Contract analysis

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.1 — Defined Terms As used in this Security Agreement, the following terms shall have the meanings set forth below: "Account" shall have the meaning assigned to such term in Article 9 of the UCC; the term shall include, without limitation, all accounts receivable of each Grantor, including all rights to payment for goods sold, leased, or licensed, or for services rendered, whether or not earned by performanc

Section 1.2 — UCC Definitions Terms defined in Article 9 of the UCC (as in effect in the State of New York on the date hereof) and used but not otherwise defined herein shall have the meanings assigned to them in Article 9 of the UCC. In the event that the UCC is hereafter amended so as to redefine any term defined herein, such term as used herein shall have the meaning so assigned to such term under the UCC as so am

Section 1.3 — Credit Agreement Definitions Capitalized terms used but not otherwise defined in this Security Agreement shall have the respective meanings assigned to them in the Credit Agreement.

Section 1.4 — Rules of Interpretation (a) Unless the context otherwise requires, references herein to "Articles," "Sections," "Exhibits," and "Schedules" are to articles, sections, exhibits, and schedules of and to this Security Agreement. (b) The words "hereof," "herein," "hereunder," and words of similar import, when used in this Security Agreement, shall refer to this Security Agreement as a whole and not to any p

ARTICLE II — GRANT OF SECURITY INTEREST

Section 2.1 — Grant As security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration, or otherwise) of all Obligations, each Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a continuing first-priority security interest in and lien upon all of such Grantor's right, title, and interest in and to the following property, w

Section 2.2 — Excluded Assets Notwithstanding the breadth of the grant set forth in Section 2.1, the Collateral shall not include any of the following property or assets (collectively, the "Excluded Assets"): (a) Real Property. All real property and interests in real property (including fee interests, leasehold interests, and easements), other than Fixtures as defined in Article 9 of the UCC to the extent such Fixtur

Section 2.3 — Security Interest Secures Obligations The Security Interest granted herein secures the prompt and complete payment and performance when due (whether at stated maturity, by acceleration, or otherwise) of all Obligations, as defined in the Credit Agreement, including, without limitation, all principal, interest (including post-petition interest, whether or not allowed as a claim in any proceeding under an

ARTICLE III — PERFECTION OF SECURITY INTEREST

Section 3.1 — UCC Financing Statements (a) Each Grantor hereby authorizes the Collateral Agent to file, and each Grantor shall execute and deliver to the Collateral Agent (to the extent necessary), one or more UCC-1 financing statements (and continuation statements and amendments thereto) in such form and in such filing offices as the Collateral Agent may determine to be necessary or advisable to perfect the Security

Section 3.2 — Deposit Account Control Agreements (a) Each Grantor shall maintain in full force and effect deposit account control agreements ("Deposit Account Control Agreements" or "DACAs") in form and substance satisfactory to the Collateral Agent with respect to all Deposit Accounts that constitute Collateral. As of the Closing Date, the following Deposit Account Control Agreements have been or will be executed an

Section 3.3 — Instruments and Chattel Paper If at any time any Grantor shall hold or acquire any Instrument or tangible Chattel Paper with a face amount in excess of $250,000 (individually or in the aggregate with respect to any single obligor), such Grantor shall promptly (and in any event within ten (10) Business Days of acquiring such Instrument or tangible Chattel Paper) deliver the original thereof to the Collat

Section 3.4 — Letter-of-Credit Rights If at any time any Grantor is or becomes the beneficiary under any letter of credit with a stated amount in excess of $250,000, such Grantor shall promptly (and in any event within ten (10) Business Days of becoming aware of such status) notify the Collateral Agent thereof and shall use commercially reasonable efforts to cause the issuer of such letter of credit and any confirmer

Section 3.5 — Commercial Tort Claims Each Grantor shall promptly (and in any event within thirty (30) days) notify the Collateral Agent in writing of any Commercial Tort Claim acquired by such Grantor after the date hereof having a value reasonably estimated by such Grantor to exceed $500,000, and shall, upon the Collateral Agent's request, execute and deliver a supplement to this Security Agreement (or such other do

Section 3.6 — Termination of Existing Liens (a) The Grantors represent and warrant that, prior to the date hereof, CROC was a borrower under that certain Credit Agreement dated as of June 12, 2019, among CROC, as borrower, the other loan parties party thereto, and Harborview Lending Group, LLC, as administrative agent and collateral agent, providing for a senior secured asset-based revolving credit facility in an agg

ARTICLE IV — REPRESENTATIONS, WARRANTIES, AND COVENANTS

Section 4.1 — Title and Authority Each Grantor represents and warrants, as of the date hereof and as of each date on which credit is extended under the Credit Agreement, that: (a) Such Grantor is the legal and beneficial owner of its Collateral, free and clear of all Liens other than Permitted Liens and the Security Interest created by this Security Agreement. (b) Such Grantor has full corporate, limited liability co

Section 4.2 — Organizational Information and Perfection Certificate (a) Each Grantor represents and warrants that the information set forth in the Perfection Certificate dated May 4, 2023, delivered by the Grantors to the Collateral Agent in connection with the execution and delivery of this Security Agreement, is true, correct, and complete in all material respects as of the date hereof. Without limiting the foregoi

Section 4.3 — Accounts Each Grantor represents and warrants that: (a) Each Account of such Grantor arises from a bona fide transaction in the ordinary course of such Grantor's business, and represents a genuine obligation of the applicable Account debtor for goods sold, leased, or licensed, or services rendered. (b) To the knowledge of such Grantor, no Account debtor has any valid defense, setoff, claim, or countercl

Section 4.4 — Inventory Each Grantor represents and warrants that: (a) All Inventory of such Grantor is of good and merchantable quality, free from any material defects, and suitable for the purposes for which it is intended. (b) All Inventory is located at the locations set forth in the Perfection Certificate and on Schedule 3 hereto, including, without limitation: (i) The CFS distribution centers located at: (A) 18

