Exhibit 10.5
EXECUTION VERSION
GUARANTOR SECURITY AGREEMENT

This GUARANTOR SECURITY AGREEMENT (as it may be amended, restated, supplemented
or otherwise modified from time to time, this “Agreement”) is made as of July
31, 2020 (the “Effective Date”) by AquaBounty Technologies, Inc., a Delaware
corporation (the “Guarantor”), in favor of First Farmers Bank and Trust
(together with its successors and assigns, the “Bank”).

Background Information

A. The Bank and AquaBounty Farms Indiana, LLC, a Delaware limited liability
company (the “Borrower”), entered into a certain Loan and Security Agreement
dated as of the date hereof (as it may be amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”) pursuant to which
the Bank has agreed to extend certain loans to the Borrower (as they may be
increased or modified from time to time pursuant to the Loan Agreement, the
“Loan”).

B. To induce the Bank to continue to extend the Loan, and in order to secure the
payment and performance of the Secured Obligations (as hereinafter defined),
Guarantor has agreed to grant a security interest to Bank in certain Collateral
(as hereinafter defined) now or hereafter owned or acquired by Guarantor as
security for the Secured Obligations.

Provisions

NOW, THEREFORE, in consideration of the premises and in order to induce the Bank
to extend the Loan, Guarantor hereby agrees with the Bank as follows:

1. Definitions. References to “Sections” shall be to Sections of this Agreement
unless otherwise specifically provided. For purposes hereof, “including” is not
limiting and “or” is not exclusive. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. Unless otherwise defined herein, all terms that are defined in the
Uniform Commercial Code of Indiana in effect from time to time shall have the
same meanings herein as in such Code, and all other capitalized terms shall have
the meanings given them in the Loan Agreement.

“Collateral” means all of the following personal property and real property
owned by Guarantor, whether now owned or existing, or hereafter arising or
acquired or received by Guarantor, wherever located:
(a) all Equipment located at or on the Real Property, excluding any equipment or
fixtures owned by Praxair, Inc.;

(b) Guarantor’s ledger sheets, ledger cards, files, correspondence, records,
books of account, business papers, computers, computer software (owned by
Guarantor or in which Guarantor has an interest), computer programs, electronic
media, tapes, disks and documents relating to that Equipment;

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(c) all proceeds and products of subsections (a) and (b) of this definition of
Collateral in whatever form, including: cash, deposit accounts (whether or not
comprised solely of proceeds), certificates of deposit, insurance proceeds
(including hazard, flood and credit insurance), negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim
proceeds; and

(d) the Real Property.

"Mortgage" shall mean that certain Mortgage, Assignment of Rents and Leases,
Security Agreement, Fixture Filing and Financing Statement encumbering the Real
Property executed by Guarantor and dated as of even date herewith and delivered
to the Bank.
"Real Property" shall mean the land and improvements constructed thereon and all
easements and appurtenances thereto located at 11550 E Gregory Road, Albany,
Indiana 47320.
“Secured Obligations” means any and all existing and future indebtedness,
obligation and liability of every kind, nature and character, direct or
indirect, absolute or contingent (including all renewals, extensions and
modifications thereof and all fees, reasonable and documented out-of-pocket
costs and expenses incurred by the Bank in connection with the preparation,
administration, collection or enforcement thereof), of the Borrower or any other
party to the Loan Agreement to the Bank, or any branch, subsidiary or Affiliate
of Bank, including without limitation all existing and future indebtedness,
obligations and liabilities arising under or pursuant to this Agreement, the
Loan Agreement, the Term Note, any promissory note or notes or letters of credit
now or hereafter issued under the Loan Agreement, as the same may be amended,
restated, supplemented or otherwise modified from time to time, including any
modification which results in the increase in the principal amount of such
obligations and liabilities, and the other Loan Documents, the structuring fees
described in the Loan Agreement, or any other fees arising under the Loan
Agreement or the Loan Documents.

