Document:

EMPLOYMENT
AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (“Agreement”), effective October ____, 2018 (“Effective Date”), is made between U.S.
Gold Corp., a Nevada corporation (“Employer” or the “Company”), and David Rector (“Employee”).
Employee and the Company are sometimes referred to herein as the “Parties.”

 

RECITALS

 

A.
Employer is in the business (the “Business”) of natural resources exploration and development.

 

B.
Employer desires to obtain the services of Employee as its Chief Operating Officer, in which capacity Employee has access to Employer’s
Confidential Information (as hereinafter defined), and to obtain assurance that Employee will protect Employer’s Confidential
Information and will not solicit Employer’s customers or its other employees during the term of employment and for a reasonable
period of time after termination of employment pursuant to this Agreement, and Employee is willing to agree to these terms.

 

C.
Employee desires to be assured of the salary, bonus opportunity and other benefits in this Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual covenants in this Agreement, and other good and valuable consideration, the parties
agree as follows:

 

1.
Employment. The Company agrees to employ and Employee agrees to serve as the Company’s Chief Operating Officer. The
duties and responsibilities of Employee shall include the duties and responsibilities as the Board of Directors of the Company
(the “Board”) may from time to time assign to Employee. Employee shall devote such amount of working time and efforts
during the Company’s normal business hours to the business and affairs of the Company and its subsidiaries Employee deems
necessary to execute the diligent and faithful performance of the duties and responsibilities duly assigned to him pursuant to
this Agreement. Provided that none of the additional activities interferes with the performance of the duties and responsibilities
of Employee or are determined by the inconsistent with the position, standing, stature, reputation or best interests of the Company,
nothing in this Section 1, shall prohibit Employee from (a) serving as a consultant, director or member of a committee, paid or
unpaid, for entities that , in the good faith determination of the Board, do not compete or present the appearance of competition
with the Company or otherwise create, or could create, in the good faith determination of the Board, a conflict of interest or
appearance of a conflict of interest with the business of the Company; (b) delivering lectures, fulfilling speaking engagements,
and any writing or publication relating to his area of expertise (c) serving as a director or trustee of any governmental, charitable
or educational organization; or (d) engaging in additional activities in connection with personal investments and community affairs;
provided that such activities are not inconsistent with Employee’s duties under this Agreement.

 

    	 

     

    

 

2.
Term of Employment. The term of employment (“Term”) will not be for a definite period, but rather continue indefinitely
until terminated in accordance with the terms and conditions of this Agreement.

 

3.
Place of Employment. Employee’s services shall be performed at the Company’s offices or such other place as the
Employee is then located. The parties acknowledge, however, that Employee may be required to travel in connection with the performance
of his duties hereunder.

 

4.
Compensation. For the duration of Employee’s employment under this Agreement, the Employee will be entitled to compensation
which will be computed and paid pursuant to the following subparagraphs.

 

4.1
Base Salary. Employee shall initially be paid an aggregate annual base salary at the rate of $180,000 per year (the “Base
Salary”), payable in equal installments during each year in accordance with the payroll practices for the executives of
the Company. The Compensation Committee of the Board, or the Board if there is no Compensation Committee, shall review Employee’s
salary from time to time and may, in its sole discretion, increase but not decrease it. The Board of Directors has the final authority
to approve Base Salary adjustments.

 

4.2
Target Bonus. Employee will participate in Employer’s annual incentive bonus plan under which Employee may earn an annual
incentive bonus. The terms of the annual incentive bonus plan, including the criteria upon which Employee can earn the maximum
bonus, will be determined annually by Employer’s Board of Directors. For 2019, Employee may earn an annual incentive of
up to one hundred percent (100%) of Employee’s then Base Salary, payable in cash or stock at Employee’s discretion,
subject to applicable securities law and obligations of Employer. Employee may also participate in other bonus or incentive plans
adopted by Employer that are applicable to Employee’s position, as they may be changed from time to time, but nothing herein
shall require the adoption or maintenance of any such plan.

 

4.3
Long Term Incentives. Employee shall be eligible to participate in any long term incentive plans adopted by the Company from
time to time, and shall otherwise be eligible for annual long term incentive awards in the discretion of the Board.

    	 

     

    

 

4.4
Recoupment. In the event that the Board determines there has been a material restatement of financial results, the Board of
Directors will review all incentive payments that were made to Employee and other executive officers (collectively “Executive
Officer”) on the basis of having met or exceeded specific performance targets in grants or awards made after January 1,
2018 which occur during the three-year period prior to the restatement. If such payments would have been lower had they been calculated
based on such restated results, the Board will, to the extent permitted by governing law, seek to recoup for the benefit of our
company such payments to the Executive Officers, including Employee, who are found personally responsible for the material restatement,
as determined by the Board. For purposes of this policy, the term “executive officers” shall have the meaning given
such term in Rule 3b-7 under the Securities Exchange Act of 1934, as amended, and the term “incentive payments” means
bonuses and awards under applicable Company incentive compensation plans or, in the absence of such plans and with regard to Employee,
under this Agreement.

 

4.5
Clawback Rights. The Bonus (the “Clawback Benefits”) shall be subject to “Company Clawback Rights”
as follows: During the period that the Employee is employed by the Company and upon the termination of the Employee’s employment
and for a period of three (3) years thereafter, if there is a Restatement (as defined below) of any financial results from which
any Clawback Benefits to Employee shall have been determined, Employee agrees to repay any Clawback Benefits amounts which were
determined by reference to any Company financial results which were later restated (as defined below), to the extent the Clawback
Benefits amounts paid exceed the Clawback Benefits amounts that would have been paid, based on the Restatement of the Company’s
financial information. All Clawback Benefits amounts resulting from such restated financial results shall be retroactively adjusted
by the Compensation Committee to take into account the restated results, and any excess portion of the Clawback Benefits resulting
from such restated results shall be immediately surrendered to the Company and if not so surrendered within ninety (90) days of
the revised calculation being provided to the Employee by the Compensation Committee following a publicly announced Restatement,
the Company shall have the right to take any and all action to effectuate such adjustment. The calculation of the Revised Clawback
Benefits amount shall be determined by the Compensation Committee in good faith and in accordance with applicable law, rules and
regulations. All determinations by the Compensation Committee with respect to the Clawback Rights shall be final and binding on
the Company and Employee. The Clawback Rights shall be subject to applicable law, rules and regulations. For purposes of this
Section 4, a restatement of financial results that requires a repayment of a portion of the Clawback Benefits amounts shall mean
“a restatement resulting from material non-compliance of the Company with any financial reporting requirement under the
federal securities laws and shall not include a restatement of financial results resulting from subsequent changes in accounting
pronouncements or requirements which were not in effect on the date the financial statements were originally prepared (“Restatement”)”.
The parties acknowledge it is their intention that the foregoing Clawback Rights as relates to Restatement conform in all respects
to the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd Frank Act”)
and requires recovery of all “incentive-based” compensation, pursuant to the provisions of the Dodd Frank Act and
any and all rules and regulations promulgated thereunder from time to time in effect. Accordingly, the terms and provisions of
this Agreement shall be deemed automatically amended from time to time to assure compliance with the Dodd Frank Act and such rules
and regulation as hereafter may be adopted and in effect.

