TLLTF TILT Holdings Inc (QB)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 28, 2024

TILT HOLDINGS INC.

(Exact name of registrant as specified in its charter)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

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Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 1.01 Entry Into a Material Definitive Agreement

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On January 28, 2024, TILT Holdings Inc. (the “Company”) and its subsidiaries Jimmy Jang, L.P. (“JJLP”), Baker Technologies, Inc. (“Baker”), Commonwealth Alternative Care, Inc. (“CAC”), Jimmy Jang Holdings, Inc.(“JJH”), JJ Blocker Co. (“JJB”), SFNY Holdings, Inc. (“SFNY”), Sea Hunter Therapeutics, LLC (“SEA”),  Standard Farms Ohio LLC (“SF Ohio”), Standard Farms LLC (“SF Penn”), SH Finance Company, LLC (“SF Finance”), Jupiter Research, LLC (“Jupiter”, and collectively with the Company, JJLP, Baker, CAC, JJH, JJB, SFNY, SEA, SF Ohio, SF Penn, SF Finance, the “Guarantors”) and Shenzen Smoore Technology Limited (“Smoore”) and each of its affiliates that sells products to Jupiter and the Company (the “Buyers”) from time to time (collectively, the “Secured Party”) entered into: (i) a Debt and Security Agreement in favor of the Secured Party (the “Debt and Security Agreement”); (ii) a Guaranty in favor of the Secured Party (the “Guaranty”); (iii) a Side Letter (the “Side Letter”); (iv) a Trademark Security Agreement in favor of the Secured Party; and (v) an Equity Pledge Agreement in favor of the Secured Party ( collectively, the “Smoore Agreements”). Also on January 28, 2024, Entrepreneur Growth Capital LLC, Jordan Geotas, the Secured Party, and Jupiter entered into a Subordination and Intercreditor Agreement (the “Subordination and Intercreditor Agreement”).

The Guarantors entered into the Smoore Agreements with the Secured Party, its principal supplier of vaping product inventory (the “Inventory”) to Jupiter, to provide for the payment of currently existing accounts payable by the Guarantors to the Secured Party (the “Accounts”), reduction in the outstanding balance of Accounts from time to time in the future, and the continued shipping of Inventory to Jupiter by the Secured Party.  

Under the Side Letter between the Secured Party and the Guarantors, the Guarantors agree to reduce the outstanding balance of all Accounts to $31,000,000 as of April 30, 2024, $29,000,000, as of June 30, 2024; $27,000,000, as of September 30, 2024; and $25,000,000, as of December 31, 2024 (the “Reduction Plan”).  The outstanding balance of Accounts that are unpaid more than 90 days after the invoice date plus, without duplication, the aggregate dollar amount of all Accounts, regardless of the date of the related invoice, in excess of $25,000,000 will incur interest at the rate of 8% per annum.

The Guarantors will have 120 days from the invoice date to pay each outstanding Account, however, the Guarantors will have a “Transition Period” though April 15, 2024 to pay any Accounts that are outstanding more than 150 days after the invoice date and  through June 23, 2024 to pay any Accounts that are outstanding more than 120 days after the invoice date, provided certain conditions are satisfied, including compliance with the Reduction Plan, no default or event of default having occurred under the Smoore Agreements, and no event of default having been declared by the Guarantors’ existing secured creditors.  If the Guarantors fail to make timely payments on the Accounts, including under the Reduction Plan, interest will accrue on all outstanding Accounts, regardless of aggregate size or date of invoice, at the rate of 8% per annum.  

Under the Side Letter, the Secured Party agrees to promptly ship ordered Inventory to Jupiter so long as the Guaranty described below remains in full force and effect, no event of default has occurred under the Smoore Agreements, and the Guarantors have performed, and the outstanding balance of all Accounts does not exceed the amounts permitted, under the Reduction Plan.  

In addition to the Side Letter, the Smoore Agreements include a Guaranty by the Guarantors (other than Jupiter) for the benefit of the Secured Party, pursuant to which, those Guarantors guarantee the payment and performance of Jupiter’s and the Company’s obligations to the Secured Party with respect to the Accounts.  The Guarantors have also entered into a Debt  and Security Agreement and related collateral security documents with or for the benefit of the Secured Party, under which the Guarantors’ performance under the Guaranty and Jupiter’s obligations with respect to the Accounts are secured by security interests in all of the assets of the Guarantors, including a pledge of all equity interests in all direct and indirect subsidiaries of the Company.  Pursuant to the Subordination and Intercreditor Agreement, certain of the Guarantors’ existing secured creditors have agreed that, other than the security interest in certain assets that were pledged by Jupiter to secure a revolving credit facility, existing security interests in favor of those existing creditors are subordinated to the security interests created under the Smoore Agreements.  

The Smoore Agreements include affirmative and negative covenants, events of default, representations and warranties and other provisions that are customary for agreements of this type.

The descriptions of the Smoore Agreements provided in this Item 1.01 are only a brief summary of the respective material terms of the Smoore Agreements and do not purport to be a complete description of the rights and obligations of the respective parties thereto. The respective summary descriptions are qualified in their entirety by reference to the full text of the respective Smoore Agreements, which are attached hereto as Exhibit 10.1, 10.2, 10.3, 10.4, 10.5, and 10.6 and incorporated by reference into this Item 1.01.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an Off-balance Sheet Arrangement of a Registrant.

The disclosure contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.

Item 8.01 Other Events

On January 31, 2024, the Company issued a press release announcing the execution of the Smoore Agreements. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

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*  In accordance with Item 601(b)(2) and/or Item 601(b)(10)(iv) of Regulation S-K, certain information has been excluded from this exhibit because it is both not material and private or confidential. A copy of the omitted portion will be furnished to the Securities and Exchange Commission upon request.

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† In accordance with Item 601(a)(6) of Regulation S-K, certain information has been excluded from this exhibit.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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Exhibit 10.1

DEBT AND SECURITY AGREEMENT

This DEBT AND SECURITY AGREEMENT, dated as of January 28, 2024 (as amended, supplemented or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”), is made by TILT HOLDINGS INC., a corporation formed under the laws of British Columbia (“TILT”), JIMMY JANG, L.P., a Delaware limited partnership (“JJLP”), BAKER TECHNOLOGIES, INC., a Delaware corporation (“Baker”), COMMONWEALTH ALTERNATIVE CARE, INC., a Massachusetts corporation (“CAC”), JIMMY JANG HOLDINGS INC., a British Columbia corporation (“JJH”), JJ BLOCKER CO., a Delaware corporation (“JJB”), SFNY HOLDINGS, INC., a Delaware corporation (“SFNY”), SEA HUNTER THERAPEUTICS, LLC, a Delaware limited liability company (“SEA”), STANDARD FARMS OHIO LLC, an Ohio limited liability company (“SF Ohio”), STANDARD FARMS LLC, a Pennsylvania limited liability company (“SF Penn”), SH FINANCE COMPANY, LLC, a Delaware limited liability company (“SF Finance”), and JUPITER RESEARCH, LLC, an Arizona limited liability company (“Jupiter”, and collectively with TILT, JJLP, Baker, CAC, JJH, JJB, SFNY, SEA, SF Ohio, SF Penn, SF Finance, the “Grantors”), in favor of SHENZHEN SMOORE TECHNOLOGY LIMITED, a company organized and existing under the laws of Peoples’ Republic of China (“Smoore”) and each of its Affiliates that sells products to Jupiter and TILT from time to time (collectively, the “Secured Party”).  Each of the Grantors and the Secured Party may be referred to herein individually as a “Party” and all may be referred to collectively herein as the “Parties”.

RECITALS

WHEREAS, Secured Party previously agreed to make sales to Jupiter and TILT (collectively, the “Buyers”) on credit, and may continue to do so, in all cases pursuant to one or more agreements (any such sale, a “Credit Sale”) so long as:

1.TILT, JJLP, Baker, CAC, JJH, JJB, SFNY, SEA, SF Ohio, SF Penn, and SF Finance (in such capacity, the “Guarantors”) have provided a guarantee as of even date herewith (the “Guaranty”) by Guarantors in favor of Secured Party, of those amounts owed by Buyers to Secured Party that are in excess of the amounts for which Secured Party receives an insurance payment for any non-payment thereof (the “Covered Amounts”). The Guaranty shall be secured by each Guarantor’s grant of a security interest in all of the assets of such Guarantor; and

2.Each Grantor has granted Secured Party a security interest in all of the assets described in Section 2 of the Agreement owned by such Grantor as security for Buyers’ payment of the Secured Obligations described in Section 3.

WHEREAS, incorporating the foregoing Recitals as if fully rewritten therein, the following Agreement is given by each Grantor in favor of the Secured Party in connection with the Guaranty to secure the payment and performance of all the Secured Obligations.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:

1.Definitions.

(a)Unless otherwise specified herein, all references to Sections and Schedules herein are to Sections and Schedules of this Agreement.

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(b)Words used but not defined in this Agreement have the meanings given in the Guaranty or the Subordination and Intercreditor Agreement (as such term is defined herein), as applicable.

(c)Unless otherwise defined herein, terms used herein that are defined in the UCC shall have the meanings assigned to them in the UCC. However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term shall have the meaning specified in Article 9 of the UCC.

(d)For purposes of this Agreement, the following terms shall have the following meanings:

“Account” has the meaning provided in the UCC, and includes all rights to payment for goods sold or leased, or for services rendered.

An “Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Collateral” has the meaning set forth in Section 2.

“Default” means an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.

“Equity Interest” means the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company; or (d) other Person having any other form of equity security or ownership interest.

“Equity Pledge Agreement” means that certain Equity Pledge Agreement dated as of even date herewith by JJLP in favor of Secured Party whereby JJLP pledged the Pledged Units as security for the Secured Obligations.

“Event of Default” means (i) a failure by a Grantor to pay or perform, as and when required, under the Guaranty, (ii) a failure by a Grantor to perform any obligation of that Grantor under Section 4 hereunder as and when such performance is due, (iii) a failure by a Grantor to pay or perform any obligation under this Agreement, which failure is not cured within 30 days of either Grantor receiving notice thereof, and (iv) any Grantor’s having filed for protection under the Bankruptcy and Insolvency Act and the Companies Creditors Arrangement Act of Canada or any applicable chapter of the United States Bankruptcy Code (collectively, the ”Bankruptcy Laws”), (v) an involuntary petition having been filed against any Grantor under any Bankruptcy Law, (vi) any Grantor admitting in writing its inability to pay its obligations as they come due, (vi) any Grantor entering into an assignment for the benefit of creditors, or (vii) any Grantor fails to make a payment on any invoice delivered by Secured Party to Jupiter or Tilt within 120 days of the date of such invoice.

“Governmental Authority” means any national, supranational, federal, state, county, provincial, local, municipal or other government or political subdivision thereof, whether domestic or foreign, and any agency, authority, commission, ministry, instrumentality, regulatory body, court, tribunal, arbitrator, central bank or other person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to any such government.

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“Intellectual Property” means all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases; all embodiments or fixations thereof and all related documentation, applications, registrations and franchises; all licenses or other rights to use any of the foregoing; and all books and records relating to the foregoing.

“Intellectual Property Claim” means any claim or assertion (whether in writing, by suit or otherwise) that a Grantor’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

“Inventory” has the meaning provided in the UCC, and includes all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Person’s business (but excluding equipment).

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Pledged Collateral” specifically includes the Pledged Units and otherwise means the portion of the Collateral that includes all of any Grantors’ right, title and interest in Equity Interests.

“Pledged Units” means JJLP’s Equity Interest in Jupiter.

“Proceeds” means “proceeds” as such term is defined in section 9-102 of the UCC and, in any event, shall include, without limitation, all dividends or other income from the Collateral, collections thereon or distributions with respect thereto.

“Secured Obligations” has the meaning set forth in Section 3.

