Contract analysis

ARTICLE 1 — DEFINITIONS AND INTERPRETATION

Section 1.01. Defined Terms Capitalized terms used but not otherwise defined in this Security Agreement shall have the meanings ascribed to such terms in the Loan Agreement. In addition to terms defined elsewhere in this Security Agreement, the following terms shall have the meanings set forth below: "Accounts" shall have the meaning ascribed to such term in Article 9 of the UCC and, in any event, shall include all r

Section 1.02. UCC Terms All terms used in this Security Agreement that are defined in the UCC (including "authenticate," "control," "debtor," "obligor," "proceeds," "purchase-money security interest," "secured party," "security interest," and "value") and that are not otherwise defined herein or in the Loan Agreement shall have the respective meanings given to such terms in the UCC.

Section 1.03. Interpretation The following rules of construction and interpretation shall apply to this Security Agreement: (a) The headings and captions in this Security Agreement are inserted for convenience of reference only and shall not define, limit, or otherwise affect the meaning or construction of any provision hereof. (b) References to "Sections," "Articles," and "Schedules" are to Sections and Articles of,

ARTICLE 2 — GRANT OF SECURITY INTEREST

Section 2.01. Grant As security for the prompt and complete payment and performance in full when due (whether at stated maturity, by required prepayment, by acceleration, by demand, or otherwise) of all Obligations, each Grantor hereby grants to the Secured Party a first-priority continuing security interest in and lien upon all of such Grantor's right, title, and interest in and to the following property, whether no

Section 2.02. Excluded Collateral Notwithstanding anything to the contrary in Section 2.01, the term "Collateral" shall not include any of the following (collectively, "Excluded Collateral"): (a) any fee-owned or leased real property or any interest therein, including fixtures to the extent they constitute an interest in real property; (b) any motor vehicles or other assets subject to certificates of title issued by

Section 2.03. Security Interest as Security Only The security interest created hereby is granted as security only and shall not subject the Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to any of the Collateral or any transaction in connection therewith. Without limiting the generality of the foregoing, the Secured Party shall not be obligated to make any dem

Section 3.01. UCC Financing Statement Filings (a) Each Grantor hereby authorizes the Secured Party to file one or more UCC-1 financing statements (and any continuation statements, amendments, assignments, and other filings related thereto) in all jurisdictions and filing offices as the Secured Party may determine to be necessary or advisable to perfect the security interests granted herein. Each Grantor acknowledges

Section 3.02. Deposit Account Control Agreements (a) Within fourteen (14) days after the Closing Date (as defined in the Loan Agreement) (i.e., by no later than August 30, 2024), each Grantor shall deliver to the Secured Party fully executed deposit account control agreements ("DACAs") in form and substance reasonably satisfactory to the Secured Party with respect to each Deposit Account maintained by such Grantor at

Section 3.03. Intellectual Property Filings To the extent required or advisable for perfection of or to provide constructive notice of the security interests granted herein, each Grantor shall, as a post-closing obligation to be completed by no later than August 30, 2024, execute and deliver to the Secured Party such short-form intellectual property security agreements, assignments, or other instruments as the Secure

Section 3.04. Equity Interest Pledges (a) Each Grantor shall, as a post-closing obligation to be completed by no later than August 30, 2024, deliver to the Secured Party: (i) the original stock certificates (or equivalent membership interest certificates, if any) evidencing all pledged Equity Interests, together with duly executed, undated stock powers or transfer instruments endorsed in blank, with respect to the fo

Section 3.05. Other Perfection Actions Each Grantor shall take all actions necessary or reasonably requested by the Secured Party from time to time to create, preserve, maintain, protect, and perfect the first-priority security interest in the Collateral granted herein, including: (a) marking its books and records to reflect the security interest of the Secured Party in the Collateral, including by noting the interes

ARTICLE 4 — REPRESENTATIONS AND WARRANTIES Each Grantor, jointly and severally, represents and warrants to the Secured Party as of the date hereof and as of each date on which a representation or warranty is deemed to be repeated under the Loan Agreement, as follows:

Section 4.01. Organization and Authority Each Grantor is duly organized or formed, validly existing, and in good standing under the laws of its jurisdiction of organization, with full corporate or limited liability company power and authority to own or lease its properties and to conduct its business as currently conducted. Specifically: (a) Arbor Health Technologies Inc. is a corporation duly incorporated, validly e