 

    	 

     

    

 

5.
Indemnification. To the fullest extent permitted by law and the Company’s articles of incorporation and bylaws, the
Company hereby indemnifies Employee and holds him harmless from the Effective Date, through the Term, and after the period of
Employee’s employment hereunder, from and against all loss, costs, damages, and expenses including, without limitation,
legal expenses of counsel (which expenses the Company will, to the extent so permitted, advance to Employee as the same are incurred)
arising out of or in connection with the fact that Employee are or was a director, officer, attorney, employee, or agent of the
Company or serving in such capacity for another corporation at the request of the Company. This indemnification is in addition
to that provided in the Company’s certificate of incorporation and bylaws.

 

6.
D&O Insurance. The Company shall cover Employee under directors and officers liability insurance from the Effective Date,
through the Term, and, while potential liability exists, after the period of Employee’s employment hereunder, on the most
favorable terms as provided to any other director or executive officer of the Company.

 

7.
Expenses. Employee shall be entitled to prompt reimbursement by the Company for all reasonable ordinary and necessary travel,
entertainment, and other expenses incurred by Employee while employed (in accordance with the policies and procedures established
by the Company for its senior executive officers) in the performance of his duties and responsibilities under this Agreement;
provided, that Employee shall properly account for such expenses in accordance with Company policies and procedures.

 

8.
Other Benefits. Employee will be eligible to participate in all employee benefit programs established by Employer that are
applicable to management personnel such as medical, pension, disability and life insurance plans on a basis commensurate with
Employee’s position and in accordance with Employer’s policies from time to time, but nothing herein shall require
the adoption or maintenance of any such plan. During any period where Employer is not offering Employee a health insurance plan,
Employer will reimburse Employee up to $500 per month towards monthly health insurance premiums.

 

9.
Termination of Employment.

 

9.1
By Employer For Cause, By Employee Without Good Reason, or Due to Disability or Death. If Employer terminates Employee’s
employment for Cause (as defined below), if Employer terminates employment with the Company other than for Good Reason (as defined
below), or if Employee’s employment terminates due to death or Disability (as defined below), the Company shall pay to the
Employee (or, if applicable, his estate) in a lump sum (i) any unpaid portion of Employee’s accrued Base Salary and unused
Paid Time Off; (ii) any amounts payable to Employee pursuant to the terms of any pension or welfare benefit plan, and (iii) any
expense reimbursements payable pursuant to the Company’s reimbursement policy (the “Accrued Obligations”). Except
in the case of termination due to death or Disability, unvested equity grants shall be forfeited as of the date of termination,
and any vested equity awards shall be treated as specified in the applicable equity plan and award agreement. In the case of termination
due to death or Disability any unvested equity grants shall be forfeited as of the date of termination, and any vested equity
awards shall be treated as specified in the applicable equity plan and award agreement.

 

    	 

     

    

 

9.2
By Employer Without Cause or By Employee for Good Reason Outside of a Change in Control Period. The Company may terminate
Employee’s employment at any time without Cause. Upon Employee’s termination of employment by the Company without
Cause outside of a Change in Control Period (as defined below), or Employee’s resignation for Good Reason outside of a Change
in Control Period, in addition to the Accrued Obligations, Employee shall be entitled to receive a lump sum severance payment
in an amount equal to the sum of Employee’s then in effect annual Base Salary. Any unvested equity grants shall fully and
immediately vest (and in the case of options become exercisable), as of the date of termination, and any vested equity awards
shall be treated as specified in the applicable equity plan and award agreement.

 

9.3
By Employer Without Cause or By Employee for Good Reason Within a Change in Control Period. Upon Employee’s termination
of employment by the Company without Cause within six months prior to, upon, or within 12 months following a Change in Control
(“Change in Control Period”) or Employee’s Resignation for Good Reason during a Change in Control Period, in
addition to the Accrued Obligations, Employee shall be entitled to receive a lump sum severance payment in an amount equal to
Employee’s then in effect annual Base Salary and a portion of Employee’s Target Bonus prorated for the portion of
the calendar year that has passed as of Employee’s last day of employment. In addition, any unvested equity awards that
were granted prior to the Change in Control Period, any Annual Long Term Incentive awards, or any other equity awards made during
the Term, shall fully and immediately vest (and in the case of options become exercisable), and otherwise shall be treated as
specified in the applicable equity plan and award agreement. If Employee’s employment is terminated during the portion of
the Change in Control Period that is six months prior to an anticipated Change in Control, Employee will become entitled to all
payments and accelerated vesting benefits upon the occurrence of the Change in Control at any time from the date of termination
of Employee’s employment and twelve months thereafter.

 

9.4
Benefits. Employee’s eligibility to participate in the Company’s medical, dental, and vision benefit plans and
other insured benefits (such as life, accident, and disability coverage) will terminate upon Employee’s termination of employment
according to the terms of the relevant benefit plan. Employee may elect to participate in medical, dental, and vision benefits
provided through an outside vendor, in conjunction with continued insurance coverage available to Employee under the provisions
of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) at COBRA rates for up to eighteen (18) months. In
the event Employee is entitled to severance payment benefits pursuant any paragraph in this Section 9, the Company shall continue
to provide all welfare benefits provided to Employee immediately before such termination (including, without limitation, health
and life insurance, but excluding disability insurance) for a period following Employee’s termination of employment equal
to the period with respect to which Employee’s Base Salary is paid as severance, at the Company’s sole cost; provided,
however, that to the extent Employee becomes re-employed and eligible for benefits with another employer prior to the expiration
of such period, Employee will elect such benefits and promptly notify the Company so that the Company will have no further obligation
to provide benefits under this subsection 5.4 unless, and then only to the extent that, the benefits that are being provided by
the Company are more favorable than such benefits provided by the other company. Any medical, dental and vision continuation coverage
provided pursuant hereto shall be deemed “alternative coverage” for purposes of COBRA.

 

    	 

     

    

 

9.5
Payment Timing/Release of Claims. The payment and provision of any and all severance benefits pursuant to this Section 9 shall
be conditioned upon and subject to execution of a release of claims by Employee at the time of termination of employment and in
a form acceptable to the Company within the Company’s sole reasonable discretion (“Release of Claims”). All
lump-sum payments due pursuant to this Agreement shall be payable sixty (60) days following the termination date, provided that
before such date, Employee has timely signed (and not revoked) the Release of Claims. The payment of the Accrued Obligations is
not subject to Employee’s execution of a Release of Claims.

 

9.6
No Obligation to Mitigate. Employee shall not be required to mitigate the amount of any payment provided for in this Section
9 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 9 be reduced by any
compensation earned by the Employee as the result of employment by another employer or business or by profits earned by Employee
from any other source at any time before and after the termination date. The Company’s obligation to make any payment pursuant
to, and otherwise to perform its obligations under, this Agreement shall not be affected by any offset, counterclaim or other
right that the Company may have against Employee for any reason.

