments. 
 Repayment of Loan. The Loan and all other Liabilities shall be repaid, if not sooner due or declared due, on the last day of the Original Term. The Loan may be prepaid in whole or part without penalty at any time, and
in the event that the Loan is so prepaid, the Lender will promptly refund to the Borrower the unallocated portion of any “Prepaid Interest” (as defined in the Note). 
 (c) Note. 
 The Loan shall, in
Lender’s sole discretion, be evidenced by a promissory note in form and substance satisfactory to Lender. However, if the Loan is not so evidenced, such Loan may be evidenced solely by entries upon the books and records maintained by Lender.

 3. RESERVED. 
  

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 4. INTEREST, FEES AND CHARGES. 
 (a) Interest Rate. 
 The Loan
shall bear interest at the rate of two and one half percent (2.5%) per month or thirty percent (30%) per annum, payable in advance commencing on the date of this Agreement and continuing on the same day of each month. Twelve
(12) months of interest due and payable hereunder in the aggregate amount of One Million Two Hundred Thousand Dollars ($1,200,000.00) shall be paid to Lender in advance from the initial proceeds of the Loan. Upon the occurrence of an Event of
Default and during the continuance thereof, the Loan shall bear interest at the rate of three percent (3.0%) per month or thirty-six percent (36%) per annum, which interest shall be payable on demand. All interest shall be calculated on
the basis of a 360-day year. 
 (b) Fees And Charges. 
 (i) Closing Fee and Good Faith Deposit: Borrower shall pay to Lender a closing fee (the “Closing Fee”) equal to Eight Hundred
Thousand and 00/100 Dollars ($800,000.00), which Closing Fee shall be fully earned and payable on the date of disbursement of the Loan. In addition, Borrowers agreed to pay to Lender as of the date of its signing of the letter of intent a good faith
deposit in the amount of $200,000. If the lender decides for any reason not to proceed with the lending of funds, One Hundred Thousand Dollars ($100,000.00) will be refunded to the Borrower, and the remaining One Hundred Thousand Dollars
($100,000.00) shall be kept by the Lender to pay its expenses. If the Borrower at any pint decides not to close on the loan with the Lender, none of the goof faith deposit will be paid back to the Borrower. 
 (ii) Costs and Expenses: Borrowers shall reimburse Lender for all costs and expenses, including, without limitation, legal expenses and
attorneys’ fees, incurred by Lender in connection with the (i) documentation and consummation of this transaction and any other transactions between Borrowers and Lender, including, without limitation, Uniform Commercial Code and other
public record searches and filings, overnight courier or other express or messenger delivery, appraisal costs, surveys, title insurance and environmental audit or review costs; (ii) collection, protection or enforcement of any rights in or to
the Collateral; (iii) collection of any Liabilities; and (iv) administration and enforcement of any of Lender’s rights under this Agreement. Borrowers shall also pay all normal service charges with respect to all accounts maintained
by Borrowers with Lender and any additional services requested by Borrowers from Lender. All such costs, expenses and charges shall constitute Liabilities hereunder, shall be payable by Borrowers to Lender on demand, and until paid, shall bear
interest at the highest rate then applicable to Loans hereunder. 
 (iii) Auditing and Collateral Management Fee: Borrowers
will pay to Lender a nonrefundable collateral management fee (the “Collateral Management Fee”) of One Hundred Thousand Dollars ($100,000.00) from the proceeds of the disbursement of the Loan, payable at closing. Additionally,
Borrower agrees to pay to lender a collateral audit fee of One Hundred Thousand Dollars (compromised of $25,000.00 for each quarter of the term of the loan), which shall be payable on the date of the disbursement of the loan. 
  

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 (c) Maximum Interest. 
 It is the intent of the parties that the rate of interest and other charges to Borrowers under this Agreement shall be lawful; therefore, if for any
reason the interest or other charges payable under this Agreement are found by a court of competent jurisdiction, in a final determination, to exceed the limit which Lender may lawfully charge to Borrowers, then the obligation to pay interest and
other charges shall automatically be reduced to such limit and, if any amount in excess of such limit shall have been paid, then such amount shall be refunded to Borrowers, 
 5. COLLATERAL. 
 (a)
Grant of Security Interest to Lender. 
 As security for the payment of all Loans now or in the future made by Lender to Borrower
hereunder and for the payment or other satisfaction of all other Liabilities, the Borrower hereby assigns to Lender and grants to Lender a continuing security interest in the following property of such Borrower, whether now or hereafter owned,
existing, acquired or arising and wherever now or hereafter located: (a) all Accounts and all Goods whose sale, lease or other disposition by such Borrower has given rise to Accounts and have been returned to, or repossessed or stopped in
transit by, such Borrower; (b) all Chattel Paper, Instruments, Documents and General Intangibles (including, without limitation, all patents, patent applications, trademarks, trademark applications, trade names, trade secrets, goodwill,
copyrights, copyright applications, registrations, licenses, software, franchises, customer lists, tax refund claims, claims against carriers and shippers, guarantee claims, contracts rights, payment intangibles, security interests, security
deposits and rights to indemnification); (c) all Inventory (whether or not Eligible Inventory); (d) all Goods (other than Inventory), including, without limitation, Equipment and Fixtures; (e) all Investment Property; (f) all
Deposit Accounts, bank accounts, deposits and cash; (g) all Letter-of-Credit Rights; (h) Commercial Tort Claims listed on Exhibit C hereto (i) any other property of such Borrower now or hereafter in the possession, custody or control
of Lender or any agent or any parent, affiliate or subsidiary of Lender or any participant with Lender in the Loans, for any purpose (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise) and (j) all
additions and accessions to, substitutions for, and replacements, products and Proceeds of the foregoing property, including, without limitation, proceeds of all insurance policies insuring the foregoing property, and all of such Borrower’s
books and records relating to any of the foregoing and to such Borrower’s business. 
 (b) Other Security. 
 Lender, in its sole discretion, without waiving or releasing any obligation, liability or duty of Borrowers under this Agreement or the Other Agreements
or any Event of Default, may at any time or times hereafter, but shall not be obligated to, pay, acquire or accept an assignment of any security interest, lien, encumbrance or claim asserted by any Person in, 

  

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upon or against the Collateral. All sums paid by Lender in respect thereof and all costs, fees and expenses including, without limitation, reasonable
attorney fees, all court costs and all other charges relating thereto incurred by Lender shall constitute Liabilities, payable by Borrowers to Lender on demand and, until paid, shall bear interest at the highest rate then applicable to Loans
hereunder. 
 (c) Possessory Collateral. 
 Upon a Borrower’s receipt of any portion of the Collateral evidenced by an agreement, Instrument or Document, including, without limitation, any Tangible Chattel Paper and any Investment Property consisting of
certificated securities, Borrower shall deliver the original thereof to Lender together with an appropriate endorsement or other specific evidence of assignment thereof to Lender (in form and substance acceptable to Lender). If an endorsement or
assignment of any such items shall not be made for any reason, Lender is hereby irrevocably authorized, as such Borrower’s attorney and agent-in-fact, to endorse or assign the same on such Borrower’s behalf. 
 (d) Electronic Chattel Paper. 
 To the extent that a Borrower obtains or maintains any Electronic Chattel Paper, such Borrower shall create, store and assign the record or records comprising the Electronic Chattel Paper in such a manner that (i) a single
authoritative copy of the record or records exists which is unique, identifiable and except as otherwise provided in clauses (iv), (v) and (vi) below, unalterable, (ii) the authoritative copy identifies Lender as the assignee of the
record or records, (iii) the authoritative copy is communicated to and maintained by the Lender or its designated custodian, (iv) copies or revisions that add or change an identified assignee of the authoritative copy can only be made with
the participation of Lender, (v) each copy of the authoritative copy and any copy of a copy is readily identifiable as a copy that is not the authoritative copy and (vi) any revision of the authoritative copy is readily identifiable as an
authorized or unauthorized revision. 
 6. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS THEREIN. 