“Security Documents” means, collectively, the Guaranty, Equity Pledge Agreement, Trademark Security Agreement, and all other documents, instruments, and agreements now or hereafter securing (or given with the intent to secure) any Secured Obligations

“Subordination and Intercreditor Agreement” means that certain Subordination and Intercreditor Agreement, dated as of even date herewith, by and among Entrepreneur Growth Capital LLC, a Delaware limited liability company, Jordan Geotas, in his capacity as Noteholder Representative (as such term is defined in the Subordination and Intercreditor Agreement) for the Noteholders (as such term is defined in the Subordination and Intercreditor Agreement),

“Trademark Security Agreement” means the Trademark Security Agreement dated as of even date herewith pursuant to which Grantors grant to Secured Party a lien on Grantors’ interests in trademarks, as security for the Secured Obligations.

“Transaction Documents” means, collectively, this Agreement, the Security Documents, and the Subordination and Intercreditor Agreement.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of California or, when the laws of any other state govern the method or manner of the perfection or enforcement of any security interest in any of the Collateral, the Uniform Commercial Code as in effect from time to time in such state.

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2.Grant of Security Interest. Each Grantor hereby pledges and grants to the Secured Party, and hereby creates a continuing first priority lien and security interest in favor of the Secured Party in and to all of its right, title and interest in and to the following, wherever located, whether now existing or hereafter from time to time arising or acquired (collectively, the “Collateral”):

(a)all of such Grantor’s property of every kind and nature including but not limited to all accounts, goods (including inventory and equipment), documents (including, if applicable, electronic documents), instruments, promissory notes, chattel paper (whether tangible or electronic), letters of credit, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), equity interest in its subsidiaries, securities and all other investment property, general intangibles (including all payment intangibles), goodwill, customer list, research and develop data and technologies, trade secrets, Intellectual Properties including but not limited to trademarks, tradenames, copyrights and patents, money, deposit accounts, and any other contract rights or rights to the payment of money and, in the case of JJLP, specifically including, but not limited in any way to, the Pledged Units; and

(b)all Proceeds and products of each of the foregoing, all books and records relating to the foregoing, all supporting obligations related thereto, and all accessions to, substitutions and replacements for, and rents, profits and products of, each of the foregoing, and any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to any Grantor from time to time with respect to any of the foregoing; and

Notwithstanding the foregoing or anything contained in this Agreement or the Guaranty to the contrary, the term “Collateral” shall not include, and a security interest is not granted in, any right or interest in any permit, license, lease, or contract if under the terms of such permit, license, or lease, or applicable laws with respect thereto, the grant of a security interest or lien therein is prohibited and such prohibition has not been waived or the requisite consent in respect of such permit, license, lease has not been obtained (or is not able to be obtained) or the grant of a security interest or lien therein would, under the terms of such permit, license, lease , result in the voiding or termination of or give rise to a right of termination of such permit, license, lease; provided that, such permit, license, or lease shall be included in the term “Collateral” and a security interest shall be granted therein, at such time as the grant of a security interest therein is no longer prohibited, or the requisite consent in respect thereof has been obtained.

Each of the Grantors represents and warrants to the Secured Party that there is no lien, pledge, guaranty, mortgage, security interests, adverse claims or other encumbrances of any character whatsoever to such Grantor or any of its assets, except for those listed on Schedule 2 attached hereto (collectively, the “Permitted Liens”).

3.Secured Obligations.

(a)The Collateral secures the due and prompt payment in full and performance of (i) with respect to a Guarantor when acting in such capacity, the Covered Amounts for which that Guarantor is liable under the Guaranty, (ii) with respect to a Buyer when acting in such capacity, the Covered Amounts for Credit Sales made to such Buyer, and (iii) with respect to each of the Grantors, the other fees, charges, expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable to and payable by that Grantor under the Transaction Documents, in each case, whether direct or indirect, absolute or contingent, now existing or hereafter arising, due or to become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U. S. C. Section 101 et seq.), as amended from time to time (including post-petition interest) and whether or not allowed or allowable as a claim in any such proceeding (collectively, the “Secured Obligations”).

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(b)Seller shall provide to Guarantor within ten (10) days of written request therefore, a written statement of the Covered Amount.

4.Perfection of Security Interest and Further Assurances.

(a)Each Grantor shall, from time to time, as may be required or requested by the Secured Party with respect to all Collateral, take all actions reasonably necessary to perfect the security interest of the Secured Party in the Collateral, including, but not limited to, delivering the Security Documents executed as of the date hereof by the applicable Grantors. All of the foregoing shall be at the sole cost and expense of such Grantor.

(b)Each Grantor hereby irrevocably authorizes, but does not obligate, the Secured Party at any time and from time to time to file in any relevant jurisdiction any financing statements and amendments thereto that contain the information required by Article 9 of the UCC of each applicable jurisdiction for the filing of any financing statement or amendment relating to the Collateral, including any financing or continuation statements or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the security interest granted by such Grantor hereunder, without the signature of such Grantor where permitted by law, including the filing of a financing statement describing the Collateral as all assets now owned or hereafter acquired by such Grantor, or words of similar effect. Each Grantor agrees to provide all information required by the Secured Party pursuant to this Section promptly to the Secured Party upon request.

(c)If any Collateral is at any time in the possession of a bailee, the Grantor that owns such Collateral shall promptly notify the Secured Party thereof and, at the Secured Party’s request and option, shall promptly obtain an acknowledgment from the bailee, in form and substance satisfactory to the Secured Party, that the bailee holds such Collateral for the benefit of the Secured Party and the bailee agrees to comply, without further consent of Grantor, at any time with instructions of the Secured Party as to such Collateral.

(d)Each Grantor agrees that at any time and from time to time, at the expense of such Grantor, such Grantor will promptly execute and deliver all further instruments and documents, obtain such agreements from third parties, and take all further action, that may be necessary or desirable, or that the Secured Party may reasonably request, in order to create and/or maintain the validity, perfection or priority of and protect any security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder or under any other agreement with respect to any Collateral.

5.Representations and Warranties.  Each Grantor hereby represents and warrants as follows:

(a)At the time the Collateral owned by such Grantor becomes subject to the lien and security interest created by this Agreement, such Grantor will be the sole, direct, legal and beneficial owner thereof, free and clear of any lien, security interest, encumbrance, claim, option or right of others except for Permitted Liens.

(b)Upon the execution and delivery of the Subordination and Intercreditor Agreement, the grant of the Collateral pursuant to this Agreement creates a valid and perfected first priority security interest in the Collateral by such Grantor, subject only to the Permitted Liens, securing the payment and performance when due of the Secured Obligations.

(c)It has full power, authority and legal right to pledge its Collateral pursuant to this Agreement.

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(d)This Agreement and the Guaranty have been duly authorized, executed and delivered by each Grantor and each constitutes a legal, valid and binding obligation of each Grantor enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject to equitable principles (regardless of whether enforcement is sought in equity or at law).

(e)No authorization, approval, or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the pledge by any Grantor of the Collateral pursuant to this Agreement or for the execution and delivery of this Agreement by Grantor or the performance by each Grantor of its obligations hereunder.

(f)The execution and delivery of this Agreement by each Grantor and the performance by such Grantor of its obligations hereunder, will not violate any provision of any applicable laws or regulation or any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Grantor or any of its property, or the organizational or governing documents of such Grantor or any agreement or instrument to which such Grantor is party or by which it or its property is bound.

(g)The Collateral consisting of securities has been duly authorized and validly issued, and is fully paid and non-assessable and subject to no options to purchase or similar rights. None of the Collateral constitutes, or is the proceeds of (i) [reserved], (ii) as-extracted collateral, (iii) manufactured homes, (iv) health-care-insurance receivables, (v) timber to be cut, or (vi) aircraft, aircraft engines, satellites, ships or railroad rolling stock. None of the account debtors or other persons obligated on any of the Collateral is a governmental authority covered by the Federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral.

(h)Each Grantor owns or has the lawful right to use all Intellectual Property necessary for the conduct of its business, without conflict with any rights of others.  There is no pending or, to any Grantor’s knowledge, any threatened Intellectual Property Claim with respect to any Grantor or any of their Property (including any Intellectual Property).  Except as disclosed on Schedule 5(h), no Grantor pays or owes any Royalty or other compensation to any Person with respect to any Intellectual Property.  All Intellectual Property owned, used or licensed by, or otherwise subject to any interests of, any Grantor is shown on Schedule 5(h).

(i)No person other than the Grantors, the Secured Party, or the secured parties with respect to Permitted Liens has control or possession of all or any part of the Collateral.

(j)Set forth on Exhibit 5(i) attached hereto are each Grantor’s exact legal name, its jurisdiction of incorporation, its places of business and the location of its assets. All information provided therein is true, complete and correct in all material respects.

6.Voting, Distributions and Receivables.

(a)The Secured Party agrees that unless an Event of Default shall have occurred and be continuing, each Grantor may, to the extent such Grantor has such right as a holder of the Collateral consisting of securities, other equity interests or indebtedness owed by any obligor, vote and give consents, ratifications and waivers with respect thereto.

(b)The Secured Party agrees that each Grantor may, unless an Event of Default shall have occurred and be continuing, receive and retain all dividends and other distributions with respect to the Collateral consisting of securities, other equity interests, or indebtedness owed by any obligor thereunder.

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(c)If any Event of Default shall have occurred and be continuing, the Secured Party may, or at the request and option of the Secured Party, each Grantor shall, notify account debtors and other persons obligated on any of the Collateral of the security interest of the Secured Party in any account, chattel paper, general intangible, instrument or other Collateral and that payment thereof is to be made directly to the Secured Party.

7.Covenants. Each Grantor hereby covenants as follows:

(a)Such Grantor will not, without providing at least 30 days’ prior written notice to the Secured Party, change its legal name, identity, type of organization, jurisdiction of organization, corporate structure, location of its chief executive office or its principal place of business or its organizational identification number. Such Grantor will, prior to any change described in the preceding sentence, take all actions reasonably required or requested by the Secured Party to maintain the perfection and priority of the Secured Party’s security interest in the Collateral.

(b)Each Grantor shall, at its own cost and expense, defend title to the Collateral and the lien and security interest of the Secured Party therein against the claim of any person claiming against or through such Grantor and shall maintain and preserve such perfected security interest for so long as this Agreement shall remain in effect.

(c)Each Grantor will not sell, offer to sell, dispose of, convey, assign or otherwise transfer, grant any option with respect to, restrict, or grant, create, permit or suffer to exist any mortgage, pledge, lien, security interest, option, right of first offer, encumbrance or other restriction or limitation of any nature whatsoever on, any of the Collateral or any interest therein, other than the Permitted Liens, without prior written consent of Secured Party.

(d)Each Grantor will keep the Collateral in good order and repair and will not use the same in violation of applicable law or any policy of insurance thereon.

(e)Each Grantor will pay promptly when due all taxes, assessments, governmental charges, and levies upon the Collateral or incurred in connection with the use or operation of the Collateral or incurred in connection with this Agreement.

(f)Each Grantor will continue to operate its business in compliance with all applicable provisions of the federal Fair Labor Standards Act, as amended, and each other applicable law.

(g)Each Grantor will immediately notify Secured Party (i) of any event occurring after the date hereof that could have a material adverse effect on such Grantor, and (ii) of any material changes to such Grantor such as the filing of any lawsuit against such Grantor, the Grantor becoming involved in any legal proceedings, or of the change of any of such Grantor’s five highest ranked management positions.

8.Secured Party Appointed Attorney-in-Fact. Each Grantor hereby appoints the Secured Party as such Grantor’s attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, from time to time during the continuance of an Event of Default in the Secured Party’s discretion to take any action and to execute any instrument which the Secured Party reasonably may deem necessary or advisable to cause this Agreement to be enforced in accordance with its terms (but the Secured Party shall not be obligated to and shall have no liability to Grantor or any third party for failure to take such action). This appointment, being coupled with an interest, shall be irrevocable. Such Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof.

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9.Secured Party May Perform. If any Grantor fails to perform any obligation contained in this Agreement after such demand therefor from Secured Party as is reasonable under the then-existing circumstances, the Secured Party may itself perform, or cause performance of, such obligation, and the expenses of the Secured Party incurred in connection therewith shall be payable by any Grantor; provided that the Secured Party shall not be required to perform or discharge any obligation of any Grantor.