Section 4.5 — Deposit Accounts Each Grantor represents and warrants that: (a) Schedule 4 hereto sets forth a true, correct, and complete list of all deposit accounts maintained by the Grantors as of the date hereof, including the account number (or the last four digits thereof), the name of the depository institution, the name of the account holder, and the purpose of each account. (b) All Deposit Accounts that const

Section 4.6 — No Other Liens Each Grantor represents and warrants that no effective UCC financing statement, security agreement, assignment, or other instrument or document similar in effect covering all or any part of the Collateral is on file or of record in any filing office or registry, except (a) UCC financing statements filed in favor of the Collateral Agent pursuant to this Security Agreement (as identified in

Section 4.7 — No Conflicts Each Grantor represents and warrants that the execution, delivery, and performance of this Security Agreement and the grant of the Security Interest contemplated hereby do not and will not (a) violate or conflict with the certificate of incorporation, certificate of formation, bylaws, operating agreement, or other organizational documents of such Grantor, (b) violate any applicable law, sta

Section 4.8 — Maintenance of Collateral Each Grantor covenants and agrees that it shall: (a) Maintain the Collateral in good condition and repair, ordinary wear and tear excepted, and shall make all repairs, renewals, and replacements thereof as are necessary or desirable to maintain the Collateral in such condition; (b) Not use or permit the Collateral to be used in violation of any applicable law, statute, regulati

Section 4.9 — Insurance (a) Each Grantor covenants and agrees that it shall maintain, with financially sound and reputable insurance companies, insurance on the Collateral in such amounts, with such deductibles, and against such risks as are required pursuant to the Credit Agreement and as are customary for companies of similar size engaged in similar businesses. (b) Each Grantor shall cause the Collateral Agent to b

Section 4.10 — Location of Collateral; Change of Name or Location Each Grantor covenants and agrees that, without providing at least thirty (30) days' prior written notice to the Collateral Agent and taking all actions reasonably requested by the Collateral Agent to maintain the perfection and priority of the Security Interest (including the filing of any necessary amendments to UCC financing statements), no Grantor

Section 4.11 — Protection of Collateral Agent's Security Interest Each Grantor shall take all actions necessary and reasonably requested by the Collateral Agent to maintain the first-priority perfected Security Interest of the Collateral Agent in the Collateral, including, without limitation: (a) Executing and delivering financing statements, amendments, continuation statements, and other documents as the Collateral

Section 4.12 — No Disposition of Collateral No Grantor shall sell, lease, license, exchange, assign, transfer, or otherwise dispose of any Collateral, or attempt or contract to do so, except as expressly permitted under the Credit Agreement, including, without limitation: (a) Sales of Inventory in the ordinary course of business; (b) Dispositions of obsolete, worn-out, or surplus Inventory and Equipment in the ordina

Section 4.13 — Collection of Accounts (a) Each Grantor shall diligently collect and enforce payment of its Accounts in the ordinary course of its business, consistent with past practices and sound business judgment. (b) Upon the occurrence and during the continuance of an Event of Default (or upon the activation of cash dominion when Availability falls below $37,500,000 as described in Sections 3.2 and 5.5 hereof), t

Section 4.14 — Negative Pledge on intellectual Property (a) Each Grantor acknowledges that its registered intellectual property (including trademarks, copyrights, and patents registered with the USPTO or USCO) constitutes Excluded Assets and is not subject to the Security Interest created by this Security Agreement. Notwithstanding such exclusion, each Grantor covenants and agrees that it shall not, without the prior

Section 4.15 — Further Assurances; After-Acquired Collateral (a) Each Grantor shall, promptly upon the request of the Collateral Agent, execute and deliver such further instruments, agreements, certificates, and documents and take such further actions as the Collateral Agent may reasonably request in order to carry out the purposes of this Security Agreement and to establish, maintain, protect, and perfect the first-

Section 4.16 — Inspection and Field Examination Rights (a) Each Grantor shall permit the Collateral Agent and its authorized agents, representatives, and designees (including Ridgeline Asset Advisors LLC or any successor engagement firm retained by the Collateral Agent) to visit and inspect the Collateral and the properties, books, and records of such Grantor, to examine and make copies of the books and records of su

Section 4.17 — Borrowing Base Reporting Each Grantor acknowledges and agrees that it is obligated, pursuant to the Credit Agreement, to deliver Borrowing Base Certificates to the Administrative Agent and the Collateral Agent in accordance with the following schedule: (a) On or before the fifteenth (15th) day of each calendar month (or, if such day is not a Business Day, the next succeeding Business Day), a Borrowing

Section 5.1 — Remedies Upon Event of Default Upon the occurrence and during the continuance of an Event of Default (as defined in the Credit Agreement), the Collateral Agent may, and at the direction of the Required Lenders shall, exercise any and all rights and remedies available to a secured party under: (a) This Security Agreement; (b) The Credit Agreement and the other Loan Documents; (c) The UCC (including Artic

Section 5.2 — Notice of Sale (a) The Collateral Agent shall give the Grantors at least ten (10) days' prior written notice of the time and place of any public sale of the Collateral, or the time after which any private sale or other disposition of the Collateral is to be made. The parties hereto agree that ten (10) days' prior written notice of any such sale or other disposition shall constitute commercially reasonab

Section 5.3 — Application of Proceeds The Proceeds of any sale, collection, or other realization upon any Collateral upon the exercise of remedies following an Event of Default shall be applied by the Collateral Agent in the following order of priority: First, to the payment of all costs, expenses, liabilities, and advances incurred or made by the Collateral Agent in connection with the exercise of remedies hereunder