 

9.7
Definitions. 

 

(i)
Cause. “Cause” Shall mean:

 

(1)
conviction of a felony or a crime involving fraud or moral turpitude; or

 

(2)
theft, material act of dishonesty or fraud, intentional falsification of any employment or Company records, or commission of any
criminal act which impairs Employee’s ability to perform appropriate employment duties for the Company; or

 

(3)
intentional or reckless conduct or gross negligence materially harmful to the Company or the successor to the Company after a
Change in Control , including violation of a non-competition or confidentiality agreement; or

 

(4)
willful failure to follow lawful instructions of the person or body to which Employee reports; or

 

    	 

     

    

 

(5)
gross negligence or willful misconduct in the performance of Employee’s assigned duties. Cause shall not include mere unsatisfactory
performance in the achievement of Employee’s job objectives.

 

(ii)
Disability. “Disability” means a physical or mental illness, injury, or condition that prevents Employee from
performing substantially all of Employee’s duties associated with Employee’s position or title with the Company for
at least 90 days in a 12-month period.

 

(iii)
Good Reason. Resignation for “Good Reason” shall mean, without the express written consent of Employee, the
occurrence of one of the following arising on or after the Effective Date, as determined in a manner consistent with Treasury
Regulation Section 1.409A-1(n)(2)(ii):

 

(1)
a material reduction or change in Employee’s title or job duties, responsibilities and requirements inconsistent with Employee’s
position with the Company and Employee’s prior duties, responsibilities and requirements,

 

(2)
a material reduction of Employee’s then in effect Base Salary or Employee’s Target Bonus as set forth in above.;

 

(3)
following a Change in Control, Employee not serving as the chief operating officer of the surviving entity to the Company;

 

(4)
any material breach of this Agreement by Company.

 

(5)
In the case of Employee’s allegation of Good Reason, (i) Employee shall provide written notice to the Company of the event
alleged to constitute Good Reason within 90 days after the initial occurrence of such event, and (ii) the Company shall have the
opportunity to remedy the alleged Good Reason event within 90 days from receipt of notice of such allegation (the “Cure
Period”). If not remedied within the Cure Period, Employee may submit a written notice of termination, provided that the
notice of termination must be given no later than 45 days after the expiration of the Cure Period; otherwise, Employee is deemed
to have accepted such event, or the Company’s remedy of such event, that may have given rise to the existence of Good Reason;
provided, however, such acceptance shall be limited to the occurrence of such event and shall not waive Employee’s right
to claim Good Reason with respect to future similar events.

 

    	 

     

    

 

(iv)
Change in Control. “Change in Control” shall mean the occurrence of any one or more of the following: (i) the
accumulation (if over time, in any consecutive twelve (12) month period), whether directly, indirectly, beneficially or of record,
by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended) of 50.1% or more of the shares of the outstanding Common Stock of the Company, whether by merger, consolidation, sale
or other transfer of shares of Common Stock (other than a merger or consolidation where the stockholders of the Company prior
to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger
or consolidation), (ii) a sale of all or substantially all of the assets of the Company or (iii) during any period of twelve (12)
consecutive months, the individuals who, at the beginning of such period, constitute the Board, and any new director whose election
by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning of the 12-month period or whose election or nomination
for election was previously so approved, cease for any reason to constitute at least a majority of the Board; provided, however,
that the following acquisitions shall not constitute a Change of Control for the purposes of this Agreement: (A) any acquisitions
of Common Stock or securities convertible, exercisable or exchangeable into Common Stock directly from the Company or from any
affiliate of the Company, or (B) any acquisition of Common Stock or securities convertible, exercisable or exchangeable into Common
Stock by any employee benefit plan (or related trust) sponsored by or maintained by the Company.

 

10.
Non-Solicitation. 

 

10.1
Employee agrees and acknowledges that the Confidential Information that Employee has already received and will receive is
valuable to the Company and that its protection and maintenance constitutes a legitimate business interest of the Company, to
be protected by the non-solicitation restrictions set forth herein. Employee agrees and acknowledges that the non-solicitation
restrictions set forth herein are reasonable and necessary and do not impose undue hardship or burdens on the Employee.

 

10.2
Employee hereby agrees and covenants that during the Term and for a period of twelve months thereafter, he shall not, without
the prior written consent of the Company:

 

(i)
recruit, solicit, attempt to persuade, or assist in the recruitment or solicitation of, any employee of the Company who was an
employee, officer or agent of the Company during the three month period immediately preceding the date of Employee’s termination
for the purpose of employing the individual or obtaining the individual’s services or otherwise causing the individual to
leave employment with the Company;

 

(ii)
solicit or divert to any competing business any customer or prospective customer with which Employee had contact during the twelve
months prior to leaving the Company

 

Employer
and Employee agree that: these provisions do not impose an undue hardship on Employee and are not injurious to the public; that
these provisions are necessary to protect the business of Employer and its affiliates; the nature of Employee’s responsibilities
with Employer under this Agreement require Employee to have access to confidential information which is valuable and confidential
to all of the Company’s business; the scope of this Section 10 is reasonable in terms of length of time and geographic scope;
and adequate consideration supports this Section 10 including the consideration set forth in this Agreement.

 

    	 

     

    

 

11.
Confidential Information. Employee recognizes that Employer’s Business and continued success depend upon the use and
protection of confidential and proprietary business information, including, without limitation, the information and technology
developed by or available through licenses to Employer, to which Employee has access (all such information being “Confidential
Information”). For purposes of this Agreement, the phrase “Confidential Information” includes, for Employer
and its current or future subsidiaries and affiliates, without limitation, and whether or not specifically designated as confidential
or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets and customers;
financial information; information concerning the development of new products and services; information concerning any personnel
of Employer (including, without limitation, skills and compensation information); and technical and non-technical data related
to software programs, designs, specifications, compilations, inventions, improvements, methods, processes, procedures and techniques;
provided, however, that the phrase does not include information that (a) was lawfully in Employee’s possession
prior to disclosure of such information by Employer; (b) was, or at any time becomes, available in the public domain other than
through a violation of this Agreement; (c) is documented by Employee as having been developed by Employee outside the scope of
Employee’s employment and independently; or (d) is furnished to Employee by a third party not under an obligation of confidentiality
to Employer. Employee agrees that during Employee’s employment and after termination of employment irrespective of cause,
Employee will use Confidential Information only for the benefit of Employer and will not directly or indirectly use or divulge,
or permit others to use or divulge, any Confidential Information for any reason, except as authorized by Employer. Employee’s
obligation under this Agreement is in addition to any obligations Employee has under state or federal law. Employee agrees to
deliver to Employer immediately upon termination of Employee’s employment, or at any time Employer so requests, all tangible
items containing any Confidential Information (including, without limitation, all memoranda, photographs, records, reports, manuals,
drawings, blueprints, prototypes, notes taken by or provided to Employee, and any other documents or items of a confidential nature
belonging to Employer) whether in hard copy, electronic, or other format, together with all copies of such material in Employee’s
possession or control. Employee agrees that in the course of Employee’s employment with Employer, Employee will not violate
in any way the rights that any entity has with regard to trade secrets or proprietary or confidential information. Employee’s
obligations under this Section 11 are indefinite in term and shall survive the termination of this Agreement. However, Employee
further understands that nothing in this Agreement prohibits Employee from reporting to any governmental authority information
concerning possible violations of law or regulation and that Employee may disclose Confidential Information to a government official
or to an attorney and use it in certain court proceedings without fear of prosecution or liability, provided Employee files any
document containing Confidential Information under seal and does not disclose the Confidential Information, except pursuant to
court order. Employee understands that in the event it is determined that the disclosure of Company trade secrets was not done
in good faith pursuant to the above, Employee will be subject to substantial damages, including punitive damages and attorneys’
fees.

