Collateral Mortgage dated as of October 9, 2018, by and between AQUA Bounty Canada Inc. and Prince Edward Island Century 2000 Fund Inc

THIS COLLATERAL MORTGAGE made this    9th    day of October, 2018.

BETWEEN:

AQUA BOUNTY CANADA INC., a body corporate, duly incorporated under the laws of the Province of Newfoundland and Labrador;

(hereinafter called the “Mortgagor”)

AND:

PRINCE EDWARD ISLAND CENTURY 2000 FUND INC., a body corporate, duly incorporated by a special Act of the Prince Edward Island Legislature, with head office in the City of Charlottetown, in Queens County, Province of Prince Edward Island

(hereinafter called the “Mortgagee”)

WHEREAS the Mortgagor is indebted to the Mortgagee;

AND WHEREAS the Mortgagee has demanded from the Mortgagor additional security for payment to the Mortgagee on demand of all money and liabilities, whether direct or contingent, now or hereafter owing or incurred from or by the Mortgagor to the Mortgagee;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that in consideration of the premises and of the Mortgagee agreeing to deal with the Mortgagor in the way of its business as a lending institution, the Mortgagor, who conveys as beneficial owner, doth grant a Mortgage unto the Mortgagee, its successors and assigns forever, over all and singular all the lands and premises described in the Schedule hereto annexed and marked “A”, TOGETHER with all and every the rights, privileges, easements, advantages and appurtenances wheresoever to the said hereditaments belonging or in anywise pertaining or thereunto now or heretofore holden, used, occupied or enjoyed; TO HAVE AND TO HOLD the said messuages and tenements, lands and hereditaments and all and singular other the premises hereinbefore granted, appointed and released or expressed and intended so to be with their appurtenances UNTO AND TO THE USE OF the Mortgagee, its successors and assigns forever.

The Mortgagor and the Mortgagee covenant and agree with each other that the provisions of this Indenture added to the short form clause shall not derogate from the Mortgagee’s rights under the long clauses in The Enactments Respecting Short Forms of Indentures but shall be in addition thereto or in substitution for part or parts thereof as the Mortgagee may elect and all shall have the force of covenants.

PROVIDED THIS MORTGAGE TO BE VOID on payment by the Mortgagor on demand of all money and liabilities, whether direct or contingent, now or hereafter owing or

incurred from or by the Mortgagor, whether as principal or surety, whether alone or jointly with any other person, and in whatever name, style or firm arising from dealings between the Mortgagee and the Mortgagor and all interests, damages, costs, charges and expenses which may become due or payable to the Mortgagee or may be paid or incurred by the Mortgagee upon or in respect to the said money and liabilities or any part thereof, all premiums of insurance upon the buildings upon the said lands which may be paid by the Mortgagee and taxes (the foregoing being hereinafter referred to as the “Indebtedness”), and performance of statute labour and observance and performance of all covenants, provisos and conditions herein contained.

IT IS UNDERSTOOD AND AGREED that these presents shall stand as continuing security for the payment of the Indebtedness.

THIS MORTGAGE shall continue to be operative and binding and shall not be considered satisfied or discharged notwithstanding that, at any time or times, the account operated by the Mortgagor at the Mortgagee may be inactive and that there may be no present indebtedness at such time or times owing by the Mortgagor or that there may be any intermediate payments of the whole or any part of the Indebtedness from time to time made to the Mortgagee or any settlements of accounts effected for any other thing whatsoever done, suffered or operated.

UPON payment by the Mortgagor of the present Indebtedness at any time owing by the Mortgagor to the Mortgagee and upon observance and performance by the Mortgagor of all covenants, provisions and conditions herein contained then to be observed and performed by the Mortgagor and upon written request of the Mortgagor delivered to the Mortgagee for a Satisfaction of Mortgage to this Mortgage, which written request and its delivery to the Mortgagee is a condition to be performed by the Mortgagor under this Mortgage before this Mortgage shall be void. The Mortgagee shall at the expense of the Mortgagor execute and deliver to the Mortgagor a Satisfaction of Mortgage to discharge this Mortgage. This Mortgage shall stand as a continuing security for payment of the Indebtedness until such request is so made and delivered by the Mortgagor to the Mortgagee.

AND FURTHER that the taking of this security shall not operate as a merger of the remedies of the Mortgagee for the payment of the Indebtedness or of other obligations or securities now or at any time hereafter held for the same or any part thereof but that for and notwithstanding these presents and anything herein contained the said remedies shall remain intact and be capable of enforcement against the Mortgagor and all other persons liable in respect of the Indebtedness and other obligations or securities in the same manner and to the same extent as if these presents had not been executed.