10.Reasonable Care. The Secured Party shall have no duty with respect to the care and preservation of the Collateral beyond the exercise of reasonable care. The Secured Party shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Secured Party accords its own property, it being understood that the Secured Party shall not have any responsibility for (a) ascertaining or taking action with respect to any claims, the nature or sufficiency of any payment or performance by any party under or pursuant to any agreement relating to the Collateral or other matters relative to any Collateral, whether or not the Secured Party has or is deemed to have knowledge of such matters, or (b) taking any necessary steps to preserve rights against any parties with respect to any Collateral. Nothing set forth in this Agreement, nor the exercise by the Secured Party of any of the rights and remedies hereunder, shall relieve any Grantor from the performance of any obligation on any Grantor’s part to be performed or observed in respect of any of the Collateral.

11.Remedies Upon Event of Default.

(a)Upon the occurrence and continuance of an Event of Default, the Secured Party may exercise any or all of the following rights and remedies:

(i)those rights and remedies provided in this Security Agreement or the Guaranty; provided that, this Section 11(a) shall not be understood to limit any rights or remedies available to the Secured Party prior to an Event of Default;

(ii)those rights and remedies available to a secured party under the UCC or under any other applicable law when a debtor is in default under a security agreement;

(iii)give notice of sole control or any other instruction under any deposit account control agreement or any other control agreement with any securities intermediary and take any action therein with respect to such Collateral;

(iv)without notice (except as specifically provided elsewhere herein, or as specifically provided in the Security Documents), demand, or advertisement of any kind to any Grantor or any other person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at a Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Secured Party may deem commercially reasonable; and

(v)upon three (3) Business Days’ prior written notice to any Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral owned by such Grantor, exchange certificates or instruments representing or evidencing such Pledged Collateral for certificates or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, collect and receive all cash dividends, interest, principal and other

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distributions made thereon and to otherwise act with respect to such Pledged Collateral as though the Secured Party was the outright owner thereof.

(b)The Secured Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral; provided, however, that the Secured Party shall comply with all state cannabis laws in connection with a disposition of the Collateral to the extent that such compliance does not materially and adversely affect the value of the Collateral.

(c)The Secured Party shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of the Secured Party, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption each Grantor hereby expressly releases.

(d)Until the Secured Party is able to effect a sale, lease, or other disposition of Collateral, the Secured Party shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value. The Secured Party may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Secured Party’s remedies (for the benefit of the Secured Party), with respect to such appointment without prior notice or hearing as to such appointment.

(e)Notwithstanding the foregoing, the Secured Party shall not be required to (i) make any demand upon, or pursue or exhaust any of its rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Secured Obligations or to pursue or exhaust any of its rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(f)Each Grantor recognizes that the Secured Party may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above.  Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the Secured Party than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Secured Party shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.

Notwithstanding the foregoing, any rights and remedies provided in this Section 11 shall be subject to the Subordination Agreement.

12.Grantors’ Obligations Upon Default. Upon the request of the Secured Party after the occurrence of an Event of Default, each Grantor will:

(a)assemble and make available to the Secured Party the Collateral owned or controlled by such Grantor and all books and records relating thereto at any place or places specified by the Secured Party, whether at any Grantor’s premises or elsewhere;

(b)permit the Secured Party, by the Secured Party’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral owned or controlled by such

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Grantor, or the books and records relating thereto, or both, are located, to take possession of all or any part of such Collateral or the books and records relating thereto, or both, to remove all or any part of such Collateral or the books and records relating thereto, or both, and to conduct sales of such Collateral, without any obligation to pay Grantor or any other Person  for such use and occupancy;

(c)prepare and file, or cause an issuer of Pledged Collateral owned or controlled by such Grantor to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with such Pledged Collateral as the Secured Party may request, all in form and substance satisfactory to the Secured Party, and furnish to the Secured Party, or cause an issuer of such Pledged Collateral to furnish to the Secured Party, any information regarding such Pledged Collateral in such detail as the Secured Party may specify;

(d)take, or cause an issuer of Pledged Collateral owned or controlled by such Grantor to take, any and all actions necessary to register or qualify such Pledged Collateral to enable the Secured Party to consummate a public sale or other disposition of such Pledged Collateral; and

(e)at its own expense, cause the independent certified public accountants then engaged by such Grantor to prepare and deliver to the Secured Party, at any time, and from time to time, promptly upon the Secured Party’s request, the following reports (i) a reconciliation of all Accounts owned or controlled by such Grantor; (ii) an aging of all such Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

13.Grant of Intellectual Property License. For the purpose of enabling the Secured Party to exercise the rights and remedies under this Agreement at such time as the Secured Party shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby (a) grants to the Secured Party, for the benefit of itself and the other Secured Parties, an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to Grantor) to use, license or sublicense any Intellectual Property rights now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, and (b) irrevocably agrees that the Secured Party may sell any of such Grantor’s Inventory directly to any person, including without limitation persons who have previously purchased such Grantor’s Inventory from any Grantor and in connection with any such sale or other enforcement of the Secured Party’s rights under this Security Agreement, may sell Inventory which bears any trademark owned by or licensed to such Grantor and any Inventory that is covered by any copyright owned by or licensed to such Grantor and the Secured Party may finish any work in process and affix any trademark owned by or licensed to such Grantor and sell such Inventory as provided herein.

14.No Waiver and Cumulative Remedies. The Secured Party shall not by any act (except by a written instrument pursuant to Section 16), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. All rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies provided by law.

15.Security Interest Absolute. Each Grantor hereby waives demand, notice, protest, notice of acceptance of this Agreement, notice of debts made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of any description. All rights of the Secured Party and liens and security interests hereunder, and all Secured Obligations of any Grantor hereunder, shall be absolute and unconditional irrespective of:

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(a)any illegality or lack of validity or enforceability of any Secured Obligation or any related agreement or instrument;

(b)any change in the time, place or manner of payment of, or in any other term of, the Secured Obligations, or any rescission, waiver, amendment or other modification of the Guaranty, this Agreement or any other agreement, including any increase in the Secured Obligations resulting from any extension of additional credit or otherwise;

(c)any taking, exchange, substitution, release, impairment or non-perfection of any Collateral or any other collateral, or any taking, release, impairment, amendment, waiver or other modification of any guaranty, for all or any of the Secured Obligations;

(d)any manner of sale, disposition or application of proceeds of any Collateral or any other collateral or other assets to all or part of the Secured Obligations;

(e)any default, failure or delay, willful or otherwise, in the performance of the Secured Obligations;

(f)any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to, or be asserted by, any Grantor against the Secured Party; or

(g)any other circumstance (including, without limitation, any statute of limitations) or manner of administering the notes or any existence of or reliance on any representation by the Secured Party that might vary the risk of any Grantor or otherwise operate as a defense available to, or a legal or equitable discharge of, any Grantor or any other grantor, guarantor or surety.

16.Amendments. None of the terms or provisions of this Agreement may be amended, modified, supplemented, terminated or waived, and no consent to any departure by any Grantor therefrom shall be effective unless the same shall be in writing and signed by the Secured Party, and then such amendment, modification, supplement, waiver or consent shall be effective only in the specific instance and for the specific purpose for which made or given.

17.Addresses For Notices. All notices and other communications provided for in this Agreement shall be in writing and shall be given in the manner and become effective as set forth in the Guaranty, and addressed to the respective Parties at their addresses as specified on the signature pages hereof or as to either Party at such other address as shall be designated by such Party in a written notice to each other Party.

18.Continuing Security Interest; Further Actions. This Agreement shall create a continuing lien and security interest in the Collateral and shall (a) subject to Section 19, remain in full force and effect until payment and performance in full of the Secured Obligations and the ceasing of all future Credit Provided, (b) be binding upon each Grantor, its successors and assigns, and (c) inure to the benefit of the Secured Party and its successors, transferees and assigns; provided that no Grantor may assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the Secured Party.

19.Termination; Release. If the Guaranty has been terminated as to a Guarantor and all Secured Obligations of such Guarantor arising out of the Guaranty have been paid and performed in full, this Agreement will be terminated as to that Guarantor. Any Buyer may elect to terminate this Agreement and such termination will be effective as to such Buyer on the date on which all Secured Obligations of

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such Buyer incurred in reliance on this Agreement have been paid and performed in full. Upon termination of this Agreement as to any Grantor, Secured Party will, and will cause any Secured Party that has not executed a copy of this Agreement to, at the request and sole expense of such Grantor, (a) duly assign, transfer and deliver to or at the direction of such Grantor (without recourse and without any representation or warranty) such of the Collateral owned or controlled by such Grantor as may then remain in the possession or control of the Secured Party, together with any monies at the time held by or on behalf of the Secured Party hereunder, and (b) execute and deliver to such Grantor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement and authorizing the delivery and filing of any UCC termination statements or amendments or other notices necessary or appropriate to reflect such termination.

20.Governing Law. UNLESS EXPRESSLY PROVIDED IN ANY OTHER AGREEMENT BETWEEN THE PARTIES, THIS AGREEMENT, THE GUARANTY AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ARIZONA, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES.

21.Forum. EACH GRANTOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN THE COUNTY OF MARICOPA, IN THE STATE OF ARIZONA, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO THIS AGREEMENT, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH GRANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.  EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 17.  A final judgment in any proceeding of any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by applicable law.

22.Other Jurisdictions. Nothing herein shall limit the right of Secured Party to bring proceedings against any Grantor in any other court, nor limit the right of any party to serve process in any other manner permitted by applicable law.  Nothing in this Agreement shall be deemed to preclude enforcement by Secured Party of any judgment or order obtained in any forum or jurisdiction.

23.Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in counterparts (and by different Parties hereto in different counterparts), each of which shall constitute an original, but all taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

[Signature pages follow]

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IN WITNESS WHEREOF, this Debt and Security Agreement has been executed as of the date first above written.

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Exhibit 5(i) to Debt and Security Agreement

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Exhibit 5(i) to Debt and Security Agreement

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Exhibit 5(i) to Debt and Security Agreement

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Exhibit 5(i) to Debt and Security Agreement

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Exhibit 5(i) to Debt and Security Agreement

Exhibit 10.2

GUARANTY

This GUARANTY (this “Guaranty”) dated as of January 28, 2024 is made by TILT HOLDINGS INC., a corporation formed under the laws of British Columbia (“TILT”), JIMMY JANG, L.P., a Delaware limited partnership (“JJLP”), BAKER TECHNOLOGIES, INC., a Delaware corporation (“Baker”), COMMONWEALTH ALTERNATIVE CARE, INC., a Massachusetts corporation (“CAC”), JIMMY JANG HOLDINGS INC., a British Columbia corporation (“JJH”), JJ BLOCKER CO., a Delaware corporation (“JJB”), SFNY HOLDINGS, INC., a Delaware corporation (“SFNY”), SEA HUNTER THERAPEUTICS, LLC, a Delaware limited liability company (“SEA”), STANDARD FARMS OHIO LLC, an Ohio limited liability company (“SF Ohio”), STANDARD FARMS LLC, a Pennsylvania limited liability company (“SF Penn”), SH FINANCE COMPANY, LLC, a Delaware limited liability company (“SF Finance”, together with TILT, JJLP, Baker, CAC, JJH, JJB, SFNY, SEA, SF Ohio, and SF Penn, each individually, and collectively, “Guarantor”) in favor of SHENZHEN SMOORE TECHNOLOGY LIMITED, a company organized and existing under the laws of Peoples’ Republic of China and each of its Affiliates that sells products to Jupiter (as defined below) and TILT from time to time (each individually, and collectively, the “Seller”). Guarantor and Seller may be referred to herein individually as a “Party” and all may be referred to collectively herein as the “Parties”.

Guarantor, in order to induce Seller to enter into that certain Debt and Security Agreement (the “Debt and Security Agreement”) dated as of even date herewith, by and among Guarantor, Jupiter Research LLC, an Arizona limited liability company (“Jupiter”), and Seller, agrees as set forth below.