 

    	 

     

    

 

12.
Work Product and Copyrights. Employee agrees that all right, title and interest in and to the materials resulting from the
performance of Employee’s duties at Employer and all copies thereof, including works in progress, in whatever media, (the
“Work”), will be and remain in Employer upon their creation. Employee will mark all Work with Employer’s copyright
or other proprietary notice as directed by Employer. Employee further agrees:

 

12.1
To the extent that any portion of the Work constitutes a work protectable under the copyright laws of the United States (the
“Copyright Law”), that all such Work will be considered a “work made for hire” as such term is used and
defined in the Copyright Law, and that Employer will be considered the “author” of such portion of the Work and the
sole and exclusive owner throughout the world of such copyright; and

 

12.2
If any portion of the Work does not qualify as a “work made for hire” as such term is used and defined in the
Copyright Law, that Employee hereby assigns and agrees to assign to Employer, without further consideration, all right, title
and interest in and to such Work or in any such portion of such Work and any copyright in such Work and further agrees to execute
and deliver to Employer, upon request, appropriate assignments of such Work and copyright in such Work and such other documents
and instruments as Employer may request to fully and completely assign such Work and copyright in such Work to Employer, its successors
or nominees, and that Employee appoints Employer as attorney-in-fact to execute and deliver any such documents on Employee’s
behalf in the event Employee should fail or refuse to do so within a reasonable period following Employer’s request.

 

13.
Inventions and Patents. For purposes of this Agreement, “Inventions” includes, without limitation, information,
inventions, contributions, improvements, ideas, or discoveries, whether protectable or not, and whether or not conceived or made
during work hours. Employee agrees that all Inventions conceived or made by Employee during the period of employment with Employer
belong to Employer, provided they grow out of Employee’s work with Employer or are related in some manner to the Business,
including, without limitation, research and product development, and projected business of Employer or its affiliated companies.
Accordingly, Employee will:

 

13.1
Make adequate written records of such Inventions, which records will be Employer’s property;

 

13.2
Assign to Employer, at its request, any rights Employee may have to such Inventions for the U.S. and all foreign countries;

 

13.3
Waive and agree not to assert any moral rights Employee may have or acquire in any Inventions and agree to provide written
waivers from time to time as requested by Employer; and

 

    	 

     

    

 

13.4
Assist Employer (at Employer’s expense) in obtaining and maintaining patents or copyright registrations with respect
to such Inventions.

 

Employee
understands and agrees that Employer or its designee will determine, in its sole and absolute discretion, whether an application
for patent will be filed on any Invention that is the exclusive property of Employer, as set forth above, and whether such an
application will be abandoned prior to issuance of a patent. Employer will pay to Employee, either during or after the term of
this Agreement, the following amounts if Employee is sole inventor, or Employee’s proportionate share if Employee is joint
inventor: $750 upon filing of the initial application for patent on such Invention; and $1,500 upon issuance of a patent resulting
from such initial patent application, provided Employee is named as an inventor in the patent.

 

Employee
further agrees that Employee will promptly disclose in writing to Employer during the term of Employee’s employment and
for one (1) year thereafter, all Inventions whether developed during the time of such employment or thereafter (whether or not
Employer has rights in such Inventions) so that Employee’s rights and Employer’s rights in such Inventions can be
determined. Except as set forth on the initialed Exhibit C (List of Inventions) to this Agreement, if any, Employee represents
and warrants that Employee has no Inventions, software, writings or other works of authorship useful to Employer in the normal
course of the Business, which were conceived, made or written prior to the date of this Agreement and which are excluded from
the operation of this Agreement.

 

NOTICE:
This Section 13 does not apply to Inventions for which no equipment, supplies, facility, or trade secret information of Employer
was used and which was developed entirely on Employee’s own time, unless: (a) the Invention relates (i) directly to the
business of Employer or (ii) to Employer’s actual or demonstrably anticipated research or development, or (b) the Invention
results from any work performed by Employee for Employer.

 

14.
Remedies. Notwithstanding other provisions of this Agreement regarding dispute resolution, Employee agrees that Employee’s
violation of any of 11, 12 or 13 of this Agreement would cause Employer irreparable harm which would not be adequately compensated
by monetary damages and that an injunction may be granted by any court or courts having jurisdiction, restraining Employee from
violation of the terms of this Agreement, upon any breach or threatened breach of Employee of the obligations set forth in any
of Sections 11, 12 or 13. The preceding sentence shall not be construed to limit Employer from any other relief or damages to
which it may be entitled as a result of Employee’s breach of any provision of this Agreement, including Sections 11, 12
or 13. Employee also agrees that a violation of any of Sections 11, 12 or 13 would entitle Employer, in addition to all other
remedies available at law or equity, to recover from Employee any and all funds, including, without limitation, wages, salary
and profits, which will be held by Employee in constructive trust for Employer, received by Employee in connection with such violation.

 

    	 

     

    

 

15.
Dispute Resolution. Except for the right of Employer and Employee to seek injunctive relief in court, any controversy, claim
or dispute of any type arising out of or relating to Employee’s employment or the provisions of this Agreement shall be
resolved in accordance with this Section 15 regarding resolution of disputes, which will be the sole and exclusive procedure for
the resolution of any disputes. This Agreement shall be enforced in accordance with the Federal Arbitration Act, the enforcement
provisions of which are incorporated by this reference. Matters subject to these provisions include, without limitation, claims
or disputes based on statute, contract, common law and tort and will include, for example, matters pertaining to termination,
discrimination, harassment, compensation and benefits. Matters to be resolved under these procedures also include claims and disputes
arising out of statutes such as the Fair Labor Standards Act, Title VII of the Civil Rights Act, the Age Discrimination in Employment
Act, Nevada State Law. Nothing in this provision is intended to restrict Employee from submitting any matter to an administrative
agency with jurisdiction over such matter.

