Document:

Exhibit 10.14

 

 

EXECUTION VERSION

 

	Dated	 	2021

 

SMARTKEM LIMITED

 

and

 

FCRF 2 LIMITED

 

FACILITY
AGREEMENT

 

    

     

    

 

 

EXECUTION
VERSION

 

CONTENTS

____________________________________________________________

 

CLAUSE

 

	1.	Definitions and Interpretation	     2
	 	 	 
	2.	The Facility	     7
	 	 	 
	3.	Drawing	     7
	 	 	 
	4.	Interest	     7
	 	 	 
	5.	Costs	     8
	 	 	 
	6.	Payments	     8
	 	 	 
	7.	Representations and warranties	     10
	 	 	 
	8.	Covenants	     13
	 	 	 
	9.	Information	     14
	 	 	 
	10.	Events of Default	     15
	 	 	 
	11.	Set-off	     17
	 	 	 
	12.	Amendments, Waivers and Consents and Remedies	     17
	 	 	 
	13.	Severance	     18
	 	 	 
	14.	Assignment and transfer	     18
	 	 	 
	15.	Counterparts	     19
	 	 	 
	16.	Third party rights	     19
	 	 	 
	17.	Notices	     19
	 	 	 
	18.	Governing law and jurisdiction	     20

 

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This agreement is dated ____________

 

Parties

 

		(1)	SMARTKEM LIMITED incorporated and registered in England and Wales with company number 06652152
whose registered office is at Optic Technium Ffordd William Morgan, St. Asaph Business Park,
St. Asaph, Clwyd, LL17 0JD (Borrower)

 

		(2)	FCRF 2 LIMITED incorporated and registered in England and Wales with company number 12338867 whose
registered office is at 26-28 Hammersmith Grove, Hammersmith, London W6 7BA (Lender)

 

BACKGROUND

 

		(A)	The Lender has agreed to provide the Borrower with a secured term loan facility of £539,204.

 

		(B)	The Borrower expects to receive a payment or payments of not less than £718,939 from HM Revenue
and Customs (HMRC) in connection with one or more R&D tax credit applications (Tax Credit).

 

Agreed terms

 

		1.	Definitions and Interpretation

 

		1.1	Definitions

 

The following definitions apply
in this agreement.

 

Availability
Period: the period from and including the date of this agreement to and including 27 January 2021.

 

Borrowed
Money: any Indebtedness of the Borrower for or in respect of:

 

a)            borrowing
or raising money (with or without security), including any premium and any capitalised interest on that money;

 

b)            any
bond, note, loan stock, debenture, commercial paper or similar instrument;

 

 

 

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c)        any
acceptances under any acceptance credit facility (or dematerialised equivalent) or any note purchase or documentary credit facilities;

 

d)        monies
raised by selling, assigning or discounting receivables or other financial assets on terms that recourse may be had to the Borrower
if those receivables or financial assets are not paid when due;

 

e)            any
deferred payment for assets or services acquired, other than trade credit that is given in the ordinary course of trading and which
does not involve any deferred payment of any amount for more than 60 days;

 

f)            any
rental or hire charges under finance leases (whether for land, machinery, equipment or otherwise);

 

g)           any
counter-indemnity obligation in respect of any guarantee, bond, indemnity, standby letter of credit or other instrument issued
by a third party in connection with the Borrower's performance of contracts;

 

h)       any
other transaction that has the commercial effect of borrowing (including any forward sale or purchase agreement and any liabilities
which are not shown as borrowed money on the Borrower's balance sheet because they are contingent, conditional or otherwise);

 

i)            any
derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and
when calculating the value of any derivative transaction, only the mark to market value shall be taken into account); and

 

j)            any
guarantee, counter-indemnity or other assurances against financial loss that the Borrower has given for any of the items referred
to in paragraphs (a) to (i) of this definition incurred by any person.

 

When calculating
Borrowed Money, no liability shall be taken into account more than once.

 

Business
Day: a day other than a Saturday, Sunday or public holiday in England when banks in London are open for business.

 

Change
of Control: a situation where:

 

a)            any
person, or group of connected persons not having control (as defined in sections 450 and 451 of the Corporation Tax Act 2010)
of the Borrower on the date of this agreement acquires control of the Borrower; or

 

 

 

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b)            any
shareholder of the Borrower who owns more than 30% of the issued ordinary share capital of the Borrower on the date of this agreement
transfers (whether by a single transfer or a series of transfers at different times) shares constituting, in aggregate, 30% or
more in nominal value of the Borrower's issued ordinary share capital without the Lender's prior written consent.

 

Drawdown
Notice: the notice given by the Borrower to the Lender in accordance with clause 3.1

 

Event
of Default: any event or circumstance listed in clause 10.1 to clause 10.18

 

Facility:
the term loan facility made available under this agreement.

 

Facility
Amount: £539,204.

 

Final
Repayment Date: the 6 month anniversary of this Agreement or, where such date is not a Business Day, the immediately
following Business Day.

 

Finance
Document: this agreement, the Security Document, the undertakings given to the Lender by the directors of the Company
on or around the date of this agreement, the Drawdown Notice and any other document designated as such by the Lender and the Borrower.

 

Indebtedness:
any obligation to pay or repay money, present or future, whether actual or contingent, sole or joint and any guarantee or indemnity
of any of those obligations.

 

Loan:
the principal amount of the loan made or to be made by the Lender to the Borrower under this agreement or (as the context requires)
the principal amount outstanding for the time being of that loan.

 

Potential
Event of Default: any event or circumstance specified in clause 10.1 to clause 10.18 that would, on the giving of notice,
expiry of any grace period or making of any determination under the Finance Documents, or satisfaction of any other condition (or
any combination thereof), become an Event of Default.

 

Security:
any mortgage, charge (whether fixed or floating, legal or equitable), pledge, lien, assignment by way of security or other security
interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

 

Security
Document: the debenture in the agreed form, executed or to be executed by the Borrower.

 

Sterling
and £: the lawful currency of the UK.

 

 

 

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		1.2	Interpretation

 

In this agreement:

 

		(a)	clause, Schedule and paragraph headings shall not affect the interpretation of this agreement;

 

		(b)	a reference to a person shall include a reference to an individual, firm, company, corporation,
partnership, unincorporated body of persons, government, state or agency of a state or any association, trust, joint venture or
consortium (whether or not having separate legal personality);

 

		(c)	unless the context otherwise requires, words in the singular shall include the plural and in the
plural shall include the singular;

 

		(d)	unless the context otherwise requires, a reference to one gender shall include a reference to the
other genders;

 

		(e)	a reference to a party shall include that party's successors, permitted assigns and permitted transferees
and this agreement shall be binding on, and enure to the benefit of, the parties to this agreement and their respective successors,
permitted assigns and permitted transferees;

 

		(f)	a reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted
from time to time;

 

		(g)	a reference to a statute or statutory provision shall include all subordinate legislation made
from time to time under that statute or statutory provision;

 

		(h)	a reference to a time of day is to London time;

 

		(i)	a reference to writing or written includes fax and email;

 

		(j)	an obligation on a party not to do something includes an obligation not to allow that thing to
be done;

 

		(k)	a reference to a Finance Document (or any provision of it) or to any other agreement or
document referred to in any Finance Document is a reference to the Finance Document, that provision or such other agreement or
document as amended (in each case, other than in breach of the provisions of this agreement) from time to time;

 

 

 

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		(l)	unless the context otherwise requires, a reference to a clause or Schedule is to a clause of, or
Schedule to, this agreement and a reference to a paragraph is to a paragraph of the relevant Schedule;

 

		(m)	any words following the terms including, include, in particular, for example
or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition,
phrase or term preceding those terms;

 

		(n)	a reference to a document in agreed form is to that document in the form agreed by the Lender
and the Borrower and initialled by or on their behalf for identification;

 

		(o)	a reference to an amendment includes a novation, re-enactment, supplement or variation (and
amended  shall be construed accordingly);

 

		(p)	a reference to assets includes present and future properties, undertakings, revenues, rights
and benefits of every description;

 

		(q)	a reference to an authorisation includes an approval, authorisation, consent, exemption,
filing, licence, notarisation, registration and resolution;

 

		(r)	a reference to a certified copy of a document means a copy certified to be a true, complete
and up-to-date copy of the original document, in writing and signed by a director or the secretary of the party delivering the
document;

 

		(s)	a reference to continuing in relation to an Event of Default means an Event of Default that
has not been waived;

 

		(t)	a reference to determines or determined means, unless the contrary is indicated,
a determination made at the discretion of the person making it;

 

		(u)	a reference to a disposal of any asset, undertaking or business includes a sale, lease,
licence, transfer, loan or other disposal by a person of that asset, undertaking or business (whether by a voluntary or involuntary
single transaction or series of transactions); and

 

		(v)	a reference to a regulation includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental, inter-governmental or supranational body, agency, department
or regulatory, self-regulatory or other authority or organisation.