RECITALS

WHEREAS, Seller manufactures vaping technology products (collectively, the “Products”) and sells such Products to Jupiter Research LLC, an Arizona limited liability company and TILT (each individually, and collectively, the “Buyer”) from time to time.

WHEREAS, Seller is unwilling to sell Products to Buyer on credit (each such sale, a “Credit Sale”) without satisfactory assurances of payment.

WHEREAS, Seller is ready, willing, and able to make Credit Sales to Buyer on the condition that Guarantor guaranty the payment of any of those amounts owed by Buyers to Seller with respect to Credit Sales that are in excess of the amounts for which Secured Party receives an insurance payment for any non-payment thereof (the “Covered Amounts”).

WHEREAS, in consideration of the benefits accruing to it from the proposed additional sales of Products, Guarantor wishes to execute this Guaranty in favor of Seller.

NOW, THEREFORE, for valuable consideration hereby acknowledged, and in consideration of the facts recited above, Guarantor hereby agrees as follows for the benefit of Seller.

AGREEMENT

1.DEFINED TERMS

All capitalized terms used which are not defined herein have the meanings given to them in the Debt and Security Agreement.

2.GUARANTY

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2.1Guaranty Generally.  Guarantor absolutely and unconditionally guarantees to Seller, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, all of the Guaranteed Amount (as such term is defined in Section 2.2 herein).  Each Guarantor represents and warrants to the Secured Party that there is no lien, pledge, guaranty, mortgage, security interests, adverse claims or other encumbrances of any character whatsoever to such Guarantor or any of its assets, except for the Permitted Liens.

2.2Guaranteed Amount Defined.  In this Guaranty, “Guaranteed Amount” shall mean the Covered Amounts outstanding from time to time, together with all costs and expenses, including all court costs and reasonable and actual attorneys’ and paralegals’ fees and expenses paid or incurred by Seller in endeavoring to collect all or any part of the Guaranteed Amount from, or in prosecuting any action against, Guarantor with respect to the Guaranteed Amount. Except as set forth in Section 2.2, Guarantor’s liability under this Guaranty for any Covered Amount shall not exceed the Buyer’s liability for such Covered Amount.

2.3Guaranty of Payment and Performance.  This Guaranty is a guaranty of payment and performance, and not of collection.  Guarantor waives to the fullest extent permitted by applicable law any right to require Seller to sue or otherwise take action against Buyer or any other Person obligated for all or any part of the Guaranteed Amount, or otherwise to enforce its payment against any Collateral securing all or any part of the Guaranteed Amount.

2.4No Discharge or Diminishment of Guaranty.

(a)Except as otherwise expressly provided for herein, the obligations of Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of all of the Guaranteed Amount), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Amount by any other party, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of Buyer; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Buyer, or its assets or any resulting release or discharge of any obligation of any other Person; or (iv) the existence of any claim, setoff or other rights which Borrower may have at any time against any other Seller, or any other Person, whether in connection herewith or in any unrelated transactions.

(b)Further, the Guaranteed Amount of Guarantor hereunder is not discharged or impaired or otherwise affected by: (i) the failure of Seller to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Amount; (ii) any waiver or modification of or supplement to any provision of any Guaranty relating to the Guaranteed Amount except to the extent expressly agreed to in writing by Seller; (iii) any release, non-perfection, or invalidity of any indirect or direct security for all or any part of the Guaranteed Amount; (iv) any action or failure to act by Seller with respect to any Collateral (as defined in the Debt and Security Agreement; or (v) any default, failure, or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Amount, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of Guarantor or that would otherwise operate as a discharge of Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all of the Guaranteed Amount).

2.5Defenses Waived.  To the fullest extent permitted by applicable law, Guarantor hereby waives any defense based on or arising out of any defense of any Buyer or any other Person or the unenforceability of all or any part of the Guaranteed Amount from any cause, or the cessation from any cause of the liability of any Buyer or any other Person, other than the indefeasible payment in full in cash of all of the Guaranteed Amount.  Without limiting the generality of the foregoing, Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any

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notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against Buyer or any other Person.  Seller may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any Collateral, compromise or adjust any part of the Guaranteed Amount, make any other accommodation with Buyer or exercise any other right or remedy available to it against Buyer, without affecting or impairing in any way the liability of Guarantor hereunder except to the extent the Guaranteed Amount has been fully and indefeasibly paid in cash.  To the fullest extent permitted by applicable law, Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Buyer against any security. Guarantor hereby unconditionally and irrevocably waives any right to revoke this Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all presently existing and future Guaranteed Amounts, until the complete, irrevocable and indefeasible payment and satisfaction in full of the Guaranteed Amounts.  This Guaranty is a guaranty of payment and performance and not of collection. Seller shall not be obligated to enforce or exhaust its remedies against the Buyer or under any of the Products sales orders or contracts before proceeding to enforce this Guaranty. This Guaranty is a direct guaranty and independent of the obligations of Guarantor under any of the Products sales orders or contracts. Seller may resort to Guarantor for payment and performance under Guaranty whether or not there is any disputes between the Buyer and Seller for the Products or under the Products sales orders or contracts. Seller may, at its option, proceed against Guarantor, jointly and severally, or against Guarantor only without having obtained a judgment against Buyer.  Guarantor hereby unconditionally and irrevocably waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of non-performance, default, acceleration, protest or dishonor and any other notice with respect to any of the Products and this Guaranty and any requirement that Seller protect, secure, perfect or insure any lien or any property subject thereto.

2.6Reinstatement; Stay of Acceleration.  If at any time any payment of any portion of the Guaranteed Amount is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of Buyer or any other Person, or otherwise, Guarantor’s Guaranteed Amount hereunder with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not Seller is in possession of this Guaranty.  If acceleration of the time for payment of any of the Guaranteed Amount is stayed upon the insolvency, bankruptcy or reorganization of Buyer, all such amounts otherwise subject to acceleration under the terms of this Guaranty shall nonetheless be payable by Guarantor forthwith on demand by Seller.  This Section 1.6 shall remain operative even after termination of this Guaranty and shall survive the payment in full of all of the Guaranteed Amount.

2.7Information.  Guarantor assumes all responsibility for being and keeping itself informed of Buyer’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Amount and the nature, scope and extent of the risks that Guarantor assumes and incurs hereunder, and agrees that Seller shall not have any duty to advise Guarantor of information known to it regarding those circumstances or risks.

2.8Termination; Reinstatement.  Any Guarantor may elect to terminate this Guaranty upon 10 days’ written notice to Seller. Any orders accepted by Seller within the 10 days after delivery of notice of termination will be deemed to have been made in reliance on this Guaranty. Except as otherwise set forth in the immediately preceding sentence, this Guaranty is a continuing guaranty and will apply to each Guarantor from the date hereof until the date on which all Guaranteed Amounts incurred in connection with Credit Sales made in reliance on such Guarantor’s Guaranty have been indefeasibly paid and performed in full.  Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of Buyer or any Guarantor is made, or Seller exercises its right of setoff, in respect of the Guaranteed Amount and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Seller in its discretion) to be repaid to a trustee,

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receiver or any other party, in connection with any proceeding under any insolvency proceeding or otherwise, all as if such payment had not been made or such setoff had not occurred and whether Seller is in possession of or has released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of Guarantor under this paragraph shall survive termination of this Guaranty.

3.REPRESENTATIONS, AND WARRANTIES

Each Guarantor hereby represents and warrants to Seller the following (which shall survive the execution and delivery of this Guaranty):

3.1The execution, delivery and performance of this Guaranty, any supplement or amendment hereto, or any agreements instruments and documents executed and delivered in connection herewith, are within such Guarantor’s corporate powers, have been duly authorized, are not in contravention of applicable law or the terms of such Guarantor’s Organic Documents, or (following the execution and delivery by all parties thereto of the Subordination and Intercreditor Agreement) of any material indenture, agreement or undertaking to which such Guarantor is a party or by which such Guarantor is bound.

3.2Schedule 3.2 annexed hereto and incorporated herein by reference sets forth such Guarantor’s exact legal name, such Guarantor’s type of organization, the jurisdiction in which such Guarantor is organized, such Guarantor’s organizational identification number or accurately states that such Guarantor has none;

3.3Such Guarantor is in good standing (to the extent applicable), validly existing under the laws of such Guarantor’s jurisdiction of formation and will preserve, renew and keep in full force and effect such Guarantor’s existence and good standing and its rights and franchises with respect thereto in such jurisdiction of formation, and will not change its state or province of incorporation or organization without providing Seller with ten (10) days’ prior written notice;

3.4Such Guarantor shall obtain and preserve, renew and keep in full force and effect each such Guarantor’s authority to do business in all jurisdictions where such Guarantor now or hereafter does business, except to the extent failure to do so could not reasonably be expected to have a material adverse effect on such Guarantor;

3.5Except to the extent the failure to have such or do so could not reasonably be expected to have a material adverse effect on Guarantor, such Guarantor has all licenses, permits, consents or approvals from or by, and has made all filings with, and has given all notices to, all governmental authorities having jurisdiction over such Guarantor, to the extent required for the operation and conduct of its business, provided. such Guarantor makes no representation or warranty with respect to licenses, permits, consents, approvals or filings under federal cannabis laws;

3.6Such Guarantor will continue to engage in a business of the same type as such Guarantor is engaged as of the date hereof or reasonably related or incidental thereto;

3.7Such Guarantor’s books and records and principal executive office are maintained at the address referred to in Schedule 3.2 or as otherwise notified to Seller pursuant to this Guaranty.  Such Guarantor shall not change such location without complying with this Section.

4.SECURITY

Guarantor’s obligations under this Guaranty are secured by the Debt and Security Agreement.

5.SUBORDINATION OF GUARANTOR

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5.1Subordination of Claims. All existing and future indebtedness, liabilities, and obligations of Buyer, or any other Guarantor that is also indebted to Seller owing to a Guarantor, whether fixed or contingent, matured or unmatured, and liquidated or unliquidated (the “Subordinated Debt”) shall be subordinated in right of payment to the payment and performance of the Guaranteed Amount, the obligations of such other Guarantor owing to Seller. The subordination shall be irrevocable so long as the Debt and Security Agreement remains in effect or any Guaranteed Amount is outstanding.

5.2Payments. Guarantor agrees that:

(a)Guarantor will not accept any payments on any of the Subordinated Debt other than such Guarantor’s compensation as an officer of Seller so long as no Event of Default has occurred and is continuing under the Debt and Security Agreement.

(b)If any Guarantor receives any payment on the Subordinated Debt other than as permitted herein, such Guarantor shall promptly deliver the payment to Seller.

(c)If any Guarantor receives any payments, security interests, or other rights in any property of Seller in violation of the subordination, such payment or property shall be received by such Guarantor in trust for Seller and shall immediately be delivered and transferred to Seller.

5.3Attorney-in-Fact. Each Guarantor appoints Seller as such Guarantor’s attorney-in-fact to file claims, vote on any plan of reorganization and receive payments, on behalf of such Guarantor with respect to any of the Subordinated Debt in any case by or against Buyer under the United States Bankruptcy Code (including Chapters 7 or 11), any assignment for the benefit of creditors made by Buyer, or in any other reorganization or insolvency proceeding.

5.4Limitation on Actions. So long as any Guaranteed Amount remains unpaid, in whole or in part, or so long as the Debt and Security Agreement remains in effect with respect to a Guarantor, such Guarantor agrees: (i) not to sell, assign, transfer, pledge, or give a security interest in the Subordinated Debt (except subject expressly to this Guaranty and except for Permitted Liens); (ii) not to enforce or apply, or take any steps to enforce or apply, any security now or hereafter existing, for the Subordinated Debt; (iii) not to commence, prosecute or participate in any administrative, legal or equitable action against Buyer or in any administrative, legal or equitable action that might adversely affect Buyer; and (iv) not to join in any petition for bankruptcy, assignment for the benefit of creditors, or creditors’ agreement against Buyer.

5.5Conflict with Subordination Agreement. In the event Guarantor and Seller enter into a subordination agreement (a “Subordination Agreement”) and such Subordination Agreement contains terms and conditions with are inconsistent with the provisions contained in Paragraph 5 of this Guaranty, the terms of the Subordination Agreement shall control.