2. Grant of Security Interests. To secure the Secured Obligations, Guarantor
hereby does hereby pledge, assign, transfer and deliver to the Bank and grants
to Bank for its benefit a continuing and unconditional first priority security
interest in and to any and all of the Collateral.

3. Delivery of Collateral; UCC Financing Statements; Mortgage.

(a) All titles, certificates, if any, or instruments representing or evidencing
any Collateral, if any, shall be delivered to and held by or on behalf of Bank
pursuant hereto and shall be accompanied by an irrevocable power of attorney
authorizing transfer or assignment, in form and substance satisfactory to Bank.

(b) Guarantor hereby authorizes Bank to file one or more UCC financing or
continuation statements, and amendments thereto (or similar documents required
by any laws of any applicable jurisdiction), relating to all or any part of the
Collateral without the signature of Guarantor (to the extent such signature is
required under the laws of any applicable jurisdiction).

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(c) Guarantor agrees that the Secured Obligations will be secured by the Real
Property described in and on the terms and conditions of the Mortgage and
authorizes Bank to record the Mortgage in the appropriate county recorder's
office.

4.  Representations and Warranties. Guarantor represents and warrants as
follows:

(a) Guarantor has full corporate power, capacity and authority to execute,
deliver and perform this Agreement, in accordance with its terms. Neither the
execution, delivery nor the performance of this Agreement violates or results in
any breach, or constitutes a default or causes an acceleration of any
obligation, of (i) any judgment, decree, order, statute, rule or regulation
applicable to Guarantor, or (ii) any material permit, any material agreement or
other material instrument to which Guarantor is a party.

(b) To the best of Guarantor’s knowledge, (a) the proper filing in the
appropriate (i) filing office of a UCC financing statement describing the same
as collateral, and (ii) the recording of the Mortgage, is effective to create
valid and perfected security interests in the Collateral, free of any adverse
claim, other than Permitted Liens, securing the payment of the Secured
Obligations, and (b) subject only to the filing of a financing statement
described in the immediately preceding sentence, Bank has a valid and first
priority security interest in the Collateral which may be perfected by such
filing and/or recording, securing the payment of the Secured Obligations, and
such security interests are entitled to all of the rights, priorities and
benefits afforded by the UCC or other applicable law as enacted in any relevant
jurisdiction which relates to perfected security interests.

(c) This Agreement constitutes a valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, or similar laws relating
to the enforcement of creditors’ rights generally and by general equitable
principles.

(d) To the best of Guarantor’s knowledge, no authorization, approval or other
action by, and no notice to or filing with, any domestic or foreign governmental
authority or regulatory body (other than as set forth in Section 3(b)) or
consent of any other Person (other than those consents obtained on or prior to
the date hereof) is required for: (i) the pledge and grant of a security
interest by Guarantor pursuant to this Agreement, (ii) the execution, delivery
or performance of this Agreement by Guarantor, or (iii) the exercise by Bank of
its rights and remedies hereunder (except as may have been taken by or at the
direction of Guarantor and except as may be required in connection with any
disposition of the Collateral by laws affecting the offering and sale of
securities generally).

(e) All information heretofore, herein or hereafter supplied to Bank by or on
behalf of Guarantor with respect to the Collateral is and will, as to hereafter
supplied information, be accurate and complete in all material respects at the
time made.

(f) All representations and warranties of Guarantor contained in this Agreement
shall survive the execution and delivery of this Agreement, except those which
by their terms are made as of a specified date.

5.  Covenants; Further Assurances. Guarantor covenants as follows:
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(a) Guarantor shall, from time to time, at its expense, promptly execute and
deliver all further reasonable instruments, documents and notices and take all
further action that may be reasonably necessary or that Bank may reasonably
request, in order to create, perfect and protect any security interest granted
or purported to be granted by this Agreement or to enable Bank to exercise and
enforce its rights and remedies hereunder. Without limiting the generality of
the foregoing, Guarantor will, upon Bank’s reasonable request, appear in and
defend any action or proceeding that may adversely affect Guarantor’s title to
or Bank’s security interest in the Collateral.

