Exhibit 10.6 


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT
AGREEMENT (this “Agreement”) is made and entered into as of February 23, 2021, effective as of February
23. 2021 (the “Effective Time”), by and between SmartKem Inc., a Delaware corporation (the “Company”),
and Ian Jenks (“Executive”).


 


W I T N E S S E T H:


 


WHEREAS, the
Company and Executive desire for Executive to serve as the Chief Executive Officer and President of the Company, in accordance
with the terms and conditions of this Agreement, effective as of the Effective Time; and


 


NOW, THEREFORE,
in consideration of the foregoing and of the mutual covenants and obligations hereinafter set forth, and for good and valuable
consideration the receipt of which is hereby acknowledged by the parties hereto, and to provide the inducements set forth above,
the parties hereto, intending to be legally bound, hereby agree as follows:


 


1.            Employment. The Company hereby offers Executive employment in accordance with the terms and conditions set forth
herein, and Executive hereby accepts such continued employment, in each case on the date hereof. Such continued employment shall
commence immediately as of the Effective Time, without further notice, upon the terms and conditions set forth herein.


 


2.            Position and Duties. 


 


2.1           Position. During the Term (as defined below), Executive will be employed on a full-time basis as Chief Executive
Officer and President of the Company and shall have the duties and responsibilities assigned by the Company from time to time consistent
with that position. Executive shall perform faithfully and diligently all duties assigned to Executive by the Board of Directors
of the Company (the “Board”). The Company reserves the right to modify Executive’s position and duties
at any time in its sole and absolute discretion; provided, that the duties assigned to Executive are consistent with the
position of an executive.


 


2.2           Best Efforts/Full-time. Executive shall expend Executive’s best efforts on behalf of the Company, and shall
abide by all policies of the Company applicable to Executive and all decisions made by the Company. Executive shall act in the
best interest of the Company at all times. Executive shall devote Executive’s full business time and efforts to the performance
of Executive’s assigned duties for the Company and SmartKem Limited, the sole stockholder of the Company (“SmartKem”);
provided, that nothing herein shall preclude Executive (a) from managing Executive’s and his family’s personal
affairs, (b) (i) from serving on the boards of directors of other for-profit companies that Executive is serving on the board
of as the Effective Date and such arrangements have been previously disclosed to the Board, or (ii) from engaging in charitable
activities, including serving on the boards of directors of non-profit organizations that such Executive is engaging in or serving
on the boards of as of the Effective Date and such arrangements have been previously disclosed to the Board or (c) subject to prior
approval by the Board, which may be given or withheld in its sole discretion, (i) from serving on the boards of directors
of other for-profit companies, or (ii) from engaging in charitable activities, including serving on the boards of directors
of non-profit organizations, as long as such activities in clauses (a), (b) and (c) individually or in the aggregate do not interfere
or conflict with Executive’s duties hereunder or create a potential business or fiduciary conflict (in each case, as determined
by the Company).


 






    	 	 	 



     


    

 


2.3           Other Positions. If requested by the Company, Executive shall serve as a director, manager or officer of the Company
or any Affiliate (as defined below) of the Company for no additional compensation. For purposes of this Agreement, (i) “Affiliate”
means, with respect to any Person (as defined below), any other Person directly or indirectly controlling, controlled by or under
common control with such specified Person, and (ii) “Person” means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated organization or other entity.


 


2.4           Compliance with Company Policies. Executive shall be in conformance and comply with all Company policies, rules and
regulations governing benefits and the conduct of their respective employees, now in effect, or as subsequently adopted or amended.


 


2.5           Work Location. Executive’s services shall be performed principally remotely; provided, however,
that at the Company’s request, Executive shall work at the Company’s offices. However, Executive may be required by
his job responsibilities to travel on Company business from time to time and Executive agrees to do so. Executive will spend up
to, but not more than, one hundred and seventy nine (179) days per year in Manchester, United Kingdom, tending to the business
at the offices of SmartKem. During Executive’s employment with the Company, Executive is responsible for obtaining and maintaining
in force all required permits and authorizations to work lawfully in the United States.


 


3.           Term. The employment relationship pursuant to this Agreement shall be for a term commencing at the Effective Time
and continuing for a term of three (3) years from the Effective Time, until terminated in accordance with Section 7 below.
The term of employment shall thereafter be deemed to be automatically extended, upon the same terms and conditions, for successive
periods of one (1) year, unless either party, at least sixty (60) days prior to the expiration of the original term or any extended
term, shall give written notice to the other of its intention not to renew such employment term. The period during which Executive
is employed pursuant to this Agreement, including any extension thereof in accordance with the preceding sentence, shall be referred
to as the “Term.” It is understood and agreed that, for purposes of this Agreement, the non-renewal of this
Agreement by Executive shall not be deemed to be a termination of Executive’s employment hereunder without “Cause”
(as defined in Section 7.1 hereof).