6.MISCELLANEOUS

6.1Binding on Successor and Assigns; Severability.  All terms, conditions, promises, covenants, provisions and warranties shall inure to the benefit of and bind Seller’s and Guarantor’s respective representatives, successors and assigns.  If any provision of this Guaranty shall be prohibited or invalid under applicable law, it shall be ineffective only to such extent, without invalidating the remainder of this Guaranty.

6.2Amendments; Assignments.  This Guaranty may not be modified, altered or amended, except in a writing signed by Guarantor and Seller, which requirement shall not be modified by oral agreement or by course of conduct.  Guarantor may not delegate any of its duties hereunder.

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6.3Integration.  This Guaranty, together with the Debt and Security Agreement and all other agreements entered into in connection therewith, and any sales agreement, purchase order, invoice or other document governing the sale of the Products to Buyer guaranteed hereunder, reflect the entire understanding of the parties with respect to the transactions contemplated hereby.

6.4Notices, Correspondence.  All notices, requests, demands and other communications under this Guaranty shall be in writing and shall be delivered by electronic mail, and may additionally be personally served, telecopied or sent by overnight courier service or United States mail and will be deemed to have been given: (i) if delivered in person, when delivered; (ii) if delivered by telecopy, on the date of transmission if transmitted on a business day before 4:00 p.m. Arizona time or, if not, on the next succeeding business day; (iii) if delivered by overnight courier, the following business day after depositing with such courier, properly addressed; (iv) if by U.S. Mail, four (4) business days after depositing in the United States mail, with postage prepaid and properly addressed; or (v) if by e-mail, confirmation of actual receipt of the recipient thereof, if transmitted on a business day before 4:00 p.m. Arizona time or, if not, on the next succeeding business day.  All notices, requests and demands are to be given or made to the respective parties at the addresses set forth below or at such other addresses as either party may designate in writing by notice in accordance with the provisions of this paragraph.

If to Seller:

Shenzhen Smoore Technology Limited

7201 E. Henkel Way, Unit 115

Scottsdale, AZ 85255

Attention: Eula Liu (刘淑杰), Legal Director; Cheney Xu (徐驰), Head of Legal and IP

Email: cheney.xu@smooretech.com; eula.liu@smooretech.com

If to Guarantor:

Tilt Holdings Inc.
2801 E. Camelback Road, Suite 180
Phoenix, Arizona 85016
Attention: Brad Hoch
Email: bhoch@tiltholdings.com

6.5Governing Law.  This Guaranty and all transactions hereunder are deemed to be consummated in the State of Arizona and shall be governed by and interpreted in accordance with the substantive and procedural laws of the State of Arizona (without regard to any choice of law rules).  If any part or provision of this Guaranty shall be determined to be invalid or in contravention of any applicable law or regulation of the controlling jurisdiction, such part or provision shall be severed without affecting the validity of any other part or provision of this Guaranty.

6.6Survival.  All warranties, representations, and covenants made by each of the Guarantor herein, or on any certificate, document or other instrument delivered by it or on its behalf under this Guaranty, shall be considered to have been relied upon by Seller, regardless of any investigation made by Seller or on its behalf.  All statements in any such certificate or other instrument prepared and/or delivered for the benefit of Seller shall constitute warranties and representations by each of the Guarantor hereunder.  Except as otherwise expressly provided herein, all covenants made by Guarantor hereunder or under any other Guaranty or instrument shall be deemed continuing until all Guaranteed Amounts are satisfied in full.

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6.7JURY WAIVER.  EACH GUARANTOR HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND ARISING OUT OF OR RELATING TO THIS GUARANTY.  EACH GUARANTOR HEREBY WAIVES ALL OF ITS RIGHTS OF SETOFF AND RIGHTS TO INTERPOSE ANY DEFENSES AND/OR COUNTERCLAIMS IN THE EVENT OF ANY LITIGATION WITH RESPECT TO ANY MATTER CONNECTED WITH THIS GUARANTY.  EACH GUARANTOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN THE COUNTY OF MARICOPA, IN THE STATE OF ARIZONA, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO THIS GUARANTY, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT.  EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM.

6.8THE PARTIES WAIVE ALL RIGHTS AND REMEDIES THAT THE PARTIES MAY HAVE OR BE ABLE TO ASSERT BY REASON OF THE LAWS OF THE STATE OF ARIZONA PERTAINING TO THE RIGHTS AND REMEDIES OF SURETIES, INCLUDING, WITHOUT LIMITATION, A.R.S. §§ 12-1641 THROUGH 12-1646, 47-3605, AND ARIZONA RULES OF CIVIL PROCEDURE 17(F).

6.9Service.  In any litigation brought by Seller, each of the Guarantor waives personal service of any summons, complaint or other process and agrees that service thereof may be made by certified or registered mail directed to such Guarantor at such Guarantor’s address set forth above, and service so made shall be complete two (2) days after the same shall have been posted.  Within twenty (20) days after such mailing, such Guarantor shall appear and answer such summons, complaint or other process, failing which such Guarantor shall be deemed in default and judgment may be entered by Seller against such Guarantor for the amount of the claim and for any other relief requested therein.

6.10Joint and Several Liability.  The obligations hereunder of the persons or entities constituting Guarantor under this Guaranty are joint and several.

6.11Counterparts; Electronic Execution.  This Guaranty may be executed in one or more counterparts, each of which taken together shall constitute one and the same instrument, admissible into evidence.  Delivery of a signature page to, or an executed counterpart of, this document by facsimile, email transmission of a scanned image, DocuSign, or other electronic means, shall be effective as delivery of an originally executed counterpart.  The words "execution," "signed," "signature," and words of like import in this document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity, or enforceability as a manually executed signature or the use of a paper-based record keeping system, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, Electronic Signatures in Global and National Commerce Act, any other similar state laws based on the Uniform Electronic Transactions Act or the Uniform Commercial Code, and the parties hereto hereby waive any objection to the contrary.

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IN WITNESS WHEREOF, each Guarantor has executed this Guaranty as of the date first above written.

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Schedule 3.2 to Guaranty

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Schedule 3.2 to Guaranty

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Schedule 3.2 to Guaranty

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Schedule 3.2 to Guaranty

Exhibit 10.3

TILT HOLDINGS, INC.

2801 E. Camelback Road, Suite 180

Phoenix, Arizona 85016

January 28, 2024

Shenzhen Smoore Technology Limited

7201 E Henkel Way, Unit 115

Scottsdale, AZ 85255

Attention: Eula Liu and Cheney Xu

Re:Guaranty (the “Guaranty”) dated as of January 28, 2024 by Tilt Holdings Inc. (“TILT”), Jimmy Jang, L.P. (“JJLP”), Baker Technologies, Inc. (“Baker”), Commonwealth Alternative Care, Inc. (“CAC”), Jimmy Jang Holdings Inc. (“JJH”), JJ Blocker Co. (“JJB”), SFNY Holdings, Inc. (“SFNY”), Sea Hunter Therapeutics, LLC (“SHT”), Standard Farms Ohio LLC (“SF Ohio”), Standard Farms LLC (“SF Penn”), SH Finance Company, LLC (“SF Finance”, together with TILT, JJLP, Baker, CAC, JJH, JJB, SFNY, SHT, SF Ohio and SF Penn, each a “Guarantor”, and collectively the, “Guarantors”) in favor of Shenzhen Smoore Technology Limited, and certain of its Affiliates collectively, the “Seller”). Guarantors and Seller may be referred to herein individually as a “Party” and all may be referred to collectively herein as the “Parties”.

Ladies and Gentlemen:

Reference is made to the above-referenced Guaranty. This side letter agreement sets forth additional conditions with respect to the terms under which each Guarantor is executing and delivering, and Seller is accepting, the Guaranty.

1.Defined Terms. Capitalized Terms used, but not defined in this letter have the meanings given or referenced in the Guaranty, or the Debt and Security Agreement, as applicable.

2.Payment of Invoices. Jupiter Research LLC (“Jupiter”) and TILT shall, at all times after April 15, 2024, cause to be paid in full all invoices outstanding or delivered by Seller to Jupiter or any Guarantor for products delivered on behalf of Jupiter (each, an “Invoice”) within 150 days of the date of each such Invoice. For the avoidance of doubt, any Invoices outstanding or delivered by Seller to Jupiter or a Guarantor after June 23, 2024 shall be due and payable by Jupiter and TILT within 120 days after the date of each such Invoice.

3.Conditions to Draws on Guaranty. The Parties have agreed that during the Transition Period (as defined below) Seller will not make a call or demand for payment or performance under the Guaranty or exercise its remedies under the Debt and Security Agreement notwithstanding that Seller may otherwise have the right to do so under the terms of those documents, so long as (i) by April 15, 2024 all Invoices outstanding more than 150 days from the date of such Invoice have been paid, and (ii) by June 23, 2024 all Invoices outstanding more than 120 days from the date of such Invoice have been paid.

The “Transition Period” will begin on the date of this letter and will end on the earliest to occur of:

(a)June 23, 2024;

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(b)the declaration of an Event of Default (after giving effect to any cure periods with respect thereto) by Entrepreneur Growth Capital LLC, a Delaware limited liability company, or by Jordan Geotas, in his capacity as Noteholder Representative (as such term is defined in the Subordination and Intercreditor Agreement) for the Noteholders (as such term is defined in the Subordination and Intercreditor Agreement);

(c)failure by Guarantor to make any payment required under the Repayment Plan described in Section 4, as and when required under Section 4;

(d)the occurrence of an Event of Default under the Debt and Security Agreement, or any other Transaction Document; and

(e)the failure by any Guarantor to perform any obligation of such Guarantor arising under this side letter agreement.

4.Defaults. For the purposes of  Paragraph 3 and Paragraph 5 of this side letter agreement, during the Transition Period the failure by a Guarantor to make a payment on any Invoice delivered by Secured Party to Jupiter or Tilt within (i) 150 days of the date of such invoice before April 15, 2024, or (ii) 120 days of the date of such invoice before June 23, 2024 will not constitute an Event of Default under the Debt and Security Agreement as long as Guarantors make such payments, including principal and applicable interest, as are required to reduce the aggregate balance of all unpaid Invoices  as set forth in Appendix 1 (the “Repayment Plan”).

5.Shipments by Seller. Seller will cause product orders to be fulfilled in a timely manner in accordance with the terms to be mutually agreed upon in writing between the parties hereto, contingent upon satisfaction of each of the following conditions:

(a)the Guaranty is in full force and effect;

(b)no Event of Default has occurred under the Transaction Documents;

(c)each Guarantor has made all payments under the Repayment Plan, as and when required under Section 4; and

(d)the Credit Line has not exceeded, at any time during each applicable period of time, (i) $31,000,000 from April 30, 2024 to June 29, 2024, (ii) $29,000,000 from June 30, 2024 to September 29, 2024, (iii) $27,000,000 from September 30, 2024 to December 30, 2024, and (iv) $25,000,000 from December 31, 2024 to the termination date (as set forth in Section 6 hereof) of this side letter agreement.

6.Termination. This side letter agreement will automatically terminate and be of no further force or effect upon the earlier of (a) the date on which all of the Transaction Documents have been terminated, or (b) the date on which the Parties have mutually agreed to terminate this side letter agreement.

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Signature Page to Side Letter Agreement

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Signature Page to Side Letter Agreement

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Signature Page to Side Letter Agreement

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Signature Page to Side Letter Agreement

Appendix 1

Repayment Plan

Guarantors and Jupiter shall repay the outstanding amounts owing from any Guarantor and Jupiter to Seller as follows:

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Exhibit 10.4

SUBORDINATION AND INTERCREDITOR AGREEMENT

This SUBORDINATION AND INTERCREDITOR AGREEMENT, dated as of January 28, 2024 (this “Agreement”), is entered into by and among ENTREPRENEUR GROWTH CAPITAL LLC, a Delaware limited liability company (“EGC” or “Working Capital Lender”), JORDAN GEOTAS, acting on behalf of himself, and on behalf of the Noteholders (as defined below) (in such capacity the “Noteholder Representative”, together with EGC, each individually an “Existing Creditor”, and collectively, the “Existing Creditors”), SHENZHEN SMOORE TECHNOLOGY LIMITED, a company organized and existing under the laws of Peoples’ Republic of China and any of its affiliates joined hereto (collectively, “Smoore”), and JUPITER RESEARCH, LLC, an Arizona limited liability company (“Jupiter”). Each of the Existing Creditors, Smoore and TILT may be referred to individually herein as a “Party” and collectively as the “Parties”.