 

 

 

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		2.	The Facility

 

The Lender grants to the Borrower
a secured Sterling term loan facility of a total principal amount not exceeding the Facility Amount on the terms, and subject to
the conditions, of this agreement.

 

		3.	Drawing

 

		3.1	The Borrower may utilise the Facility in a single amount on any Business Day during the Availability
Period by providing the Lender with a Drawdown Notice. To do this, the Borrower shall give the Lender at least one Business Day's
prior notice of the date on which the Borrower wants to draw down the Loan specifying the amount of the proposed Loan, the Business
Day on which it is to be made and the bank account to which payment is to be made. The amount of the Loan shall not exceed the
Facility Amount.

 

		3.2	Any notice given under clause 3.1 will be irrevocable.

 

		3.3	Any amount of the Facility not drawn down during the Availability Period will automatically be
cancelled at the end of the Availability Period.

 

		3.4	Upon drawing down the Loan, the Borrower shall pay to the Lender an arrangement fee equal to 5%
of the Facility Amount, and the Lender shall be permitted to withhold such arrangement fee from the amount remitted to the Borrower
upon drawdown.

 

		4.	Interest

 

		4.1	Subject to clause 4.3, the Borrower shall pay interest on the Loan at the rate of 1.25% per month.

 

		4.2	Interest shall accrue daily and shall
compound monthly on the monthly anniversary of the date of draw down of the Loan, and shall be payable in accordance with
clause 5.

 

		4.3	Notwithstanding clause 4.1, if there has been an Event of Default or the Borrower fails to make
any payment due to HMRC or to the Lender under this agreement on the due date for payment, interest on the unpaid amount shall
accrue daily and compound monthly, from the date of the Event of Default or non-payment to the date of actual payment of sums owed
by the Borrower to the Lender (both before and after judgment), at 4% per month. Interest accrued under this clause 4.3 shall be
immediately payable by the Borrower on demand by the Lender.

 

 

 

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		4.4	Subject to clause 4.5, the Borrower
may repay all or part of the Loan and any accrued Interest at any time before the Final Repayment Date, subject to any such payment
being made first in payment of any interest due under this agreement and secondly in repayment of the Loan.

 

		4.5	If the Borrower repays any part of the Loan before the expiry of 2 months from the date of drawdown
of the Loan then the Borrower shall pay an early repayment fee equal to 2 months’ compounded interest at the applicable rate
(being the rate set out in clause 4.1 or clause 4.3 as appropriate), less any interest already paid.

 

		4.6	Upon receipt of all or part of the Tax Credit, the Borrower shall apply the amount of the full
or partial Tax Credit firstly in payment of any interest due under this agreement and secondly in repayment of the Loan.

 

		4.7	If not otherwise repaid in full earlier, the Loan and any interest thereon shall be repaid in full
by the Borrower to the Lender on the Final Repayment Date.

 

		5.	Costs

 

		5.1	The Borrower shall pay, on demand, all costs and expenses (together with any value added tax on
them) that the Lender incurs in connection with the negotiation and preparation, execution, amendment, extension, alteration, preservation
and enforcement of the Loan and/or the Finance Documents.

 

		5.2	The Borrower shall pay any stamp, documentary and other similar duties and taxes to which the Finance
Documents may be subject, or give rise and shall indemnify the Lender against any losses or liabilities that it may incur as a
result of any delay or omission by the Borrower in paying any such duties or taxes.

 

		6.	Payments

 

		6.1	All payments made by the Borrower under the Finance Documents shall be in Sterling and in immediately available cleared funds to the Lender to its account at Adam & Co, account number [**]; sort code [**] or such other account as may be notified in writing by the Lender to the Borrower.

 

 

 

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		6.2	Notwithstanding Clause 6.1, the
Borrower shall irrevocably instruct HMRC to pay the Tax Credit to the Lender's account at Adam & Co, account number 04583101;
sort code 83-91-35 and the Lender shall apply such amounts in accordance with the terms of the Finance Documents. If, for any reason,
the Borrower receives the Tax Credit to its own account, it shall hold it on trust for the Lender (which trust is hereby declared)
and promptly transfer the Tax Credit to the Lender's aforementioned bank account.

 

		6.3	Once the Lender has received all amounts due to it under the Finance Documents, it will instruct
its bankers to transfer any remaining amount of the Tax Credit to the Borrower, to the account notified to the Lender for that
purpose by the Borrower.

 

		6.4	The Lender will not be responsible to the Borrower or to any other person for the credit failure
or other acts or omissions of any banking institution with which the Lender deposits money or which is involved in the transfer
of money, or for the failure of or any disruption to any payment or communications systems required for any money transfer.

 

		6.5	If any payment becomes due on a day that is not a Business Day, the due date of such payment will
be extended to the next succeeding Business Day, or, if that Business Day falls in the following calendar month, such due date
shall be the immediately preceding Business Day.

 

		6.6	All payments made by the Borrower under the Finance Documents shall be made in full, without set-off,
counterclaim or condition, and free and clear of, and without any deduction or withholding, provided that, if the Borrower is required
by law or regulation to make such deduction or withholding, it shall:

 

		(a)	ensure that the deduction or withholding does not exceed the minimum amount legally required;

 

		(b)	pay to the relevant taxation or other authorities, as appropriate, the full amount of the deduction
or withholding;

 

		(c)	furnish to the Lender, within the period for payment permitted by the relevant law, either:

 

		(i)	an official receipt of the relevant taxation authorities concerned on payment to them of amounts
so deducted or withheld; or

 

		(ii)	if such receipts are not issued by the taxation authorities concerned on payment to them of amounts
so deducted or withheld, a certificate of deduction or equivalent evidence of the relevant deduction or withholding; and

 

 

 

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		(d)	pay to the Lender such additional amount as is necessary to ensure that the net full amount received
by the Lender after the required deduction or withholding is equal to the amount that the Lender would have received had no such
deduction or withholding been made.

 

		7.	Representations and warranties

 

The Borrower represents and warrants
to the Lender on the date of this agreement:

 

		7.1	It:

 

		(a)	is a duly incorporated limited liability company validly existing under the laws of its jurisdiction
of incorporation; and

 

		(b)	has the power to own its assets and carry on its business as it is being conducted.

 

		(c)	It has the power to enter into, deliver and perform, and has taken all necessary action to authorise
its entry into, delivery and performance of, the Finance Documents and the transactions contemplated by them.

 

		(d)	No limit on its powers will be exceeded as a result of the borrowing or grant of security contemplated
by the Finance Documents.

 

		7.2	The entry into and performance by it of, and the transactions contemplated by, the Finance Documents,
do not and will not contravene or conflict with:

 

		(a)	its constitutional documents;

 

		(b)	any agreement or instrument binding on it or its assets or constitute a default or termination
event (however described) under any such agreement or instrument; or

 

		(c)	any law or regulation or judicial or official order, applicable to it.

 

		7.3	It has obtained all required authorisations to enable it to enter into, exercise its rights and
comply with its obligations in the Finance Documents and to make them admissible in evidence in its jurisdiction of incorporation.
All such authorisations are in full force and effect.

 

 

 

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		7.4	Its obligations under the Finance Documents are legal, valid, binding and enforceable in accordance
with their terms.

 

		7.5	It is not necessary to file, record or enrol any Finance Document (other than the registration
of the Security Document under the Companies Act 2006 with any court or other authority or pay any stamp, registration or similar
taxes relating to any Finance Document or the transactions contemplated by any Finance Document.

 

		7.6	No Event of Default or Potential Event of Default has occurred or is continuing, or is reasonably
likely to result from making the Loan or the entry into, the performance of, or any transaction contemplated by the Finance Documents.

 

		7.7	No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace
period, the giving of notice, the making of any determination or any combination thereof, would constitute) a default or termination
event (howsoever described) under any other agreement or instrument which is binding on the Borrower or to which any of its assets
is subject which has or is likely to have a material adverse effect on its business, assets or condition or ability to perform
its obligations under the Finance Documents.

 

		7.8	No litigation, arbitration or administrative proceedings are taking place, pending or, to the Borrower's
knowledge, threatened against it, any of its directors or any of its assets, which might reasonably be expected to have a material
adverse effect on its business, assets or condition, or its ability to perform its obligations under the Finance Documents.

 

		7.9	Its audited financial statements have been prepared in accordance with consistently applied accounting
principles, standards and practices generally accepted in the UK and give a true and fair view of its financial condition and operations
during the relevant accounting period and were approved by the Borrower's directors in compliance with section 393 of the Companies
Act 2006. There has been no material adverse change in its business or financial condition since the Borrower’s most recent
financial statement.

 

		7.10	It does not owe money to HMRC (including but not limited to payments for PAYE, VAT or otherwise)
and does not foresee any circumstances where it will, prior to the payment of the Tax Credit, be unable to pay moneys owing to
HMRC as they fall due.

 

		7.11	It has taken all reasonable steps to ensure that the Tax Credit application has been correctly
prepared and that the amounts claimed fall within the applicable rules and regulatory framework for the period claimed and
in any event are reasonable and proportionate.