Borrowers shall, at Lender’s request, at any time and from time to time, authenticate, execute and deliver to Lender such financing statements,
documents and other agreements and instruments (and pay the cost of filing or recording the same in all public offices deemed necessary or desirable by Lender) and do such other acts and things or cause third parties to do such other acts and things
as Lender may deem necessary or desirable in its sole discretion in order to establish and maintain a valid, attached and perfected security interest in the Collateral in favor of Lender (free and clear of all other liens, claims, encumbrances and
rights of third parties whatsoever, whether voluntarily or involuntarily created, except Permitted Liens) to secure payment of the Liabilities, and in order to facilitate the collection of the Collateral. Each Borrower irrevocably hereby makes,
constitutes and appoints Lender (and all Persons designated by Lender for that purpose) as such Borrower’s true and lawful attorney and agent-in-fact to execute and file such financing statements, documents and other agreements and instruments
and 

  

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do such other acts and things as may be necessary to preserve and perfect Lender’s security interest in the Collateral. Each Borrower further agrees
that a carbon, photographic, photostatic or other reproduction of this Agreement or of a financing statement shall be sufficient as a financing statement. Each Borrower further ratifies and confirms the prior filing by Lender of any and all
financing statements which identify such Borrower as debtor, Lender as secured party and any or all Collateral as collateral. 
 7.
POSSESSION OF COLLATERAL AND RELATED MATTERS. 
 Until an Event of Default has occurred, each Borrower shall have the right, except
as otherwise provided in this Agreement, in the ordinary course of such Borrower’s business, to (a) sell, lease or furnish under contracts of service any of such Borrower’s Inventory normally held by such Borrower for any such
purpose; and (b) use and consume any raw materials, work in process or other materials normally held by such Borrower for such purpose; provided, however, that a sale in the ordinary course of business shall not include any transfer or sale in
satisfaction, partial or complete, of a debt owed by such Borrower. 
 8. COLLECTIONS. 
 (a) Lender may, at any time and from time to, whether before or after notification to any Account Debtor and whether before or after the maturity of any
of the Liabilities, (i) enforce collection of any of Borrowers’ Accounts or other amounts owed to Borrowers by suit or otherwise; (ii) exercise all of Borrowers’ rights and remedies with respect to proceedings brought to collect
any Accounts or other amounts owed to Borrowers; (iii) surrender, release or exchange all or any part of any Accounts or other amounts owed to Borrowers, or compromise or extend or renew for any period (whether or not longer than the original
period) any indebtedness thereunder; (iv) sell or assign any Account of Borrowers or other amount owed to Borrowers upon such terms, for such amount and at such time or times as Lender deems advisable; (v) prepare, file and sign
Borrowers’ name on any proof of claim in bankruptcy or other similar document against any Account Debtor or other Person obligated to Borrowers; and (vi) do all other acts and things which are necessary, in Lender’s sole discretion,
to fulfill Borrowers’ obligations under this Agreement and to allow Lender to collect the Accounts or other amounts owed to Borrowers. In addition to any other provision hereof, Lender may at any time, whether before or after the occurrence and
during the continuance of an Event of Default, at Borrowers’ expense, notify any parties obligated on any of the Accounts to make payment directly to Lender of any amounts due or to become due thereunder. 
 (b) For purposes of calculating interest and fees, Lender shall, within three (3) Business Days after receipt by Lender at its office in Kildeer,
Illinois of (i) checks and (ii) cash or other immediately available funds from collections of items of payment and Proceeds of any Collateral, apply the whole or any part of such collections or Proceeds against the Liabilities in such
order as Lender shall determine in its sole discretion. For purposes of determining the amount of Loans available for borrowing purposes, checks and cash or other immediately available funds from collections of items of payment and Proceeds of any
Collateral shall be applied in whole or in part against the Liabilities, in such order as Lender shall determine in its sole discretion, on the day of receipt, subject to actual collection. 
  

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 (c) On a monthly basis, Lender shall deliver to Borrowers an account statement showing all Loans, charges
and payments, which shall be deemed final, binding and conclusive upon Borrowers unless Borrowers notify Lender in writing, specifying any error therein, within thirty (30) days of the date such account statement is sent to Borrowers and any
such notice shall only constitute an objection to the items specifically identified. 
 9. COLLATERAL, AVAILABILITY AND FINANCIAL
REPORTS AND SCHEDULES. 
 (a) Monthly Reports. 
 Borrower shall deliver to Lender, in addition to any other reports, as soon as practicable and in any event: within fifteen (15) days after the end
of each month, (A) a detailed trial balance of such Borrower’s Accounts aged per invoice date, in form and substance reasonably satisfactory to Lender including, without limitation, the names and addresses of all Account Debtors of such
Borrower, and (B) a summary and detail of accounts payable (such Accounts and accounts payable divided into such time intervals as Lender may require in its sole discretion), including a listing of any held checks. 
 (b) Financial Statements. 
 Borrower shall deliver to Lender the following financial information, all of which shall be prepared in accordance with generally accepted accounting principles consistently applied, and shall be accompanied by a compliance certificate in
the form of Exhibit B hereto, which compliance certificate shall include a calculation of all financial covenants contained in this Agreement: (i) no later than thirty (30) days after each calendar month, copies of internally
prepared financial statements, including, without limitation, balance sheets and statements of income, retained earnings and cash flow of Borrower, certified by the Chief Financial Officer of such Borrower; and (ii) no later than ninety
(90) days after the end of each of Borrowers’ Fiscal Years, audited consolidated annual financial statements with an unqualified opinion by independent certified public accountants selected by Borrower and reasonably satisfactory to
Lender; 
 (c) Other Information. 
 Promptly following request therefore by Lender, such other business or financial data, reports, appraisals and projections as Lender may reasonably request. 
 10. TERMINATION. 
 THIS
AGREEMENT SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL DECEMBER ____, 2006 (THE “Original Term”). At the sole and absolute discretion of Lender, Lender may extend the Original Term for an additional one year ending on the 

  