WHEREAS, TILT Holdings Inc., a corporation formed under the laws of British Columbia (“TILT”), Jimmy Jang, L.P., a Delaware limited partnership (“JJLP”), Baker Technologies, Inc., a Delaware corporation (“Baker”), Commonwealth Alternative Care, Inc., a Massachusetts corporation (“CAC”), Jimmy Jang Holdings Inc., a British Columbia corporation (“JJH”), JJ Blocker Co., a Delaware corporation (“JJB”), SFNY Holdings, Inc., a Delaware corporation (“SFNY”), Sea Hunter Therapeutics, LLC, a Delaware limited liability company (“SEA”), Standard Farms Ohio LLC, an Ohio limited liability company (“SF Ohio”), Standard Farms LLC, a Pennsylvania limited liability company (“SF Penn”), SH Finance Company, LLC, a Delaware limited liability company (“SF Finance”), and Jupiter (collectively with TILT, JJLP, Baker, CAC, JJH, JJB, SFNY, SEA, SF Ohio, SF Penn, SF Finance, each individually an “Obligor”, and collectively, the “Obligors”) and Smoore are contemporaneously herewith entering into that certain Debt and Security Agreement, dated as of even date herewith (as amended, restated, modified, renewed, extended, or replaced from time to time, the “Debt and Security Agreement”);

WHEREAS, Working Capital Lender has made or may make loans from time to time to Jupiter and the payment of a portion of such loans are guaranteed by Tilt and to secure such guaranty, Tilt granted EGC a lien and security interest in its assets;

WHEREAS, the Noteholders have made and may make loans from time to time to Tilt which loans are secured by liens and security interest in the assets of Obligors; and

WHEREAS, each Existing Creditor and Smoore have agreed to enter into this Agreement to set forth their relative priorities of the liens and security interests granted by the Obligors to the Parties.

NOW, THEREFORE, in consideration of the mutual promises, covenants, conditions, representations, and warranties set forth herein and for other good and valuable consideration, the parties hereto agree as follows:

1.Defined Terms. As used in this Agreement (including the foregoing preamble and Recitals), the following terms shall have the meanings specified below:

“Account” or “Accounts” shall have the same meaning as contained in the UCC and shall also include contract rights and general intangibles related to Accounts, payment intangibles, instruments, and to all proceeds thereof including, but not limited to, credit card receivables, amounts payable from a credit card processor and the proceeds of any insurance thereon.

“Affiliate” shall mean, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the specified Person. For the purposes of this definition, “Control” shall mean the possession, directly or

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indirectly, of more than fifty percent (50%) of the voting equity interests and the right to exercise same. The terms “Controlling” and “Controlled” have meanings correlative thereto.

“Bankruptcy Code” means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded, or replaced from time to time.

“Business Day” means any day that is not a Saturday, Sunday, or other day on which commercial banks in Arizona or New York are authorized or required by law to remain closed.

“Collateral” means any and all property and interests in property that secures all or a portion of the Indebtedness.

“Collections Account” means a “deposit account” (as such term is defined in the UCC) in the name of Jupiter established pursuant to the Working Capital Loan Agreement under the “control” (as such term is defined in the UCC) of Working Capital Lender.

“Creditor” means any of Smoore and the Existing Creditors.

“Documents” means, collectively, the Working Capital Loan Documents, the Noteholder Documents and the Smoore Documents.

“Enforcement Action” means (a) to take from or for the account of any Obligor by setoff or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by any Obligor with respect to Indebtedness, (b) to sue any Obligor for payment of, or to initiate or participate with others in any suit, action or proceeding against any Obligor to (i) enforce payment or performance of or to collect the whole or any part of any of the Indebtedness or (ii) commence judicial enforcement against any Obligor of any of the rights and remedies under the applicable Documents or applicable law with respect to the applicable Indebtedness, including, without limitation, the commencement of (or joining in) a Proceeding, (c) to exercise any put option to any Obligor or to cause any Obligor to honor any redemption or mandatory prepayment obligation under any Document, (d) to notify account debtors or directly collect Accounts in respect of any of the Indebtedness, (e) to take any action under the provisions of any state or federal law, including, without limitation, the UCC, or under any contract or agreement, to enforce, foreclose upon, take possession of or sell any Collateral, or (f) to exercise in any other manner any remedies (including enforcing any security interest) against any Obligor with respect to any of the Indebtedness set forth in any applicable Document or that otherwise might be available at law, in equity, pursuant to judicial proceeding or otherwise in respect of the applicable Indebtedness; provided, however, that the term Enforcement Action shall not include (w) any suit or action initiated or maintained by a Creditor within thirty (30) days of the expiration of, and solely to the extent such suit or action is necessary to prevent the expiration of, any applicable statute of limitations or similar permanent restriction on claims (provided that no payment on the applicable Indebtedness or money damages are received or retained in connection therewith), (x) upon the occurrence and during the continuation of an event of default with respect to any Indebtedness, accruing any increased interest with respect to such Indebtedness as a result of such event of default, or (y) the filing of any notice in a Proceeding not in violation of this Agreement.

“Existing Intercreditor Agreement” means that certain Amended and Restated Subordination and Intercreditor Agreement, dated as of March 13, 2023, by and among TILT, Jupiter, EGC, and the Noteholder Representative (as may be amended, restated, amended and restated, or otherwise modified from time to time).

“Indebtedness” means, collectively, the Working Capital Indebtedness, the Note Indebtedness and the Smoore Indebtedness.

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“Inventory” shall have the meaning given to such term in the UCC and shall also include all of each Person’s now owned and hereafter acquired goods, merchandise or other personal property, wherever located, to be furnished under any contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Person’s business or used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise or other personal property, and all documents of title or other documents representing any of the above, and such Person’s books relating to any of the foregoing.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, option, levy, execution, attachment, garnishment, hypothecation, assignment for security, deposit arrangement, encumbrance, charge, security interest, or other preferential arrangement in the nature of a security interest of any kind or nature whatsoever, on or of such asset, and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease, or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Note Agreement” means the Secured Note Purchase Agreement dated as of November 1, 2019, among Jupiter, affiliates of Jupiter, Noteholder Representative and the Noteholders, as amended, restated, supplemented, or otherwise modified from time to time,

“Noteholders” means, collectively, the Persons identified as the Purchasers under the Secured Note Purchase Agreement (each individually, a “Noteholder”).

“Noteholder Documents” means the Note Agreement and all other documents and instruments evidencing, securing or pertaining to any portion of the Note Indebtedness, as amended, restated, supplemented, or otherwise modified from time to time.

“Noteholder Indebtedness” means the Obligations (as defined in the Note Agreement) and other obligations and liabilities now or hereafter owed to any of the Noteholders pursuant to the Note Documents, whether before or after the commencement of a Proceeding and without regard to whether or not an allowed claim, and all obligations and liabilities incurred with respect to Permitted Refinancings, together with any amendments, restatements, modifications, renewals, increases or extensions of any thereof permitted hereunder.

“Paid in Full” or “Payment in Full” means as respects the applicable Indebtedness, the payment in full in cash of such Indebtedness other than inchoate obligations for which no claim has been made and the termination of all obligations on the part of any Creditor to advance funds with respect thereto.

“Permitted Refinancing” means any refinancing of the applicable Indebtedness pursuant to Permitted Refinancing Loan Documents.

“Permitted Refinancing Loan Documents” means, with respect to any Indebtedness, any financing documentation which replaces the documentation relating to such Indebtedness, and pursuant to which such Indebtedness is refinanced (in each case in accordance with then applicable Documents or Permitted Refinancing Loan Documents, as the case may be), as such financing documentation may be amended, restated, supplemented, or otherwise modified from time to time.

“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association or joint venture.

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“Proceeding” means any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization, assignment for the benefit of creditors or other proceeding for the liquidation, dissolution or other winding up of TILT, Jimmy Jang, Jupiter, or any of their respective subsidiaries or any of their respective properties.

“Smoore Collateral” means all Collateral other than Working Capital Collateral.

“Smoore Default Notice” means a notice of default or event of default under the Smoore Documents, such notice to be sent in accordance with Section 16 hereof to each of the Parties hereto.

“Smoore Documents” means the Smoore Guaranty, Debt and Security Agreement and all other documents and instruments evidencing, securing or pertaining to any portion of the Smoore Indebtedness, as amended, restated, supplemented, or otherwise modified from time to time as permitted hereunder.

“Smoore Guaranty” means that certain Guaranty dated as of the date hereof, by TILT, JJLP, Baker, CAC, JJH, JJB, SFNY, SEA, Standard Farms, SF Ohio, SF Penn, and SF Finance, in favor of Smoore.

“Smoore Indebtedness” means the Secured Obligations, as defined under the Debt and Security Agreement.

“Supporting Obligation” shall have the meaning given to such term in the UCC.

“UCC” means Article 1 or Article 9 of the Uniform Commercial Code in effect from time to time in the State of California.

“Working Capital Collateral” means the following property of Jupiter, in each case, whether now owned or existing or hereafter created, acquired or arising and wherever located: (a) Jupiter’s Accounts; (b) Jupiter’s Inventory, merchandise, materials, whether raw, work in progress or finished goods, packaging and shipping materials and all other tangible property held for sale or lease; (c) Proceeds of any of the foregoing, including Cash Proceeds and other non-cash Proceeds, and proceeds of any insurance policies covering any of the of the foregoing; (d) the Collections Account, (e) Jupiter’s records, to the extent related to any of the foregoing, including all books, records and other property at any time evidencing or relating to any of the foregoing, and all electronic means of storing such records; (f) to the extent not otherwise included above, all collateral support and Supporting Obligations relating to any of the foregoing; and (g) to the extent not otherwise included above, all products and accessions of or in respect of any of the foregoing.

“Working Capital Default Notice” means a notice of default or event of default under the Working Capital Loan Documents, such notice to be sent in accordance with Section 21 hereof to each of the parties hereto.

“Working Capital Indebtedness” means the Obligations (as defined in the Working Capital Loan Agreement) in an aggregate principal amount not to exceed $16,500,000 and all other amounts and other obligations and liabilities now or hereafter owed by Jupiter to Working Capital Lender pursuant to the Working Capital Loan Documents, whether before or after the commencement of a Proceeding and without regard to whether or not an allowed claim, and all obligations and liabilities incurred with respect to Permitted Refinancings, together with any amendments, restatements, modifications, renewals, increases or extensions of any thereof permitted hereunder.

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“Working Capital Loan Agreement” means that Loan and Security Agreement dated July 21, 2021, among Jupiter, Tilt and Working Capital Lender (as amended, restated, supplemented, or otherwise modified from time to time, including, without limitation, by that Joinder and First Amendment to Loan and Security Agreement dated March 13, 2023).

“Working Capital Loan Documents” means the Working Capital Loan Agreement and all other documents and instruments evidencing, securing or pertaining to any portion of the Working Capital Indebtedness, as amended, restated, supplemented, or otherwise modified from time to time as permitted hereunder.  Notwithstanding the foregoing, the Working Capital Loan Documents shall not include the TILT Security Agreement.

2.Consents. Each Existing Creditor hereby acknowledges and consents to the Liens and encumbrances contemplated under the Smoore Documents and the creation and existence of the Smoore Indebtedness, notwithstanding any restriction on Liens, security interests and other encumbrances (i.e. any negative pledge) with respect to the Collateral or the creation or existence of Indebtedness which may be contained in the Noteholder Documents or the Working Capital Loan Documents.