 

 

 

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		7.12	The information, in written or electronic format, supplied by, or on its behalf, to the Lender
in connection with the Facility and the Finance Documents was, at the time it was supplied or at the date it was stated to be given
(as the case may be):

 

		(a)	if it was factual information, complete, true and accurate in all material respects;

 

		(b)	if it was a financial projection or forecast, prepared on the basis of recent historical information
and on the basis of reasonable assumptions and was fair and made on reasonable grounds; and

 

		(c)	if it was an opinion or intention, made after careful consideration and was fair and made on reasonable
grounds; and

 

		(d)	not misleading in any material respect, nor rendered misleading by a failure to disclose other
information,

 

except to the extent that it
was amended, superseded or updated by more recent information supplied by, or on behalf of, the Borrower to the Lender.

 

		7.13	The Security Document creates (or once entered into, will create):

 

		(a)	valid, legally binding and enforceable Security for the obligations expressed to be secured by
it; and

 

		(b)	subject to registration under section 859A of the Companies Act 2006 and, in the case of real property
registration at HM Land Registry, perfected Security over the assets expressed to be subject to security in it,

 

in favour of the Lender, having
the priority and ranking expressed to be created in the Security Document and ranking ahead of all (if any) Security and rights
of third parties except those preferred by law.

 

		7.14	Each of the representations and warranties in this clause 10 is deemed to be repeated by the Borrower
on:

 

		(a)	the date of the request to draw down the Loan;

 

		(b)	the date that the Loan is actually drawn down; and

 

 

 

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		(c)	each date immediately succeeding the date on which interest is paid under this agreement in accordance
with clause 4.2,

 

by reference to the facts and
circumstances existing on each such date.

 

		8.	Covenants

 

The Borrower covenants with the
Lender that, as from the date of this agreement until all its liabilities under the Finance Documents have been discharged:

 

		8.1	It will promptly, after becoming aware of them, notify the Lender of any litigation, arbitration
or administrative proceedings or claim of the kind described in clause 7.8.

 

		8.2	It will notify the Lender of any Potential Event of Default or Event of Default (and the steps,
if any, being taken to remedy it) promptly on becoming aware of its occurrence.

 

		8.3	If the Lender is obliged for any reason to comply with "know your customer" or similar
identification procedures in circumstances where the necessary information is not already available to it, the Borrower will, promptly
on the request of the Lender, supply (or procure the supply of) such documentation and other evidence as is reasonably requested
in order for the Lender to be able to carry out, and be satisfied that it has complied with, all necessary "know your customer"
or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

		8.4	It will not:

 

		(a)	create, or permit to subsist, any Security on or over any of its assets other than Security created
pursuant to the Security Document;

 

		(b)	sell, transfer or otherwise dispose of any of its assets on terms whereby such assets are or may
be leased to or re-acquired or acquired by it; or

 

		(c)	sell, transfer or otherwise dispose of any of its receivables on recourse terms; or

 

		(d)	enter into any arrangement under which money or the benefit of a bank or other account may be applied,
set-off or made subject to a combination of accounts; or

 

		(e)	enter into any other preferential arrangement having a similar effect,

 

in circumstances where the arrangement
or transaction is entered into primarily as a method of raising Borrowed Money or of financing the acquisition of an asset.

 

 

 

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		8.5	It will not incur or permit to subsist, any obligation for Borrowed Money.

 

		8.6	It will not pay the principal or interest on any loans to its directors, people connected with
them, or entities in which they have an interest.

 

		8.7	It shall not sell, assign, lease, transfer or otherwise dispose of in any manner (or purport to
do so) all or any part of, or any interest in, its assets other than:

 

		(a)	trading stock in the ordinary course of business;

 

		(b)	assets exchanged for other assets comparable or superior as to type, value and quality; and

 

		(c)	assets whose market value is worth less than £5,000 (or its equivalent in another currency
or currencies) in any financial year.

 

		9.	Information

 

		9.1	The Borrower undertakes to provide the Lender with the following information at the following times:

 

	Information	Time
	A copy of each tax return submitted to HMRC until the Borrower has satisfied its obligations under this agreement in full	As soon as they are available 
	Monthly management accounts in a form reasonably acceptable to the Lender	As soon as they are available and in any event not more than the 10th day of the month after the month to which they relate
	Any communication received from or sent to HMRC	As soon as reasonably practical for received documents and prior to sending in the case of outgoing communications
	Annual accounts	As soon as they are available
	An up-to-date copy of the company’s bank statements	On the 1st and 15th day of the month (or where such day is on a weekend or bank holiday, the immediate following working day)

 

 

 

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		10.	Events of Default

 

Each of the events or circumstances
set out in this clause 10 (other than clause 10.19) is an Event of Default.

 

		10.1	The Borrower fails to pay any sum payable by it under any Finance Document, unless its failure
to pay is caused solely by an administrative error or technical problem and payment is made within three Business Days of its due
date.

 

		10.2	The Borrower fails (other than by failing to pay), to comply with any provision of any Finance
Documents.

 

		10.3	Any representation, warranty or statement made, repeated or deemed made by the Borrower in, or
pursuant to, any Finance Document is (or proves to have been) incomplete, untrue, incorrect or misleading when made, repeated or
deemed made.

 

		10.4	The Borrower stops or suspends payment of any of its debts, or is unable to, or fails to, or admits
its inability to, pay its debts as they fall due.

 

		10.5	There is a breach of any of the undertakings given by the directors of the Borrower in the Directors’
Undertakings given on the date of this agreement.

 

		10.6	The value of the Borrower's assets is less than its liabilities (taking into account contingent
and prospective liabilities).

 

		10.7	A moratorium is declared in respect of any Indebtedness of the Borrower.

 

		10.8	Any action, proceedings, procedure or step is taken for:

 

 

 

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		(a)	the suspension of payments, a moratorium of any Indebtedness, winding up, dissolution, administration
or reorganisation (using a voluntary arrangement, scheme of arrangement or otherwise) of the Borrower; or

 

		(b)	the composition, compromise, assignment or arrangement with any creditor; or

 

		(c)	the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager
or other similar officer in respect of the Borrower or any of its assets; or

 

		(d)	the enforcement of any Security over any assets of the Borrower.

 

		10.9	The Borrower commences negotiations, or enters into any composition, compromise, assignment or
arrangement, with one or more of its creditors with a view to rescheduling any of its Indebtedness (because of actual or anticipated
financial difficulties).

 

		10.10	Any event occurs in relation to the Borrower similar to those in clause 10.6 to clause 10.9 (inclusive)
under the laws of any applicable jurisdiction.

 

		10.11	A distress, attachment, execution, expropriation, sequestration or another analogous legal process
is levied, enforced or sued out on, or against, the Borrower's assets.

 

		10.12	Any provision of any Finance Document is or becomes, for any reason, invalid, unlawful, unenforceable,
terminated, disputed or ceases to be effective or to have full force and effect.

 

		10.13	The Borrower repudiates or evidences an intention to repudiate any Finance Document.

 

		10.14	The Borrower suspends or ceases to carry on (or threatens to suspend or cease to carry on) all
or a substantial part of its business.

 

		10.15	Any event occurs (or circumstances exist) which, in the opinion of the Lender, has or is likely
to materially and adversely affect the Borrower's ability to perform all or any of its obligations under, or otherwise comply with
the terms of, any Finance Document.

 

		10.16	The Borrower receives notice from HMRC that it is levying, or threatening to levy, a penalty against
the Borrower in connection with the Tax Credit, any previous R&D tax credit claims made by the Borrower or for any other reason.

 

 

 

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		10.17	There is a Change of Control of the Borrower.

 

		10.18	The Borrower fails to provide the information it is required to provide pursuant to clause 9 in
accordance with the timeframes set out therein.

 

		10.19	At any time after an Event of Default has occurred which is continuing, the Lender may, by notice
to the Borrower:

 

		(a)	cancel all outstanding obligations of the Lender under this agreement whereupon they shall immediately
be cancelled; and/or

 

		(b)	declare that the Loan (and all accrued interest and all other amounts outstanding under the Finance
Documents) is immediately due and payable, whereupon they shall become immediately due and payable; and/or

 

		(c)	declare that the Loan be payable on demand, whereupon it shall become immediately payable on demand
by the Lender; and/or

 

		(d)	declare the Security Document to be enforceable.

 

		10.20	Where there is a Potential Event of Default or Event of Default
pursuant to clause 10.17, the date of the Event of Default shall for the purposes of this agreement be the date falling 10 Business
Days after the Change of Control becomes effective, and the provisions of clauses 4.3 and 10.19 shall be amended accordingly
such that they shall only be effective from such date.

 

		11.	Set-off

 

		11.1	The Lender may at any time set off any liability of the Borrower to the Lender against any liability
of the Lender to the Borrower, whether either liability is present or future, liquidated or unliquidated, and whether or not either
liability arises under any Finance Document. Any exercise by the Lender of its rights under this clause 11.1 shall not limit or
affect any other rights or remedies available to it under the Finance Documents or otherwise.