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anniversary date of the Original Term (the “Renewal Term”) upon payment by Borrowers to Lender of the following: a $750,000 renewal fee (the
“Renewal Fee”); six months of prepaid interest; and a $100.000.00 audit fee. These fees must be paid by Borrower to Lender at least five (5) Business Days prior to the end of the Original Term. At such time as Borrowers have
repaid all of the Liabilities and this Agreement has terminated, each Borrower shall deliver to Lender a release, in form and substance satisfactory to Lender, of all obligations and liabilities of Lender and its officers, directors, employees,
agents, parents, subsidiaries and affiliates to Borrower, and if Borrower is obtaining new financing from another lender, Borrower shall deliver such lender’s indemnification of Lender, in form and substance satisfactory to Lender, for checks
which Lender has credited to either Borrower’s account, but which subsequently are dishonored for any reason or for automatic clearinghouse or wire transfers not yet posted to such Borrower’s account. 
 Upon payment and performance in full of all of the monetary Liabilities and termination of this Agreement as provided herein, Lender shall promptly
deliver to Borrowers termination statements, requests for re-conveyances and such other documents as may be reasonably required to terminate Lender’s security interest in the Collateral. 
 11. REPRESENTATIONS AND WARRANTIES. 
 Borrower hereby represents and warrants to Lender, which representations and warranties (whether appearing in this Section 11 or elsewhere) shall be true at the time of Borrower’s execution hereof and the closing of the
transactions described herein or related hereto, shall remain true until the repayment in full and satisfaction of all the Liabilities and termination of this Agreement, and shall be remade by Borrower at the time each Loan is made pursuant to this
Agreement. 
 (a) Financial Statements and Other Information. 
 The financial statements and other information delivered or to be delivered by Borrower to Lender at or prior to the date of this Agreement accurately
reflects the financial condition of Borrower as of the respective dates of such statements and other information, and there has been no adverse change in the financial condition, the operations or any other status of Borrower since the date of the
financial statements delivered to Lender most recently prior to the date of this Agreement. All written information now or heretofore furnished by Borrower to Lender is true and correct as of the date with respect to which such information was
furnished. 
 (b) Locations. 
 The office where Borrower keeps its books, records and accounts (or copies thereof) concerning the Collateral, such Borrower’s principal place of business and all of each Borrower’s other places of business,
locations of Collateral and post office boxes and locations of bank accounts are set forth in Exhibit A and at other locations within the continental United States of which Lender has been advised by a Borrower in accordance with
subsection 12(b)(i). The Collateral, including, without limitation, the Equipment (except any part thereof which a Borrower shall have advised Lender in writing consists of Collateral normally used in more than 

  

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one state) is kept, or, in the case of vehicles, based, only at the addresses set forth on Exhibit A, and at other locations within the continental
United States of which Lender has been advised by a Borrower in writing in accordance with subsection 12(b)(i) hereof. 
 (c)
Loans by Borrowers. 
 Borrower has not made any loans or advances to any Affiliate or other Person except for advances authorized
hereunder to employees, officers and directors of Borrowers for travel and other expenses arising in the ordinary course of Borrowers’ business and loans, if any, permitted pursuant to subsection 13(f) hereof. 
 (d) Liens. 
 Borrower is the
lawful owner of all Collateral now purportedly owned or hereafter purportedly acquired by such Borrower, free from all liens, claims, security interests and encumbrances whatsoever, whether voluntarily or involuntarily created and whether or not
perfected, other than the Permitted Liens. 
 (e) Organization, Authority and No Conflict. 
 Vsurance, Inc. is a corporation duly organized, validly existing and in good standing in the State of Nevada, its state organizational identification
number is ______________ and is duly qualified and in good standing in all states where the nature and extent of the business transacted by it or the ownership of its assets makes such qualification necessary. Borrower has the right and power and is
duly authorized and empowered to enter into, execute and deliver this Agreement and the Other Agreements and perform its obligations hereunder and thereunder. Borrower’s execution, delivery and performance of this Agreement and the Other
Agreements does not conflict with the provisions of the organizational documents of such Borrower, any statute, regulation, ordinance or rule of law, or any agreement, contract or other document which may now or hereafter be binding on such
Borrower, and Borrower’s execution, delivery and performance of this Agreement and the Other Agreements shall not result in the imposition of any lien or other encumbrance upon any of such Borrower’s property under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other agreement or instrument by which such Borrower or any of its property may be bound or affected. 
 (f) Litigation. 
 Except as set forth on Schedule 11(f) hereto, there are no actions or
proceedings which are pending or threatened against Borrowers which might have a Material Adverse Effect on a Borrower, and such Borrower shall, promptly upon becoming aware of any such pending or threatened action or proceeding, give written notice
thereof to Lender. Borrowers have no Commercial Tort Claims pending other than those set forth on Exhibit C hereto as Exhibit C may be amended from time to time. 
  

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 (g) Compliance with Laws and Maintenance of Permits. 
 Each Borrower has obtained all governmental consents, franchises, certificates, licenses, authorizations, approvals and permits, the lack of which would
have a Material Adverse Effect on such Borrower. Each Borrower is in compliance in all material respects with all applicable federal, state, local and foreign statutes, orders, regulations, rules and ordinances (including, without limitation,
Environmental Laws and statutes, orders, regulations, rules and ordinances relating to taxes, employer and employee contributions and similar items, securities, ERISA or employee health and safety) the failure to comply with which would have a
Material Adverse Effect on such Borrower. 
 (h) Affiliate Transactions. 
 Except as set forth on Schedule 11(h) hereto or as permitted pursuant to subsection 11(c) hereof, neither Borrower is conducting, permitting
or suffering to be conducted, transaction with any Affiliate other than transactions with Affiliates for the purchase or sale of Inventory or services in the ordinary course of business pursuant to terms that are no less favorable to such Borrower
than the terms upon which such transfers or transactions would have been made had they been made to or with a Person that is not an Affiliate. 
 (i) Names and Trade Names. 
 Each Borrower’s name has always been as set forth on the first page of this
Agreement and Borrowers use no trade names, assumed names, fictitious names or division names in the operation of its business, except as set forth on Schedule 11(i) hereto 
 (j) Equipment. 
 Each Borrower
has good and indefeasible and merchantable title to and ownership of all Equipment purportedly owned by such Borrower, subject to the Permitted Liens. No Equipment is an accession to other personal property unless such personal property is subject
to a second priority lien in favor of Lender, subject to Permitted Liens. 
 (k) Enforceability. 
 This Agreement and the Other Agreements to which Borrower is a party are the legal, valid and binding obligations of Borrower and are enforceable against
Borrower in accordance with their respective terms. 
 (l) RESERVED. 
 (m) Indebtedness. 
 Except as
set forth on Schedule 11(m) hereto, neither Borrower is obligated (directly or indirectly), for any loans or other indebtedness for borrowed money other than the Loans. 
  

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 (n) Margin Security and Use of Proceeds. 
 Borrower does not own any margin securities, and none of the proceeds of the Loans hereunder shall be used for the purpose of purchasing or carrying any
margin securities or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase any margin securities or for any other purpose not permitted by Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time. 
 (o) Parent, Subsidiaries and Affiliates. 
 Except as set forth on Schedule 11(o) hereto, Borrower does not have any Parents, Subsidiaries or other Affiliates or divisions, nor is Borrower
engaged in any joint venture or partnership with any other Person. 
 (p) No Defaults. 
 Neither Borrower is in default under any material contract, lease or commitment to which it is a party or by which it is bound, nor does either Borrower
know of any dispute regarding any contract, lease or commitment which would have a Material Adverse Effect on such Borrower. 
 (q)
Employee Matters. 
 Except as set forth on Schedule 11(q), there are no controversies pending or threatened between either
Borrower and any of its employees, agents or independent contractors other than employee grievances arising in the ordinary course of business which would not, in the aggregate, have a Material Adverse Effect on such Borrower, and each Borrower is
in compliance with all federal and state laws respecting employment and employment terms, conditions and practices except for such non-compliance which would not have a Material Adverse Effect on such Borrower. 
 (s) Intellectual Property. 
 Each Borrower possesses adequate licenses, patents, patent applications, copyrights, service marks, trademarks, trademark applications, tradestyles and trade names to continue to conduct its business as heretofore conducted by it.