 


4.            Compensation.


 


4.1           Salary. As compensation for Executive’s performance of Executive’s duties hereunder, the Company shall
pay to Executive a salary at the annualized rate of $300,000 (the “Salary”), payable in substantially equal
installments in accordance with the Company’s normal payroll practices as in effect from time to time. The Company shall
deduct from each such installment all payroll taxes and other amounts required or permitted to be deducted or withheld under applicable
law or under any employee benefit plan or program in which Executive participates.


 






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4.2           Annual Target Bonus. In addition to the Salary, Executive shall be eligible for an annual discretionary bonus with
a target bonus opportunity equal to 30% of the Salary (the “Annual Bonus”) for each calendar year ending during
of the Term, as determined by performance targets which shall be set by the Board in consultation with Executive. Any Annual Bonus
for a calendar year, to the extent earned, shall be paid in a lump sum at a time established by the Board in its sole and absolute
discretion, but in no event later than March 15th of the year following the year during which such Annual Bonus relates.
The Annual Bonus shall not be deemed earned until the date that it is paid. Accordingly, in order for Executive to receive an Annual
Bonus (or any portion thereof), Executive must be actively employed by the Company at the time of such payment.


 


5.            Benefits.


 


5.1           Employee Benefits. Executive will be eligible for all welfare and retirement benefits generally available to executives
of the Company, in effect from time to time, subject to the terms and conditions of the Company’s benefit plan documents.
Unless and until the Company contracts for a health insurance plan for the Company, or if earlier, the Company hires any other
employee, the Company shall maintain an individual health reimbursement arrangement in accordance with the requirements under the
Department of Treasury Regulations 45 CFR Parts 144, 146, 147 and 155. The Company reserves the right to change or eliminate employee
benefits or change contribution levels, at any time and from time to time.


 


5.2           Paid Time Off. Executive shall be entitled to paid vacation, holidays, personal days and sick leave in accordance
with the policies, programs and practices of the Company in effect from time to time. Such vacation shall be taken at such intervals
as shall be appropriate and consistent with the proper performance of Executive’s duties hereunder.


 






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6.            Business Expenses. Executive will be reimbursed for reasonable, out-of-pocket business expenses incurred in the performance
of Executive’s duties on behalf of the Company. To obtain reimbursement, expenses must be submitted promptly with appropriate
supporting documentation in accordance with the Company’s policies and procedures.


 


7.            Termination of Executive’s Employment.


 


7.1           Termination for Cause by the Company. Although the Company anticipates a mutually rewarding employment relationship
with Executive, the Company may terminate Executive’s employment at any time for Cause. For purposes of this Agreement, “Cause”
is defined as:


 


(a)              
Executive’s conduct constituting misconduct in connection with the performance of his duties, including, without limitation,
fraud, theft, embezzlement, deceit or dishonesty, or wrongful appropriation for personal use or benefit of any property;


 


(b)              
Executive’s commission of any felony or other crime involving dishonesty or moral turpitude;


 


(c)              
Executive’s failure to perform the Executive’s duties and responsibilities to the Company, SmartKem or any of
their Affiliates (other than due to a Disability), disregard of or refusal to perform any lawful direction of the Board, or willful
or material violation of the Company’s policies or procedures, in each case which (if curable) is not cured within a period
of fifteen (15) days following written notice thereof from the Company or Board;


 


(d)              
Executive’s breach of this Agreement or any other agreement or contract between Executive and the Company SmartKem
or any of their Affiliates, which breach (if curable) is not cured within a period of fifteen (15) days following written notice
thereof from the Company or Board;


 


(e)              
Any (i) breach of (A) any fiduciary obligation or (B) covenant, agreement or duty to the Company, SmartKem or any of their
Affiliates relating to confidentiality, noncompetition, nonsolicitation, nondisparagement, or proprietary rights, or (ii) breach
of any obligation, covenant, agreement or duty to the Company, SmartKem or any of their Affiliates contained in Section 9 of this
Agreement;


 


(f)               
Executive’s engaging in any sexual harassment or sexual misconduct of any kind;


 


(g)              
Executive’s use of alcohol or controlled substances that impairs his ability to perform his duties and responsibilities
with respect to the Company, SmartKem or any of their Affiliates, or any willful or grossly negligent action or conduct by Executive
that affects or could reasonably be expected to adversely affect the Company, SmartKem or any of their Affiliates; and/or


 


(h)              
Executive’s violation in any material respect of any employment policy of the Company, which violation either is not
reasonably capable of being cured, or is not cured, within fifteen (15) days immediately following notice of such violation from
the Company or Board.


 






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In the event Executive’s
employment is terminated in accordance with this Section 7.1, Executive shall be entitled to receive only the Accrued Obligations
(as defined in Section 7.4). All other obligations of the Company to Executive pursuant to this Agreement shall become automatically
terminated and completely extinguished.


 


7.2           Termination Without Cause by the Company. The Company may terminate Executive’s employment under this Agreement
without Cause, which includes a non-renewal of the Term by the Company, at any time upon written notice to Executive, as set forth
below.