 

15.1
Mediation. Employer and Employee will make a good faith attempt to resolve any and all claims and disputes by submitting them
to mediation in Nevada before resorting to arbitration or any other dispute resolution procedure. The mediation of any claim or
dispute must be conducted in accordance with the then-current JAMS procedures for the resolution of employment disputes by mediation,
by a mediator who has had both training and experience as a mediator of general employment and commercial matters. If the parties
to this Agreement cannot agree on a mediator, then the mediator will be selected by JAMS in accordance with JAMS’ strike
list method. Within thirty (30) days after the selection of the mediator, Employer and Employee and their respective attorneys
will meet with the mediator for one mediation session of at least four hours. If the claim or dispute cannot be settled during
such mediation session or mutually agreed continuation of the session, either Employer or Employee may give the mediator and the
other party to the claim or dispute written notice declaring the end of the mediation process. All discussions connected with
this mediation provision will be confidential and treated as compromise and settlement discussions. Nothing disclosed in such
discussions, which is not independently discoverable, may be used for any purpose in any later proceeding. The mediator’s
fees will be paid in equal portions by Employer and Employee, unless Employer agrees to pay all such fees.

 

15.2
Arbitration. If any claim or dispute has not been resolved in accordance with Section 15.1, then the claim or dispute will
be determined by arbitration in accordance with the then-current JAMS employment arbitration rules and procedures, except as modified
herein. The arbitration will be conducted by a sole neutral arbitrator who has had both training and experience as an arbitrator
of general employment and commercial matters and who is and for at least ten (10) years has been, a partner, a shareholder, or
a member in a law firm. If Employer and Employee cannot agree on an arbitrator, then the arbitrator will be selected by JAMS in
accordance with Rule 15 of the JAMS employment arbitration rules and procedures. No person who has served as a mediator under
the mediation provision, however, may be selected as the arbitrator for the same claim or dispute. Reasonable discovery will be
permitted and the arbitrator may decide any issue as to discovery. The arbitrator may decide any issue as to whether or as to
the extent to which any dispute is subject to the dispute resolution provisions in Section 15 and the arbitrator may award any
relief permitted by law. The arbitrator must base the arbitration award on the provisions of Section 15 and applicable law and
must render the award in writing, including an explanation of the reasons for the award. Judgment upon the award may be entered
by any court having jurisdiction of the matter, and the decision of the arbitrator will be final and binding. The statute of limitations
applicable to the commencement of a lawsuit will apply to the commencement of an arbitration under Section 15.2. The arbitrator’s
fees will be paid in equal portions by Employer and Employee, unless Employer agrees to pay all such fees.

 

    	 

     

    

 

16.
Fees Related to Dispute Resolution. Unless otherwise agreed, the prevailing party will be entitled to its costs and attorneys’
fees incurred in any litigation or dispute relating to the interpretation or enforcement of this Agreement.

 

17.
Disclosure. Employee agrees fully and completely to reveal the terms of this Agreement to any future employer or potential
employer of Employee and authorizes Employer, at its election, to make such disclosure.

 

18.
Representation of Employee. Employee represents and warrants to Employer that Employee is free to enter into this Agreement
and has no contract, commitment, arrangement or understanding to or with any party that restrains or is in conflict with Employee’s
performance of the covenants, services and duties provided for in this Agreement. Employee agrees to indemnify Employer and to
hold it harmless against any and all liabilities or claims arising out of any unauthorized act or acts by Employee that, the foregoing
representation and warranty to the contrary notwithstanding, are in violation, or constitute a breach, of any such contract, commitment,
arrangement or understanding.

 

19.
Conditions of Employment. Employer’s obligations to Employee under this Agreement are conditioned upon Employee’s
timely compliance with requirements of the United States immigration laws.

 

20.
Assignability. During Employee’s employment, this Agreement may not be assigned by either party without the written
consent of the other; provided, however, that Employer may assign its rights and obligations under this Agreement without Employee’s
consent to a successor by sale, merger or liquidation, if such successor carries on the Business substantially in the form in
which it is being conducted at the time of the sale, merger or liquidation. This Agreement is binding upon Employee, Employee’s
heirs, personal representatives and permitted assigns and on Employer, its successors and assigns.

 

21.
Notices. Any notices required or permitted to be given hereunder are sufficient if in writing and delivered by hand, by facsimile,
by registered or certified mail, or by overnight courier, to Employee at David Rector, 1640 Terrace Way, Walnut Creek, CA 94597
or to Employer at U.S. Gold Corp., Suite 102 – Box 604, 1910 E Idaho Street, Elko, NV 89801. Notices shall be deemed to
have been given (i) upon delivery, if delivered by hand, (ii) seven days after mailing, if mailed, (iii) one business day after
delivery, if delivered by courier, and (iv) one business day following receipt of an appropriate electronic confirmation, if by
facsimile.

 

    	 

     

    

 

22.
Severability. If any provision of this Agreement or compliance by any of the parties with any provision of this Agreement
constitutes a violation of any law, or is or becomes unenforceable or void, then such provision, to the extent only that it is
in violation of law, unenforceable or void, shall be deemed modified to the extent necessary so that it is no longer in violation
of law, unenforceable or void, and such provision will be enforced to the fullest extent permitted by law. The Parties shall engage
in good faith negotiations to modify and replace any provision which is declared invalid or unenforceable with a valid and enforceable
provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it
replaces. If such modification is not possible, said provision, to the extent that it is in violation of law, unenforceable or
void, shall be deemed severable from the remaining provisions of this Agreement, which provisions will remain binding on the parties.

 

23.
Waivers. No failure on the part of either party to exercise, and no delay in exercising, any right or remedy hereunder will
operate as a waiver thereof; nor will any single or partial waiver of a breach of any provision of this Agreement operate or be
construed as a waiver of any subsequent breach; nor will any single or partial exercise of any right or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right or remedy granted hereby or by law.

 

24.
Governing Law. Except as provided in Section 15 above, the validity, construction and performance of this Agreement shall
be governed by the laws of the State of Nevada without regard to the conflicts of law provisions of such laws. The parties hereto
expressly recognize and agree that the implementation of this Section 24 is essential in light of the fact that Employer has its
corporate headquarters and its principal executive offices within the State of Nevada, and there is a critical need for uniformity
in the interpretation and enforcement of the employment agreements between Employer and its key employees. A Court of competent
jurisdiction in Washington shall have exclusive jurisdiction of any lawsuit arising from or relating to Employee’s employment
with, or termination from, Employer, or arising from or relating to this Agreement. Employee consents to such venue and personal
jurisdiction.

 

25.
409A Savings Clause.

 

25.1
The provisions of this Agreement are intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and any final regulations and guidance promulgated thereunder (“Section 409A”) and shall
be construed in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A. The Company and
Employee agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which
are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment
to Employee under Section 409A.

 

    	 

     

    

 

25.2
To the extent that Employee will be reimbursed for costs and expenses or in-kind benefits, except as otherwise permitted by
Section 409A, (a) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit,
(b) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect
the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; provided that the foregoing
clause (b) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code
solely because such expenses are subject to a limit related to the period the arrangement is in effect and (c) such payments shall
be made on or before the last day of the taxable year following the taxable year in which you incurred the expense.

