Document:

Exhibit 10.2 - First Amendment to Loan and Security Agreement

Exhibit 10.2

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT 

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of July 3, 2014 (“First Amendment Closing Date”), by and between AMERICAN INSURANCE ACQUISITION INC., a Delaware corporation (the “Borrower”), which has its chief executive office located at 150 Northwest Point Blvd., 3rd Floor, Elk Grove Village, Illinois 60007, and FIFTH THIRD BANK, an Ohio banking corporation (the “Lender”), whose address is 1701 Gold Road, Suite 900, Rolling Meadows, Illinois 60008.

R E C I T A L S:

A.    On or about May 7, 2014 (“Closing Date”), Lender made a revolving line of credit loan available to the Borrower in the maximum principal amount of up to Ten Million and No/100 Dollars ($10,000,000.00) (“Revolving Loan”), pursuant to the terms and conditions of that certain Loan and Security Agreement dated as of the Closing Date, by and between Lender and Borrower (as amended hereby and as may be further amended, restated, supplemented or otherwise modified from time to time, after giving effect to this Amendment, the “Loan Agreement”), and as evidenced by that certain Revolving Promissory Note of dated as of the Closing Date, made payable by Borrower to the order of Lender in the original principal amount of the Loan (“Revolving Note”).  All capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to them in the Loan Agreement.
 
B.    The Revolving Loan is secured by, among other things, (i) the Loan Agreement, (ii) that certain Stock Pledge Agreement dated as of the Closing Date, by and among Borrower, Camelot Services, Inc., a Missouri corporation, and Lender, and (iii) the other Loan Documents.

C.    Borrower desires to make certain amendments to the Loan Documents as more fully set forth below. 

AGREEMENTS:

NOW, THEREFORE, in consideration of (i) the facts set forth hereinabove (which are hereby incorporated into and made a part of this Agreement), (ii) the agreements by Lender to amend the Loan Documents, as provided herein, (iii) the covenants and agreements contained herein, and (iv) for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.Amendment to the Loan Agreement. Subject to the terms and conditions hereof, and in accordance with Section 13.3 of the Loan Agreement, the definition of “Statutory Unassigned Surplus Eligible for Dividend Calculation” in Section 1.1 (Defined Terms) of the Loan Agreement is hereby deleted in its entirety and restated as follows:
“Statutory Unassigned Surplus Eligible for Dividend Calculation' shall mean the sum of:

(a).    the lesser of (i) ten percent (10%) of the Statutory Surplus of American Country, and (ii) the year-to-date Statutory Net Income of American Country, plus 

(b).     the lesser of (i) ten percent (10%) of the Statutory Surplus of American Service, and (ii) the year-to-date Statutory Net Income of American Service, plus

Exhibit 10.2

(c).    the lesser of (i) ten percent (10%) of the Statutory Surplus of Gateway, and (ii) the year-to-date Statutory Net Income of Gateway.”

2.Representations and Warranties.  By execution hereof, Borrower hereby represents and warrants to Lender as follows:
(a)no Event of Default exists as of the date hereof or would result from the amendments contemplated hereby;

(b)the representations and warranties contained in Section 7 of the Loan Agreement or in any other Loan Document, or which are contained in any of the financial statements from time to time certified by Borrower and furnished pursuant thereto, are true and correct on and as of the date hereof except that to the extent that such representations, warranties or financial statements specifically refer to an earlier date, they are true and correct in all material respects as of such earlier date;

(c)it has the requisite corporate or organizational power and authority and has taken all necessary corporate and other organizational action to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby; and

(d)this Agreement has been duly executed and delivered by Borrower and its duly authorized officers, and constitutes a legal, valid and binding obligation of Borrower, enforceable in accordance with its terms, except as may be limited by debtor relief laws or by general equitable principles.

3.Conditions Precedent to Effectiveness.  This Agreement shall become effective upon the date on which all of the following conditions precedents have been satisfied (or otherwise waived in accordance with Section 13.3 of the Loan Agreement):
(a)Counterparts of this Agreement.  Receipt by Lender of executed original counterparts (or electronic copies followed promptly by originals) of this Agreement, which shall be in form and substance satisfactory to Lender;
(b)No Material Adverse Effect.  There has been no event or circumstance since the Closing Date that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect; and
(c)Fees and Expenses.  Borrower shall have paid to Lender all reasonable out-of-pocket expenses accrued or incurred by Lender on or before the First Amendment Closing Date (including all reasonable fees, charges and disbursements of counsel to Lender (directly to such counsel if requested by Lender)), plus such additional amounts of such fees, charges and disbursements as shall constitute its estimate of such reasonable fees, charges and disbursements incurred or to be incurred through the closing proceedings; provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and Lender and all fees were incurred in connection with the execution and delivery of this Amendment.  