3.Subordination of Existing Creditor Liens in Smoore Collateral. Regardless of the time, manner, or order of perfection and notwithstanding any provision of the UCC or any other applicable law or the Documents or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing the indebtedness of any Obligor owing to any Existing Creditor or Smoore, the subordination of such Liens to any other Liens, or any other circumstance whatsoever, whether or not any Proceeding has been commenced by or against any Obligor, each Existing Creditor hereby agrees that any Lien on the Smoore Collateral now or hereafter held by or on behalf of an Existing Creditor, or any agent or trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Smoore Collateral securing the Smoore Indebtedness. Each Existing Creditor (i) shall promptly execute and/or deliver to Smoore such UCC financing statement amendments or other documents as Smoore shall reasonably request to evidence or give notice of the priority of Smoore’s Liens in the Smoore Collateral and (ii) shall be deemed to have authorized Smoore to file any and all UCC financing statement amendments to evidence or give notice of the priority of Smoore’s Liens in the Smoore Collateral required by Smoore in respect of such Liens. In furtherance of the foregoing, each Existing Creditor hereby irrevocably appoints Smoore its attorney-in-fact, with full authority in the place and stead of such Existing Creditor and in the name of such Existing Creditor or otherwise, to execute and deliver any document or instrument which such Existing Creditor may be required to deliver pursuant to this Section 3.

4.Subordination of Smoore Liens in Working Capital Collateral.  Regardless of the time, manner, or order of perfection and notwithstanding any provision of the UCC, or any other applicable law or the Documents or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing the Indebtedness, the subordination of such Liens to any other Liens, or any other circumstance whatsoever, whether or not any Proceeding has been commenced by or against Jupiter, Smoore hereby agrees that any Lien on the Working Capital Collateral now or hereafter held by or on behalf of Smoore, or any agent or trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Working Capital Collateral securing any Working Capital Indebtedness. All Liens on the Working Capital Collateral securing any Working Capital Indebtedness shall be and remain senior in all respects and prior to all Liens on the Working Capital Collateral securing any other Indebtedness for all purposes.  Smoore (i) shall promptly execute and/or deliver to EGC such UCC financing statement amendments or other documents as EGC shall reasonably request to evidence or give notice of the priority of EGC’s Liens in the Working Capital Collateral and (ii) shall be deemed to have

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authorized Working Capital Lender to file any and all UCC financing statement amendments to evidence or give notice of the priority of EGC’s Liens in the Working Capital Collateral required by EGC in respect of such Liens. In furtherance of the foregoing, Smoore hereby irrevocably appoints EGC its attorney-in-fact, with full authority in the place and stead of such Smoore and in the name of Smoore or otherwise, to execute and deliver any document or instrument which Smoore may be required to deliver pursuant to this Section 4.

5.Proceedings and Enforcement Actions.

(a)From and after delivery to an Existing Creditor of a Smoore Default Notice (but only so long as the Event of Default giving rise to such Smoore Default Notice has not been waived or cured), any payment (whether made in cash, securities or other property) received by such Existing Creditor which, but for the terms hereof, otherwise would be payable or deliverable out of, from the proceeds of, in lieu of, or in respect of the Smoore Collateral, shall be paid or delivered directly to Smoore (to be held and/or applied by Smoore to the repayment of any and all then outstanding Smoore Indebtedness in accordance with the terms of the Smoore Documents until all Smoore Indebtedness is Paid in Full), and each Existing Creditor irrevocably authorizes, empowers and directs all debtors, debtors-in–possession, receivers, trustees, liquidators, custodians, conservators and others having authority in the premises to effect all such payments and deliveries, and, subject to the provisions hereof, each Existing Creditor also irrevocably authorizes, empowers and directs Smoore to demand, sue for, collect and receive every such payment or distribution.

(b)From and after delivery to Smoore of a Working Capital Default Notice (but only so long as the Event of Default giving rise to such Working Capital Default Notice has not been waived or cured) any payment (whether made in cash, securities or other property) received by Smoore which, but for the terms hereof, otherwise would be payable or deliverable out of, from the proceeds of, in lieu of, or in respect of the Working Capital Collateral, shall be paid or delivered directly to EGC (to be held and/or applied by EGC to the repayment of any and all then outstanding Working Capital Indebtedness in accordance with the terms of the Working Capital Loan Documents until all Working Capital Indebtedness is Paid in Full), and Smoore irrevocably authorizes, empowers and directs all debtors, debtors-in–possession, receivers, trustees, liquidators, custodians, conservators and others having authority in the premises to effect all such payments and deliveries, and, subject to the provisions hereof, Smoore also irrevocably authorizes, empowers and directs EGC to demand, sue for, collect and receive every such payment or distribution.

(c)Each Existing Creditor agrees to execute and deliver to each other Creditor or its representative all such further instruments confirming the authorization referred to in the foregoing clause (a).

(d)Smoore agrees to execute and deliver to each other Creditor or its representative all such further instruments confirming the authorization referred to in the foregoing clause (b).

(e)In the event of a Proceeding, the provisions of this Agreement shall continue to govern the relative rights and priorities of Creditors even if all or part of the Liens securing the Indebtedness are subordinated, set aside, avoided or disallowed in connection with any such Proceeding.

(f)Except as expressly set forth in this Agreement, no Creditor shall be deemed to have waived or relinquished any rights that it may have with respect to any claims or otherwise in connection with any Proceeding. For purposes of clarification, each Creditor retains its rights, to the extent such Creditor’s actions are at all times consistent with and in compliance with this Agreement, to otherwise act in any Proceeding in its capacity as a holder of Indebtedness to the fullest extent provided by law.

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(g)Until the Debt and Security Agreement and the Smoore Guaranty have been terminated in accordance with their terms with respect to an Obligor, no Existing Creditor shall, without the prior written consent of Smoore, take any Enforcement Action with respect to that Obligor’s right, title and interest in the Smoore Collateral and Smoore shall have the exclusive right to commence and maintain any such Enforcement Action or otherwise enforce rights, exercise remedies (including set off, recoupment and the right to credit bid their debt) and to make determinations regarding the release, disposition, or restrictions with respect to such Smoore Collateral. In commencing or maintaining any Enforcement Action or otherwise exercising rights and remedies with respect to such Smoore Collateral, Smoore may enforce the provisions of the Smoore Documents and exercise remedies thereunder, all in such order and in such manner as it may determine in the exercise of its sole discretion in compliance with any applicable law and without consultation with any other Creditor and regardless of whether any such exercise is adverse to the interest of any other Creditor. Such exercise and enforcement shall include the rights of an agent appointed by Smoore to sell or otherwise dispose of such Smoore Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the laws of any applicable jurisdiction. Additionally, and for the avoidance of doubt, until the Debt and Security Agreement and the Smoore Guaranty have been terminated in accordance with their terms with respect to an Obligor, each Existing Creditor hereby covenants and agrees that it shall not:

(1)take any action adverse to the priority status of the Liens on the Smoore Collateral securing the Smoore Indebtedness or the rights of Smoore as provided herein;

(2)make any filings (other than statements of interest) or file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading in any Proceeding, in each case, which are inconsistent with the provisions of this Agreement;

(3)vote on any plan of reorganization, arrangement, compromise or liquidation, make other filings, make any arguments and motions, in each case, which are inconsistent with the provisions of this Agreement;

(4)credit bid for the Smoore Collateral at any public, private or judicial foreclosure upon the Smoore Collateral initiated by Smoore, or any sale of the Smoore Collateral during a Proceeding; or bid for or purchase the Smoore Collateral at any public, private or judicial foreclosure upon the Smoore Collateral initiated by Smoore, or any sale of the Smoore Collateral during a Proceeding where such bid or purchase would not result in Payment in Full of the Smoore Indebtedness; and

(5)have (and hereby agrees to waive) any and all rights it may have as a junior lien creditor (including junior lien rights to assert any marshaling, appraisal, valuation or other similar right) or otherwise to object to the manner in which Smoore seeks to enforce or collect the Smoore Indebtedness, regardless of whether any action or failure to act by or on behalf of Smoore is adverse to the interest of any Existing Creditor, provided nothing herein will prevent any such Existing Creditor from seeking adequate protection payments in any Proceeding to the extent Smoore is also being offered adequate protection payments.

(h)Until the Working Capital Loan Documents have been terminated in accordance with their terms, Smoore shall not, without the prior written consent of EGC, take any Enforcement Action with respect the Working Capital Collateral and EGC shall have the exclusive right to commence and maintain any such Enforcement Action or otherwise enforce rights, exercise remedies (including set off, recoupment and the right to credit bid their debt) and to make determinations regarding the release, disposition, or restrictions with respect to such Working Capital Collateral. In commencing or maintaining any Enforcement Action or otherwise exercising rights and remedies with respect to such Working Capital

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Collateral, EGC may enforce the provisions of the Working Capital Loan Documents and exercise remedies thereunder, all in such order and in such manner as it may determine in the exercise of its sole discretion in compliance with any applicable law and without consultation with any other Creditor and regardless of whether any such exercise is adverse to the interest of any other Creditor. Such exercise and enforcement shall include the rights of an agent appointed by EGC to sell or otherwise dispose of such Working Capital Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under the laws of any applicable jurisdiction. Additionally, and for the avoidance of doubt, until the Working Capital Loan Documents have been terminated in accordance with their terms with respect to an Obligor, Smoore hereby covenants and agrees that it shall not:

(1)take any action adverse to the priority status of the Liens on the Working Capital Collateral securing the Working Capital Indebtedness or the rights of EGC as provided herein;

(2)make any filings (other than statements of interest) or file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading in any Proceeding, in each case, which are inconsistent with the provisions of this Agreement;

(3)vote on any plan of reorganization, arrangement, compromise or liquidation, make other filings, make any arguments and motions, in each case, which are inconsistent with the provisions of this Agreement;

(4)credit bid for the Working Capital Collateral at any public, private or judicial foreclosure upon the Working Capital Collateral initiated by EGC, or any sale of the Working Capital Collateral during a Proceeding; or bid for or purchase the Working Capital Collateral at any public, private or judicial foreclosure upon the Working Capital Collateral initiated by EGC, or any sale of the Working Capital Collateral during a Proceeding where such bid or purchase would not result in Payment in Full of the Working Capital Indebtedness; and

(5)have (and hereby agrees to waive) any and all rights it may have as a junior lien creditor (including junior lien rights to assert any marshaling, appraisal, valuation or other similar right) or otherwise to object to the manner in which EGC seeks to enforce or collect the Working Capital Indebtedness, regardless of whether any action or failure to act by or on behalf of EGC is adverse to the interest of Smoore, provided nothing herein will prevent Smoore from seeking adequate protection payments in any Proceeding to the extent EGC is also being offered adequate protection payments.

(i)Each Creditor acknowledges and agrees that:

(1)the grants of Liens pursuant to the Documents constitute separate and distinct grants of Liens; and

(2)because of, among other things, their differing rights in the assets of Obligors, the Smoore Indebtedness, the Working Capital Indebtedness and the Noteholder Indebtedness each are fundamentally different and must be separately classified in any plan of reorganization proposed or adopted in any Proceeding.

(j)The Parties hereto acknowledge that this Agreement is a “subordination agreement” under section 510(a) of the Bankruptcy Code, which will be effective before, during and after the commencement of any Proceeding. All references in this Agreement to any Obligor will include such Person as a debtor-in-possession and any receiver or trustee for such Person in a Proceeding.

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6.Reserved.

7.Incorrect Payments. If any payment (whether made in cash, securities or other property) not expressly permitted under this Agreement is received by any Existing Creditor on account of Indebtedness before such Existing Creditor is entitled to such payment under the terms of this Agreement, such payment shall be held in trust by such Existing Creditor first for the benefit of Smoore and then the other Creditors and shall immediately be paid over first to Smoore and then the applicable Creditor, or its designated representative, for application to the payment of the applicable Indebtedness in accordance with the terms of this Agreement. If any payment (whether made in cash, securities or other property) not expressly permitted under this Agreement is received by Smoore on account of Indebtedness before Smoore is entitled to such payment under the terms of this Agreement, such payment shall be held in trust by Smoore first for the benefit of EGC and then the other Creditors and shall immediately be paid over first to EGC and then the applicable Creditor, or its designated representative, for application to the payment of the applicable Indebtedness in accordance with the terms of this Agreement.