(b) Guarantor shall furnish to Bank, from time to time upon reasonable request,
statements and schedules further identifying, updating, and describing the
material Collateral and such other information, reports and evidence concerning
the Collateral as Bank may reasonably request, all in reasonable detail.

(c) Guarantor agrees that it shall not consent to: (i) an amendment, change or
alteration of its charter documents in any way not consistent with the Loan
Agreement; (ii) a Change in Control without prior written consent of Bank
pursuant to Section 18; (iii) a dissolution, assignment for the benefit of
creditors, or bankruptcy filing by Guarantor; or (iv) an appointment of a
receiver, trustee or liquidator with respect to the property of Guarantor.
Notwithstanding the foregoing, Guarantor may change its name from AquaBounty
Technologies, Inc. to AquaBounty, Inc. upon concurrent written notice to the
Bank.

(d) Except for the name change contemplated in Section 5(c) above, Guarantor
shall not change its name, type of organization or jurisdiction of organization,
without thirty (30) days’ prior written notice of such change to Bank.

(e) Except as otherwise permitted herein, Guarantor shall not: (i) sell, assign
(by operation of law or otherwise), transfer or otherwise dispose of, or grant
any option or similar right with respect to, any of the Collateral, or (ii) move
or remove any of the Collateral from the State of Indiana. In addition,
Guarantor shall not use or permit the use of any Collateral in violation of any
provision of applicable law and shall not do anything to impair the rights of
Bank in any of the Collateral.

(f) Guarantor agrees it shall not create, incur, assume or suffer to exist any
mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), or preference, priority, or other security agreement,
including without limitation, any conditional sale or other title retention
agreement, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in respect of any of the
foregoing of any kind (including the charge on property purchased under
conditional sales or other title retention agreements) upon or with respect to
the Collateral except (i) in favor of Bank securing the Secured Obligations, and
(ii) to the extent otherwise permitted herein and Permitted Liens.

(g) To the extent applicable, Guarantor agrees that it shall maintain full and
complete books of account and other records reflecting the results of its
operations, and the operations of Guarantor.

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(h) Guarantor agrees that it shall, (i) pay and discharge promptly, or cause to
be paid and discharged promptly, when due and payable, all material and income
taxes, assessments and governmental charges or levies imposed upon Guarantor,
Guarantor’s income or Guarantor’s property, or upon any part thereof, other than
those being properly contested; and/or (ii) preserve and keep in full force and
effect its material rights and properties in the Collateral, except, in each
case, in any instance where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

(i) Upon the occurrence and during the continuance of an Event of Default beyond
the applicable cure period, Guarantor agrees that it shall cause to be paid all
sums and distributions (whether made in cash, tangible or intangible property of
any kind or character, or otherwise) due or to become due to Guarantor,
pertaining to the Collateral, directly to Bank, upon Bank’s written notice
directing such action to Guarantor. Guarantor further agrees that it shall not
take any actions (or inactions) which limit or otherwise impair the foregoing.
Any distributions that are required to be remitted to Bank pursuant to the terms
of this Agreement shall be deposited into such account as directed by Bank from
time to time.

(j) Except as otherwise permitted by this Agreement, Guarantor agrees that it
will not, without Bank’s prior written consent: (i) grant, create, incur,
assume, permit or suffer to exist any lien upon any of its properties or assets,
whether now owned or hereafter acquired, except liens which would not adversely
affect the value of the Collateral and Permitted Liens; (ii) dissolve or
liquidate, or sell, transfer, license, lease or otherwise dispose of any
material portion of its property or assets or business, other than sales or
dispositions in the ordinary course of business or otherwise permitted by the
Loan Agreement; (iii) do any other act that would make it impossible or
impractical to carry on the ordinary business of Guarantor as it is generally
conducted on the Effective Date.
(k) Insurance Requirements.