 

25.3
A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing
for the payment of any amounts or benefits upon or following a termination of employment unless such termination constitutes a
“Separation from Service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement
references to a “termination,” “termination of employment” or like terms shall mean Separation from Service.

 

25.4
Each installment payable hereunder shall constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b),
including Treasury Regulation Section 1.409A-2(b)(2)(iii). Each payment that is made within the terms of the “short-term
deferral” rule set forth in Treasury Regulation Section 1.409A-1(b)(4) is intended to meet the “short-term deferral”
rule. Each other payment is intended to be a payment upon an involuntary termination from service and payable pursuant to Treasury
Regulation Section 1.409A-1(b)(9)(iii), et. seq., to the maximum extent permitted by that regulation, with any amount that is
not exempt from Code Section 409A being subject to Code Section 409A.

 

25.5
Notwithstanding anything to the contrary in this Agreement, if Employee is a “specified employee” within the meaning
of Section 409A at the time of Employee’s termination, then only that portion of the severance and benefits payable to Employee
pursuant to this Agreement, if any, and any other severance payments or separation benefits which may be considered deferred compensation
under Section 409A (together, the “Deferred Compensation Separation Benefits”), which (when considered together) do
not exceed the Section 409A Limit (as defined herein) may be made within the first six (6) months following Employee’s termination
of employment in accordance with the payment schedule applicable to each payment or benefit. Any portion of the Deferred Compensation
Separation Benefits in excess of the Section 409A Limit otherwise due to Employee on or within the six (6) month period following
Employee’s termination will accrue during such six (6) month period and will become payable in one lump sum cash payment
on the date six (6) months and one (1) day following the date of Employee’s termination of employment. All subsequent Deferred
Compensation Separation Benefits, if any, will be payable in accordance with the payment schedule applicable to each payment or
benefit. Notwithstanding anything herein to the contrary, if Employee dies following termination but prior to the six (6) month
anniversary of Employee’s termination date, then any payments delayed in accordance with this paragraph will be payable
in a lump sum as soon as administratively practicable after the date of Employee’s death and all other Deferred Compensation
Separation Benefits will be payable in accordance with the payment schedule applicable to each payment or benefit.

 

    	 

     

    

 

25.6
For purposes of this Agreement, “Section 409A Limit” will mean a sum equal (x) to the amounts payable prior to
March 15 following the year in which Employee’s employment terminates plus (y) the lesser of two (2) times: (i) Employee’s
annualized compensation based upon the annual rate of pay paid to Employee during the Company’s taxable year preceding the
Company’s taxable year of Employee’s termination of employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1)
and any IRS guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified
plan pursuant to Section 401(a)(17) of the Code for the year in which Employee’s employment is terminated.

 

26.
Golden Parachute Limitation. Notwithstanding any other provision of this Agreement, in the event that it shall be determined
that the aggregate payments or distributions by the Company to or for the benefit of Employee, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (the “Payments”), constitute “excess parachute
payments” (as such term is defined under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”)
or any successor provision, and the regulations promulgated thereunder (collectively, “Section 280G”)) that would
be subject to the excise tax imposed by Section 4999 of the Code or any successor provision (collectively, “Section 4999”)
or any interest or penalties with respect to such excise tax (the total excise tax, together with any interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”)), then the Payments shall be either (a) delivered in
full, or (b) delivered to such lesser extent that would result in no portion of the Payments being subject to the Excise Tax,
whichever of the foregoing amounts, taking into account the applicable Federal, state or local income and employment taxes and
the Excise Tax, results in the receipt by Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding
that all or some portion of such benefits may be subject to the Excise Tax. In the event that the Payments are to be reduced pursuant
to this Section 26, such Payments shall be reduced such that the reduction of compensation to be provided to Employee as a result
of this Section 26 is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements
of Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts
shall be reduced on a pro rata basis (but not below zero). All calculations required pursuant to this Section 26 shall be performed
in good faith by nationally recognized registered public accountants or tax counsel selected by the Company.

 

27.
Counterparts. This agreement may be executed in counterpart in different places, at different times and on different dates,
and in that case all executed counterparts taken together collectively constitute a single binding agreement.

 

    	 

     

    

 

28.
Costs and Fees Related to Negotiation and Execution of Agreement. Each Party Shall be responsible for the payment of its own
costs and expenses, including legal fees and expenses, in connection with the negotiation and execution of this Agreement. Neither
Party will be liable for the payment of any commissions or compensation in the nature of finders’ fees or brokers’
fees, gratuity or other similar thing or amount in consideration of the other Party entering into this Agreement to any broker,
agent or third party acting on behalf of the other Party.

 

29.
Entire Agreement. This instrument contains the entire agreement of the parties with respect to the relationship between Employee
and Employer and supersedes all prior agreements and understandings, and there are no other representations or agreements other
than as stated in this Agreement related to the terms and conditions of Employee’s employment. This Agreement may be changed
only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or
discharge is sought, and any such modification will be signed by the Chairman of the Board of Directors of Employer.

 

IN
WITNESS WHEREOF, the parties have duly signed and delivered this Agreement as of the day and year first above written.

 

	 	U.S. GOLD CORP.
	 	 	 
	 	By:
    	/s/
    John Braca
	 	Name:
    	John
    Braca
	 	Title:
    	Chairman
    of the Board
	 	 	 
	 	David Rector
	 	 	 
	 	/s/ David RectorExhibit

	
		
	Island Investment Development Inc.

94 Euston Street
PO Box 1176, Charlottetown
Prince Edward Island
Canada  C1A 7M8
	Island Investment Development Inc.

94, rue Euston
C.P. 1176, Charlottetown
Île-du-Prince-Édouard
Canada  C1A 7M8

PRIVATE & CONFIDENTIAL

July 10, 2018

Aqua Bounty Canada Inc.
718 Bay Fortune Road
Souris, PEI C0A 2B0

Attention: Dawn Runighan

Dear Ms. Runighan:

Re:    Offer to Finance
Our File #2018-00827
On the basis of an application for a loan submitted by Aqua Bounty Canada Inc (the “Borrower”), and the financial statements / other information provided in support of the request, Island Investment Development Inc. (“IIDI”), through Prince Edward Island Century 2000 Fund Inc. (the “Lender”), is pleased to extend the following financing offer:
1.0    PURPOSE AND AMOUNT
		
	1.1
	A term loan (hereinafter collectively called the “Loan”) of up to Two Million Seven Hundred Thousand Dollars ($2,700,000), the proceeds of which are to be used to finance the construction of 2 buildings in Fortune, PEI;

		
	1.2
	The Borrower agrees to assume all project cost overruns without prejudice to the security held by the Lender;

No change in the Project and financing may be made without the Lender’s prior written consent.
2.0    TERMS OF REPAYMENT
The terms of repayment for the Loan are as follows:
		
	2.1
	The Loan has a term of five years from the date of first disbursement with a 20 year amortization period. If any portion of the Loan remains outstanding at maturity, the Loan, and any unpaid accrued interest, shall be immediately due and payable in full;

Aqua Bounty Canada Inc
Our File #2018-00827
July 10, 2018
Page 2 of 11

		
	2.2
	The Loan will bear interest at the fixed rate of four percent (4.0%) per annum on the principal balance outstanding to maturity. Interest is calculated daily, commencing on first disbursement, and is due and payable on the first day of each month thereafter during the term of the Loan until maturity;

		
	2.3
	Repayment shall be by way of monthly, blended principal and interest installments of $16,314.66 commencing on the 1st day of each month immediately following first disbursement and continuing on the 1st day of each month thereafter during the term of the Loan until maturity;

		
	2.4
	All payments will be applied firstly to unpaid interest and then to principal;

		
	2.5
	To facilitate ease of administration, the Borrower agrees that payments will be set-up on the Lender’s pre-authorized payment system.