8.Conflict. In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any of the Documents, the provisions of this Agreement shall control and govern.

9.Sale, Transfer. No Creditor shall sell, assign, dispose of or otherwise transfer all or any portion of its rights and obligations in respect of the Working Capital Indebtedness or the Noteholder Indebtedness unless, prior to the consummation of any such action, any such transferee or assignee, as a condition to acquiring an interest in the Working Capital Indebtedness or the Noteholder Indebtedness shall agree to be bound hereby, in form satisfactory to Smoore. Notwithstanding the failure to satisfy the foregoing conditions, such transfer shall be valid, and the subordination effected hereby shall survive any sale, assignment, disposition or other transfer of all or any portion of any Working Capital Indebtedness or the Noteholder Indebtedness, and the terms of this Agreement shall be binding upon the successors and assigns of each Creditor. Smoore shall not sell, assign, dispose of or otherwise transfer all or any portion of its rights and obligations in respect of the Smoore Indebtedness unless, prior to the consummation of any such action, (a) such Creditor receives the prior written consent of EGC to such action, and (b) any such transferee or assignee, as a condition to acquiring an interest in the Smoore Indebtedness shall agree to be bound hereby, in form satisfactory to EGC. Notwithstanding the failure to satisfy the foregoing conditions, such transfer shall be valid, and the subordination effected hereby shall survive any sale, assignment, disposition or other transfer of all or any portion of any Smoore Indebtedness, and the terms of this Agreement shall be binding upon the successors and assigns of each Creditor. Each Creditor, upon the request of another Creditor and at the expense of Obligors, shall reasonably cooperate and promptly execute and deliver such further documents and do such further acts and things as such Creditor may reasonably request in order to affect fully the purposes of this Section.

10.Collateral in Existing Creditor’s Possession or Control. Each Existing Creditor possessing or controlling Collateral hereby agrees and acknowledges that such Existing Creditor does so subject to the terms of this Agreement.

11.Relationship with Existing Intercreditor Agreements. Each Existing Creditor hereby acknowledges and consents to (a) Smoore entering into and performing its obligations under this Agreement, and (b) the Lien priorities and any rights granted to Smoore hereunder, notwithstanding any restriction or contrary provisions that may be contained in the documents evidencing the Working Capital Indebtedness or the Noteholder Indebtedness. Notwithstanding the foregoing, nothing herein shall amend or modify any provision of the Existing Intercreditor Agreements or any documents evidencing the Working Capital Indebtedness or the Noteholder Indebtedness, and Smoore and Existing Creditors acknowledge and agree that the relative priorities of the Existing Creditors’ Liens, encumbrances and claims

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in and to the Collateral, as such exist among the Existing Creditors, will be set forth in the Existing Intercreditor Agreements.

12.Reserved.

13.Continued Effectiveness of this Agreement; Modifications.

(a)The terms of this Agreement, the subordination effected hereby, and the rights and the obligations of Smoore and the Existing Creditors arising hereunder, shall not be affected, modified or impaired in any manner or to any extent by: (i) any amendment or modification of or supplement to the Documents (including any increase in the amount thereof or any Permitted Refinancing); (ii) the validity or enforceability of any of such documents; (iii) any exercise or non- exercise of any right, power or remedy under or in respect of the applicable Indebtedness or any of the instruments or documents referred to in clause (i) above; or (iv) the commencement of any Proceeding in respect of any Obligor.

(b)Except as expressly provided in Section 5, each Creditor may at any time and from time to time without the consent of or notice to any other Creditor, without incurring liability to any other Creditor and without impairing or releasing the obligations of any other Creditor under this Agreement, change the manner or place of payment or extend the time of payment of or renew or alter any Indebtedness, or amend, restate, supplement, or otherwise modify in any manner any Document.

(c)Each Creditor waives any and all rights it may have to require any other Creditor to marshal assets, to exercise rights or remedies in a particular manner, or to forbear from exercising such rights and remedies in any particular manner or order. Each Creditor hereby waives all notice of the acceptance by the other Creditors of the subordination and other provisions of this Agreement, and each Creditor expressly consents to reliance by each other Creditor upon the subordination and other agreements as herein provided.

14.Representations and Warranties. Each Existing Creditor and Smoore hereby represents and warrants to the each of the other Creditors as follows (in each case solely with respect to, or as relevant to, itself or himself, as applicable):

(a)Existence and Power. To the extent such Person is not a natural person, such Person is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable.

(b)Authority. To the extent such Person is not a natural person, such Person has the power and authority to execute, deliver and perform its obligations under this Agreement, all of which have been duly authorized by all proper and necessary action required by such Person.

(c)Binding Agreements. This Agreement constitutes the legal valid and binding obligation of such Person, enforceable against the Existing Creditors and Smoore, as the case may be, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally and by equitable principles.

(d)Conflicting Agreements. The execution, delivery and performance of this Agreement by such Person does not (a) to the extent such Person is not a natural person, contravene the terms of such Person’s organization documents, (b) conflict with or result in any material breach or contravention of, or result in the creation of any lien under, any material contract or agreement to which such Person is a party or to which such Person’s property is subject or any order, injunction, writ or decree

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of any governmental authority to which such Person or such Person’s property is subject or (c) violate any law, rule or regulation binding upon such Person or such Person’s property.

(e)Default under Documents. To the best of each Party’s knowledge, and except as set forth in Schedule 14(e), on the date hereof, no default exists under or with respect to Noteholder Indebtedness, the Working Capital Indebtedness or the Smoore Indebtedness, as the case may be.

15.Noteholder Representative. The Creditors shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication delivered by Noteholder Representative on behalf of any Noteholder.  Any Creditor may give any notice or communication with a Noteholder hereunder to Noteholder Representative on behalf of such Noteholder.  Any Creditor shall deal exclusively with Noteholder Representative for any or all purposes under this Agreement or the Documents.  Each Noteholder has agreed pursuant to the Secured Note Purchase Agreement that any notice, election, communication, representation, agreement or undertaking made on its behalf by Noteholder Representative shall be binding upon and enforceable against it.

16.No Third-Party Beneficiaries. The provisions of this Agreement are solely for the purpose of defining the relative rights of Smoore and the Existing Creditors and shall not be deemed to create any rights or priorities in favor of any other Person, including, without limitation, any Obligor.

17.Default Notices. Each Creditor and each of the Obligors shall provide the other Creditors, upon the occurrence of each, notice of a default from any Creditor to any of the Obligors.

18.Additional Documents and Actions. Each Party hereto at any time, and from time to time, after the execution and delivery of this Agreement, upon the request of any other Party hereto and at the expense of Obligors, promptly will execute and deliver such further documents and do such further acts and things as such other Party may reasonably request in order to affect fully the purposes of this Agreement.

19.Cumulative Rights, No Waivers. Each and every right, remedy and power granted to any Creditor hereunder shall be cumulative and in addition to any other right, remedy or power specifically granted herein, in the Documents to such Creditor now or hereafter existing in equity, at law, by virtue of statute or otherwise, and may be exercised by each Creditor, subject to the terms of this Agreement, from time to time, concurrently or independently and as often and in such order as such Creditor may deem expedient. Any failure or delay on the part of any Creditor in exercising any such right, remedy or power, or abandonment or discontinuance of steps to enforce the same, shall not operate as a waiver thereof or affect any other Creditors’ right thereafter to exercise the same, and any single or partial exercise of any such right, remedy or power shall not preclude any other or further exercise thereof or the exercise of any other right, remedy or power, and no such failure, delay, abandonment or single or partial exercise of such other Creditors’ rights hereunder shall be deemed to establish a custom or course of dealing or performance among the Parties hereto.

20.Termination. This Agreement shall terminate with respect to any Obligor and its right title and interest in any Collateral, upon the earlier of (a) the Debt and Security Agreement and the Guaranty having been terminated in accordance with their terms, or (b) the payment in full in cash of the Noteholder Indebtedness and the Working Capital Indebtedness and the full termination and release of the documents evidencing the Working Capital Indebtedness and the Noteholder Indebtedness; provided, however, this Agreement shall be reinstated if at any time any payment of any of the Smoore Indebtedness, the Working Capital Indebtedness or the Noteholder Indebtedness is rescinded or must otherwise be returned by any holder of the Smoore Indebtedness, the Working Capital Indebtedness or the Noteholder Indebtedness, or

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portion thereof, intended to have been satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred.

21.Notices. All notices and communications under this Agreement shall be in writing and shall be delivered by electronic mail, and, may additionally be (i) delivered in person, (ii) mailed, postage prepaid, either by registered or certified mail, return receipt requested, (iii) delivered by overnight express courier, or (iv) sent by telecopy (with such telecopy to be confirmed promptly in writing sent in accordance with (i), (ii) or (iii) above), addressed in each case to the address set forth under each such Party’s signature, to any other address, as to any of the Parties hereto, as such Party shall designate in a written notice to the other Parties hereto. All notices sent pursuant to the terms of this Section shall be deemed received (i) if personally delivered, then on the Business Day of delivery, (ii) if sent by overnight, express carrier, on the next Business Day immediately following the day sent, (iii) if sent by registered or certified mail, on the earlier of the third Business Day following the day sent or when actually received, (iv) if delivered by telecopy, on the date of transmission if transmitted on a Business Day before 4:00 p.m. New York time, otherwise on the next Business Day, or (v) if by e-mail, confirmation of actual receipt of the recipient thereof, if transmitted on a business day before 4:00 p.m. New York time or, otherwise on the next Business Day.

22.Amendments; Etc. No waiver of any provision of this Agreement, and no consent to any departure by Smoore or any Existing Creditor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Party against whom the waiver or consent is sought to be enforced, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by Smoore and each Existing Creditor. Any notice to or demand on Smoore, or any Existing Creditor in any event not specifically required hereunder shall not entitle Smoore or any Existing Creditor to any other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.

23.Successors and Assigns. This Agreement shall inure to the benefit of the successors and permitted assigns of Smoore and the Existing Creditors, and shall be binding upon the successors and permitted assigns of the Obligors, Smoore, and the Existing Creditors.

24.Counterparts. This Agreement may be executed in counterparts (and by different Parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “signed,” “signature,” and words of like import in this Agreement shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

25.Severability. The illegality or unenforceability of any provision of this Agreement or any instrument or agreement required hereunder shall not in any way affect or impair the legality or enforceability of the remaining provisions of this Agreement.

26.Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

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27.Governing Law. THE VALIDITY OF THIS AGREEMENT AND THE OTHER SMOORE DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER SMOORE DOCUMENT IN RESPECT OF SUCH OTHER SMOORE DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD FOR PRINCIPLES OF CONFLICTS OF LAWS.

28.Jurisdiction and Venue. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER SMOORE DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, IN THE STATE OF NEW YORK, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY SMOORE COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT SMOORE’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SMOORE ELECTS TO BRING SUCH ACTION OR WHERE SUCH SMOORE COLLATERAL OR OTHER PROPERTY MAY BE FOUND AND THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY WORKING CAPITAL COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT EGC’S OPTION IN THE COURTS OF ANY JURISDICTION WHERE EGC ELECTS TO BRING SUCH ACTION OR WHERE SUCH WORKING CAPITAL COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH OBLIGOR, EXISTING CREDITOR, AND SMOORE WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 27.

29.WAIVER OF JURY TRIAL. EACH OBLIGOR, EXISTING CREDITOR, AND SMOORE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE SMOORE DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH OBLIGOR, EXISTING CREDITOR, AND SMOORE REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, each of the Parties hereto has duly executed and delivered this Agreement, or caused this Agreement to be duly executed and delivered by its officer or officers thereunto duly authorized, as of the date first above written:

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Signature Page - Subordination and Intercreditor Agreement

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Signature Page - Subordination and Intercreditor Agreement

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Signature Page - Subordination and Intercreditor Agreement