 

		12.	Amendments, Waivers and Consents and Remedies

 

		12.1	No amendment of any Finance Document shall be effective unless it is in writing and signed by,
or on behalf of, each party to it (or its authorised representative).

 

 

 

    17 

     

    

 

	 	 

 

		12.2	A waiver of any right or remedy under any Finance Document or by law, or any consent given under
any Finance Document, is only effective if given in writing by the waiving or consenting party and shall not be deemed a waiver
of any other breach or default. It only applies in the circumstances for which it is given and shall not prevent the party giving
it from subsequently relying on the relevant provision.

 

		12.3	A failure or delay by a party to exercise any right or remedy provided under any Finance Document
or by law shall not constitute a waiver of that or any other right or remedy, prevent or restrict any further exercise of that
or any other right or remedy or constitute an election to affirm any Finance Document. No single or partial exercise of any right
or remedy provided under any Finance Document or by law shall prevent or restrict the further exercise of that or any other right
or remedy. No election to affirm any Finance Document by the Lender shall be effective unless it is in writing.

 

		12.4	The rights and remedies provided under the Finance Documents are cumulative and are in addition
to, and not exclusive of, any rights and remedies provided by law.

 

		13.	Severance

 

If any provision (or part of
a provision) of any Finance Document is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum
extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision (or part
of a provision) shall be deemed deleted. Any modification to or deletion of a provision (or part of a provision) under this clause
shall not affect the legality, validity and enforceability of the rest of the relevant Finance Documents.

 

		14.	Assignment and transfer

 

		14.1	The Lender may assign any of its rights under the Finance Documents or transfer all its rights
or obligations by novation.

 

		14.2	The Borrower may not assign any of its rights or transfer any of its rights or obligations under
any Finance Document.

 

 

 

    18 

     

    

 

	 	 

 

		15.	Counterparts

 

		15.1	Each Finance Document may be executed in any number of counterparts, each of which when executed
shall constitute a duplicate original, but all the counterparts shall together constitute one agreement.

 

		15.2	Transmission of an executed counterpart of this agreement (but for the avoidance of doubt not just
a signature page) by fax or email (in PDF, JPEG or other agreed format) shall take effect as delivery of an executed counterpart
of this agreement. If either method of delivery is adopted, without prejudice to the validity of the agreement thus made, each
party shall provide the others with the original of such counterpart as soon as reasonably possible thereafter.

 

		15.3	No counterpart shall be effective until each party has executed at least one counterpart.

 

		16.	Third party rights

 

		16.1	A person who is not a party to this agreement has no right under the Contracts (Rights of Third
Parties) Act 1999 to enforce or enjoy the benefit of any term of this agreement. This does not affect any right or remedy of a
third party which exists, or is available, apart from that Act.

 

		16.2	The rights of the parties to rescind or agree any amendment or waiver under this agreement are
not subject to the consent of any other person.

 

		17.	Notices

 

		17.1	Any notice or other communication given to a party under or in connection with, any Finance Document
shall be:

 

		(a)	in writing;

 

		(b)	delivered by hand, by pre-paid first-class post or other next working day delivery service or sent
by e-mail; and

 

		(c)	sent to a party's registered offices or such other address (including an e-mail address) as it
may notify to the other party from time to time.

 

 

 

    19 

     

    

 

	 	 

 

		17.2	Any notice or other communication that the Lender gives to the Borrower under or in connection
with, any Finance Document shall be deemed to have been received:

 

		(a)	if delivered by hand, at the time it is left at the relevant address;

 

		(b)	if posted by pre-paid first-class post or other next working day delivery service, on the second
Business Day after posting; and

 

		(c)	if sent by e-mail, at the time the e-mail is sent, or, if sent after 5.30pm or on a day that is
not a Business Day, at 9.30am on the next following Business Day.

 

		17.3	A notice or other communication given as described in clause 17.2(a) on a day that is not
a Business Day, or after normal business hours, in the place it is received, shall be deemed to have been received on the next
Business Day.

 

		17.4	Any notice or other communication given to the Lender shall be deemed to have been received only
on actual receipt.

 

		18.	Governing law and jurisdiction

 

		18.1	This agreement and any dispute or claim (including non-contractual disputes or claims) arising
out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law
of England and Wales.

 

		18.2	Each party irrevocably agrees that, subject as provided below, the courts of England and Wales
shall have exclusive jurisdiction over any dispute or claim (including non-contractual disputes or claims) that arises out of,
or in connection with this agreement or its subject matter or formation. Nothing in this clause shall limit the right of the Lender
to take proceedings against the Borrower in any other court of competent jurisdiction, nor shall the taking of proceedings in any
one or more jurisdictions preclude the taking of proceedings in any other jurisdictions, whether concurrently or not, to the extent
permitted by the law of such other jurisdiction.

 

		18.3	The Borrower irrevocably consents to any process in any legal action or proceedings under clause
18.2 being served on it in accordance with the provisions of this agreement relating to service of notices. Nothing contained in
this agreement shall affect the right to serve process in any other manner permitted by law.

 

This agreement has been entered into on
the date stated at the beginning of it.

 

 

 

    20 

     

    

 

	 	 

 

	Signed by ________________________ for and on behalf of SMARTKEM LIMITED	 	/s/ Robert Bahns
	 	 	Director
	 	 	 
	Signed by _______________________ for and on behalf of FCRF 2 LIMITED	 	/s/ Edmund Salvesen
	 	 	DirectorExhibit 10.15

 

		26-28 Hammersmith Grove

London W6 7BA

 

      Dated                                     2021

 

SMARTKEM LIMITED

 

 and

 

FCRF 2 LIMITED

 

DEBENTURE
  

 

  

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

THIS DEED is dated ___________

 

Parties

 

		(1)	SMARTKEM LIMITED incorporated and registered in England and
Wales with company number 06652152 whose registered office is at Optic
Technium Ffordd William Morgan, St. Asaph Business Park, St. Asaph, Clwyd, LL17 0JD (Borrower)

 

		(2)	FCRF 2 LIMITED incorporated and registered in England and Wales with company number 12338867 whose
registered office is at 26-28 Hammersmith Grove, Hammersmith, London W6 7BA
(Lender)

 

Background

 

		(A)	The Lender has agreed, pursuant to the Facility Agreement, to provide the Borrower with loan facilities
on a secured basis.

 

		(B)	Under this deed, the Borrower provides security to the Lender for the loan facilities made available
under the Facility Agreement.

 

It
is hereby agreed

 

		1.	Definitions and interpretation

 

		1.1	Definitions

 

The following definitions apply
in this deed:

 

Book Debts: all present
and future book and other debts, and monetary claims due or owing to the Borrower, and the benefit of all security, guarantees
and other rights of any nature enjoyed or held by the Borrower in relation to any of them.

 

Business Day: a day other
than a Saturday, Sunday or public holiday in England when banks in London are open for business.

 

Charged Property: any
freehold, leasehold or commonhold property the subject of the security constituted by this deed and references to "Charged
Property" shall include references to the whole or any part or part of it.

 

Delegate: any person
appointed as attorney of the Lender, Receiver or Delegate.

 

Designated Account: any
account of the Borrower nominated by the Lender as a designated account for the purposes of this deed.

 

Equipment: all present
and future equipment, plant, machinery, tools, vehicles, furniture, fittings, installations and apparatus and other tangible moveable
property for the time being owned by the Borrower, including any part of it and all spare parts, replacements, modifications and
additions.

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

Event of Default: has
the meaning given to that expression in the Facility Agreement.

 

Facility Agreement: the
facility agreement dated on or around the date of this Deed between the Borrower and the Lender for the provision of the loan facilities.

 

Financial Collateral:
has the meaning given to that expression in the Financial Collateral Regulations.

 

Financial Collateral Regulations:
the Financial Collateral Arrangements (No 2) Regulations 2003 (SI 2003/3226).

 

Insurance Policy: each
contract and policy of insurance effected or maintained by the Borrower from time to time in respect of its assets or business
(including, without limitation, any contract or policy of insurance relating to the Charged Properties or the Equipment).

 

Intellectual Property: the
Borrower's present and future patents, rights to inventions, copyright and related rights, trade marks and service marks, business
names and domain names, rights in get-up, goodwill and the right to sue for passing off , rights in designs, rights in computer
software, database rights, rights to use, and protect the confidentiality of, confidential information (including know-how and
trade secrets) and all other intellectual property rights, in each case whether registered or unregistered and including all applications
and rights to apply for and be granted, renewals or extensions of, and rights to claim priority from, such rights and all similar
or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.

 

Investments: all certificated
shares, stock, debentures, bonds or other securities or investments (whether or not marketable) from time to time legally or beneficially
owned by or on behalf of the Borrower.

 

LPA 1925: the Law of
Property Act 1925.