4.Effect of this Agreement.  Borrower agrees that, except as expressly provided herein or in the other documents to be executed and delivered to Lender in connection herewith, (a) the Loan Agreement and the other Loan Documents shall remain unmodified and in full force and effect, and (b) this Agreement shall not be deemed to (i) be a waiver of, consent to, a modification of or amendment to any other term or condition of the Loan Agreement, any other Loan Document or any other agreement by and between the Borrower, on the one hand, and Lender, on the other hand, (ii) prejudice any other right or rights which Lender may now have or may have in the future under or in connection with the Loan Agreement or the other Loan Documents or any of the instruments or agreements 

Exhibit 10.2

referred to therein, as the same may be amended, restated, supplemented or otherwise modified from time to time, or (iii) be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with Borrower or any other Person with respect to any waiver, amendment, modification or any other change to the Initial Loan Agreement or any other Loan Document or any rights or remedies arising in favor of Lender under or with respect to any such documents.  References in the Loan Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein” and “hereof”) and in any other Loan Document to the “Loan Agreement” shall be deemed to be references to the Loan Agreement as modified hereby.  This Amendment shall be deemed incorporated into, and a part of, the Loan Agreement and shall constitute a “Loan Document” under and as defined in the Loan Agreement.
5.Reaffirmations of Borrower.  Borrower hereby (a) agrees that this Agreement shall not limit or diminish the obligations of such Persons under, or release such Persons from any obligations under, the Loan Agreement and each other Loan Document to which such Person is a party, (b) confirms and reaffirms its obligations under the Loan Agreement and each other Loan Document to which it is a party, and (c) agrees that the Loan Agreement (as modified hereby) and each other Loan Document remain in full force and effect and are hereby ratified and confirmed.
6.Inconsistencies. To the extent there are any inconsistencies between the Loan Agreement and any of the other Loan Documents, the Loan Agreement shall control.
7.Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to its conflicts of law principles.
8.Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.
9.Electronic Transmission.  This Agreement may be executed by one or more parties hereto as a facsimile, telecopy, pdf or other reproduction, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile, e-mail or other electronic transmission pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes.

 [Signature Page Follows]

Exhibit 10.2

Signature Page to First Amendment to Loan and Security Agreement

IN WITNESS WHEREOF, the parties hereto have executed this Amendment dated as of the day and year first above written.

	
		
	LENDER:

FIFTH THIRD BANK, an Ohio banking corporation

By: /s/Jeffrey Bobis
Name: Jeffrey Bobis
Title: Vice President
	BORROWER:

AMERICAN INSURANCE ACQUISITION INC., a Delaware corporation 

By:/s/Scott D. Wollney
Name:Scott D. Wollney 
Title:Chief Executive Officer and PresidentExhibit 10.1

SEEN ON SCREEN TV INC.

2014 STOCK OPTION PLAN

ARTICLE I

PURPOSE

SEEN ON SCREEN TV INC. (the "Company"), is largely dependent for the successful conduct of its business on the initiative, effort and judgment of its officers, employees, and others who supply services to it.  This Stock Option Plan (the "Plan") is intended to provide the foregoing with an incentive through stock ownership in the Company and encourage them to remain in the Company's service.  Moreover, since the Incentive Stock Options and Non‐Qualified Stock Options provided for in the Plan are subject to various alternative provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the Committee (as hereinafter defined) will have considerable latitude in shaping options granted under the Plan to the particular circumstances of the optionee, thus recognizing the full incentive value of the option.

ARTICLE II

ADMINISTRATION

The Plan shall be administered by the Board of Directors (the "Board") of the Company.  The Board, at its option, may delegate the administration of the Plan to another committee of the Board subject to the provisions of this Article II.  Subject to the express provisions of the Plan, the Board shall have plenary authority, in its discretion, to approve the individuals within the class set forth in Article IV to whom, and the time and price per share at which, options shall be granted, and the number of shares to be subject to each option.  In making such determination, the Board may take into account the nature of the services rendered by the respective employees, their present and potential contributions to the Company's success and such other factors as the Board in its discretion shall deem relevant.  Subject to the express provisions of the Plan, the Board shall also have plenary authority to interpret the Plan, to prescribe, amend and rescind rules and regulations regulating it, and to make all other determinations necessary or advisable for the administration of the Plan.  The Board's determination on the matters referred to in this Article II shall be final, conclusive and binding upon all optionees.