 


If Executive’s
employment is terminated pursuant to this Section 7.2, Executive shall, in full discharge of all of the Company’s
obligations to Executive, be entitled to receive, and the Company’s sole obligation to Executive under this Agreement or
otherwise shall be to pay or provide to Executive, the following:


 


(a)              
The Accrued Obligations (as defined below);


 


(b)              
Subject to Section 7.7, payments equal to six (6) months (the “Severance Period”) of Executive’s
Salary (at the rate in effect immediately prior to the date of termination (the “Termination Date”)), less applicable
withholdings and authorized deductions, to be paid in equal installments in accordance with the Company’s customary payroll
practices (the “Severance Payments”). The Severance Payments shall commence on the first regular payroll date
following Executive’s execution (and non-revocation) of the Release Agreement (as defined below);


 


(c)              
Subject to Section 7.7, and Executive's (A) timely election of, and continued eligibility for, continuation coverage
under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA") and (B) continued compliance
with the obligations this Agreement, continued participation in the Company's group health plan at the Company’s expense
(to the extent permitted under applicable law and the terms of such plan) which covers Executive (and Executive's eligible dependents)
for a period of six (6) months (the “COBRA Assistance”); provided, that in the event that the Executive
obtains other full-time employment that offers group health benefits, such continuation of coverage by the Company under this Section
7.2(c) shall immediately cease. Notwithstanding the foregoing, the Company shall not be obligated to provide the continuation
coverage contemplated by this Section 7.2(c) if it would result in the imposition of excise taxes on the Company for failure
to comply with the nondiscrimination requirements of the Patient Protection and Affordable Care Act of 2010, as amended, and the
Health Care and Education Reconciliation Act of 2010, as amended (to the extent applicable); provided, that if the Company's
group health plan is self-insured, the Company will report to the appropriate tax authorities taxable income to Executive equal
to the portion of the deemed cost of such participation (based on applicable COBRA rates) not paid by Executive, and, moreover,
that if the Company's obligation to make payments to Executive ceases as a result of the application of this sentence, then the
Company shall be obligated to pay Executive an amount in cash equal to the amount of premiums which otherwise would have been payable
by the Company as set forth above; and


 






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(d)              
Subject to Section 7.7, a pro-rata portion of the Annual Bonus payable for the calendar year in which such termination
occurs, based on the product of (x) the Annual Bonus computed at 100% of target that would have been payable with respect to such
calendar year had Executive’s employment not terminated, and (y) a fraction, the numerator of which is the number of days
during such calendar year up to and including the date of termination of Executive’s employment, and the denominator of which
is 365, payable on the date that the Annual Bonus for such calendar year would have been made had Executive remained employed by
the Company (the “Pro-Rated Bonus”).


 


7.3           Resignation by Executive for Good Reason by Executive. Executive may terminate Executive’s employment under
this Agreement for Good Reason (as defined below) at any time upon written notice to the Company, as set forth below.


 


(a)              
“Good Reason” means any of the following occurring without the consent of Executive: (i) a reduction
in Executive’s Salary, (ii) a material breach of this Agreement by the Company, or (iii) a material diminution in Executive’s
duties, authorities or responsibilities. In order for a termination to be considered for Good Reason, Executive must provide written
notice to the Company of the event within thirty (30) days from the date of occurrence of the event. Upon receipt of such timely
written notice, the Company shall have thirty (30) days to remedy the event, and failure to remedy the same shall entitle Executive
to resign for Good Reason.


 


(b)              
If Executive’s employment is terminated pursuant to this Section 7.3, Executive shall, in full discharge
of all of the Company’s obligations to Executive, be entitled to receive, and the Company’s sole obligation to Executive
under this Agreement or otherwise shall be to pay or provide to Executive the Accrued Obligations and, subject to Section 7.7,
the Severance Payments, the COBRA Assistance and the Pro-Rated Bonus. The Severance Payments shall commence on the first regular
payroll date following Executive’s execution (and non-revocation) of the Release Agreement (as defined below).


 


7.4           Voluntary
Resignation by Executive without Good Reason. Executive may voluntarily resign Executive’s position with the Company
at any time without Good Reason, on sixtey (60) days’ advance written notice to the Company. If Executive’s employment
is terminated pursuant to this Section 7.4, Executive shall, in full discharge of all of the Company’s obligations
to Executive, be entitled to receive, and the Company’s sole obligation under this Agreement or otherwise shall be to pay
or provide to Executive, the following (collectively, the “Accrued Obligations”):


 


(a)              
Executive’s earned, but unpaid, Salary through the Termination Date, payable in accordance with the Company’s
standard payroll practices;


 


(b)              
Executive’s accrued, but unused, vacation (to the extent payable pursuant to, and in accordance with, the Company’s
policies and applicable law);


 






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(c)              
expenses reimbursable under Section 6 above incurred on or prior to the Termination Date but not yet reimbursed;
and


 


(d)              
amounts or benefits (if any) that are vested amounts or vested benefits or that Executive is otherwise entitled to receive
under any plan, program, policy or practice (with the exception of those, if any, relating to severance) on the Termination Date,
in accordance with such plan, program, policy, or practice.