 

Receiver: a receiver,
receiver and manager or administrative receiver appointed by the Lender under clause 10.

 

Secured Assets: all the
assets, property and undertaking for the time being of the Borrower which are, or are intended to be, subject to the Security created
by, or pursuant to, this deed (and references to the Secured Assets shall include references to any part of them).

 

Secured Liabilities:
all present and future obligations and liabilities of the Borrower to the Lender, whether actual or contingent and whether owed
jointly or severally, as principal or surety or in any other capacity, under or in connection with the Facility Agreement or this
deed, together with all interest (including, without limitation, default interest) accruing in respect of those monies, obligations
or liabilities.

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

Security Financial Collateral
Arrangement: has the meaning given to that expression in the Financial Collateral Regulations.

 

Security: any mortgage,
charge (whether fixed or floating, legal or equitable), pledge, lien, assignment by way of security or other security interest
securing any obligation of any person, or any other agreement or arrangement having a similar effect.

 

Security Period: the
period starting on the date of this deed and ending on the date on which the Lender is satisfied that all the Secured Liabilities
have been unconditionally and irrevocably paid and discharged in full and no further Secured Liabilities are capable of being outstanding.

 

Tax Credit: has the same
meaning as in the Facility Agreement.

 

VAT: value added tax
or any equivalent tax chargeable in the UK or elsewhere.

 

		1.2	Interpretation

 

In this deed:

 

		(a)	headings shall not affect the interpretation of this deed;

 

		(b)	a reference to a person shall include a reference to an individual, firm, company, corporation,
partnership, unincorporated body of persons, government, state or agency of a state or any association, trust, joint venture or
consortium (whether or not having separate legal personality);

 

		(c)	unless the context otherwise requires, words in the singular shall include the plural and in the
plural shall include the singular;

 

		(d)	unless the context otherwise requires, a reference to one gender shall include a reference to the
other genders;

 

		(e)	a reference to a party shall include that party's successors, permitted assigns and permitted transferees
and this deed shall be binding on, and enure to the benefit of, the parties to this deed and their respective personal representatives,
successors, permitted assigns and permitted transferees;

 

		(f)	a reference to a statute or statutory provision is a reference to it as amended, extended or re-enacted
from time to time;

 

		(g)	a reference to a statute or statutory provision shall include all subordinate legislation made
from time to time under that statute or statutory provision;

 

		(h)	a reference to writing or written includes fax but not email;

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		(i)	an obligation on a party not to do something includes an obligation not to allow that thing to
be done;

 

		(j)	a reference to this deed (or any provision of it) or to any other agreement or document
referred to in this deed is a reference to this deed, that provision or such other agreement or document as amended (in each case,
other than in breach of the provisions of this deed) from time to time;

 

		(k)	unless the context otherwise requires, a reference to a clause or Schedule is to a clause of, or
Schedule to, this deed;

 

		(l)	any words following the terms including, include, in particular, for example
or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition,
phrase or term preceding those terms;

 

		(m)	a reference to an amendment includes a novation, re-enactment, supplement or variation (and
amend and amended shall be construed accordingly);

 

		(n)	a reference to assets includes present and future properties, undertakings, revenues, rights
and benefits of every description;

 

		(o)	a reference to an authorisation includes an approval, authorisation, consent, exemption,
filing, licence, notarisation, registration and resolution;

 

		(p)	a reference to determines or determined means, unless the contrary is indicated,
a determination made at the absolute discretion of the person making it; and

 

		(q)	a reference to a regulation includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental, inter-governmental or supranational body, agency, department
or regulatory, self-regulatory or other authority or organisation.

 

		1.3	Nature of security over real property

 

A reference in this deed to
a charge or mortgage of or over any Charged Property includes:

 

		(a)	all buildings and fixtures and fittings (including trade and tenant's fixtures and fittings) and
fixed plant and machinery that are situated on or form part of that Charged Property at any time;

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		(b)	the proceeds of the sale of any part of that Charged Property and any other monies paid or payable
in respect of or in connection with that Charged Property;

 

		(c)	the benefit of any covenants for title given, or entered into, by any predecessor in title of the
Borrower in respect of that Charged Property, and any monies paid or payable in respect of those covenants; and

 

		(d)	all rights under any licence, agreement for sale or agreement for lease in respect of that Charged
Property.

 

		1.4	Clawback

 

If the Lender considers that
an amount paid by the Borrower in respect of the Secured Liabilities is capable of being avoided or otherwise set aside on the
liquidation or administration of the Borrower or otherwise, then that amount shall not be considered to have been irrevocably paid
for the purposes of this deed.

 

		1.5	Law of Property (Miscellaneous Provisions) Act 1989

 

For the purposes of section
2 of the Law of Property (Miscellaneous Provisions) Act 1989, the terms of the Facility Agreement are incorporated into this deed.

 

		1.6	Perpetuity period

 

If the rule against perpetuities
applies to any trust created by this deed, the perpetuity period shall be 125 years (as specified by section 5(1) of the Perpetuities
and Accumulations Act 2009).

 

		2.	Covenant to pay

 

The Borrower shall, on demand,
pay to the Lender and discharge the Secured Liabilities when they become due.

 

		3.	Grant of security

 

		3.1	Legal mortgage

 

As a continuing security for
the payment and discharge of the Secured Liabilities, the Borrower with full title guarantee charges to the Lender, by way of a
first legal mortgage, all estates or interests in any freehold, leasehold or commonhold property now owned by it.

 

		3.2	Fixed charges

 

As a continuing security for
the payment and discharge of the Secured Liabilities, the Borrower with full title guarantee charges to the Lender by way of a
first fixed charge :

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		(a)	all present and future estates or interests of the Borrower in, or over, any freehold, leasehold
or commonhold property (other than any such property effectively mortgaged under clause 3.1);

 

		(b)	the benefit of all other contracts, guarantees, appointments and warranties relating to each Charged
Property and other documents to which the Borrower is a party or which are in its favour or of which it has the benefit relating
to any letting, development, sale, purchase, use or the operation of any Charged Property or otherwise relating to any Charged
Property (including, in each case, but without limitation, the right to demand and receive all monies whatever payable to or for
its benefit under or arising from any of them, all remedies provided for in any of them or available at law or in equity in relation
to any of them, the right to compel performance of any of them and all other rights, interests and benefits whatever accruing to
or for its benefit arising from any of them);

 

		(c)	all licences, consents and authorisations (statutory or otherwise) held or required in connection
with its business or the use of any Secured Asset, and all rights in connection with them;

 

		(d)	all its present and future goodwill;

 

		(e)	all its uncalled capital;

 

		(f)	all the Equipment;

 

		(g)	all the Intellectual Property;

 

		(h)	all the Book Debts;

 

		(i)	(to the extent not effectively assigned under clause 3.3(a)) the Tax Credit;

 

		(j)	all the Investments;

 

		(k)	all monies from time to time standing to the credit of its accounts with any bank, financial institution
or other person (including each Designated Account), together with all other rights and benefits accruing to or arising in connection
with each account (including, but not limited to, entitlements to interest);

 

		(l)	all its rights in respect of each Insurance Policy, including all claims, the proceeds of all claims
and all returns of premiums in connection with each Insurance Policy, to the extent not effectively assigned under clause 3.3.

 

		3.3	Assignment

 

As a continuing security for
the payment and discharge of the Secured Liabilities, the Borrower with full title guarantee assigns to the Lender absolutely,
subject to a proviso for reassignment on irrevocable discharge in full of the Secured Liabilities:

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		(a)	All its rights in relation to the Tax Credit; and

 

		(b)	all its rights in each Insurance Policy, including all claims, the proceeds of all claims and all
returns of premiums in connection with each Insurance Policy;

 

		3.4	Floating charge

 

As a continuing security for
the payment and discharge of the Secured Liabilities, the Borrower with full title guarantee charges to the Lender, by way of first
floating charge, all its undertaking, property, assets and rights not otherwise effectively mortgaged, charged or assigned clause
3.1 to clause 3.3 inclusive.

 

		3.5	Qualifying floating charge

 

Paragraph 14 of Schedule B1
to the Insolvency Act 1986 applies to the floating charge created by clause 3.4.

 

		3.6	Automatic crystallisation of floating charge

 

The floating charge created
by clause 3.4 shall automatically and immediately (without notice) convert into a fixed charge over the assets subject to that
floating charge if:

 

		(a)	the Borrower:

 

		(i)	creates, or attempts to create, without the prior written consent of the Lender, Security or a
trust in favour of another person over all or any part of the Secured Assets (except as expressly permitted by the terms of this
deed or the Facility Agreement); or

 

		(ii)	disposes, or attempts to dispose of, all or any part of the Secured Assets (other than Secured
Assets that are only subject to the floating charge while it remains uncrystallised);

 

		(b)	any person levies (or attempts to levy) any distress, attachment, execution or other process against
all or any part of the Secured Assets; or

 

		(c)	a resolution is passed or an order is made for the winding-up, dissolution, administration or re-organisation
of the Borrower.

