Policy

FALCO INSURANCE COMPANY, INC.
WARRANTY INSURANCE POLICY
DECLARATIONS

POLICY NUMBER: FALCO-WARXXX-17-100
NAMED INSURED: Ventamatic Ltd.
MAILING ADDRESS: 100 Washington Road
Mineral Wells, TX 76067

POLICY PERIOD:
A. Inception Date: December 1, 2017

12:01 A.M at Named Insured’s Address

B. Termination Date: December 1, 2018

12:01 A.M at Named Insured’s Address

LIMITS OF INSURANCE AND RETENTION
A. Per Loss Limit: $1,000,000
B. Aggregate Annual Limit: $1,000,000
C. Retention: $0

PREMIUM: $ 900,550.00
ENDORSEMENTS ATTACHED TO THIS POLICY: None

________________________________
Authorized Representative

Jurisdiction: This Policy has been applied for, negotiated and issued in Delaware and, accordingly, subject to the exclusive
jurisdiction of the Courts of Delaware and shall be interpreted according to the laws of Delaware.

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Falco Insurance Company, Inc.
FALCO-WARXXX-17-100
In return for the payment of premium, and subject to all the terms of this policy, we agree
with you to provide the insurance as stated in this policy.
This policy contains restrictions and limitations. Please read this policy and all endorsements
carefully to determine what is and what is not covered, as well as the rights and duties of the
parties under this policy. This policy consists of Declarations, Insuring Agreements, Exclusions,
Definitions and other terms and may also contain one or more Endorsements. Endorsements
change the policy, and may be added or removed from time to time.
It is imperative that you review this entire policy carefully to determine rights, duties, and
what is and is not covered under this policy since various provisions in this policy restrict
coverage.

This is a CLAIMS-MADE insurance Policy.
CLAIMS MADE AND REPORTED COVERAGE NOTICE
Except to such extent as may otherwise be provided in the policy and its
endorsements, the coverage afforded under this Policy is limited to liability for
only those claims that are incurred and first reported in writing to Falco Insurance
Company, Inc. during the Policy Period, but no later than 60 days after policy
end.
PLEASE REVIEW THIS POLICY CAREFULLY AND DISCUSS THE COVERAGE WITH

YOUR LEGAL OR INSURANCE ADVISOR

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Falco Insurance Company, Inc.
FALCO-WARXXX-17-100

FALCO INSURANCE COMPANY, INC.
WARRANTY INSURANCE POLICY

INTRODUCTION
This Policy reimburses you for claims you pay against the warranty you extend to
your customers, but also contains restrictions and limitations. Please read this
Policy and all Endorsements carefully to determine what is and what is not
covered, as well as the rights and duties of the parties under this Policy.
This Policy consists of Declarations, Insuring Agreements, Exclusions,
Definitions, Conditions and other terms, and may contain one or more
Endorsements. Endorsements change the Policy, and may be added or removed
from time to time. Endorsements are attached to the end of this Policy.
Throughout this Policy, the words “you” and “your” refer to the Named Insured
shown in the Declarations. The words “we”, “us” and “our” refer to Falco
Insurance Company, Inc.
The word “insured” means any person or organization qualifying as such under
Section B – Who Is An Insured.

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Falco Insurance Company, Inc.
FALCO-WARXXX-17-100
SECTION A – COVERAGE
By acceptance of this Policy, you:
(1) Agree to all of its language, terms and conditions; and
(2) Certify that all statements made to us for insurance or renewing your
insurance are true, material and complete. This insurance is issued in reliance
upon those representations. If this insurance is obtained by fraud or material
misrepresentation or omission, this insurance is void. If this insurance is void, it
grants no rights and no coverage to any insured.
1. GENERAL INSURING AGREEMENT
1. The insurance provided under this policy is reimbursement only. It shall be a
condition precedent to recovery of funds from us in respect of any Reimbursement
Request you make under this Policy that you shall first have discharged or paid the
same. We shall not be obliged to make payment to any person who or entity which
is not an Insured under this Policy.
2. The amount we will pay or reimburse an insured for costs is limited as described in
Section C – Limits of Insurance.
3. Covered Claims. Only claims made within the Period of Submission are covered by
this policy. Claims for contracts which commence outside of the Policy Period or
claims which are made beyond the Period for Submission are not covered by this
policy.
4. Period for Submission. Claims (including all available information) must be made
within the Period of Submission which is during the policy period or within 30 days
thereafter.
5. Calculation of Loss. We will calculate your loss as being the amount “you” incur for
repairs or replacement to customers’ items which have been submitted for repairs
under the Warranty.

SECTION B – WHO IS AN INSURED
6. If you are an individual, you are an insured.