 


7.5           Termination of Employment due to Executive’s death or Disability. Executive’s employment under this Agreement
shall terminate automatically upon Executive’s death. The Company may terminate Executive’s employment under this Agreement
due to Executive’s Disability at any time upon written notice. If Executive’s employment under this Agreement terminates
due to his death or Disability, Executive or Executive’s estate, as the case may be, shall receive the Accrued Obligations.
For purposes of this Agreement “Disability” shall mean Executive’s physical or mental illness, which prevents
Executive from performing Executive’s material duties, with or without reasonable accommodation, for a period of (A) sixty
(60) consecutive calendar days or (B) an aggregate of ninety (90) calendar days out of any consecutive six (6) month period.


 


7.6           Termination of Employment Upon Expiration of the Term or Non-Renewal by Executive. This Agreement shall expire as
of, Executive’s employment with the Company shall terminate as of, and Executive shall only be entitled to Executive’s
Salary then in effect paid through, in each case, the last day of the Term unless this Agreement is renewed or the Term is otherwise
extended pursuant to a mutual agreement in writing by the Company and Executive. On the last day of the Term (absent such mutual
agreement), all other obligations of the Company to Executive pursuant to this Agreement shall be automatically terminated and
completely extinguished, except as provided in Section 9.9.


 


7.7           Release Agreement. In order to receive the Severance Payments, the COBRA Assistance and the Pro-Rated Bonus set forth
in Section 7.2 and Section 7.3 (if eligible), Executive must timely execute (and not revoke) a separation agreement
and general release (the “Release Agreement”) in a form as is determined acceptable to the Company in its sole
and absolute discretion within sixty (60) days following the Termination Date. Notwithstanding anything in this Agreement to the
contrary, in the event any such sixty (60) day period plus the first regularly scheduled payroll date following such sixty (60)
day period spans two (2) calendar years, then any Severance Payments payable hereunder will commence on the first regularly scheduled
payroll date of the second (2nd) calendar year if such date is later than the date on which payment would otherwise
have been made absent this proviso.


 


7.8           Post-Termination Breach. Notwithstanding anything to the contrary contained in this Agreement, the Company’s
obligations to provide Severance Payments, the COBRA Assistance and the Pro-Rated Bonus shall immediately cease if Executive breaches
any of the provisions of this Agreement, the Release Agreement or any other agreement Executive has with the Company, SmartKem
or any of their Affiliates.


 


7.9           Removal from any Boards and Positions. If Executive’s employment is terminated for any reason, then Executive
shall be deemed to, and shall, resign (i) from any board or other governing body to which he has been appointed or nominated
by or on behalf of the Company, and (ii) from any position with the Company, SmartKem or any of their Affiliates, including, but
not limited to, as an officer.


 






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8.            Covenants.


 


8.1           Confidential Information. While working for the Company, Executive may develop or acquire knowledge in Executive’s
work or from the Board, officers, employees, agents or consultants of the Company of Confidential Information relating to the Company,
its business or potential business or that of SmartKem or any Affiliate of SmartKem or the Company. “Confidential Information”
includes all trade secrets, know-how, show-how, technical, operating, financial, and other business information, whether or not
reduced to writing or other medium and whether or not marked or labeled confidential, proprietary or the like, specifically including,
but not limited to, information regarding source codes, software programs, computer systems, commission rates, loss experiences,
algorithms, formulae, works of authorship, techniques, documentation, models and systems, marketing, sales and pricing techniques,
designs, inventions, products, improvements, modifications, methodology, processes, concepts, records, files, memoranda, reports,
plans, proposals, price lists, client and supplier information, product development and project procedures.


 


With respect
to Confidential Information of the Company:


 


(a)              
Executive shall use Confidential Information only in the performance of Executive’s duties for the Company. Executive
shall not use Confidential Information at any time (during or after Executive’s employment with the Company) for Executive’s
personal benefit, for the benefit of any other Person, or in any manner adverse to the interests of the Company, SmartKem or any
of their Affiliates;


 


(b)              
Executive shall not disclose Confidential Information at any time (during or after Executive’s employment with the
Company) except to authorized personnel of the Company, unless the Company consents in advance in writing or unless the Confidential
Information indisputably becomes of public knowledge or enters the public domain (other than through Executive’s direct or
indirect act or omission);


 


(c)              
Executive shall safeguard the Confidential Information by all reasonable steps and abide by all policies and procedures
of the Company in effect from time to time regarding storage, copying and handling of documents; and


 


(d)              
Executive shall return all materials containing and/or relating to Confidential Information, together with all other property
of the Company to the Company when Executive’s employment relationship with the Company terminates or otherwise on demand
and, at that time Executive shall certify to the Company, in writing and under oath, that Executive has complied with this Agreement.
Executive shall not retain any copies or reproductions of correspondence, memoranda, reports, notebooks, drawings, photographs,
databases, or other documents or electronically stored information of any kind relating in any way to the business, potential business
or affairs of the Company.