(1) Guarantor shall at all times insure and keep insured by insurance companies
reasonably acceptable to the Bank, all Collateral against loss or damage from
general liability, fire and such other hazards or risks as are customarily
insured against by companies similarly situated and operating like properties,
and, with respect to the Real Property, in an amount sufficient to replace the
Real Property in accordance with the appraisal performed in conjunction with the
Loan and with a maximum deductible of $25,000 per incident. At least three (3)
days prior to the Closing Date, Guarantor shall deliver to the Bank a
certificate setting forth in summary form the nature and extent of the insurance
maintained by Guarantor pursuant to this Section 5(k)(1). All such policies of
insurance must be reasonably satisfactory to the Bank in relation to the
insurance provided, amount and term of the Obligations and type and value of the
Collateral and assets of the Guarantor and all policies shall identify the Bank
as lender's loss payee and as an additional insured, and, on the policies
relation to the Real Property, as mortgagee.

(2) In the event of the loss of any Collateral occasioned by fire or other
hazard, Guarantor shall give prompt written notice to the insurance carrier and
to Bank. During the existence of an Event of Default, Bank shall have the right,
on behalf of Guarantor, to make proof of loss, to adjust and compromise any
claim under insurance policies, to appear in and prosecute any action arising
from such insurance policies, to
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collect and receive insurance proceeds, and to deduct therefrom Bank’s
reasonable expenses incurred in the collection of such proceeds; provided,
however, that nothing contained in this paragraph shall require Bank to incur
any expense or take any action hereunder. Guarantor hereby collaterally assigns
to Bank all rights of Guarantor in and to any insurance proceeds paid as a
result of any such loss or damage.

(l) Upon the occurrence and during the continuance of an Event of Default beyond
the applicable cure period, Guarantor agrees that, upon Bank's request,
Guarantor shall assign or cause to be assigned all rights and interests in and
to that certain Lease Agreement, dated November 22, 2005, by and between Thomas
David Stone (“Lessor”) and Bell Aquaculture, LLC (the “Original Tenant”) (the
“Lease Agreement”), as amended by that certain Addendum to Lease Agreement dated
April 28, 2008, by and between Lessor and Original Tenant; as further amended by
that certain Addendum to Lease Agreement dated July 29, 2008, by and between
Lessor and Original Tenant; as further amended by that certain Second Addendum
to Lease Agreement dated October 15, 2008, by and between Lessor and Original
Tenant; as further amended by that certain Agreement of Understanding, Consent
and Amendment dated March 4, 2016, by and between Lessor and Bell Fish Company
LLC (f/k/a TCFI Bell SPE I LLC) (the “Second Tenant”); as assigned to Guarantor
under that certain Notice of Assignment of Lease Agreement dated July 7, 2017,
from Second Tenant to Lessor; and as assigned as a matter of law to Michael
Haydon Miller as Co-Trustee of the 2003 Michael Haydon Miller Trust following
its purchase from Lessor of the real property underlying the Lease Agreement and
assumption of the rights and obligations of Lessor under the Lease Agreement, in
order to allow for the continuation of operations on the Real Property.

6. Defaults. The occurrence of any Event of Default, as defined in the Loan
Agreement or any of the Loan Documents or the breach of any terms or provisions
of the Loan Agreement or any of the Loan Documents, which default or breach
continues beyond any period of grace therein provided shall constitute a Default
of this Agreement.

7. Collateral Rights

(a) So long as no Event of Default has occurred and is then continuing beyond
the applicable cure period, Guarantor shall be entitled to exercise any and
rights pertaining to the Collateral, or any part thereof, for any purpose not
inconsistent with the terms of this Agreement; and

(b) So long as no Event of Default has occurred and is then continuing beyond
the applicable cure period, in respect of which Bank has provided Guarantor with
notice of its election to exercise the rights and remedies set forth in
subsection 7(c) below, Guarantor shall be entitled to exercise any and all
rights pertaining to the Collateral, or any part thereof, for any purpose not
inconsistent with the terms of this Agreement.