 (t) Environmental Matters. 
 Except as set forth in Schedule 11(s) hereto, Borrower has not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Materials, on or off its premises (whether or
not owned by it) in any manner which at any time violates any Environmental Law or any license, permit, certificate, approval or similar authorization thereunder and the operations of the such Borrower comply in all material respects with all
Environmental Laws and all licenses, permits, certificates, approvals and similar authorizations thereunder. There has been no investigation, proceeding, complaint, order, 

  

 14 








 
directive, claim, citation or notice by any governmental authority or any other Person, nor is any pending or to the best of the such Borrower’s
knowledge threatened with respect to any noncompliance with or violation of the requirements of any Environmental Law by such Borrower or the release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use,
storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials or any other environmental, health or safety matter, which affects such Borrower or its business, operations or assets or any properties at
which such Borrower has transported, stored or disposed of any Hazardous Materials. Neither Borrower has any material liability (contingent or otherwise) in connection with a release, spill or discharge, threatened or actual, of any Hazardous
Materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials. 
 (u) ERISA Matters. 
 Except as set forth on Schedule 11(t), each Borrower has paid and discharged all obligations and
liabilities arising under ERISA of a character which, if unpaid or unperformed, might result in the imposition of a lien against any of its properties or assets. 
 12. AFFIRMATIVE COVENANTS. 
 Until payment and satisfaction in full of all Liabilities and
termination of this Agreement, unless Borrowers obtain Lender’s prior written consent waiving or modifying any of Borrowers’ covenants hereunder in any specific instance, each Borrower covenants and agrees as follows: 
 (a) Maintenance of Records. 
 Borrower shall at all times keep accurate and complete books, records and accounts with respect to all of such Borrower’s business activities, in accordance with sound accounting practices and generally accepted accounting principles
consistently applied and insurance industry custom and practice, and shall keep such books, records and accounts, and any copies thereof, only at the addresses indicated for such purpose on Exhibit A 
 (b) Notices. 
 Borrower shall:

 (i) Locations. Promptly (but in no event less than ten (10) days prior to the occurrence thereof) notify Lender
of the proposed opening of a new place of business or new location of Collateral, the closing of any existing place of business or location of Collateral, any change of in the location of such Borrower’s books, records and accounts (or copies
thereof), the opening or closing of any post office box, the opening or closing of any bank account or, if any of the Collateral consists of Goods of a type normally used in more than one state, the use of any such Goods in any state other than a
state in which such Borrower has previously advised Lender that such Goods will be used. 
  

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 (ii) INTENTIONALLY DELETED. 
 (iii) Litigation and Proceedings. Promptly upon becoming aware thereof, notify Lender of any actions or proceedings which are pending or
threatened against a Borrower which might have a Material Adverse Effect on such Borrower and of any Commercial Tort Claims of such Borrower which may arise, which notice shall constitute such Borrower’s authorization to amend Exhibit C to add
such Commercial Tort Claim. 
 (iv) Names and Trade Names. Notify Lender within ten (10) days of the change of its name or
the use of any trade name, assumed name, fictitious name or division name not previously disclosed to Lender in writing. 
 (v) ERISA
Matters. Promptly notify Lender of (i) the occurrence of any “reportable event” (as defined in ERISA) which might result in the termination by the Pension Benefit Guaranty Corporation (the “PBGC”) of any employee
benefit plan (“Plan”) covering any officers or employees of the Borrower, any benefits of which are, or are required to be, guaranteed by the PBGC, (ii) receipt of any notice from the PBGC of its intention to seek termination of any
Plan or appointment of a trustee therefore or (iii) its intention to terminate or withdraw from any Plan. 
 (vi) Environmental
Matters. Immediately notify Lender upon becoming aware of any investigation, proceeding, complaint, order, directive, claim, citation or notice with respect to any non-compliance with or violation of the requirements of any Environmental Law
by such Borrower or the generation, use, storage, treatment, transportation, manufacture handling, production or disposal of any Hazardous Materials or any other environmental, health or safety matter which affects such Borrower or its business
operations or assets or any properties at which such Borrower has transported, stored or disposed of any Hazardous Materials. 
 (vii)
Default; Material Adverse Change. Promptly advise Lender of any material adverse change in the business, property, assets, prospects, operations or condition, financial or otherwise, of each Borrower, the occurrence of any Event of
Default hereunder or the occurrence of any event which, if uncured, will become an Event of Default after notice or lapse of time (or both). 
 All of the
foregoing notices shall be provided by Borrowers to Lender in writing. 
 (c) Compliance with Laws and Maintenance of Permits.

 Borrower shall maintain all governmental consents, franchises, certificates, licenses, authorizations, approvals and permits, the lack
of which would have a Material Adverse Effect on Borrowers and each Borrower shall remain in compliance with all applicable federal, state, local and foreign statutes, orders, regulations, rules and ordinances (including, without limitation,
Environmental Laws and statutes, orders, regulations, rules and ordinances relating to taxes, employer and employee contributions and similar items, securities, ERISA or employee health and safety) the failure with which to comply would have a
Material Adverse Effect on 

  

 16 








 
Borrower. Following any determination by Lender that there is noncompliance, or any condition which requires any action by or on behalf of Borrower in order
to avoid non-compliance, with any Environmental Law, at Borrower’s expense cause an independent environmental engineer acceptable to Lender to conduct such tests of the relevant site(s) as are appropriate and prepare and deliver a report
setting forth the results of such tests, a proposed plan for remediation and an estimate of the costs thereof. 
 (d) Inspection and
Audits. 
 Borrowers shall permit Lender, or any Persons designated by it, to call at Borrower’s place of business two times each
year and after the occurrence and during the continuance of an Event of Default at any reasonable times, and, without hindrance or delay, to inspect the Collateral and to inspect, audit, check and make extracts from Borrower’s books, records,
journals, orders, receipts and any correspondence and other data relating to Borrower’s business, the Collateral or any transactions between the parties hereto, and shall have the right to make such verification concerning Borrower’s
business as Lender may consider reasonable under the circumstances. Borrower shall furnish to Lender such information relevant to Lender’s rights under this Agreement as Lender shall at any time and from time to time request. Lender, through
its officers, employees or agents shall have the right, at any time and from time to time, in Lender’s name, to verify the validity, amount or any other matter relating to any of a Borrower’s Accounts, by mail, telephone, telegraph or
otherwise. Borrower authorizes Lender to discuss the affairs, finances and business of Borrower with any officers, employees or directors of Borrower or with a Parent or any Affiliate or the officers, employees or directors of a Parent or any
Affiliate, and to discuss the financial condition of Borrower with Borrower’s independent public accountants. Any such discussions shall be without liability to Lender or to Borrower’s independent public accountants. Borrower shall pay to
Lender all customary fees and all costs and out-of-pocket expenses incurred by Lender in the exercise of its rights hereunder, and all of such fees, costs and expenses shall constitute Liabilities hereunder, including normal audit fees and
out-of-pocket expenses related to such audit, including but not limited to, airfare, lodging, and meals, to cover Lender’s periodic examinations of Collateral, as well as Borrower’s books and records. Audit fees will be charged at the rate
of $25,000.00 for each quarterly audit, payable in advance. All of such fees, costs and expenses shall be constituted Liabilities hereunder, shall be payable on demand and, until paid, shall bear interest at the highest rate then applicable to Loans
hereunder. 
 (e) Insurance. 
 Borrower shall: 
 (i) Keep the Collateral properly housed and insured for the full insurable value thereof
against loss or damage by fire, theft, explosion, sprinklers, collision (in the case of motor vehicles) and such other risks as are customarily insured against by Persons engaged in businesses similar to that of such Borrower, with such companies,
in such amounts, with such deductibles, and under policies in such form, as shall be reasonably satisfactory to Lender. Original (or certified) copies of such policies of insurance have been or shall be, within thirty (30) days of the date
hereof, delivered to Lender, together with evidence of payment of all 