 






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8.2           Inventions and Patents. Executive agrees that all inventions, innovations, improvements, technical information, systems,
software developments, methods, designs, analyses, drawings, reports, copyrights, service marks, trademarks, trade names, logos
and all similar or related information (whether patentable or unpatentable) which relate to Executive’s work for the Company
or which relate to the Company’s, SmartKem’s or any of their Affiliates’ businesses, research and development
or existing or future products or services and which are conceived, developed or made by Executive (whether or not during usual
business hours and whether or not alone or in conjunction with any other person) during the Term, together with all patent applications,
letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may
be granted for or upon any of the foregoing (collectively referred to in this Agreement as “Work Product”),
belong to the Company. Executive agrees to take reasonable steps to promptly disclose such Work Product to the Company and perform
all actions requested by the Company (whether during or after the Term) at the Company’s expense, to establish and confirm
such ownership (including the execution and delivery of assignments, consents, powers of attorney and other instruments) and to
provide reasonable assistance to the Company, at no out-of-pocket cost to Executive, in connection with the prosecution of any
applications for patents, trademarks, trade names, service marks or reissues thereof or in the prosecution or defense of interferences
relating to any Work Product. Executive agrees that any such copyrightable work is work made for hire by Executive for the Company.
Executive hereby assigns to the Company, or waives if not assignable, all of Executive’s “moral rights” in and
to all such Work Product, and agrees promptly to execute any further specific assignments or waivers related to moral rights at
the request of the Company. In the event that the Company is unable to secure Executive’s signature after reasonable effort
in connection with any patent, trademark, copyright, mask work or other similar protection relating to a Work Product, Executive
hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Executive’s agent and
attorney in fact, to act for and on Executive’s behalf and stead to execute and file any such application and to do all other
lawfully permitted acts to further the prosecution and issuance of patents, trademarks, copyrights, mask works or other similar
protection thereon with the same legal force and effect as if executed by Executive. Notwithstanding the foregoing, “work
product” does not include any information or materials that Executive creates or develops entirely on Executive’s own
time and for which no equipment, supplies, facilities, intellectual property, resources, employees or Confidential Information
of the Company were used, unless the information or materials (i) relate to the Company’s business, (ii) relate to the Company’s
actual or anticipated research or development or (iii) result from any work performed by Executive for the Company within the scope
of Executive’s employment.


 


8.3           Non-Competition.


 


(a)              
Scope. To protect the Company’s legitimate protectable interests in, among other things, the Company’s
Confidential Information, customer relationships and goodwill, Executive agrees that during the term of employment and for twelve
(12) months thereafter (the “Restricted Period”), Executive shall not, directly or indirectly, (a) in any geographic
location where the Executive performed direct, substantive services for any of the Company’s customers, (b) in which the
Executive provided services to Company, or (c) where the Executive’s use or disclosure of Confidential Information could
disadvantage the Company, become employed by, engage, invest or participate in any Competitive Business (defined below), provided,
however, that Executive may own, as a passive investor, publicly-traded securities of any corporation that competes with the business
of the Company so long as such securities do not, in the aggregate, constitute more than three percent 3%) of any class of outstanding
securities of such corporations.  For purposes of this Agreement, “Competitive Business” means (a)
any business engaged in the manufacturing of materials for organic thin-film transistors; or (b) any business or division or unit
of a larger enterprise in which the Company is actively engaged or has taken active plans to engage during the Executive’s
employment with the Company.


 






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(b)              
Reasonableness of Restrictions. Executive represents and agrees that the restrictions on competition, as to time,
geographic area, and scope of activity, required by this Section 8 are reasonable, are necessary to protect the goodwill
of the Company, do not impose a greater restraint than is necessary to protect the goodwill and business interests of the Company,
and are not unduly burdensome to Executive. Executive expressly acknowledges that the Company competes on a worldwide basis and
that the geographical scope of these limitations is reasonable and necessary for the protection of the Company’s trade secrets
and other confidential and proprietary information. Executive further agrees that these restrictions allow Executive an adequate
number and variety of employment alternatives, based on Executive’s varied skills and abilities. Executive represents that
Executive is willing and able to compete in other employment not prohibited by this Agreement.