(c) At any time that an Event of Default has occurred and is then continuing
beyond the applicable cure period, in respect of which Bank has provided
Guarantor with notice of its election to exercise the rights and remedies set
forth in this subsection 7(c), all rights of Guarantor to exercise rights in
respect of the Collateral shall immediately cease to be effective upon its
receipt of notice from Bank of Bank’s intent to exercise its rights hereunder,
and upon
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the delivery of such notice all such rights shall become vested in Bank and Bank
shall thereupon have the sole right to exercise such rights with respect to the
Collateral.

8. Bank Appointed Attorney-in-Fact. Guarantor hereby irrevocably appoints Bank,
its nominee, and any other Person whom Bank may designate, as Guarantor’s
attorney-in-fact, (a) solely during the existence of an Event of Default, with
full power to take any action and to execute any instrument that such
attorney-in-fact may deem necessary or advisable to exercise its rights in the
Collateral, including, without limitation, to receive, endorse and collect all
sums and distributions (whether made in cash, tangible or intangible property of
any kind or character, or otherwise) due or to become due to Guarantor on
account of the Collateral, and (b) with full power, during the existence of any
Event of Default (in respect of which Bank has provided Guarantor with notice of
its election to exercise the rights and remedies set forth in subsection 7(c)
above), to take any action and to execute any instrument that such
attorney-in-fact may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, to: (i) receive, endorse and
collect all instruments (or other property, as applicable) made payable to
Guarantor representing any distribution in respect of the Collateral, or any
part thereof; (ii) exercise the rights pertaining to the Collateral; and (iii)
sell, transfer, pledge, make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though such
attorney-in-fact was the absolute owner thereof for all purposes, and to do, at
such attorney-in-fact’s option and Guarantor’s expense, at any time or from time
to time, all acts and things that such attorney-in-fact deems necessary to
protect, preserve or realize upon the Collateral. Guarantor hereby ratifies and
approves all acts of any such attorney-in-fact made or taken pursuant to this
Section 8 and agrees that neither Bank nor any other person designated as an
attorney-in-fact by Bank shall be liable for any acts, omissions, errors of
judgment or mistakes of fact or law (other than, and only to the extent of, such
person’s gross negligence or willful misconduct). The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the Secured
Obligations have been satisfied in full (other than contingent obligations not
yet due and owing).

9. Bank May Perform. If Guarantor fails to perform any agreement contained
herein, subject to any applicable cure period, Bank may itself perform, or cause
performance of, such agreement, and the out-of-pocket expenses of Bank incurred
in connection therewith shall be payable by Guarantor under Section 14 hereof,
and be a part of the Secured Obligations.

10. Limitation on Duty of Bank with Respect to the Collateral. Beyond the safe
custody thereof, and as otherwise required by the UCC, Guarantor agrees that
Bank shall have no duties concerning the custody and preservation of any
Collateral in its control or with respect to any income thereon or the
preservation of rights against prior parties or any other rights pertaining
thereto. Bank shall be deemed to have exercised reasonable care in the custody
and preservation of the Collateral in its control if the Collateral is accorded
treatment substantially equal to that which it accords its own property. It is
expressly agreed that Bank shall have no responsibility for: (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Collateral, whether or not Bank has or is
deemed to have knowledge of such matters, or (ii) taking any necessary steps to
preserve rights against any parties with respect to any Collateral, but Bank may
do so and all reasonable expenses incurred in connection therewith shall be
payable by and for the sole account of Guarantor.

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11. Remedial Provisions.