Section 4.02. Authorization The execution, delivery, and performance of this Security Agreement by each Grantor have been duly authorized by all necessary corporate or limited liability company action on the part of such Grantor. Without limiting the foregoing: (a) the Board of Directors of Arbor Health Technologies Inc. adopted resolutions on August 2, 2024 authorizing the execution, delivery, and performance of thi

Section 4.03. Legal Name; Location; Identification (a) The exact legal name (as set forth in its certificate of incorporation, certificate of formation, or other constitutive document filed with the applicable governmental authority), entity type, jurisdiction of organization, state organizational identification number, and federal employer identification number of each Grantor are as set forth in Section 4.01 above

Section 4.04. Title to Collateral; No Prior Liens (a) Each Grantor has good and marketable title to, or valid and subsisting leasehold interests or other rights in, all of its Collateral, free and clear of all security interests, liens, encumbrances, charges, claims, options, and restrictions of every kind and nature whatsoever (collectively, "Liens"), other than Permitted Liens (as defined in the Loan Agreement). (b

Section 4.05. Intellectual Property (a) Schedule 2 hereto sets forth a true, correct, and complete list of all registered Patents (including pending patent applications), Trademarks (including pending trademark applications), and Copyrights owned by each Grantor as of the Closing Date. (b) Each Grantor owns or has valid and enforceable licenses to use all intellectual Property that is necessary for the conduct of its

Section 4.06. Deposit Accounts Schedule 4 hereto sets forth a true, correct, and complete list of all Deposit Accounts maintained by each Grantor as of the Closing Date, including the name of the depository institution, the last four digits of the account number, the type of account, and the status of any applicable deposit account control agreement. The Deposit Accounts of each Grantor as of the Closing Date are as

Section 4.07. Equity Interests (a) Schedule 5 hereto sets forth a true, correct, and complete list of all Equity Interests owned by each Grantor as of the Closing Date, including the issuer, class or type of interest, certificate number (if applicable), and percentage of outstanding interests held. The Equity Interests owned by each Grantor as of the Closing Date are as follows: (i) Arbor Health Technologies Inc. hol

Section 4.08. Commercial Tort Claims As of the Closing Date, no Grantor has any pending Commercial Tort Claims, except as set forth on Schedule 3 hereto. Schedule 3 hereto discloses: None.

Section 4.09. Letter-of-Credit Rights As of the Closing Date, no Grantor is the beneficiary of any letter of credit. None disclosed.

Section 4.10. Enforceability This Security Agreement has been duly executed and delivered by each Grantor and constitutes a legal, valid, and binding obligation of each Grantor, enforceable against such Grantor in accordance with its terms, subject to (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance, and other similar laws affecting creditors' rights genera

ARTICLE 5 — COVENANTS Each Grantor covenants and agrees that, so long as any Obligation remains outstanding or any commitment of the Secured Party under the Loan Agreement remains in effect:

Section 5.01. Maintenance of Collateral Each Grantor shall maintain all tangible Collateral in good working order and condition (ordinary wear and tear excepted) and shall make all repairs, renewals, replacements, and improvements thereto as may be necessary or appropriate to maintain such Collateral in such condition. No Grantor shall use or permit any Collateral to be used unlawfully or in violation of any provisio

Section 5.02. Changes in Name, Jurisdiction, or Structure No Grantor shall (a) change its legal name, (b) change its jurisdiction of organization, (c) change its entity type or organizational structure (including by way of merger, conversion, consolidation, or reorganization), or (d) change its organizational identification number, in each case without providing at least thirty (30) days' prior written notice to the

Section 5.03. Disposition of Collateral No Grantor shall sell, assign, transfer, exchange, lease, license, or otherwise dispose of any material Collateral or any interest therein outside the ordinary course of business without the prior written consent of the Secured Party, except as expressly permitted under the Loan Agreement, including (a) sales of Inventory in the ordinary course of business, (b) dispositions of

Section 5.04. Insurance Each Grantor shall maintain insurance on the Collateral in accordance with the requirements of Section 7.01(b) of the Loan Agreement, with financially sound and reputable insurance companies having an A.M. Best rating of not less than "A-" and a financial size category of not less than "VII" (or such other carriers as may be reasonably acceptable to the Secured Party), in amounts and covering

Section 5.05. Liens No Grantor shall create, incur, assume, or suffer to exist any Lien on any Collateral, other than Permitted Liens as defined in the Loan Agreement. Each Grantor shall defend the title to the Collateral and the security interests of the Secured Party therein against the claims and demands of all Persons.