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ARTICLE III

AMOUNT OF STOCK AND DURATION OF PLAN

The aggregate amount (subject to adjustment as provided in Article VIII) of stock which may be purchased pursuant to options granted under this Plan shall be fifteen million (15,000,000) shares of the Company's Common Stock.  Any option granted hereunder must be granted within ten (10) years from the date of approval of adoption of the Plan by the Board or the date on which this Plan is approved by the Company's shareholders, whichever is earlier.  Shares subject to options under the Plan may, in the sole discretion of the Board, be either authorized and unissued shares or issued shares which have been acquired by the Company and are being held in its treasury.  When options have been granted under the Plan and have lapsed unexercised or partially unexercised, the shares which were subject thereto may be reoptioned under the Plan.

ARTICLE IV

ELIGIBILITY AND PARTICIPATION

All officers, employees, and others who have supplied services to the Company shall be eligible to receive Stock Options under the Plan.

ARTICLE V

TERMS AND CONDITIONS OF OPTIONS

Each option granted under the Plan shall be evidenced by a Stock Option Agreement (the "Agreement"), the form of which shall have been approved by the Board and Counsel to the Company.  The Agreement shall be executed by the Company and the optionee and shall set forth the terms and conditions of the option, which terms and conditions shall include, but not by way of limitation, the following:

1.  Option Price.  The option price shall be determined by the Board.

2.  Term of Option.  The term of the option shall be selected by the Board, but in no event shall such term exceed ten (10) years.

3.  Transferability.  Options granted hereunder shall not be transferable otherwise than by will or operation of the laws of descent and distribution.  During the lifetime of the optionee, options granted hereunder shall be exercisable only by the optionee.

4.  Termination of Employment.  In the event of an optionee's termination of employment with the Company for any reason other than death, all options granted hereunder shall thereupon terminate, unless an exception has been granted in writing by the Board.  The Board may, in its discretion, direct that certain Agreements contain provision permitting exercise of an option after an optionee's retirement.  Upon the termination of an optionee's employment by reason of his death, such optionee's option(s) shall terminate to the extent it was not exercisable at the date of his death.  To the extent such options were

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then exercisable by the optionee, optionee's estate or the beneficiaries thereof shall be entitled to exercise such options for a period of three (3) months from the date of his death, (unless the option(s) should sooner terminate according to its own provisions) but not thereafter.  Notwithstanding the other provisions of this subparagraph 4, no option shall be exercised more than ten (10) years from the date upon which it is granted. Options granted to service providers who are not officers or directors of the Company will not terminate.

5.  Other Conditions.  At its sole discretion, the Board may impose other conditions upon the options granted hereunder, including, but not by way of limitation, percentage limitations upon the exercise of options granted hereunder.  If the Plan and the shares of Common Stock reserved for options hereunder have not been registered under the Securities Act of 1933, as amended (the "Act"), the Board shall satisfy itself that the exemption from registration afforded by Section 4(a)(2) of the Act will be available.

ARTICLE VI

INCENTIVE STOCK OPTIONS

The Board, in recommending and granting stock options hereunder, shall have the discretion to determine that certain options shall be Incentive Stock Options, as defined in Section 422A of the Code and the regulations thereunder, while other options shall be Non‐Qualified Stock Options.  Neither the members of the Board nor the Company shall be under any obligation or incur any liability to any person by reason of the determination by the Board whether an option granted under the Plan shall be an Incentive Stock Option or a Non‐Qualified Stock Option.  The provisions of this Article VI shall be applicable to all Incentive Stock Options at any time granted or outstanding under the Plan.

All Incentive Stock Options granted or outstanding under the Plan shall be granted and held subject to and in compliance with the terms and conditions specifically set forth in Articles II, III, IV, and V hereof and, in addition, subject to and in compliance with the following further terms and conditions:

1.  The option price of all Incentive Stock Options shall not be less than one hundred percent (100%) of the fair market value of the Company's Common Stock at the time the option is granted (notwithstanding any provision of Article V hereof to the contrary);

2.  No Incentive Stock Option shall be granted to any person who, at the time of the grant, owns stock possessing more than ten percent (10%) of the total combined voting power of the Company.  Such ownership limitation will be waived if (i) the option price is at least one hundred ten percent (110%) of the fair market value of the Company's Common Stock at the time the option is granted; and (ii) the option by its terms must not be exercisable more than five (5) years from the date it is granted; and,

3.  The aggregate fair market value of all shares of Common Stock (determined at the time of the grant of the option) exercisable for the first time by an employee during any calendar year shall not exceed $100,000.