  

 17 








 
premiums therefore, and shall contain an endorsement, in form and substance acceptable to Lender, showing loss under such insurance policies payable to
Lender. Such endorsement, or an independent instrument furnished to Lender, shall provide that the insurance company shall give Lender at least thirty (30) days written notice before any such policy of insurance is altered or canceled and that
no act, whether willful or negligent, or default of a Borrower or any other Person shall affect the right of Lender to recover under such policy of insurance in case of loss or damage. In addition, Borrower shall cause to be executed and delivered
to Lender an assignment of proceeds of its business interruption insurance policies. Borrower hereby directs all insurers under all policies of insurance to pay all proceeds payable thereunder directly to Lender. Borrower irrevocably makes,
constitutes and appoints Lender (and all officers, employees or agents designated by Lender) as such Borrower’s true and lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims under such policies of
insurance, endorsing the name of such Borrower on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and making all determinations and decisions with respect to such policies of insurance.

 (ii) Maintain, at its expense, such public liability and third party property damage insurance as is customary for Persons engaged in
businesses similar to that of Borrower with such companies and in such amounts, with such deductibles and under policies in such form as shall be reasonably satisfactory to Lender and original (or certified) copies of such policies have been or
shall be, within ninety (90) days after the date hereof, delivered to Lender, together with evidence of payment of all premiums therefore; each such policy shall contain an endorsement showing Lender as additional insured thereunder and
providing that the insurance company shall give Lender at least thirty (30) days written notice before any such policy shall be altered or canceled. 
 If Borrower at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay any premium relating thereto, then Lender, without waiving or releasing any obligation or default by
Borrower hereunder, may (but shall be under no obligation to) obtain and maintain such policies of insurance and pay such premiums and take such other actions with respect thereto as Lender deems advisable. Such insurance, if obtained by Lender,
may, but need not, protect Borrower’s interests or pay any claim made by or against Borrower with respect to the Collateral. Such insurance may be more expensive than the cost of insurance Borrower may be able to obtain on its own and may be
cancelled only upon Borrower providing evidence that it has obtained the insurance as required above. All sums disbursed by Lender in connection with any such actions, including, without limitation, court costs, expenses, other charges relating
thereto and reasonable attorneys’ fees, shall constitute Loans hereunder, shall be payable on demand by Borrower to Lender and, until paid, shall bear interest at the highest rate then applicable to Loans hereunder. 
 (f) Collateral. 
 Borrower
shall keep the Collateral in good condition, repair and order and shall make all necessary repairs to the Equipment and replacements thereof so that the operating efficiency and the value thereof shall at all times be preserved and maintained.
Borrower shall permit Lender to examine any of the Collateral at any time and wherever the Collateral may be 

  

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located and, Borrower shall, immediately upon written request therefore by Lender, deliver to Lender any and all evidence of ownership of any of the
Equipment including, without limitation, certificates of title and applications of title. Borrower shall, at the written request of Lender, indicate on its records concerning the Collateral a notation, in form satisfactory to Lender, of the security
interest of Lender hereunder. 
 (g) Use of Proceeds. 
 All monies and other property obtained by Borrower from Lender pursuant to this Agreement shall be used solely for business purposes of Borrower.

 (h) Taxes. 
 Borrower shall file all required tax returns and pay all of its taxes when due, including, without limitation, taxes imposed by federal, state or municipal agencies, and shall cause any liens for taxes to be promptly released; provided,
that Borrower shall have the right to contest the payment of such taxes in good faith by appropriate proceedings so long as (i) the amount so contested is shown on such Borrower’s financial statements; and (ii) the contesting of any
such payment does not give rise to a lien for taxes. If Borrower fails to pay any such taxes and in the absence of any such contest by Borrower, Lender may (but shall be under no obligation to) advance and pay any sums required to pay any such taxes
and/or to secure the release of any lien therefore, and any sums so advanced by Lender shall constitute Loans hereunder, shall be payable by Borrower to Lender on demand, and, until paid, shall bear interest at the highest rate then applicable to
Loans hereunder. 
 (i) Intellectual Property. 
 Each Borrower shall maintain adequate licenses, patents, patent applications, copyrights, service marks, trademarks, trademark applications, trade styles and trade names to continue its business as heretofore
conducted by it or as hereafter conducted by it. 
 13. NEGATIVE COVENANTS. 
 Until payment and satisfaction in full of all Liabilities and termination of this Agreement, unless Borrowers obtain Lender’s prior written consent
waiving or modifying any of such Borrower’s covenants hereunder in any specific instance, each Borrower agrees as follows: 
 (a)
Guaranties. 
 Borrower shall not assume, guarantee or endorse, or otherwise become liable in connection with, the obligations of
any Person, except by endorsement of instruments for deposit or collection or similar transactions in the ordinary course of business. 
  

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 (b) Indebtedness. 
 Borrower shall not create, incur, assume or become obligated (directly or indirectly), for any loans or other indebtedness of borrowed money other than
the loans, except that Borrowers may (i) borrow money from a person other than Lender on an unsecured and subordinated basis if a subordination agreement in favor of Lender and in form and substance satisfactory to Lender is executed and
delivered to Lender relative thereto; (ii) maintain its present indebtedness listed on Schedule 11(n) hereto; (iii) incur unsecured indebtedness to trade creditors in the ordinary course of business; (iv) incur purchase money
indebtedness or capitalized lease obligations in connection with Capital; and (v) incur operating lease obligations. 
 (c)
Liens. 
 Borrowers shall not grant or permit to exist (voluntarily or involuntarily) any lien, claim, security interest or other
encumbrance whatsoever on any of its assets, other than Permitted Liens. 
 (d) Mergers, Sales, Acquisitions, Subsidiaries and Other
Transactions Outside the Ordinary Course of Business. 
 Borrower shall not (i) enter into any merger or consolidation;
(ii) change the state of such Borrower’s organization or enter into any transaction which has the effect of changing such Borrower’s state of organization (iii) sell, lease or otherwise dispose of any of its assets other than in
the ordinary course of business; (iv) purchase the stock, other equity interests or all or a material portion of the assets of any Person or division of such Person; or (v) enter into any other transaction outside the ordinary course of
such Borrower’s business, including, without limitation, any purchase, redemption or retirement of any shares of any class of its stock or any other equity interest, and any issuance of any shares of, or warrants or other rights to receive or
purchase any shares of, any class of its stock or any other equity interest. Borrower shall not form any Subsidiaries or enter into any joint ventures or partnerships with any other Person. 
 (e) Dividends and Distributions. 
 Borrowers shall not declare or pay any dividend or other distribution (whether in cash or in kind) on any class of its stock (if Borrower is a corporation) or on account of any equity interest in Borrower (if Borrower is a partnership,
limited liability company or other type of entity). 
 (f) Investments; Loans. 
 Borrower shall not purchase or otherwise acquire, or contract to purchase or otherwise acquire, the obligations or stock of any Person, other than direct
obligations of the United States; nor shall Borrower lend or otherwise advance funds to any Person except for advances made to employees, officers and directors for travel and other expenses arising in the ordinary course of business. 
  