(a) Upon the occurrence and during the continuance of an Event of Default beyond
the applicable cure period, Bank and its attorneys may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein, in
the Mortgage (with respect to the Real Property), or otherwise available to it,
all the rights and remedies of a secured party under the UCC or under the
Mortgage, and Bank may also, without demand, advertisement or notice of any kind
(other than the notice specified below relating to a public or private sale),
sell the Collateral or any part thereof in one or more portions at one or more
public or private sales or dispositions, at any exchange, broker’s board or at
any of Bank’s offices (or those of Bank’s attorneys) or elsewhere, for cash, on
credit, or for future delivery, at such price or prices and upon such other
terms as Bank deems advisable. Guarantor agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days’ notice to Guarantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification of such matters;
provided, that no notification need be given to Guarantor if it has
authenticated after default a statement renouncing or modifying any right to
notification of sale or other intended disposition. At any sale of the
Collateral, if permitted by law, Bank may bid (which bid may be, in whole or in
part, in the form of cancellation of indebtedness) for the purchase of the
Collateral or any portion thereof free of any right of equity or redemption in
Guarantor. Bank shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. Bank may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned.

(b) Guarantor recognizes that Bank may be unable to effect a public sale of all
or part of the Collateral and may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obligated to agree, among
other things, to acquire such Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. Guarantor
acknowledges that any such private sales may be at prices and on terms less
favorable to the seller than if sold at public sales and agrees that the fact
that the sale is conducted at a private sale shall itself not be cause to
determine that such sale was not made in a commercially reasonable manner. To
the extent permitted by law, Guarantor hereby specifically waives (and, as
applicable, releases) any right or equity of redemption, and any right of stay
or appraisal, which Guarantor has or may have under any law now existing or
hereafter enacted.

(c) Guarantor acknowledges that Bank shall not be liable for any failure or
delay in realizing upon or collecting the Secured Obligations or any guaranty
thereof or collateral security therefore; and Guarantor further acknowledges
that Bank shall not have any duty to take any action with respect thereto,
except with respect to any duty or obligation imposed on Bank by the UCC.

12. Remedies Cumulative. No failure on the part of Bank to exercise, and no
delay in exercising and no course of dealing with respect to, any power,
privilege or right under this Agreement, the Loan Agreement or any of the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise by Bank of any power, privilege or right under this Agreement,
the Loan Agreement or the other Loan Documents preclude any other or further
exercise thereof or the exercise of any other such power, privilege or right.
The powers,
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privileges and rights in this Agreement, the Loan Agreement and the other Loan
Documents are cumulative and are not exclusive of any other remedies provided by
law.

13. Application of Proceeds. Upon the occurrence and during the continuance of
an Event of Default, the proceeds of any sale or disposition of, or other
realization upon, all or any part of the Collateral shall be applied in the
following manner:

(a) FIRST: To the payment of all reasonable costs and expenses of such sale,
collection or other realization and all amounts for which Bank is entitled to
indemnification hereunder, and to the payment of all reasonable costs and
expenses paid or incurred by Bank in connection with the exercise of any right
or remedy hereunder, all in accordance with Section 14;

(b) SECOND: To the payment of any Secured Obligations, as shall be determined in
the sole discretion of Bank; and

(c) THIRD: To the payment or upon the order of Guarantor, or to whosoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.

14. Expenses. Without limiting Guarantor’s obligations under the Loan, this
Agreement, the Loan Agreement or any other Loan Document, Guarantor hereby
agrees to promptly pay all of Bank’s reasonable and documented out-of-pocket
fees, costs and expenses (including out-of-pocket expenses and reasonable
outside attorney’s fees) in connection with (a) maintaining the Collateral, (b)
creating, perfecting, protecting and enforcing the lien for the benefit of Bank
on the Collateral, (c) selling or otherwise disposing of the Collateral, (d)
paying any amount required under any provision of applicable law (including,
without limitation, Section 9-615(a)(3) of the UCC) with respect to the
Collateral, or (e) any other matters contemplated by or arising out of this
Agreement with respect to the Collateral. If Guarantor fails to promptly pay any
portion of the above fees, costs and expenses when due or to perform any other
obligation of Guarantor under this Agreement, Bank or any agent of Bank may, at
its option, but shall not be required to, pay or perform the same and charge
Guarantor’s account for all fees, costs and expenses incurred therefor, and
Guarantor agrees to reimburse Bank or such agent therefor on demand. All sums so
paid or incurred by Bank or any agent for any of the foregoing, any and all
other sums for which Guarantor may become liable hereunder and all fees, costs
and expenses (including reasonable attorneys’ fees, legal expenses and court
costs) incurred by Bank or any agent in enforcing or protecting any of their
rights or remedies under this Agreement shall be payable on demand, shall
constitute Secured Obligations, shall bear interest until paid at the highest
rate provided in the Loan Agreement and shall be secured by the Collateral.