3.0    PREPAYMENT
		
	3.1
	Advances made under this Loan may be repaid in whole, or in part, at any time, without penalty;

		
	3.2
	Prepayment effects a permanent reduction of the Loan, which may not be re-advanced to the Borrower thereafter;

		
	3.3
	Partial prepayments shall be applied regressively on the last maturing installments of principal.

4.0    SECURITY
The following security (hereinafter referred to collectively as the “Security”) evidenced by documents, registrations, filings and opinions of legal counsel satisfactory to the Lender, is to be provided prior to any funds being disbursed:
		
	4.1
	A Promissory Note from the Borrower for the full amount of the Loan.

		
	4.2
	A registered General Security Agreement from the Borrower conveying a first security interest in all present and after acquired personal property of the borrower.

		
	4.3
	An open ended collateral mortgage conveying a first fixed charge on buildings and land (PID #849505) located at 1300 Rte 2, Souris, Prince Edward Island.

		
	4.4
	An open ended collateral mortgage conveying a first fixed charge on buildings and land (PlD #151639) located at 0718 Bay Fortune, Souris, Prince Edward Island.

		
	4.5
	An open ended collateral mortgage conveying a first fixed charge on buildings and land (PID #1022300) located in Souris, Prince Edward Island.

		
	4.6
	Assignment of Fire Insurance confirming the Agency’s interest as first loss payee on all assets / personal property / real property.

		
	4.7
	The Corporate Guarantee from Aqua Bounty Technologies Inc (the “Guarantor”) for the full amount of the Loan.

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Our File #2018-00827
July 10, 2018
Page 3 of 11

5.0    INSURANCE
		
	5.1
	The Borrower agrees to keep all personal property assigned, mortgaged or pledged as security for the Loan insured for physical damages and losses on an all risk basis for their replacement cost and have the Lender named as first loss payee;

		
	5.2
	The Borrower agrees to assign insurance proceeds to the Lender for an amount equal to the balance of the Loan;

		
	5.3
	The Lender agrees that where insurance proceeds are payable to the Borrower and the Lender, such proceeds shall be used either to repair, rebuild, or replace any lost or damaged personal property and/or equipment with respect to which the claim is made, or shall be applied as a reduction of principal on the Loan without notice, bonus or penalty, unless otherwise agreed to in writing by the Lender;

		
	5.4
	The Borrower shall notify the Lender immediately of any loss or damage to the Borrower’s property held as security;

		
	5.5
	If the Borrower does not maintain insurance as required, the Lender may purchase insurance to protect its own interest and the Borrower will pay the premiums.

6.0    UNDERLYING CONDITIONS
During the term of the Loan, and as long as the Borrower is indebted or otherwise liable to the Lender, the Borrower will not, without the prior written consent of the Lender:
		
	6.1
	Undertake capital expenditures or lease purchase agreements in excess of $100,000 per annum that are not contemplated in the Borrower’s business plan;

		
	6.2
	Pay any compensation or benefit in excess of $100,000 per year (including the declaration or payment of dividends on any class of shares; and/or taxable benefits for personal use of corporate assets) to the shareholder and all persons related to the shareholder;

		
	6.3
	Undertake transactions between related businesses other than in the normal course of business and at normal market rates;

		
	6.4
	For the purposes hereof, related persons shall have the same meaning as that set out in Section 251 of the Income Tax Act of Canada;

		
	6.5
	Change the capital structure or ownership of the borrowing company or redeem any of its shares. There shall be no amalgamation, merger, acquisition, or any other business combination; nor sale of the business or any of its assets; nor the creation of an affiliated company, nor granting of any operating license;

Requests for consent will not be withheld by the Lender unless such changes will materially impair the financial viability of the Borrower or otherwise compromise the integrity of the Borrower.
7.0    CONTINGENT CONDITIONS
Prior to any disbursement of funds, the Borrower is required to provide:
		
	7.1
	Confirmation of other project financing in the amount of $750,000 from ACOA and $9,250,000 from the shareholders of Aqua Bounty Canada Inc.

		
	7.2
	Confirmation that property tax ownership and assessment data on PID’s #849505, #151639 and #1022300 is current and any taxes owing are fully paid.

Aqua Bounty Canada Inc
Our File #2018-00827
July 10, 2018
Page 4 of 11

		
	7.3
	Sub search to be completed on PIO #849505 and #151639 to ensure IIDI maintains a valid first charge over both properties.

		
	7.4
	The Borrower is to cover the cost of any financial shortfalls related to this project.

8.0    DISBURSEMENT
		
	8.1
	Upon satisfaction of the contingent conditions to this offer in their entirety, and satisfactory completion and registration of the security documents, the Loan proceeds shall be disbursed:

		
	8.1.1
	The Borrower’s presentation, satisfactory to the Lender, of paid invoices (complete with serial numbers where applicable);

		
	8.1.2
	Where unpaid invoices are presented for disbursement, the Borrower authorizes and hereby directs the Lender to remit payment directly to the equipment vendor.

		
	8.2
	Drawdown of all undisbursed funds shall occur no later than 24 months past the date of this Letter of Offer, after which any undisbursed portion of the Loan may be cancelled by the Lender.

9.0    GENERAL CONDITIONS TO DISBURSEMENT
Notwithstanding anything herein to the contrary, the Lender has the right, at its option, to terminate this commitment, and shall not be required to disburse all or any further part of the Loan, at any time or times, and the balance owing on the Loan may, at its option, become immediately due and payable:
		
	9.1
	If an Event of Default has occurred or an event which, with the lapse of time or with notice and lapse of time specified herein would become an Event of Default, shall have occurred and be continuing; or

		
	9.2
	If, in the opinion of the Lender, there has been any material adverse change in the business, assets or financial condition of the Borrower; or

		
	9.3
	If there is any action, proceeding or investigation pending or threatened against the Borrower which would, in the opinion of the Lender, if successful, have a material adverse effect on the Borrower; or

		
	9.4
	If there has been any material discrepancy or inaccuracy in any written or oral representations, statements or information made or furnished to the Lender at any time; or

		
	9.5
	If, in the opinion of the Lender, any money loaned has not been or is not being applied for the purpose for which it was advanced, or if the security materially depreciates in value.