THE MORTGAGOR covenants with the Mortgagee that the Mortgagor will pay the Indebtedness and will in all things abide by, observe and perform the above proviso, that the Mortgagor has a good title in fee simple to the said lands and that it has the right to convey the said lands to the Mortgagee and that on default the Mortgagee shall have quiet possession of the lands free from encumbrances and the Mortgagor will execute such further assurances of the said lands as may be requisite, and that the Mortgagor will execute as well before as after default; and the Mortgagor has done no act to encumber the said lands save as aforesaid; and that the Mortgagor will pay all taxes, charges and assessments, municipal, local, parliamentary and otherwise that may at any time be imposed on the said lands or any part thereof, or on the Mortgagee, its successors and assigns, on account thereof or of said redemption moneys, and that the said lands shall stand charged with and for such payments and the making thereof, and the Mortgagor will insure the buildings on the said lands to their full insurable value in dollars of lawful money of Canada; and the Mortgagor will assign and deliver up to the Mortgagee any policy or policies of insurance now existing upon the said buildings subject to the rights of any prior Mortgagee; and the Mortgagor doth release to the Mortgagee all its claims upon the said lands subject to the said proviso.

PROVIDED that the Mortgagee on default of payment for at least fifteen days may on at least four weeks’ notice enter on and lease or sell the said lands. Provided further that on default of payment for three months’ the foregoing power of entry, leasing and selling may be exercised by the Mortgagee without any notice whatsoever.

THE MORTGAGOR hereby covenants and agrees with the Mortgagee that, without prejudice to the powers under the foregoing proviso, the Mortgagee, in the event of default by the Mortgagor in payment of the Indebtedness or any part thereof, may sell the said lands or any part thereof by public auction or private sale for such price as can reasonably be obtained therefor and on such terms as to credit and otherwise and with such conditions of sale and stipulations as to title or evidence or commencement of title or otherwise as it shall in its discretion deem proper, and in that event of any sale on credit or for part cash and part credit, the Mortgagee shall not be accountable for or be charged with any moneys until actually received; and the Mortgagee may rescind or vary any contract for sale and may buy in and re-sell the mortgaged lands or any part thereof without being answerable for loss occasioned thereby; and no purchaser shall be bound to inquire into the legality, regularity or propriety of any sale or be affected by notice of any irregularity or impropriety; and no lack of default or want of notice or other requirement or any irregularity or impropriety of any kind shall invalidate any sale hereunder but the Mortgagee alone shall be responsible; and the Mortgagee may sell without entering into actual possession of the lands, and when it desires to take possession it

may break locks and bolts and while in possession shall be accountable only for moneys which are actually received by it and sales may be made from time to time of parts of the mortgaged lands to satisfy any part of the Indebtedness, leaving the residue thereof secured hereunder on the remaining lands or may take proceedings to sell and may sell the said lands for part of the Indebtedness subject to the balance of the Indebtedness not yet due at the time of the said sale; and the Mortgagee may take sale proceedings hereunder notwithstanding that other mortgage proceedings have been taken or are then pending; and the proceeds of any sale hereunder may be applied firstly in payment of any costs, charges and expenses incurred in taking, recovering or keeping possession of the said lands or by reason of non-payment or procuring payments of the Indebtedness of any part thereof;

THE MORTGAGOR hereby attorns to and becomes tenant of the said lands to the Mortgagee from year to year from the date of the execution hereof during the term of this Mortgage and any renewal or renewals thereof at a rental equivalent to, applicable in satisfaction of, and payable at the same times as the payments of interest hereinbefore provided to be paid, the legal relation of landlord and tenant being hereby constituted between the Mortgagee and the Mortgagor; but it is agreed that neither the existence of this provision nor anything done by virtue hereof shall render the Mortgagee a mortgagee in possession or accountable for any moneys except those actually received by it, and the Mortgagee may on default of payment or on breach of any of the covenants in this Mortgage contained enter upon the said lands and determine the tenancy hereby created without notice.

PROVIDED that the Mortgagee may distrain for arrears of any part of the Indebtedness. The Mortgagor hereby waives the right to claim exemption and agrees that the Mortgagee shall not be limited in the amount for which it may distrain.

THE MORTGAGOR covenants with the Mortgagee that it will keep the said lands and buildings, fixtures and improvements thereon or hereafter brought or erected thereon in good condition and repair according to the nature and description thereof respectively, and that the Mortgagee may, whenever it deems it necessary, by its surveyor or agent, enter upon and inspect the said lands and the reasonable cost of such inspection shall be added to the Indebtedness, and that if the Mortgagor or those claiming under it neglect to keep the said lands, fixtures and improvements in good condition and repair or commit any act of waste on the said lands or do anything by which the value of the said lands shall be diminished, as to all of which the Mortgagee shall be the sole judge, or make default as to any of the covenants or provisos herein contained, the Indebtedness shall, at the option of the Mortgagee, forthwith become due and payable, and in default of payment thereof the powers of entering upon and leasing or selling hereby given may be exercised forthwith; and the Mortgagee may make such

repairs as it deems necessary and the cost thereof with interest thereon shall be a charge upon the said lands prior to all claims thereon subsequent to these presents.

PROVIDED that until default of payment the Mortgagor shall have quiet possession of the said lands.