 20 








 (g) Fundamental Changes, Line of Business. 
 Neither Borrower shall amend its organizational documents or change its Fiscal Year or enter into a new line of business materially different from such
Borrower’s current business. 
 (h) Equipment. 
 Borrowers shall not permit any Equipment to become an accession to any other personal property unless such personal property is subject to a priority lien
in favor of Lender, subject to the Permitted Liens. 
 (i) Affiliate Transactions. 
 Except as set forth on Schedule 11(i) hereto or as permitted pursuant to subsection 11(c) hereof, Borrowers shall not conduct, permit or
suffer to be conducted, transactions with Affiliates for the purchase or sale of Inventory or services in the ordinary course of business pursuant to terms that are less favorable to Borrowers than the terms upon which such transfers or transactions
would have been made had they been made to or with a Person that is not an Affiliate. 
 14. DEFAULT. 
 The occurrence of any one or more of the following events shall constitute an “Event of Default” by Borrowers hereunder: 
 (a) Payment. 
 The failure of
any Obligor to pay when due, declared due, or demanded by Lender, any of the Liabilities. 
 (b) Breach of this Agreement and the Other
Agreements. 
 The failure of Obligor to perform, keep or observe any of the covenants, conditions, promises, agreements or
obligations of such Obligor under this Agreement or any of the Other Agreements; provided that any such failure by an Obligor under subparagraphs 12(b)(ii), 11(d) (but only with respect to involuntarily created liens, claims, security interests and
encumbrances), 12(c), 11(q), 11(r), 11(s) and 11(t) of this Agreement shall not constitute an Event of Default hereunder until the fifteenth (15th) day following the occurrence thereof. 
 (c) Breaches of Other Obligations.

 The failure of any Obligor to perform, keep or observe any of the covenants, conditions, promises, agreements or obligations of such
Obligor under any other agreement with any Person if such failure could reasonably be expected to have a Material Adverse Effect on such Obligor. 
  

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 (d) Breach of Representations and Warranties. 
 The making or furnishing by any Obligor to Lender of any representation, warranty, certificate, schedule, report or other communication within or in
connection with this Agreement or the Other Agreements or in connection with any other agreement between such Obligor and Lender, which is untrue or misleading in any respect. 
 (e) Loss of Collateral. 
 The
loss, theft, damage or destruction of, or (except as permitted hereby) sale, lease or furnishing under a contract of service of, any of the Collateral in excess of $100,000 that is not covered by insurance. 
 (f) Levy, Seizure or Attachment. 
 The making or any attempt by any Person to make any levy, seizure or attachment upon any of the Collateral. 
 (g) Bankruptcy
or Similar Proceedings. 
 The commencement of any proceedings in bankruptcy by or against any Obligor or for the liquidation or
reorganization of any Obligor, or alleging that such Obligor is insolvent or unable to pay its debts as they mature, or for the readjustment or arrangement of any Obligor’s debts, whether under the United States Bankruptcy Code or under any
other law, whether state or federal, now or hereafter existing, for the relief of debtors, or the commencement of any analogous statutory or non-statutory proceedings involving any Obligor; provided, however, that if such commencement of proceedings
against such Obligor is involuntary, such action shall not constitute an Event of Default unless such proceedings are not dismissed within thirty (30) days after the commencement of such proceedings. 
 (h) Appointment of Receiver. 
 The appointment of a receiver or trustee for any Obligor, for any of the Collateral or for any substantial part of any Obligor’s assets or the institution of any proceedings for the dissolution, or the full or partial liquidation, or
the merger or consolidation, of any Obligor which is a corporation, limited liability company or a partnership; provided, however, that if such appointment or commencement of proceedings against such Obligor is involuntary, such action shall not
constitute an Event of Default unless such appointment is not revoked or such proceedings are not dismissed within forty-five (45) days after the commencement of such proceedings. 
 (i) Judgment. 
 The entry of
any judgment or order against any Obligor in excess of $25,000, which remains unsatisfied or not discharged and in effect for thirty (30) days after such entry without a stay of enforcement or execution. 
  

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 (j) Death or Dissolution of Obligor. 
 The death of Russell Smith, or of any general partner who is a natural Person of any Obligor which is a partnership, or any member who is a natural Person
of any Obligor which is a limited liability company or the dissolution of any Obligor which is a partnership, limited liability company, corporation or other entity. 
 (k) Default or Revocation of Guaranty. 
 The occurrence of an event of default under, or the
revocation or termination of, any agreement, instrument or document executed and delivered by any Person to Lender pursuant to which such Person has guaranteed to Lender the payment of all or any of the Liabilities or has granted Lender a security
interest in or lien upon some or all of such Person’s real and/or personal property to secure the payment of all or any of the Liabilities. 
 (l) Criminal Proceedings. 
 The institution in any court of a criminal proceeding against any Obligor, or the
indictment of any Obligor for any crime. 
 16. REMEDIES UPON AN EVENT OF DEFAULT. 
 (a) Upon the occurrence of an Event of Default described in subsection 15(g) hereof, all of the Liabilities shall immediately and automatically
become due and payable, without notice of any kind. Upon the occurrence of any other Event of Default, all Liabilities may, at the option of Lender, and without demand, notice or legal process of any kind, be declared, and immediately shall become,
due and payable. 
 (b) Upon the occurrence of an Event of Default, Lender may exercise from time to time any rights and remedies available
to it under the Uniform Commercial Code and any other applicable law in addition to, and not in lieu of, any rights and remedies expressly granted in this Agreement or in any of the Other Agreements and all of Lender’s rights and remedies shall
be cumulative and non-exclusive to the extent permitted by law. In particular, but not by way of limitation of the foregoing, Lender may, without notice, demand or legal process of any kind, take possession of any or all of the Collateral (in
addition to Collateral of which it already has possession), wherever it may be found, and for that purpose may pursue the same wherever it may be found, and may enter onto Borrower’s premises where any of the Collateral may be, and search for,
take possession of, remove, keep and store any of the Collateral until the same shall be sold or otherwise disposed of, and Lender shall have the right to store the same at Borrower’s premises without cost to Lender. At Lender’s request,
Borrower shall, at Borrower’s expense, assemble the Collateral and make it available to Lender at one or more places to be designated by Lender and reasonably convenient to Lender and Borrower. Borrower recognizes that if Borrower fail to
perform, observe or discharge any of its Liabilities under this Agreement or the Other Agreements, no remedy at law will provide adequate relief to Lender, and agrees that 

  

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Lender shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages. Any notification of
intended disposition of any of the Collateral required by law will be deemed to be a reasonable authenticated notification of disposition if given at least ten (10) days prior to such disposition and such notice shall (i) describe Lender
and Borrowers, (ii) describe the Collateral that is the subject of the intended disposition, (iii) state the method of the intended disposition, (iv) state that Borrowers are entitled to an accounting of the Liabilities and state the
charge, if any, for an accounting, and (v) state the time and place of any public disposition or the time after which any private sale is to be made. Lender may disclaim any warranties that might arise in connection with the sale, lease or
other disposition of the Collateral and has no obligation to provide any warranties at such time. Any Proceeds of any disposition by Lender of any of the Collateral may be applied by Lender to the payment of expenses in connection with the
Collateral, including, without limitation, legal expenses and reasonable attorneys’ fees, and any balance of such Proceeds may be applied by Lender toward the payment of such of the Liabilities, and in such order of application, as Lender may
from time to time elect. 
 17. Conditions Precedent. The obligation of Lender to fund the Loan is subject to the satisfaction
or waiver on or before December _____, 2005 of the following conditions precedent: Lender shall have received each of the following agreements, opinions, certificates and other documents as follows: 
  