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FALCO-WARXXX-17-100
7. If you are a partnership, a limited liability company, an association or a corporation,
you are an insured.
8. No person or entity is an insured that is not shown as a Named Insured in the
Declarations.
SECTION C – LIMITS OF INSURANCE
9. Each Insured Event Limit. Our responsibly to pay under any one claim submitted
under the Warranty is limited to the amount shown in the Declarations.
10.Total Policy Period Limit. Regardless of the number of claims, the maximum amount
which we shall pay in respect to all claims which commence during the Policy Period
shall be the amount shown in the Declarations.
SECTION D – MINIMIZING LOSS
1. Due Care and Diligence. “You” must use due care and diligence and take all
practicable measures to prevent and minimize loss. This includes ensuring that all
rights against the contract goods, services, buyers, suppliers and third parties are
properly preserved and exercised.
2. Information. “You” must provide us with all information and documents that “we”
may require.
3. Failure to Comply. If “you” fail to comply with any of the provisions of this Article
after we have made a payment, then “you” will be liable to refund the payment to
“us” on demand.
4. Protect the Covered Property. “You” must take all reasonable steps to protect or
recover the “covered property” at and after a loss has occurred to avoid further loss.
5. Cooperation. “You” must cooperate with “us” in performing all acts that are required
by this policy.
SECTION E – EXCLUSIONS
This insurance does not apply to:
1. Illegal Acts
Reimbursement Requests arising out of or involving the conspiracy, fraud, criminal
act or omission of a Customer or the Insured.
2. Wanton or Willful Conduct
Any Reimbursement Request arising from wanton or willful conduct by a Customer

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FALCO-WARXXX-17-100
or the insured.
3. Consequential Damages
Reimbursement Requests related to or arising out of consequential, special or other
damage, including but not limited to loss of use.
4. Reimbursement Request by Non-Insured
Reimbursement Request made by any person or organization that is not an insured
under this Policy.
5. Other Insurance or Plan
Damage or loss you have or could have properly reported under any other insurance
policy or similar plan.
6. Nuclear, Biological or Similar Event
Reimbursement Requests related to or resulting from the effects of nuclear reaction,
radiation, radioactivity, biological contamination, chemical contamination or
explosions of any type.

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FALCO-WARXXX-17-100
SECTION F – CONDITIONS
1. Policy Period
The Policy Period for this insurance is shown in the Declarations and is the time
identified between the Inception Date and the Termination Date. However, the
Policy Period may be shortened by your or our right to cancel this insurance in
accordance with the provisions of the Cancellation Condition in this Section D –
Conditions.
2. Duties In The Event of a Loss

a. You must see to it that we are notified as soon as practicable of a
circumstance that may result in a Reimbursement Request. To the extent
possible, the notice should include specific circumstances surrounding the
loss or damage.
b. You must submit all Reimbursement Requests under this Policy within
ninety (90) days following your expenditure of the sums for which you are
seeking reimbursement.

3. Legal Action Against Us
No person or organization has a right under this Policy:
a. To join us as a party or otherwise bring us into a suit asking for damages
from an insured; or
b. To sue us on this Policy unless all of its terms have been fully complied
with.

4. Misrepresentations or Fraudulent Acts. Any misrepresentation, whether fraudulent
or otherwise, or fraudulent conduct on “your” part (or on the part of any other person
who has a legal or beneficial interest in this policy or its proceeds) in relation to this
policy (including the Application), to any claim under it, or to any contract to which
this policy applies, will render the policy void, but we will retain any premium paid,
and “you” will be liable to refund to us any payment “we” may have made under the
policy.
5. Set Off. “We” have the right to apply any amount payable under this policy in or
toward payment of any amount owing from “you” to “us” (paying interest before
principal) whether under this policy or otherwise.
6. Relevant Law. This policy shall be governed by and construed in accordance with
the laws of Delaware.

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FALCO-WARXXX-17-100
7. Arbitration. All disputes arising under or in connection with this policy shall be
exclusively to arbitration in Delaware unless otherwise agreed by “you” and “us”.
8. Transfer of Rights of Recovery Against Others To Us
If the insured has rights to recover all or part of any payment we have made under
this Coverage Part, those rights are transferred to us. The insured must do nothing
after loss to impair them. At our request, the insured will bring suit or transfer those
rights to us and help us enforce them.
9. When Your Business or Profession Changes

a. In the event 51% or more of the controlling interest of any Insured is
changed during the Policy Period, then this Policy shall automatically
terminate upon the completion of such change in control. From that point
forward, such insurance as is afforded by this Policy shall apply only to
Claims which had first been made prior to that change in control.
b. You must notify us of any change that might affect the terms of this
insurance, including, but not limited to, a change in:
i. Members, partners, officers, directors, stockholders, or employees;
or,
ii. Any material business practice, performance, or risk associated
with any Insured.

10.Governing Law
This Policy, its interpretations and any disputes against us shall be governed by the
Laws of the State of Utah, without regard to the conflicts of laws provisions therein.
11.Cancellation
We may terminate this Policy with 60 days written notice to you upon:
a. your material misrepresentation to us;
b. a substantial change in the risk assumed under this Policy;
c. your substantial breach of the duties, conditions or warranties associated
with this Policy;
d. determination by the Insurance Commissioner for the State of Delaware
that continuation of this Policy would place the insurer in violation of Utah
law;
e. your financial impairment; or,
f. any other reason approved by the Insurance Commissioner for the State
of Delaware.

SECTION E – DEFINITIONS

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1. Recoveries. “Recoveries” means all sums whatsoever, received or realized whether
by you, by some person acting on your behalf for claims.
2. Warranty. The Warranty extended by you to your customers for repair or
replacement.
3. Reimbursement Request means any request or demand you made for payment or
reimbursement pursuant to loss or damage covered under this Policy.
4. Customer means any person or entity who has signed a purchase agreement with
you to for your product or services.

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FALCO-WARXXX-17-100
In WITNESS WHEREOF, the Falco Insurance Company, Inc. has caused this policy to
be executed and attested, but this policy shall not be valid unless countersigned in the
Declarations by one of its duly authorized representatives.
Attached to and made part of Policy No. FALCO-WARXXX-17-100 of the Falco
Insurance Company, Inc.
Issued to: Ventamatic Ltd.