Section 5.06. Intellectual Property Protection Each Grantor shall: (a) diligently maintain, protect, and enforce all material intellectual Property, including by timely filing all renewal applications, affidavits of use, and maintenance fees, timely paying all annuities and other required payments, and diligently prosecuting all pending applications, in each case as necessary to maintain the validity and enforceabili

Section 5.07. Deposit Account Notifications Each Grantor shall promptly (and in any event within five (5) Business Days) notify the Secured Party in writing of the opening of any new Deposit Account, specifying the depository institution, account number, and type of account. Within thirty (30) days of opening any such new Deposit Account (unless such account qualifies as an Excluded Collateral Deposit Account under S

Section 5.08. Commercial Tort Claims Each Grantor shall promptly (and in any event within ten (10) Business Days) notify the Secured Party in writing upon becoming aware of any Commercial Tort Claim in which the amount in controversy exceeds five hundred thousand dollars ($500,000), setting forth in reasonable detail the facts giving rise to such claim. Promptly upon request by the Secured Party, such Grantor shall e

Section 5.09. Further Assurances Each Grantor shall, at its own cost and expense, execute and deliver all documents, instruments, agreements, and certificates and take all further actions that the Secured Party may reasonably request from time to time to create, preserve, protect, perfect, validate, and maintain the first-priority security interest in the Collateral granted herein, including: (a) filing additional UC

Section 5.10. Books and Records; Inspection Each Grantor shall maintain accurate and complete books and records with respect to the Collateral in accordance with sound business practices and in a manner consistent with past practice, and shall permit the Secured Party and its representatives (including independent accountants, consultants, and counsel) to inspect, audit, and copy such books and records during normal

ARTICLE 6 — RIGHTS OF SECURED PARTY

Section 6.01. Attorney-in-Fact Each Grantor hereby irrevocably constitutes and appoints the Secured Party and any officer, employee, or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact, effective upon the occurrence and during the continuance of an Event of Default, with full power and authority in the name, place, and stead of such Grantor or in the Secured Party's own name, fr

Section 6.02. Right to Perform If any Grantor shall fail to perform any obligation under this Security Agreement or any other Loan Document (including any obligation to maintain insurance, file financing statements, or deliver documents), the Secured Party may (but shall have no obligation to) perform or cause the performance of such obligation, and any reasonable costs, expenses, fees, and charges incurred by the Se

Section 7.01. General Remedies Upon Event of Default (a) Upon the occurrence and during the continuance of any Event of Default (as defined in Article IX of the Loan Agreement), the Secured Party shall have, in addition to all other rights and remedies granted to it in this Security Agreement, the Loan Agreement, and the other Loan Documents, all rights and remedies of a secured party under the Uniform Commercial Cod

Section 7.02. Application of Proceeds Any cash Proceeds of Collateral received by the Secured Party in connection with the collection, enforcement, or exercise of any right, remedy, or power under this Security Agreement or any other Loan Document (including any Proceeds received from the sale or other disposition of the Collateral) shall be applied in the following order of priority: (a) first, to the payment of all

Section 7.03. Deficiency If the Proceeds of the Collateral are insufficient to satisfy all Obligations in full, each Grantor shall remain jointly and severally liable for any such deficiency, and the Secured Party shall be entitled to pursue all available remedies against the Grantors for the recovery of any such deficiency.

Section 7.04. Rights Cumulative The rights and remedies of the Secured Party under this Security Agreement, the Loan Agreement, and the other Loan Documents are cumulative and not exclusive of any other rights or remedies that may be available to the Secured Party under applicable law or in equity. No delay or failure by the Secured Party in exercising any right, remedy, power, or privilege hereunder shall operate as

Section 8.01. Governing Law This Security Agreement and any claims, controversies, disputes, or causes of action (whether in contract, tort, or otherwise) arising out of or relating to this Securi