	 	(i)	This Agreement; 

  

	 	(ii)	$4,000,000 Promissory Note (Secured); 

  

	 	(iii)	Secretary’s Certificate of each Borrower; 

  

	 	(iv)	Good Standing Certificate for each Borrower dated within twenty days of this date; 

  

	 	(v)	Unanimous Written Consent of the Directors of each Borrower authorizing the Loans and the execution and delivery of this Agreement; 

  

	 	(vi)	Acknowledgment of the filing of a UCC-1 Financing Statement naming Vsurance as Debtor in favor of Lender with the Office of the Nevada Secretary of State; 


 

	 	(vii)	Guaranty of W. Russell Smith, III; 

  

	 	(viii)	Stock Pledge Agreement from each of Vsurance, Joel D. Clendening, Donna L. Killean and Purfect Pet Insurance Agency, together with the stock certificates evidencing each stock
pledge and related stock powers executed in blank; 

  

	 	(ix)	Within sixty (60) days of closing, Assignment of Life Insurance Policy from W. Russell Smith, III, with respect to policy in the amount of Four Million Dollars ($4,000,000.00);


  

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	 	(x)	Within 120 days of closing, Borrower shall provide to Lender copies of life insurance policies on Donna Smith and L. Killean each in the amount of Four Million Dollars
($4,000,000.00), and each naming Lender as loss payee; and 

  

	 	(xi)	Opinion of Borrower’s counsel in form satisfactory to Lender. 

 18. INDEMNIFICATION. 
 Borrower agrees to defend (with counsel agreed to by to Lender),
protect, indemnify and hold harmless Lender, each affiliate or subsidiary of Lender, and each of their respective officers, directors, employees, attorneys and agents (each an “Indemnified Party”) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature (including, without limitation, the disbursements and the reasonable fees of counsel for each Indemnified Party in
connection with any investigative, administrative or judicial proceeding, whether or not the Indemnified Party shall be designated a party thereto), which may be imposed on, incurred by, or asserted against, any Indemnified Party (whether direct,
indirect or consequential and whether based on any federal, state or local laws or regulations, including, without limitation, securities laws and regulations, Environmental Laws and commercial laws and regulations, under common law or in equity, or
based on contract or otherwise) in any manner relating to or arising out of this Agreement or any Other Agreement, or any act, event or transaction related or attendant thereto, the making or issuance and the management of the Loans or any Letters
of Credit or the use or intended use of the proceeds of the Loans or any Letters of Credit; provided, however, that Borrowers shall not have any obligation hereunder to any Indemnified Party with respect to matters caused by or resulting from the
willful misconduct or gross negligence of such Indemnified Party. To the extent that the undertaking to indemnify set forth in the preceding sentence may be unenforceable because it violates any law or public policy, Borrower shall satisfy such
undertaking to the maximum extent permitted by applicable law. Any liability, obligation, loss, damage, penalty, cost or expense covered by this indemnity shall be paid to each Indemnified Party on demand, and, failing prompt payment, shall,
together with interest thereon at the highest rate then applicable to Loans hereunder from the date incurred by each Indemnified Party until paid by Borrower, be added to the Liabilities of Borrower and be secured by the Collateral. The provisions
of this Section 18 shall survive the satisfaction and payment of the other Liabilities and the termination of this Agreement. 
 19. NOTICE. 
 All written notices and other written communications with respect to this Agreement shall be sent by
ordinary, certified or overnight mail, by telecopy or delivered in person, and in the case of Lender shall be sent to it at 20682 North Plumwood, Kildeer, Illinois 60047, Attention: Mohammed H. Mirza (847) 726-2217, and in the case of Borrower
shall be sent to it at its principal place of business set forth on Exhibit A hereto or as otherwise directed by Borrower in writing. All notices shall be deemed received upon actual receipt thereof or refusal of delivery. 
  

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 20. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION. 
 This Agreement and the Other Agreements are submitted by Borrowers to Lender for Lender’s acceptance or rejection at Lender’s principal place of
business as an offer by Borrowers to borrow monies from Lender now and from time to time hereafter, and shall not be binding upon Lender or become effective until accepted by Lender, in writing, at said place of business. If so accepted by Lender,
this Agreement and the Other Agreements shall be deemed to have been made at said place of business. THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO INTERPRETATION,
ENFORCEMENT, VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING, WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, BUT EXCLUDING PERFECTION OF THE SECURITY INTERESTS IN COLLATERAL LOCATED OUTSIDE OF THE STATE
OF ILLINOIS, WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT JURISDICTION IN WHICH SUCH COLLATERAL IS LOCATED. If any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or remaining provisions of this Agreement. 
 To induce Lender to accept this Agreement, Borrower irrevocably agrees that, subject to Lender’s sole and absolute election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF OR FROM OR
RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO, STATE OF ILLINOIS. EACH BORROWER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL
COURTS LOCATED WITHIN SAID CITY AND STATE. Borrowers irrevocably consent to service of process by mail. EACH BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST SUCH BORROWER BY LENDER IN
ACCORDANCE WITH THIS SECTION. 
 21. MODIFICATION AND BENEFIT OF AGREEMENT. 
 This Agreement and the Other Agreements may not be modified, altered or amended except by an agreement in writing signed by Borrower or such other person
who is a party to such Other Agreement and Lender. Borrower may not sell, assign or transfer this Agreement, or the Other Agreements or any portion thereof, including, without limitation, Borrower’s rights, titles, interest, remedies, powers or
duties hereunder and thereunder. Borrower hereby consents to Lender’s sale, assignment, transfer or other disposition, at any time and from time to time hereafter, of this Agreement, or the Other Agreements, or of any portion thereof, or
participations therein, including, without limitation, Lender’s rights, titles, interest, remedies, powers and/or duties and agrees that it shall execute and deliver such documents as Lender may request in connection with any such sale,
assignment, transfer or other disposition. 
  

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 22. HEADINGS OF SUBDIVISIONS. 
 The headings of subdivisions in this Agreement are for convenience of reference only, and shall not govern the interpretation of any of the provisions of
this Agreement. 
 23. POWER OF ATTORNEY. 
 Each Borrower acknowledges and agrees that its appointment of Lender as its attorney and agent-in-fact for the limited purposes specified in this Agreement is an appointment coupled with an interest and shall be
irrevocable until all of the Liabilities are satisfied and paid in full and this Agreement is terminated. 
 24. CONFIDENTIALITY.