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ARTICLE VII

EXERCISE OF OPTIONS

Options granted hereunder may be exercised only by tendering to the Company written notice of exercise accompanied by the aggregate purchase price for the shares with respect to which the option is being exercised.  No option shall be exercisable unless the shares issuable on the exercise thereof have been registered under the Act, or the Company shall have first received the opinion of its counsel that registration under the Act is not required in connection with such issuance.  At the time of exercise, if the shares with respect to which the option is being exercised have not been registered under the Act, the Company may require the optionee to give the Company whatever written assurance counsel for the Company may require that the shares are being acquired for investment and not with a view to the distribution thereof, and that the shares will not be disposed of without the written opinion of such counsel that registration under the Act is not required.  Share certificates issued to the optionee upon exercise of the option shall bear a legend to the foregoing effect to the extent counsel for the Company deems it advisable.  The purchase price of shares of Common Stock of the Company acquired upon the exercise of any Non‐Qualified Stock Option or Incentive Stock Option granted under the Plan may be paid by an optionee by the payment of cash, or by the assignment to the Company of shares of the Company's Common Stock theretofore owned by the optionee having a value equal to such option price, or by any combination thereof.  For purposes of the Plan, shares of Common Stock shall be deemed to have a value equal to the average of the closing bid and asked price for a share for the trading day upon which such value is being determined.

ARTICLE VIII

ADJUSTMENTS

Subject to any required action by the Company's Directors and shareholders, the number of shares provided for in each outstanding option and the price per share thereof, and the number of shares provided for in the Plan, shall be proportionately adjusted for any increase of decrease in the number of issued shares of the Company Common Stock resulting from a subdivision or consolidation of shares or the payment of a stock dividend (but only on the Common Stock) or any other increase or decrease in the number of such shares effected without receipt of consideration by the Company.  Subject to any required action by the Company's Directors and shareholders, if the Company shall be the surviving corporation in any merger or consolidation, each outstanding option shall pertain to and apply to the securities to which a holder of the number of shares of the Company's Common Stock subject to the option would have been entitled.  In the event (hereinafter collectively referred to as an "Event of Sale or Liquidation") of:  (a) a dissolution or liquidation of the Company; (b) a merger or consolidation in which the Company is not the surviving corporation; (c) a sale of all or substantially all of the assets of the Company; or (d) a sale of all or substantially all of the outstanding Common Stock of the Company to one purchaser, then each outstanding option shall terminate, provided, however, that in such event, each optionee shall have the right immediately prior to any Event of Sale or Liquidation to exercise his option with respect to the full number of shares covered thereby, without regard to any installment provision contained in this Agreement.  In the event of a change in the Company's Common Stock which is limited to a change of all of its authorized shares with par value into the same number of shares with a different par value or without par value, the shares resulting from any such change shall be deemed

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to be Common Stock within the meaning of the Plan.  The aforesaid adjustment shall be made by the Committee whose determination in that respect shall be final, binding and conclusive.  Except as hereinbefore expressly provided in this Article VIII, the optionee shall have no rights by reason of subdivision or consolidation of shares of stock of any class or payment of any stock dividend or any other  increase or decrease in the number of shares of any class or by reason of any Event of Sale or Liquidation, or spin‐off of assets or stock of another corporation; and any issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, or securities convertible into shares of stock of any class, shall not affect and no adjustment by reason thereof shall be made with respect to the number or price of shares of the Company's Common Stock subject to any option.  The grant of an option pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge or to consolidate or to dissolve or liquidate or sell or transfer all or any part of its business or assets.

ARTICLE IX

AMENDMENT OR DISCONTINUANCE

The Board may at any time amend, rescind or terminate the Plan, as it shall deem advisable, provided, however, that no change may be made in options theretofore granted under the Plan (without the consent of the optionees) which should impair the optionee's rights.  Provided, however, that no amendment to the Plan will be effective unless and until such amendment has been approved by the holders of a majority of the Company's  outstanding voting stock (voting as a single class) present, or represented, and entitled to vote at a duly constituted meeting of such shareholders.