IT IS FURTHER AGREED by and between the parties hereto that the Mortgagee may at its discretion at all times release any part or parts of the said lands or any other security or any surety for the Indebtedness or any part thereof either with or without any sufficient consideration therefor, without responsibility therefor and without thereby releasing any other part of the said lands or any person from this Mortgage or from any of the covenants herein contained and without being accountable to the Mortgagor for the value thereof or for any money except that actually received by the Mortgagee, it being expressly agreed that every part or lot into which the mortgaged lands are or may hereafter be divided does and shall stand charged with the whole of Indebtedness. PROVIDED that no extension of time given by the Mortgagee to the Mortgagor or anyone claiming under the Mortgagee or any other dealing by the Mortgagee with the owner or owners of the equity of redemption of the said lands or of any part thereof shall in any way affect or prejudice the rights of the Mortgagee against the Mortgagor or any other person liable for the payment of the Indebtedness or any parts thereof;

PROVIDED that no sale or other dealing by the Mortgagor with the equity of redemption in the said lands or any part thereof shall in any way change the liability of the Mortgagor or in any way alter the rights of the Mortgagee as against the Mortgagor or any other person liable for payment of the Indebtedness or any part thereof.

PROVIDED and it is hereby further agreed by and between the parties hereto that should default be made by the Mortgagor in the observance or performance of any of the covenants, provisos, agreements or conditions contained in any mortgage to which this mortgage is subject, then, and in that event, the Indebtedness shall forthwith become due and be payable at the option of the Mortgagee and all the powers in and by this mortgage conferred shall become exercisable forthwith without any notice.

IT IS FURTHER understood and agreed between the parties hereto that any moneys received by the Mortgagee under and by virtue of this mortgage, whether by sale or lease of the property mortgaged or any part thereof or otherwise, and any moneys received by the Mortgagee under or by virtue of any other security now or hereafter held in connection with the Indebtedness or any part thereof, may be applied from time to time by the Mortgagee upon such part or parts of the Indebtedness as the Mortgagee may think best.

PROVIDED that the taking of a judgment or judgments against the Mortgagor on any of the covenants herein contained shall not operate as a merger of the said covenants or

affect the Mortgagee’s right to interest on the amount of the Indebtedness at the rate payable by the Mortgagor to the Mortgagee, and further that any such judgment may provide that interest thereon shall be computed at the same rate until such judgment shall have been fully paid and satisfied.

AND it is hereby declared and agreed by and between the parties hereto that all rights, advantages, privileges, immunities, powers and remedies hereby secured to the Mortgagee shall be equally secured to and exercisable by its successors and assigns; that all covenants and liabilities entered into or imposed hereunder upon the Mortgagor shall be equally binding upon the heirs, executors, administrators and assigns or successors and assigns of the Mortgagor as the case may be; and that all the provisions hereof shall have effect, any statute to the contrary notwithstanding.

Notwithstanding anything herein to the contrary, the Mortgagee shall not be required to disburse all or any further part of any principal sum at any time or times and the whole of any principal sum may, at the Mortgagee’s option, become immediately due and payable:

Any one or more of the following events shall constitute an event of default (whether any such event of default shall be voluntary or involuntary or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any administrative governmental body):

IT IS FURTHER declared and agreed that in these presents, unless there is something in the context inconsistent therewith, any words importing the singular shall include the plural and words importing person shall include firms and corporations, and these presents shall be construed accordingly.

NO REMEDY conferred on the Mortgagee by this instrument or otherwise shall be deemed exclusive of any other remedy. Each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity and may be exercised from time to time as often as it is deemed expedient.

IN WITNESS WHEREOF the corporate seal of the Mortgagor was hereunto affixed by its duly authorized signing officer(s) who signed in authentication thereof on day and year first above written.

C A N A D A

PROVINCE OF PRINCE EDWARD ISLAND

I, David A. Frank, of Concord, in the State of Massachusetts,

1.    I am the Secretary, Treasurer & CFO of the Mortgagor named in the annexed Indenture and am of the full age of eighteen (18) years.

2.    Aqua Bounty Canada Inc. is a resident of Canada within the meaning of the Income Tax Act (Canada).

3.    For the purpose of this Affidavit, “Act” means the Family Law Act, S.P.E.I. 1995, c.12; “family home” means every property in which a married person has an interest and that is or, if the spouses are living separate and apart, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence; “property” means the lands described in the Schedule to the annexed Indenture; and “spouse” means an individual who, in respect of another person, (i) is married to the other person, or (ii) has entered into a marriage with the other person that is voidable or void.

4.    The property is not now the subject of a Court Order, interim or otherwise, made pursuant to the Act.

5.    The property has never been occupied by myself, my spouse or any other person (or their spouses) who is associated with or is a shareholder of the corporate grantor as a family home.

Description for PID#1022300 to be inserted.

DATED:    October    9th   , 2018

BETWEEN:

AND:

STEWART McKELVEY

M10167-21 PMK/amc