 


8.4           Non-Solicitation; Non-Disparagement.


 


(a)              
Non-Solicitation of Employees, Customers or Suppliers. To protect the legitimate business interests of the Company
and in consideration of the Company’s willingness to provide the Executive access to its Confidential Information, customer
relationships and goodwill, Executive agrees that during the Restricted Period, the Executive will not directly or indirectly,
whether as employee, owner, sole proprietor, partner, shareholder, director, member, consultant, agent, founder, co-venture partner
or otherwise, (i) do anything to divert or attempt to divert from the Company any business of any kind, including, without limitation,
solicit or interfere with any of the Company’s customers, clients, members, business partners or suppliers (“Business
Partners”) with whom the Executive performed direct, substantive services during his/her employment or as to whom Executive
had access to Confidential Information where the Executive’s use or disclosure of Confidential Information could disadvantage
the Company, or (ii) solicit, induce, recruit or encourage any person engaged or employed by the Company to terminate his or her
employment or engagement.  This restriction shall not apply to any Business Partner with whom the Executive can demonstrate
he/she had a pre-existing relationship prior to his/her employment with the Company. 


 


(b)              
Non-Disparagement. Executive shall not, either directly or indirectly, disparage, or induce or encourage others to
disparage, the reputation of the Company, its services, its products or any of its current or former Affiliates, including SmartKem
or any of their respective members, officers, directors, employees, or agents.


 


8.5          Reformation if Necessary. To the extent permitted by applicable law, in the event a court of competent jurisdiction
determines that the geographic area, duration, or scope of activity of any restriction under this Section 8 is unenforceable,
the restrictions under this Section 8 shall not be terminated but shall be reformed and modified to the extent required
to render them valid and enforceable.


 






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8.6           Tolling of Restricted Period. The Restricted Period shall be extended for an amount of time equal to the time period
during which a court of competent jurisdiction determines that Executive was in violation of any provision of Section 8.3
or 8.4 and shall continue through any action, suit or proceedings arising out of or relating to Section 8.3
or 8.4.


 


8.7           No Defense. The existence or assertion of any claim of or by Executive, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the covenants contained in this Section 8 (collectively,
the “Restrictive Covenants”).


 


8.8           Reasonableness; Injunction. Executive acknowledges and agrees that (i) Executive has obtained the advice of
counsel in connection with this Agreement, (ii) the Restrictive Covenants are reasonable in scope and in all other respects, (iii) any
violation of the Restrictive Covenants will result in irreparable injury to the Company, (iv) money damages would be an inadequate
remedy at law for the Company in the event of a breach of any of the Restrictive Covenants by Executive, and (v) specific performance
in the form of injunctive relief would be an adequate remedy for the Company. If Executive breaches or threatens to breach a Restrictive
Covenant, the Company shall be entitled, in addition to all other remedies, to an injunction restraining any such breach, without
any bond or other security being required and without the necessity of showing actual damages.


 


8.9           Preserved Rights. This Agreement is not intended to, and shall not, in any way prohibit, limit or otherwise interfere
with Executive’s protected rights under federal, state or local law to, without notice to the Company: (a) communicate or
file a charge with a government regulator; (b) participate in an investigation or proceeding conducted by a government regulator;
or (c) receive an award paid by a government regulator for providing information.


 


8.10         Cooperation. Subject to Section 8.9 of this Agreement, in the event that any action, suit, claim, hearing,
proceeding, arbitration, mediation, audit, assessment, inquiry or investigation (whether civil, criminal, administrative or otherwise)
(each, a “Proceeding”) is commenced by any governmental authority or other Person in connection with the Company
or any of its Affiliates, Executive agrees to cooperate in good faith with the Company or any such Affiliate to defend against
such Proceeding and, if an injunction or other order is issued in any such Proceeding, to cooperate in good faith with the Company
or any such Affiliate in its efforts to have such injunction or other order lifted. Such cooperation shall include, but not be
limited to, attending any telephone or in-person meetings, conferences, interviews, depositions, hearings, proceedings or preparation
sessions, and providing access to any books and records in Executive’s control, in each case, at the request of the Company
or any of its Affiliates or any of their respective representatives. Upon presentation of appropriate documentation, the Company
shall pay or promptly reimburse Executive for all reasonable out-of-pocket travel, duplicating or telephonic expenses incurred
by the Executive in complying with this Section 8.10. In connection with any cooperation under this Section 8.10
following a termination of employment, unless Executive is receiving payment under Section 7.2 or 7.3, the Company
shall pay Executive a daily fee of $1,250 for any full day (and pro-rated for partial days of service) in which Executive’s
services used under this Section 8.10 are used.


 






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9.            General Provisions.


 


9.1           Parties in Interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer upon any Person
other than the Company and its Affiliates and Executive, or their successors or permitted assigns, any rights or remedies under
or by reason of this Agreement.


 


9.2           Amendment; Waiver. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver
is in writing and signed, in the case of an amendment, by the Company and Executive, or in the case of a waiver, by the party against
whom the waiver is to be effective. No oral amendment or modification shall be effective under any circumstances whatsoever. No
failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power
or privilege, and no waiver in any one instance shall be effective with respect to any other instance or create a course of dealing.


 


9.3           Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other provisions hereof. If any term or other provision of
this Agreement, or the application thereof to any Person or any circumstance, is invalid, illegal or unenforceable, (a) a suitable
and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent
and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision
to other Persons, entities or circumstances shall not be affected by such invalidity, illegality or unenforceability, nor shall
such invalidity, illegality or unenforceability affect the validity or enforceability of such provision, or the application thereof,
in any other jurisdiction.