15. Termination of Lien; Release of Collateral. Bank agrees that upon
satisfaction in full of all Secured Obligations (other than contingent
obligations not yet due and owing) and the termination of the Loan Agreement and
all other Loan Documents, the lien provided for hereunder shall automatically
terminate without further action.

16. Changes in Writing. No amendment, modification, termination or waiver of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by Bank and Guarantor.

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17. Notices. All notices, approvals, requests, demands and other communications
hereunder shall be given in accordance with the notice provisions of the Loan
Agreement.

18. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, except that Guarantor may not assign its rights or obligations
hereunder without the prior written consent of Bank, which Bank will not
unreasonably withhold, condition or delay. No sales of participations, other
sales, assignments, transfers or other dispositions of any agreement governing
or instrument evidencing the Secured Obligations or any portion thereof or
interest therein shall in any manner impair the lien granted to Bank hereunder.

19. Waivers. In addition to, and not in lieu of, any other waivers herein,
Guarantor waives to the greatest extent it may lawfully do so, and agrees that
it shall not at any time insist upon, plead or in any manner whatever claim or
take the benefit or advantage of, any appraisal, valuation, stay, extension,
marshalling of assets, redemption or similar law, or exemption, whether now or
at any time hereafter in force, which may delay, prevent or otherwise affect the
performance by Guarantor of its obligations under, or the enforcement by Bank
of, this Agreement. Guarantor hereby waives, to the extent permitted by
applicable law, diligence, presentment and demand (whether for nonpayment or
protest or of acceptance, maturity, extension of time, change in nature or form
of the Secured Obligations, acceptance of further security, release of further
security, composition or agreement arrived at as to the amount of, or the terms
of the Secured Obligations, notice of adverse change in any person’s financial
condition or any other fact which might materially increase the risk to
Guarantor) with respect to any of the Secured Obligations or all other demands
whatsoever and waives the benefit of all provisions of law which are or might be
in conflict with the terms of this Agreement.

20. Indemnity. Guarantor hereby agrees to indemnify, pay and hold harmless Bank
and the officers, directors and employees of Bank (collectively called the
“Indemnitees”) from and against any and all liabilities, obligations, losses
(other than loss of profit), damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and out of pocket disbursements of outside
counsel for such Indemnitee) in connection with any investigative,
administrative or judicial proceeding, whether or not such Indemnitee shall be
designated a party thereto and including any such proceeding initiated by or on
behalf of Guarantor, which may be imposed on, incurred by or asserted against
such Indemnitee as a result of or in connection with this Agreement or the
enforcement by Bank of its rights and remedies hereunder, in each case, except
that Guarantor shall not have any obligation hereunder to an Indemnitee with
respect to (x) any liability resulting from the gross negligence or willful
misconduct of such Indemnitee, as determined by a court of competent
jurisdiction, (y) a claim brought by the Borrower or any Subsidiary against an
Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or
under any other Loan Document, if Borrower or such Subsidiary has obtained a
final and nonappealable judgment in its favor on such claim as determined by a
court of competent jurisdiction or (z) or arising from any litigation, contest,
dispute, suit, proceeding, action or claim between one such Indemnitee and
another such Indemnitee. To the extent that the undertaking set forth in the
immediately preceding sentence may be unenforceable, Guarantor shall contribute
the maximum portion which it is permitted to pay and satisfy under applicable
law to the payment and satisfaction of all such indemnified liabilities incurred
by the Indemnitees or any of them.