 

		3.7	Crystallisation of floating charge by notice

 

The Lender may, in its sole
discretion, at any time and by written notice to the Borrower, convert the floating charge created under this deed into a fixed
charge as regards any part of the Secured Assets specified by the Lender in that notice.

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		4.	Treatment of Tax Credit

 

		4.1	All monies received by the Borrower by way of payment of the Tax Credit at any time (whether or
not the security constituted by this deed has become enforceable) shall:

 

		(a)	be paid immediately to the Lender or its solicitors in accordance with the terms of the Facility
Agreement; and

 

		(b)	until such time as such monies have been paid to the Lender or its solicitors, they shall be held
on trust by the Borrower as trustee of the same for the benefit of the Lender.

 

		5.	Representations and warranties

 

		5.1	Times for making representations and warranties

 

The Borrower makes the representations
and warranties set out in this clause 5 to the Lender on the date of this deed and on each day of the Security Period with reference
to the facts and circumstances existing at the time of repetition.

 

		5.2	Ownership of Secured Assets

 

The Borrower is the sole legal
and beneficial owner of, and has good, valid and marketable title to, the Secured Assets.

 

		5.3	No Security

 

The Secured Assets are free
from any Security other than the Security created by this deed.

 

		5.4	No adverse claims

 

The Borrower has not received,
or acknowledged notice of, any adverse claim by any person in respect of the Secured Assets or any interest in them.

 

		5.5	No adverse covenants

 

There are no covenants, agreements,
reservations, conditions, interests, rights or other matters whatsoever that materially and adversely affect the Secured Assets.

 

		5.6	No breach of laws

 

There is no breach of any law
or regulation that materially and adversely affects the Secured Assets.

 

		5.7	No interference in enjoyment

 

No facility necessary for the
enjoyment and use of the Secured Assets is subject to terms entitling any person to terminate or curtail its use.

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		5.8	Enforceable security

 

This deed constitutes and will
constitute the legal, valid, binding and enforceable obligations of the Borrower, and is, and will continue to be, effective security
over all and every part of the Secured Assets in accordance with its terms.

 

		6.	General covenants

 

		6.1	Negative pledge and disposal restrictions

 

The Borrower shall not at any
time, except with the prior written consent of the Lender:

 

		(a)	create, purport to create or permit to subsist any Security on, or in relation to, any Secured
Asset other than any Security created by this deed;

 

		(b)	sell, assign, transfer, part with possession of, or otherwise dispose of in any manner (or purport
to do so), all or any part of, or any interest in, the Secured Assets; or

 

		(c)	create or grant (or purport to create or grant) any interest in the Secured Assets in favour of
a third party.

 

		6.2	Preservation of Secured Assets

 

The Borrower shall not do, or
permit to be done, any act or thing that would or might depreciate, jeopardise or otherwise prejudice the security held by the
Lender, or materially diminish the value of any of the Secured Assets or the effectiveness of the security created by this deed
and shall keep all Secured Assets, where applicable, in good and serviceable condition, safeguard and maintain its rights in the
Secured Assets and deal with them only in the ordinary course of business.

 

		7.	Powers of the Lender

 

		7.1	Power to remedy

 

		(a)	The Lender shall be entitled (but shall not be obliged) to remedy, at any time, a breach by the
Borrower of any of its obligations contained in this deed.

 

		(b)	The Borrower irrevocably authorises the Lender and its agents to do all things that are necessary
or desirable for that purpose.

 

		(c)	Any monies expended by the Lender in remedying a breach by the Borrower of its obligations contained
in this deed shall be reimbursed by the Borrower to the Lender on a full indemnity basis and shall carry interest in accordance
with clause 14.1.

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		7.2	Lender has Receiver's powers

 

To the extent permitted by law,
any right, power or discretion conferred by this deed (either expressly or impliedly) or by law on a Receiver may, after the security
constituted by this deed has become enforceable, be exercised by the Lender in relation to any of the Secured Assets whether or
not it has taken possession of any Secured Assets and without first appointing a Receiver or notwithstanding the appointment of
a Receiver.

 

		7.3	Indulgence

 

The Lender may, at its discretion,
grant time or other indulgence, or make any other arrangement, variation or release with any person not being a party to this deed
(whether or not any such person is jointly liable with the Borrower) in respect of any of the Secured Liabilities, or of any other
security for them without prejudice either to this deed or to the liability of the Borrower for the Secured Liabilities.

 

		7.4	Appointment of accountants

 

The Borrower shall:

 

		(a)	at its own cost, if at any time so required by the Lender, appoint an accountant or firm of accountants
nominated by the Lender to investigate the financial affairs of the Borrower and report to the Lender; and

 

		(b)	co-operate fully with any accountants so appointed and immediately provide those accountants with
all information requested.

 

The Borrower authorises the
Lender to make an appointment as it shall think fit at any time, without further authority from the Borrower. In every case, the
Borrower shall pay, or reimburse the Lender for, the fees and expenses of those accountants.

 

		8.	When security becomes enforceable

 

		8.1	Security becomes enforceable on Event of Default

 

The security constituted by
this deed shall become immediately enforceable if an Event of Default occurs.

 

		8.2	Discretion

 

After the security constituted
by this deed has become enforceable, the Lender may, in its absolute discretion, enforce all or any part of that security at the
times, in the manner and on the terms it thinks fit, and take possession of and hold or dispose of all or any part of the Secured
Assets.

 

 

 

     

     

    

 

		26-28 Hammersmith Grove

London W6 7BA

 

		9.	Enforcement of security

 

		9.1	Enforcement powers

 

		(a)	For the purposes of all powers implied by statute, the Secured Liabilities are deemed to have become
due and payable on the date of this deed.

 

		(b)	The power of sale and other powers conferred by section 101 of the LPA 1925 (as varied or extended
by this deed) shall be immediately exercisable at any time after the security constituted by this deed has become enforceable .

 

		(c)	Section 103 of the LPA 1925 does not apply to the security constituted by this deed.

 

		9.2	Privileges

 

Each Receiver and the Lender
is entitled to all the rights, powers, privileges and immunities conferred by the LPA 1925 on mortgagees and receivers.

 

		9.3	No liability as mortgagee in possession

 

Neither the Lender nor any Receiver
or Delegate shall be liable, by reason of entering into possession of a Secured Asset or for any other reason, to account as mortgagee
in possession in respect of all or any of the Secured Assets, nor shall any of them be liable for any loss on realisation of, or
for any act, default or omission for which a mortgagee in possession might be liable.

 

		9.4	Right of appropriation

 

		(a)	To the extent that:

 

		(i)	the Secured Assets constitute Financial Collateral; and

 

		(ii)	this deed and the obligations of the Borrower under it constitute a Security Financial Collateral
Arrangement,

 

the Lender shall have the right,
at any time after the security constituted by this deed has become enforceable, to appropriate all or any of those Secured Assets
in or towards the payment or discharge of the Secured Liabilities in any order that the Lender may, in its absolute discretion,
determine.

 

		(b)	The value of any Secured Assets appropriated in accordance with this clause shall be the amount
standing to the credit of each of the Borrower's accounts with any bank, financial institution or other person, together with any
accrued but unpaid interest, at the time the right of appropriation is exercised; and

 

 

 

     

     

    

 

 

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		(c)	The Borrower agrees that the methods of valuation provided for in this clause are commercially
reasonable for the purposes of the Financial Collateral Regulations.

 

		9.5	Power to dispose of chattels

 

		(a)	At any time after the security constituted by this deed has become enforceable, the Lender or any
Receiver may, as agent for the Borrower, dispose of any chattels or produce found on any Charged Property.

 

		(b)	Without prejudice to any obligation to account for the proceeds of any disposal made under clause
9.5(a), the Borrower shall indemnify the Lender and any Receiver against any liability arising from any disposal made under clause
9.5(a).

 

		10.	Receiver

 

		10.1	Appointment

 

			At any time after the security constituted by this deed has become enforceable, or at the
                                                                              request of the Borrower, the Lender may, without further notice, appoint by way of deed, or otherwise in writing, any one or
                                                                              more persons to be a Receiver of all or any part of the Secured Assets.

 

		10.2	Removal

 

			The Lender may, without further notice (subject to section 45 of the Insolvency Act 1986 in
                                                                              the case of an administrative receiver), from time to time, by way of deed, or otherwise in writing, remove any Receiver
                                                                              appointed by it and may, whenever it thinks fit, appoint a new Receiver in the place of any Receiver whose appointment may
                                                                              for any reason have terminated.

 

		10.3	Remuneration

 

			The Lender may fix the remuneration of any Receiver appointed by it without the restrictions
                                                                              contained in section 109 of the LPA 1925, and the remuneration of the Receiver shall be a debt secured by this deed, to the
                                                                              extent not otherwise discharged.