 


9.4           Governing Law. This Agreement and its negotiation, execution, performance or non-performance, interpretation, termination,
construction and all Proceedings that may be based upon, arise out of, or relate to this Agreement, or the transactions contemplated
hereby (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in
connection with this Agreement or as an inducement to enter this Agreement), shall be exclusively governed by, and construed in
accordance with, the laws of the State of Delaware regardless of laws that might otherwise govern under any applicable conflict
of laws principles.


 


9.5           Jurisdiction. Each party hereto hereby irrevocably and unconditionally: (i) consents and submits for itself
and its property in any Proceeding based upon, arising out of, or related to this Agreement and its negotiation, execution, performance,
non-performance, interpretation, termination, construction or the transactions contemplated hereby, or for recognition and enforcement
of any judgment in respect thereof, to the exclusive jurisdiction of the state and federal courts located in the State of Delaware;
(ii) consents that any such Proceeding may be brought in such courts, and waives any objection that it may now or hereafter have
to the venue of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agrees not
to plead or claim the same; (iii) agrees that service of process in any such Proceeding may be effected by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail), postage prepaid, to any party hereto at its or his
or her address set forth in this Agreement or at such other address of which the sender shall have been previously notified in
writing and in accordance with this Agreement; and (iv) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law. Each of the parties also agrees that any final, non-appealable judgment against
a party in connection with any Proceeding arising out of or relating to this Agreement shall be conclusive and binding on such
party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United
States. A certified or exemplified copy of such award or judgment shall be conclusive evidence of the fact and amount of such award
or judgment.


 






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9.6           WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW, THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL OF ANY PROCEEDING BASED UPON, ARISING OUT OF, OR RELATED TO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH
WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. THE PARTIES FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.


 


9.7           Remedies Cumulative. All remedies provided in this Agreement are cumulative and in addition to all other remedies
which may be available at law or in equity.


 


9.8           Notices. All notices or other communications hereunder shall be deemed to have been duly given and effective upon
delivery if in writing and if served by personal delivery upon the party for whom it is intended, if delivered by registered or
certified mail, return receipt requested, or by a national courier service, or if sent by facsimile or electronic mail; provided,
that the facsimile or electronic mail is promptly confirmed by telephone confirmation thereof or followed by one of the other foregoing
permitted means of notice (other than facsimile or electronic mail), to the party at the address set forth below, or such other
address as may be designated in writing hereafter, in the same manner, by such party:


 






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If to the Company, to:


 


Octopus Investments


33 Holborn


London


EC1N 2HT


Attn: Simon King, Ph.D.

Email: simon.king@octopusventures.com


 


with a copy to:


 


Lowenstein Sandler LLP


One Lowenstein Drive


Roseland, NJ 07068


Attention: John (“Jack”) Hogoboom


E-mail: jhogoboom@lowenstein.com


 


If to Executive, to him at the offices of the Company
with a copy to him at his home address, set forth in the records of the Company.


 


9.9           Survival. Notwithstanding anything herein to the contrary, each provision of this Agreement (other than Sections
1 through 6) shall survive the termination of this Agreement and termination of employment for any reason or Executive’s
ceasing to provide services to the Company to the extent necessary to give effect to its terms, including, without limitation,
Sections 8, 9, 10, 11, 12, and 13 of this Agreement.


 


9.10         Counterparts. This Agreement may be executed in one or more counterparts (including by facsimile or electronic .pdf
submission), each of which shall be deemed an original, and all of which shall constitute one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy, portable document
format (.pdf) or otherwise) to the other party, it being understood that both parties need not sign the same counterpart.


 


9.11         Defend Trade Secrets Act. Executive acknowledges receipt of the following notice under the Defend Trade Secrets Act:
An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of
a trade secret if he/she (i) makes such disclosure in confidence to a federal, state, or local government official, either directly
or indirectly, or to an attorney and such disclosure is made solely for the purpose of reporting or investigating a suspected violation
of law; or (ii) such disclosure was made in a complaint or other document filed in a lawsuit or other proceeding if such filing
is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation
of law may disclose the employer's trade secrets to the attorney and use the trade secret information in the court proceeding if
the individual: (i) files any document containing the trade secret under seal; and (ii) does not disclose the trade secret, except
pursuant to court order. Nothing contained herein will waive, limit or affect any rights of the Company under any applicable trade
secrets laws, including Defend Trade Secrets Act of 2016, which will be enforceable separate and apart from this Agreement.


 






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9.12         Assignment. This Agreement is personal to Executive and shall not be assigned by Executive, including by operation
of law or otherwise, without the prior written consent of the Company. The Company may assign its rights under this Agreement without
Executive’s consent. Any purported assignment, hypothecation or transfer in breach of this Section 9.12 shall be null
and void.