ARTICLE X

SHAREHOLDER APPROVAL

The Plan shall be effective (the "Effective Date") when it has received the approval of a majority of the Board of Directors.  However, the Plan and all options granted under the Plan shall be void if the Plan is not approved by the holders of a majority of the outstanding voting stock of the Company (voting as a single class) within twelve (12) months of the Effective Date.

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SEEN ON SCREEN TV INC.

STOCK OPTION AGREEMENT

INCENTIVE STOCK OPTIONS

or

NON-QUALIFIED STOCK OPTION AGREEMENT

THIS AGREEMENT is made and entered into by and between SEEN ON SCREEN TV INC. (the "Company") and _____________________________________________________ ("Optionee").

WHEREAS, the Company considers it desirable and in the Company's best interests that officers, employees and others who have supplied services to the Company be given an inducement to acquire a propriety interest in the Company and an added incentive to advance the interests of the Company by possessing an option to purchase stock of the Company in accordance with the Incentive Stock Option Plan (the "Plan") adopted by the Board of Directors (the "Board") of the Company on _____________________, 201___.

NOW THEREFORE, in consideration of the promises, it is agreed by and between the parties as follows:

1.  Grant of Option.  The Company hereby grants to ____________________________ the right, privilege, and option to purchase _____________________ shares of the Company's Common Stock at the purchase price of $__________ per share, in the manner and subject to the conditions hereinafter provided and Article VI of the "Stock Option Plan."

2.  Vesting Schedule.  The options will vest according to the following schedule:

____________ options upon execution of this Agreement

____________ options ______ months after the execution date

____________ options ______ months after the execution date

2.  Time of Exercise of Options.  The aforesaid option may, until the termination thereof as provided in Article V, paragraph 4, be exercised in any increments, subject to Article VI(1) of the "Stock Option Plan."  Provided that for this purpose any such previously granted option not having been exercised in full shall be deemed to remain outstanding until the expiration of the period during which under its initial term it could have been exercised.

3.  Method of Exercise.  The options shall be exercised by written notice (the "Notice") from Optionee to the Executive Committee (the "Committee") of the Board.  The Notice shall specify the number of shares of stock for which the option is being exercised and be accompanied by a cashier's check for payment in full of the option price for the number of shares specified. In the event the Company owes Optionee any sums of money, the amount owed Optionee may be offset against the exercise price of the option price.   The option shall be deemed exercised as of the time the Notice is actually received

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by the Company.  The Company shall make immediate delivery of such shares in electronic or paper form to the Optionee or his designated brokerage firm, as directed in writing by the Optionee, provided that if any law or regulation required the Company to take any action with respect to the shares specified in such Notice before the issuance thereof, then the date of delivery of such shares shall be extended for the period necessary to take such action.

4.  Termination of Option.  Except as otherwise provided, the option to the extent not already exercised or expired by its own terms shall terminate upon the first to occur of the following dates:

(a)  Termination of the Optionee, unless designated by the Board that the options will remain effective for a specific period of time after termination, not to exceed the original expiration date.

(b)  Death of the Optionee.

(c)  Midnight _______________, 201___.

5.  Adjustments.  Subject to any required action by the Company's Directors and shareholders, the number of shares provided for in this option, and the price thereof, shall be adjusted proportionately upward or downward in accordance with the provisions of Article VIII of the Plan.

6.  Rights prior to Exercise of Option.  This option is nontransferable by the Optionee.  Optionee shall have no rights as a stockholder with respect to the option shares until payment of the option price and delivery to him of such shares as herein provided.

7.  Restriction of Disposition.  All shares acquired by Optionee pursuant to this Stock Option Agreement may be subject to restriction on sale, encumbrance and other dispositions pursuant to state or federal law.

8.  Notices.  The addresses to which all notices required to be given hereunder shall be sent are, if to the Company:

SEEN ON SCREEN TV INC.

4017 Colby Avenue

Everett, Washington  98201

Tel:  (425) 367-4668

and if to Optionee:

___________________________

___________________________

___________________________

___________________________

Either party may change his address by giving written notice to the other party at the indicated address.  All notices given hereunder shall be deemed received when actually delivered to the indicated address.

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9.  Stock Option Plan.  This Agreement is subject to and incorporated by reference to all the terms and conditions set forth in the Plan.  In the event of any conflict between the terms of this Agreement and the Plan, the terms and conditions of the Plan shall control.

10.  Binding Effect.  Optionee acknowledges receipt of a copy of the Plan.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of _____________________, 201____.

	
 

	
SEEN ON SCREEN TV INC.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
BY:

	
 

	
 

	
 

	
Antoine Jarjour, President

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