 

		10.4	Power of appointment additional to statutory powers

 

			The power to appoint a Receiver conferred by this deed shall be in addition to all statutory
                                                                             and other powers of the Lender under the Insolvency Act 1986, the LPA 1925 or otherwise, and shall be exercisable without the
                                                                             restrictions contained in sections 103 and 109 of the LPA 1925 or otherwise.

 

 

    

     

    

 

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Hammersmith Grove

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		10.5	Agent of the Borrower

 

			Any Receiver appointed by the Lender under this deed shall be the agent of the Borrower and
                                                                             the Borrower shall be solely responsible for the contracts, engagements, acts, omissions, defaults, losses and remuneration
                                                                             of that Receiver and for liabilities incurred by that Receiver. The agency of each Receiver shall continue until the Borrower
                                                                             goes into liquidation and after that the Receiver shall act as principal and shall not become the agent of the Lender.

 

		11.	Powers of Receiver

 

		11.1	General

 

		(a)	Any Receiver appointed by the Lender under this deed shall, in addition to the powers conferred
on it by statute, have the rights, powers and discretions set out in clause 11.2 to clause 11.6.

 

		(b)	A Receiver has all the rights, powers and discretions conferred on a receiver (or a receiver and
manager) under the LPA 1925, and shall have those rights, powers and discretions conferred on an administrative receiver under
the Insolvency Act 1986 whether it is an administrative receiver or not.

 

		(c)	If there is more than one Receiver holding office at the same time, each Receiver may (unless the
document appointing it states otherwise) exercise all of the powers conferred on a Receiver under this deed individually and to
the exclusion of any other Receiver.

 

		(d)	Any exercise by a Receiver of any of the powers given by clause 11 may be on behalf of the Borrower,
the directors of the Borrower or itself.

 

		11.2	Employ personnel and advisers

 

		(a)	A Receiver may provide services and employ or engage any managers, officers, servants, contractors,
workmen, agents, other personnel and professional advisers on any terms, and subject to any conditions, that it thinks fit.

 

		(b)	A Receiver may discharge any such person or any such person appointed by the Borrower.

 

		11.3	Remuneration

 

			A Receiver may charge and receive any sum by way of remuneration (in addition to all costs,
                                                                             charges and expenses incurred by it) that the Lender may prescribe or agree with it.

 

		11.4	Possession

 

			A Receiver may take immediate possession of, get in and realise any Secured Asset.

 

 

 

    

     

    

 

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		11.5	Dispose of Secured Assets

 

			A Receiver may sell, exchange, convert into money and realise all or any of the Secured
                                                                              Assets in respect of which it is appointed in any manner (including, without limitation, by public auction or private sale)
                                                                              and generally on any terms and conditions as it thinks fit. Any sale may be for any consideration that the Receiver thinks
                                                                              fit and a Receiver may promote, or concur in promoting, a company to purchase the Secured Assets to be sold.

 

		11.6	Incidental powers

 

			A Receiver may do any other acts and things that it:

 

		(a)	may consider desirable or necessary for realising any of the Secured Assets;

 

		(b)	may consider incidental or conducive to any of the rights or powers conferred on a Receiver under
or by virtue of this deed or law; or

 

		(c)	lawfully may or can do as agent for the Borrower.

 

		12.	Delegation

 

		12.1	Delegation

 

			The Lender or any Receiver may delegate (either generally or specifically) by power of
                                                                              attorney or in any other manner to any person any right, power, authority or discretion conferred on it by this deed
                                                                              (including the power of attorney granted under clause 16.1).

 

		12.2	Terms

 

			The Lender and each Receiver may make a delegation on the terms and conditions (including the
                                                                              power to sub-delegate) that it thinks fit.

 

		12.3	Liability

 

			Neither the Lender nor any Receiver shall be in any way liable or responsible to the Borrower
                                                                              for any loss or liability arising from any act, default, omission or misconduct on the part of any Delegate.

 

		13.	Application of proceeds

 

		13.1	Order of application of proceeds

 

			All monies received or recovered by the Lender, a Receiver or a Delegate under this deed or
                                                                              in connection with the realisation or enforcement of all or part of the security constituted by this deed, shall (subject to
                                                                              the claims of any person having prior rights and by way of variation of the LPA 1925) be applied in the following order of
                                                                              priority (but without prejudice to the Lender's right to recover any shortfall from the Borrower):

 

		(a)	in or towards payment of all costs, liabilities, charges and expenses incurred by or on behalf
of the Lender (and any Receiver, Delegate, attorney or agent appointed by it) under or in connection with this deed, and of all
remuneration due to any Receiver under or in connection with this deed;

 

 

 

    

     

    

 

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		(b)	in or towards payment of the Secured Liabilities in any order and manner that the Lender determines;
and

 

		(c)	in payment of the surplus (if any) to the Borrower or other person entitled to it.

 

		13.2	Appropriation

 

			Neither the Lender, any Receiver nor any Delegate shall be bound (whether by virtue of
                                                                              section 109(8) of the LPA 1925, which is varied accordingly, or otherwise) to pay or appropriate any receipt or payment
                                                                              first towards interest rather than principal or otherwise in any particular order between any of the Secured
                                                                              Liabilities.

 

		14.	Costs and indemnity

 

		14.1	Costs

 

			The Borrower shall, promptly on demand, pay to, or reimburse, the Lender and any Receiver, on
                                                                              a full indemnity basis, all costs, charges, expenses, taxes and liabilities of any kind (including, without limitation,
                                                                              legal, printing and out-of-pocket expenses) incurred by the Lender, any Receiver or any Delegate in connection with:

 

		(a)	this deed or the Secured Assets;

 

		(b)	taking, holding, protecting, perfecting, preserving or enforcing (or attempting to do so) any of
the Lender's, a Receiver's or a Delegate's rights under this deed; or

 

		(c)	taking proceedings for, or recovering, any of the Secured Liabilities,

 

			together with interest, which shall accrue and be payable (without the need for any demand
                                                                              for payment being made) from the date on which the relevant cost, charge, expense, tax or liability arose until full
                                                                              discharge of that cost, charge, expense, tax or liability (whether before or after judgment, liquidation, winding up or
                                                                              administration of the Borrower) at the rate and in the manner specified in the Facility Agreement.

 

		14.2	Indemnity

 

		(a)	The Borrower shall indemnify the Lender, each Receiver and each Delegate, and their respective
employees and agents against all liabilities, costs, expenses, damages and losses (including but not limited to any direct, indirect
or consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs (calculated on a full indemnity
basis) and all other professional costs and expenses) suffered or incurred by any of them arising out of or in connection with:

 

 

 

    

     

    

 

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		(i)	the exercise or purported exercise of any of the rights, powers, authorities or discretions vested
in them under this deed or by law in respect of the Secured Assets;

 

		(ii)	taking, holding, protecting, perfecting, preserving or enforcing (or attempting to do so) the security
constituted by this deed; or

 

		(iii)	any default or delay by the Borrower in performing any of its obligations under this deed.

 

		(b)	Any past or present employee or agent may enforce the terms of this clause 14.2 subject to and
in accordance with the provisions of the Contracts (Rights of Third Parties) Act 1999.

 

		15.	Further assurance

 

		15.1	Further assurance

 

		15.2	The Borrower shall promptly, at its own expense, take whatever action the Lender or any Receiver
may reasonably require for:

 

		(a)	creating, perfecting or protecting the security created or intended to be created by this deed;

 

		(b)	facilitating the realisation of any Secured Asset; or

 

		(c)	facilitating the exercise of any right, power, authority or discretion exercisable by the Lender
or any Receiver in respect of any Secured Asset,

 

		15.3	including, without limitation the execution of any mortgage, transfer, conveyance, assignment or
assurance of all or any of the assets forming part of (or intended to form part of) the Secured Assets (whether to the Lender or
to its nominee) and the giving of any notice, order or direction and the making of any filing or registration which, in any such
case, the Lender may consider necessary or desirable.

 

		16.	Power of attorney

 

		16.1	Appointment of attorneys

 

		By	way of security, the Borrower irrevocably appoints the
Lender, every Receiver and every Delegate separately to be the attorney of the Borrower and, in its name, on its behalf and as
its act and deed, to execute any documents and do any acts and things that:

 

		(a)	the Borrower is required to execute and do under this deed; or

 

 

 

    

     

    

 

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		(b)	any attorney deems proper or desirable in exercising any of the rights, powers, authorities and
discretions conferred by this deed or by law on the Lender, any Receiver or any Delegate.

 

		16.2	Ratification of acts of attorneys

 

			The Borrower ratifies and confirms, and agrees to ratify and confirm, anything that any of
                                                                              its attorneys may do in the proper and lawful exercise, or purported exercise, of all or any of the rights, powers,
                                                                              authorities and discretions referred to in clause 16.1.

 

		17.	Assignment and transfer

 

		17.1	Assignment by Lender

 

		(a)	At any time, without the consent of the Borrower, the Lender may assign or transfer any or all
of its rights and obligations under this deed.

 

		(b)	The Lender may disclose to any actual or proposed assignee or transferee any information in its
possession that relates to the Borrower, the Secured Assets and this deed that the Lender considers appropriate.