 Borrower and Lender hereby agree and acknowledge that any and all information relating to Borrower which is (i) furnished by
Borrower to Lender (or to any affiliate of Lender); and (ii) non-public, confidential or proprietary in nature, shall be kept confidential by Lender or such affiliate in accordance with applicable law; provided, however, that such information
and other credit information relating to Borrower may be distributed by Lender or such affiliate to Lender’s or such affiliate’s directors, officers, employees, attorneys, affiliates, assignees, participants, auditors, agents and
regulators, and upon the order of a court or other governmental agency having jurisdiction over Lender or such affiliate, to any other party. Borrower and Lender further agree that this provision shall survive the termination of this Agreement.
Notwithstanding the foregoing, Borrower hereby consent to Lender publishing a tombstone or similar advertising material relating to the financing transaction contemplated by this Agreement. 
 25. COUNTERPARTS. 
 This
Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, shall be deemed an original, but
all of which counterparts together shall constitute but one agreement. 
 26. ELECTRONIC SUBMISSIONS. 
 Upon not less than thirty (30) days’ prior written notice (the “Approved Electronic Form Notice”), Lender may permit or require
that any of the documents, certificates, forms, deliveries or other communications, authorized, required or contemplated by this Agreement or the Other Agreements, be submitted to Lender in “Approved Electronic Form” (as hereafter
defined), subject to any reasonable terms, conditions and requirements in the applicable Approved Electronic Forms Notice. For purposes hereof “Electronic Form” means e-mail, e-mail attachments, data submitted on web-based forms or
any other communication method that delivers machine readable data or information to Lender, and “Approved Electronic Form” means an Electronic Form that has been approved in writing by Lender 

  

 27 








 
(which approval has not been revoked or modified by Lender) and sent to Borrowers in an Approved Electronic Form Notice. Except as otherwise specifically
provided in the applicable Approved Electronic Form Notice, any submissions made in an applicable Approved Electronic Form shall have the same force and effect that the same submissions would have had if they had been submitted in any other
applicable form authorized, required or contemplated by this Agreement or the Other Agreements. 
 27. WAIVER OF JURY TRIAL; OTHER
WAIVERS. 
 (a) BORROWER AND LENDER EACH HEREBY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY
OR INDIRECTLY TO THIS AGREEMENT, ANY OF THE OTHER AGREEMENTS, THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWER OR LENDER OR WHICH, IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP BETWEEN
BORROWER AND LENDER. IN NO EVENT SHALL LENDER BE LIABLE FOR 
 LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

 (b) Each Borrower hereby waives demand, presentment, protest and notice of nonpayment, and further waives the benefit of all valuation,
appraisal and exemption laws. 
 (c) Each Borrower hereby waives the benefit of any law that would otherwise restrict or limit Lender or any
affiliate of Lender in the exercise of its right, which is hereby acknowledged and agreed to, to set-off against the Liabilities, without notice at any time hereafter, any indebtedness, matured or not matured, owing by Lender or such affiliate of
Lender to each Borrower, including, without limitation, any deposit account at Lender or such affiliate. 
 (d) OTHER THAN NOTICE, IF ANY, AS
SPECIFICALLY PROVIDED IN THIS AGREEMENT, EACH BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO REPOSSESS THE COLLATERAL OF SUCH BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON SUCH COLLATERAL. 
 (e) Lender’s failure, at any time or times hereafter, to require strict performance by Borrower
of any provision of this Agreement or any of the Other Agreements shall not waive, affect or diminish any right of Lender thereafter to demand strict compliance and performance therewith. Any suspension or waiver by Lender of an Event of Default
under this Agreement or any default under any of the Other Agreements shall not suspend, waive or affect any other Event of Default under this Agreement or any other default under any of the Other Agreements, whether the same is prior or subsequent
thereto and whether of the same or of a different kind or character. No delay on the part of Lender in the exercise of any right or remedy under this Agreement or any Other Agreement shall preclude other or further exercise thereof or the exercise
of any right or remedy. None of the undertakings, agreements, warranties, covenants and representations of Borrower contained in this Agreement or any of the Other Agreements and no Event of Default under this Agreement or default under any of the
Other Agreements shall be deemed to have been suspended or waived by Lender unless such suspension or waiver is in writing, signed by a duly authorized officer of Lender and directed to such Borrower specifying such suspension or waiver. 

 

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 IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written
above. 
  

			
	 BORROWERS:

	
	 VSURANCE, INC.

		
	 By:
	 	  
	 Name:
	 	
	
	 LENDER:

	
	SAMIR FINANCIAL, L.L.C., an Illinois limited liability company
		
	 By:
	 	  
	 Name:
	 	 Mohammed H. Mirza

	 Title
	 	 Manager



  

 29 








 EXHIBIT A — BUSINESS AND COLLATERAL LOCATIONS 
 Attached to and made a part of that certain Loan and Security Agreement of even date herewith between VSURANCE, INC. (“Borrower”) and
SAMIR FINANCIAL, L.L.C. (“Lender”). 
 Borrower’s Business Locations (please indicate which location is the principal
place of business and at which locations originals and all copies of Borrower’s books, records and accounts are kept). 
  

							
		 	 1.
	  	4845 West Lake Road	  	
		 		  	Erie, Pennsylvania 16505	  	

  

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 EXHIBIT B - COMPLIANCE CERTIFICATE 
 Attached to and made a part of that certain Loan and Security Agreement, as it may be amended in accordance with its terms from time to time, including
all exhibits attached thereto (the “Agreement”) of even date herewith between VSURANCE, INC. (“Borrower”) and SAMIR FINANCIAL, L.L.C. (“Lender”). 
 This Certificate is submitted pursuant to subsection 9(c) of the Agreement. 
 The undersigned hereby certifies to Lender that as of the date of this Certificate: 
 1. The undersigned is the President of Vsurance, Inc.; 
 2. There exists no event or circumstance which is or which with the passage of time, the giving of notice, or both would constitute an Event of Default, as that term is defined in the Agreement, or, if such an event
of circumstance exists, a writing attached hereto specifies the nature thereof, the period of existence thereof and the action that Vsurance, Inc. has taken or proposes to take with respect thereto; 
 3. No material adverse change in the condition, financial or otherwise, business, property, or results of operations of Vsurance, Inc. has occurred, or,
if such a change has occurred, a writing attached hereto specifies the nature thereof and the action that Vsurance, Inc. has taken or proposes to take with respect thereto; 
 4. Borrower is in compliance with the representations, warranties and covenants in the Agreement, or, if Vsurance, Inc. is not in compliance with any
representations, warranties or covenants in the Agreement, a writing attached hereto specifies the nature thereof, the period of existence thereof and the action that Vsurance, Inc. has taken or proposes to take with respect thereto; 
 5. The financial statements of Vsurance, Inc. being concurrently delivered herewith have been prepared in accordance with generally accepted accounting
principles consistently applied and there have been no material changes in accounting policies or financial reporting practices of Vsurance, Inc. or, if any such change has occurred, such changes are set forth in a writing attached hereto.

 6. Attached hereto is a true and correct calculation of the financial covenants contained in the Agreement. 
  

			
	 VSURANCE, INC.

		
	 By:
	 	  
		
	 Its:
	 	  


  

 31 








 EXHIBIT C - COMMERCIAL TORT CLAIMS 
 None. 
  

 32 








 SCHEDULE 11(f) - LITIGATION 
 None. 
  

 33 








 SCHEDULE 11(h) - AFFILIATE TRANSACTIONS 
  

 34 








 SCHEDULE 11(i) - NAMES & TRADE NAMES 
 Vetpet, MD 
 Pinpoint Pet 
 Purfect Pet Insurance 
 Purfect Horse insurance 
  

 35 








 SCHEDULE 11(m) - INDEBTEDNESS 
 None 
  

 36 








 SCHEDULE 11(o) - PARENT, SUBSIDIARIES AND AFFILIATES 
 Vsurance, Inc. owns 100% of the outstanding stock of Purfect Pet Insurance Agency. 
  

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 SCHEDULE 11(q) - EMPLOYEE MATTERS 
 None. 
  

 38 








 SCHEDULE 11(t) - ENVIRONMENTAL MATTERS 
 None. 
  

 39 








 SCHEDULE 11(u) ERISA MATTERS. 
 None. 
  

 40