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21. WAIVER OF JURY TRIAL. The parties hereto acknowledge and agree that there
may be a constitutional right to a jury trial in connection with any claim,
dispute or lawsuit arising between or among them, but that such right may be
waived. Accordingly, the parties agree that, notwithstanding such constitutional
right, in this commercial matter the parties believe and agree that it shall in
their best interests to waive such right, and, accordingly, hereby waive such
right to a jury trial, and further agree that the best forum for hearing any
claim, dispute, or lawsuit, if any, arising in connection with this Agreement,
the Loan Agreement, the Loan Documents, or the relationship among the parties
hereto, in each case whether now existing or hereafter arising, or whether
sounding in contract or tort or otherwise, shall be a court of competent
jurisdiction sitting without a jury.

22. Governing Law. This Agreement shall be construed in accordance with the
internal laws (but without regard to the conflict of laws provisions) of the
State of Indiana but giving effect to federal laws applicable to national banks.

23. Consent to Jurisdiction. Guarantor hereby irrevocably (a) consents to the
jurisdiction of the state and federal courts located in Marion County, Indiana
with respect to any litigation; (b) waives any objection to the jurisdiction and
venue of any litigation in either such court; (c) agrees not to commence any
litigation except in either of such courts or to contest the removal of any
litigation commenced in any other court to either of such courts; (d) agrees not
to seek to remove, by consolidation or otherwise, any litigation commenced in
either of such courts to any other court; and (e) waives personal service of
process in connection with any litigation and consents to service of process by
registered or certified mail, postage prepaid, addressed as set forth herein or
in any other manner permitted by law. Unless the parties otherwise agree, all
discovery shall be conducted in Indianapolis, Indiana and each party shall bear
its own expenses in connection therewith.

24. Counterparts; Integration; Headings. This Agreement may be signed in any
number of counterparts, including by facsimile or other electronic means, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof. Headings and captions used in this Agreement are included for
convenience of reference and shall not be given any substantive effect.

[Signatures on Following Pages]
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        IN WITNESS WHEREOF, Guarantor has caused this Agreement to be executed
and delivered effective as of the Effective Date.

GUARANTOR:

AQUABOUNTY TECHNOLOGIES, INC.

By: /s/ David A. Frank 
David A. Frank, Treasurer and Chief Financial Officer

STATE OF MASSACHUSETTS )
         ) SS:
COUNTY OF MIDDLESEX  )

The foregoing instrument was acknowledged before me, a Notary Public in and for
said County and State, on this 31st day of July, 2020, by David A. Frank, as
Treasurer and Chief Financial Officer of AquaBounty Farms Indiana LLC, a
Delaware limited liability company, on behalf of the company.

/s/ Christopher H. Martin 
Print Name: Christopher H. Martin
Notary Public, Middlesex County, Massachusetts
My commission expires: August 19, 2022

[Affix seal below]

/SEAL/
Guarantor’s Signature Page to Guarantor Security Agreement

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WITNESS:

/s/ Sherry Sylvester 
Witness Signature

Witness Name (Print): Sherry Sylvester

STATE OF MASSACHUSETTS )
        ) SS:
COUNTY OF MIDDLESEX )

Before me, a Notary Public in and for said County and State, personally appeared
Sherry Sylvester, on this 31st day of July, 2020, being known to me to be the
person whose name is subscribed as a witness to the foregoing instrument, who,
being duly sworn by me, deposes and says that the foregoing instrument was
executed and delivered by David A. Frank in the above-named subscribing
witness’s presence, and that the above-named subscribing witness is not a party
to the transaction described in the foregoing instrument and will not receive
any interest in or proceeds from the property that is the subject of the
transaction.

/s/ Christopher H. Martin 
Print Name: Christopher H. Martin
Notary Public, Middlesex County, Massachusetts
My commission expires: August 19, 2022

[Affix seal below]

/SEAL/
Guarantor’s Signature Page to Guarantor Security Agreement

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Accepted as of the day and year first above written.

BANK:

FIRST FARMERS BANK AND TRUST

By: /s/ Amie Osborn 
Amie Osborn, Vice President
Bank’s Signature Page to Guarantor Security Agreement