 

		17.2	Assignment by Borrower

 

			The Borrower may not assign any of its rights, or transfer any of its rights or obligations,
                                                                              under this deed.

 

		18.	Set-off

 

		18.1	Lender's right of set-off

 

			The Lender may at any time set off any liability of the Borrower to the Lender against any
                                                                              liability of the Lender to the Borrower, whether either liability is present or future, liquidated or unliquidated, and
                                                                              whether or not either liability arises under this deed. If the liabilities to be set off are expressed in different
                                                                              currencies, the Lender may convert either liability at a market rate of exchange for the purpose of set-off. Any exercise by
                                                                              the Lender of its rights under this clause 18shall not limit or affect any other rights or remedies available to it under
                                                                              this deed or otherwise.

 

		18.2	No obligation to set off

 

			The Lender is not obliged to exercise its rights under clause 18.1. If, however, it does
                                                                              exercise those rights it must promptly notify the Borrower of the set-off that has been made.

 

		18.3	Exclusion of Borrower's right of set-off

 

			All payments made by the Borrower to the Lender under this deed shall be made in full without
                                                                              any set-off, counterclaim, deduction or withholding (other than any deduction or withholding of tax as required by law).

 

 

 

    

     

    

 

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Hammersmith Grove

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		19.	Amendments, waivers and consents

 

		19.1	Amendments

 

			No amendment of this deed shall be effective unless it is in writing and signed by, or on
                                                                              behalf of, each party (or its authorised representative).

 

		19.2	Waivers and consents

 

		(a)	A waiver of any right or remedy under this deed or by law, or any consent given under this deed,
is only effective if given in writing by the waiving or consenting party and shall not be deemed a waiver of any other breach or
default. It only applies in the circumstances for which it is given and shall not prevent the party giving it from subsequently
relying on the relevant provision.

 

		(b)	A failure or delay by a party to exercise any right or remedy provided under this deed or by law
shall not constitute a waiver of that or any other right or remedy, prevent or restrict any further exercise of that or any other
right or remedy or constitute an election to affirm this deed. No single or partial exercise of any right or remedy provided under
this deed or by law shall prevent or restrict the further exercise of that or any other right or remedy. No election to affirm
this deed by the Lender shall be effective unless it is in writing.

 

		19.3	Rights and remedies

 

			The rights and remedies provided under this deed are cumulative and are in addition to, and
                                                                              not exclusive of, any rights and remedies provided by law.

 

		20.	Severance

 

		20.1	Severance

 

			If any provision (or part of a provision) of this deed is or becomes invalid, illegal or
                                                                              unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such
                                                                              modification is not possible, the relevant provision (or part of a provision) shall be deemed deleted. Any modification to or
                                                                              deletion of a provision (or part of a provision) under this clause shall not affect the legality, validity and enforceability
                                                                              of the rest of this deed.

 

		21.	Counterparts

 

		21.1	Counterparts

 

			This deed may be executed in any number of counterparts, each of which when executed and
                                                                              delivered shall constitute a duplicate original, but all the counterparts shall together constitute one deed.

 

 

 

    

     

    

 

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Hammersmith Grove

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		22.	Third party rights

 

		22.1	Third party rights

 

		(a)	Except as expressly provided, a person who is not a party to this deed shall not have any rights
under the Contracts (Rights of Third Parties) Act 1999 to enforce, or enjoy the benefit of, any term of this deed. This does not
affect any right or remedy of a third party which exists, or is available, apart from that Act.

 

		(b)	The rights of the parties to rescind or agree any amendment or waiver under this deed are not subject
to the consent of any other person.

 

		23.	Further provisions

 

		23.1	Independent security

 

			The security constituted by this deed shall be in addition to, and independent of, any other
                                                                              security or guarantee that the Lender may hold for any of the Secured Liabilities at any time. No prior security held by the
                                                                              Lender over the whole or any part of the Secured Assets shall merge in the security created by this deed.

 

		23.2	Continuing security

 

			The security constituted by this deed shall remain in full force and effect as a continuing
                                                                              security for the Secured Liabilities, despite any settlement of account, or intermediate payment, or other matter or thing,
                                                                              unless and until the Lender discharges this deed in writing.

 

		23.3	Discharge conditional

 

			Any release, discharge or settlement between the Borrower and the Lender shall be deemed
                                                                              conditional on no payment or security received by the Lender in respect of the Secured Liabilities being avoided, reduced or
                                                                              ordered to be refunded under any law relating to insolvency, bankruptcy, winding-up, administration, receivership or
                                                                              otherwise. Despite any such release, discharge or settlement:

 

		(a)	the Lender or its nominee may retain this deed and the security created by or under it, including
all certificates and documents relating to the whole or any part of the Secured Assets, for any period that the Lender deems necessary
to provide the Lender with security against any such avoidance, reduction or order for refund; and

 

		(b)	the Lender may recover the value or amount of such security or payment from the Borrower subsequently
as if the release, discharge or settlement had not occurred.

 

 

 

    

     

    

 

	 	26-28
Hammersmith Grove

London W6 7BA

 

 

		23.4	Certificates

 

			A certificate or determination by the Lender as to any amount for the time being due to it
                                                                              from the Borrower under this deed and the Facility Agreement shall be, in the absence of any manifest error, conclusive
                                                                              evidence of the amount due.

 

		23.5	Consolidation

 

			The restriction on the right of consolidation contained in section 93 of the LPA 1925 shall
                                                                              not apply to this deed.

 

		24.	Notices

 

		24.1	Delivery

 

			Any notice or other communication given to a party under or in connection with this deed
                                                                              shall be:

 

		(a)	in writing;

 

		(b)	delivered by hand, by pre-paid first-class post or other next working day delivery service or sent
by fax; and

 

		(c)	sent to the address set out at the beginning of this agreement or to any other address or fax number
as is notified in writing by one party to the other from time to time.

 

		24.2	Receipt by Borrower

 

			Any notice or other communication that the Lender gives to the Borrower shall be deemed to
                                                                              have been received:

 

		(a)	if delivered by hand, at the time it is left at the relevant address;

 

		(b)	if posted by pre-paid first-class post or other next working day delivery service, on the second
Business Day after posting; and

 

		(c)	if sent by fax, when received in legible form.

 

A notice or other communication
given as described in clause 24.2(a) or clause 24.2(c) on a day that is not a Business Day, or after normal business
hours, in the place it is received, shall be deemed to have been received on the next Business Day.

 

		24.3	Receipt by Lender

 

			Any notice or other communication given to the Lender shall be deemed to have been received
                                                                              only on actual receipt.

 

 

 

    

     

    

 

	 	26-28
Hammersmith Grove

London W6 7BA

 

 

		24.4	Service of proceedings

 

			This clause 24 does not apply to the service of any proceedings or other documents in any
                                                                              legal action or, where applicable, any arbitration or other method of dispute resolution.

 

		24.5	No notice by email

 

			A notice or other communication given under or in connection with this deed is not valid if
                                                                              sent by email.

 

		25.	Governing law and jurisdiction

 

		25.1	Governing law

 

			This deed and any dispute or claim (including non-contractual disputes or claims) arising out
                                                                              of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law
                                                                              of England and Wales.

 

		25.2	Jurisdiction

 

			Each party irrevocably agrees that, subject as provided below, the courts of England and
                                                                              Wales shall have exclusive jurisdiction over any dispute or claim (including non-contractual disputes or claims) arising out
                                                                              of or in connection with this deed or its subject matter or formation. Nothing in this clause shall limit the right of the
                                                                              Lender to take proceedings against the Borrower in any other court of competent jurisdiction, nor shall the taking of
                                                                              proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdictions, whether
                                                                              concurrently or not, to the extent permitted by the law of such other jurisdiction.

 

 

 

    

     

    

 

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Hammersmith Grove

London W6 7BA

 

 

In witness whereof this document
has been executed and delivered as a deed on the date first stated above.

 

	 	 
	Executed
    as a Deed by SMARTKEM LIMITED acting by                   ,
    a 	/s/ Robert Bahns
	director, in the presence of	 
	 	Director
	 	 
	 	 
	/s/ Hind Khalifeh	 
	 	 
	[SIGNATURE OF WITNESS]	 
	 	 
	[NAME OF WITNESS IN BLOCK CAPITALS]	 
	 	 
	[ADDRESS OF WITNESS]	 
	 	 
	[OCCUPATION OF WITNESS]	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 
	Executed
as a Deed by FCRF 2 LIMITED acting by                   ,
a director,	/s/ Edmund Salvesen
	 in  the presence of	 
	 	Director
	 	 
	/s/ Mary Abigail Salvesen	 
	 	 
	[SIGNATURE OF WITNESS]	 
	 	 
	[NAME OF WITNESS IN BLOCK CAPITALS]	 
	 	 
	[ADDRESS OF WITNESS]	 
	 	 
	[OCCUPATION OF WITNESS]

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