 


10.          No Other Contracts. Executive represents and warrants to the Company that neither the execution and delivery of this
Agreement by Executive nor the performance of Executive’s obligations hereunder, shall constitute a default under or a breach
of any other agreement or contract to which Executive is a party or by which Executive is bound, nor shall the execution and delivery
of this Agreement by Executive nor the performance of Executive’s duties and obligations hereunder give rise to any claim
or charge against either Executive or the Company based upon any other contract, or agreement to which Executive is a party or
by which Executive is bound. Executive shall indemnify and hold harmless the Company against any and all claims that execution
and delivery of this Agreement by Executive or Executive’s performance of his obligations hereunder constitutes a default
under or a breach of any other agreement or contract to which Executive is a party or by which Executive is bound.


 


11.          Code Section 409A Compliance.


 


11.1         This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986
as amended, and any regulations and Treasury guidance promulgated thereunder (collectively, “Section 409A of the Code”).


 


11.2         The Company shall not be liable to Executive for any payment made under this Agreement which is determined to result in
an additional tax, penalty or interest under Section 409A of the Code, nor for reporting in good faith any payment made under this
Agreement as an amount includible in gross income under Section 409A of the Code.


 


11.3         Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A of
the Code.


 


11.4         With respect to any reimbursement of expenses or any provision of in-kind benefits to Executive specified under this Agreement,
such reimbursement of expenses or provision of in-kind benefits shall be subject to the following conditions: (a) the expenses
eligible for reimbursement or the amount of in-kind benefits provided in one taxable year shall not affect the expenses eligible
for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangements
providing for the reimbursement of expenses referred to in Section 105(b) of the Code; (b) the reimbursement of an eligible expense
shall be made no later than the end of the year following the year in which such expense was incurred; and (c) the right to reimbursement
or in-kind benefits shall not be subject to liquidation or exchange for another benefit.


 






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11.5         
Notwithstanding anything in this Agreement to the contrary, if a payment obligation arises on account of Executive’s
separation from service while Executive is a “specified employee” as described in Section 409A of the Code and
the Treasury Regulations thereunder and as determined by the Company in accordance with its procedures, by which determination
Executive is bound, any payment of “deferred compensation” (as defined under Treasury Regulation Section 1.409A-1(b)(1),
after giving effect to the exemptions in Treasury Regulation Sections 1.409A-1(b)(3) through (b)(12)) shall be made on the first
(1st) business day of the seventh (7th) month following the date of Executive’s separation from service, or, if
earlier, within fifteen (15) days after the appointment of the personal representative or executor of Executive’s estate
following Executive’s death.


 


11.6         
Notwithstanding anything contained herein to the contrary, Executive shall not be considered to have terminated employment
with the Company for purposes of this Agreement unless Executive would be considered to have incurred a “termination of employment”
from the Company within the meaning of Treasury Regulation §1.409A-1(h)(1)(ii). In no event whatsoever shall the Company be
liable for any additional tax, interest or penalty that may be imposed on Executive by Section 409A of the Code or damages for
failing to comply with Section 409A of the Code.


 


12.           Entire Agreement. This Agreement contains the entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements and understandings, oral or written, with the subject matter hereof.


 


13.           280G Cutback. If any payment, benefit or distribution of any type to or for the benefit of Executive, whether paid
or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively,
the “Parachute Payments”) would subject Executive to the excise tax imposed under Section 4999 of the Code (the
 “Excise Tax”) or would not be deductible as a result of Section 280G of the Code, the Parachute Payments shall
be reduced so that the maximum amount of the Parachute Payments (after reduction) shall be one dollar ($1.00) less than the amount
which would cause the Parachute Payments to be subject to the Excise Tax or would cause the Parachute Payments to not be deductible.
The Company shall reduce or eliminate the Parachute Payments by first reducing or eliminating any cash payments (with the payments
to be made furthest in the future being reduced first), then by reducing or eliminating accelerated vesting of stock options or
other awards that vest based on attainment of performance measures, then by reducing or eliminating accelerated vesting of stock
options or other awards that vest based only on Executive’s continued service to the Company, taking the last ones scheduled
to vest (absent the acceleration) first, then by reducing or eliminating any other remaining Parachute Payments; provided,
that no such reduction or elimination shall apply to any non-qualified deferred compensation amounts (within the meaning of Section
409A of the Code) to the extent such reduction or elimination would accelerate or defer the timing of such payment in manner that
does not comply with Section 409A of the Code.


 






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THE PARTIES TO THIS AGREEMENT HAVE READ
THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS
AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN.


 


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


 


	 	COMPANY:
	 	 
	 	PARASOL INVEStMENTS CORP.
	 	 
	 	 
	 	By: 	 /s/ Robert Bahns
	 	 	Name: Robert Bahns 
	 	 	Title: Chief Financial Officer
	 	 
	 	EXECUTIVE:
	 	 
	 	 
	 	 /s/ Ian Jenks 
	 	Name: Ian Jenks



   


[Signature
Page to Employment Agreement]