Material Agreement - Form 8-K

Loan And Security Agreement

On April 18, 2024 (the "Closing Date"), AquaBounty Technologies, Inc. (the "Company"), AquaBounty Farms, Inc. (the "Parent"), which is a subsidiary of the Company, AquaBounty Farms Indiana LLC ("ABFI"), a subsidiary of the Parent, and AquaBounty Farms Ohio LLC ("ABFO" and, together with the Company, the Parent and ABFI, the "Borrowers"), a subsidiary of the Parent, entered into a Loan and Security agreement (the "Loan Agreement") with JMB Capital Partners Lending, LLC (the "Lender") to fund working capital of the Borrowers through a secured term loan of up to $10 million (the "Loan") that matures on July 31, 2024 or, if earlier, upon the sale of certain collateral or upon an Event of Default (as defined therein) (the "Stated Maturity Date"). $5 million of the Loan will be advanced to the Borrowers on the Closing Date (the "Initial Loan"), and an additional $5 million will be advanced to the Borrowers upon the satisfaction of certain conditions set out in the Loan Agreement. Of the Initial Loan, approximately $2,843,000 will be used by the Lender to purchase the Loan and Security Agreement ("First Farmers Loan Agreement"), dated as of July 31, 2020, between AQBI and First Farmers Bank & Trust ("First Farmers"). The Lender shall release cash collateral held by First Farmers in an amount of $1,000,000 upon purchasing the First Farmers Loan Agreement.

The Loan bears interest at a rate of 15% on its outstanding principal balance and is subject to a commitment fee equal to 5% of the Lender's Commitment (as defined in the Loan Agreement), payable on the Closing Date, and an exit fee equal to 8% of the Lender's Commitment, payable upon the earlier of the payment of all or any portion of the principal amount of the Loan or upon the Stated Maturity Date.

As mortgagee of ABFI's farm in Albany, Indiana (the "Albany Farm"), First Farmers shall assign the Mortgage, Assignment of Rents and Leases, Security Agreement, Fixture Filing and Financing Statement (the "Indiana Mortgage") in favor of the Lender in regard to the Albany Farm to secure the Borrowers' obligations under the Loan Agreement and the First Farmers Loan Agreement. In addition Registrant shall grant a new mortgage to Lender in regard to the Albany Farm to secure Borrowers' obligations under the Loan Agreement.

As the owner of a farm in Pioneer, Ohio (the "Pioneer Farm"), ABFO shall grant an Open-Ended Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the "Ohio Mortgage") in favor of the Lender in regard to the Pioneer Farm to secure the Borrowers' obligations under the Loan Agreement.

The Loan Agreement grants a first security interest in all present and after-acquired assets of the Borrowers, subject to certain exclusions set forth in the Loan Agreement, the Indiana Mortgage grants a first security interest in the buildings and land comprising of the Albany Farm, and the Ohio Mortgage grants a first security interest in the buildings and land comprising of the Pioneer Farm.

The Loan Agreement contains customary representations, warranties, and affirmative and negative covenants.

The foregoing summary of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Loan Agreement.

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