10.0    FINANCIAL REPORTING COVENANTS
The Borrower shall, at its expense, deliver to the Lender, financial reports and other information in the form and content as the Lender may specify, on the following basis:
		
	10.1
	Within 180 days of its year-end, annual financial statements of the Borrower, prepared on a “Review Engagement” basis by an external firm of professional accountants in accordance with generally accepted accounting principles;

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Our File #2018-00827
July 10, 2018
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	10.2
	Within 180 days of its year-end, annual financial statements of the Guarantor, prepared on a “Review Engagement” basis by an external firm of professional accountants in accordance with generally accepted accounting principles;

		
	10.3
	In the event of late filing of the Borrower’s Financial Statements or inventory reports, a $100 fee will be levied at the first of each week, starting 14 days after the statements were otherwise due. Waiver of this will be at the sole discretion of the Lender;

		
	10.4
	Upon the request of the Lender, the Borrower shall submit the Borrower’s internally prepared financial statements and other such information in respect of the financial operations of the Borrower as may be deemed necessary by the Lender acting reasonably, from time to time.

11.0    UNDERTAKINGS OF THE BORROWER
The Borrower undertakes:
		
	11.1
	To comply with all applicable laws and regulations, and with the decisions, orders, instructions, directives, permits, authorizations or licenses given or issued pursuant to said laws and regulations;

		
	11.2
	To carry on its business in a manner that is appropriate, effective and consistent with generally accepted and recognized practices; to maintain in force the permits, authorizations or licenses required for that purpose;

		
	11.3
	To maintain in good repair, working order and condition, all material properties used in the business of the Borrower and to keep all property taxes paid current;

		
	11.4
	To notify the Lender immediately of any emission, spill or discovery of any pollutant in connection with its assets or those of its subsidiaries, its activities evidencing a real or potential violation of environmental legislation or environmental permits;

		
	11.5
	In the case of the deposit, release or discharge of a pollutant into the environment contrary to any law, to contain the emission, deposit, release or discharge and immediately repair the damage caused;

		
	11.6
	Not to acquire businesses or interests in businesses or make investments in an entity that is not the Borrower and to ensure that the Borrower does not acquire businesses or interests in businesses or invest directly or indirectly, whether through the purchase of securities, assets or otherwise, in spheres of activity other than those in which the Borrower currently operates, without having first obtained the Lender’s written consent;

The Lender agrees that any request advanced by the Borrower to amend the undertakings described in this Credit Agreement, will be dealt with in a timely manner and that consent to vary the Undertakings will not be unreasonably withheld.
12.0    EVENTS OF DEFAULT
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 government body):

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Our File #2018-00827
July 10, 2018
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	12.1
	If the Borrower makes default in the payment of any sum which is due and owing to the Lender hereunder and such default shall have continued for a period of fifteen (15) days;

		
	12.2
	If the Borrower shall neglect to observe or perform any other covenant or condition herein contained on its part to be observed or performed; and if the same is capable of being cured, after notice in writing has been given by the Lender specifying such default and requiring the Borrower to cure same, the Borrower shall have failed to cure same within a period of fifteen (15) days;

		
	12.3
	A default on this Loan, or any other loan that the Borrower has with the Lender, shall constitute a default on all loans that the Borrower has with the Lender;

		
	12.4
	If an order shall be made or an effective resolution be passed for the winding-up or the liquidation of the Borrower or Guarantor;

		
	12.5
	If the Borrower, or Guarantor, shall make an assignment for the benefit of its creditors or shall be declared bankrupt or make a proposal or assignment under the Bankruptcy and Insolvency Act or if a custodian or sequestrator or receiver or a receiver and manager or any other officer with similar powers shall be appointed of the Borrower or of its property;

		
	12.6
	If an encumbrancer shall take possession of the property of the Borrower or any substantial part thereof or if a distress or execution or any similar process be levied or enforced against such property and remain unsatisfied for such period as would permit such property or such part thereof to be sold thereunder;

		
	12.7
	If the Borrower, or Guarantor, shall make an application to any court for an order under the Companies Creditors Arrangement Act;

		
	12.8
	If the Lender in good faith believes that the ability to pay any monies hereby secured or to perform any covenant or condition hereof is impaired or that the assets pledged as security for the Loan are in danger of being lost, damaged or confiscated;

		
	12.9
	If the Borrower ceases to carry on its business in the Province of Prince Edward Island;

		
	12.10
	The making of any representation or warranty by the Borrower, or Guarantor, or the application in any document or certificate furnished to the Lender in connection herewith or pursuant hereto which shall prove at any time to be materially incorrect, as of the date made.

The Lender may, at any time it deems necessary to protect its Loans or security, obtain the advice and assistance of such lawyers, accountants, engineers or other professional or expert personnel as it may deem necessary, and any expense in this connection shall be borne by the Borrower, provided the Lender has advised the Borrower in advance of its intention to retain such professional or expert personnel and upon completion provides the Borrower with a detailed account of the expenditures arising from such retention.
13.0    ACKNOWLEDGEMENT
		
	13.1
	The Borrower acknowledges that it has independently satisfied itself respecting the feasibility of the project and has not relied in any way upon any oral or written representations by the Lender or the fact the Loan is being made;

		
	13.2
	The Borrower acknowledges that it recognizes that, although the Lender is a Crown corporation, it operates on the basis of an independent body for the purpose of dealing with applications for financial assistance made to it. Applications are considered strictly

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July 10, 2018
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on their own merits and independent of other government departments or agencies and without regard to any possible understanding with any government department and/or representatives;
		
	13.3
	The Borrower further acknowledges that the Lender is not involved or responsible for any representations or warranties undertaken by other government departments or agencies in conjunction with the Borrower and also acknowledges that there are no undertakings between the Borrower and the Lender except those that appear in these documents;

		
	13.4
	The Borrower expressly waives the right to receive a copy of any financing statement or financing change statement which may be registered by the Lender in connection with any security interest taken by the Lender from the Borrower arising from this Letter of Offer, and also waives the right to receive a copy of any verification statement issued with respect thereto, where such waiver is not otherwise prohibited by law.

14.0    COMMUNICATIONS
The Borrower must consult with the Lender regarding communication activities relating to the Project, as outlined in the following clauses:
		
	14.1
	The Borrower consents to public announcements of the Project, by or on behalf of the Lender. The Borrower shall also acknowledge the Lender’s Contribution in any public communications of the Project and shall obtain the approval of the Lender before preparing any announcements, brochures, advertisements, web content or other materials that will display the Lender’s logo or otherwise make reference to the Lender.

		
	14.2
	The Lender shall inform the Borrower of the date on which the announcement is to be made and the Borrower shall keep this Agreement confidential until such date. After official announcement of the Project by the Lender or at first disbursement of Loan proceeds, whichever is earlier, information appearing in Schedule A – Loan Fact Sheet for Public Disclosure, herein, will be considered to be in the public domain.

		
	14.3
	The Borrower will advise the Lender at least thirty (30) calendar days in advance of any special event such as, but not limited to, an official opening, ribbon cutting or other like event that the Borrower organizes in connection with the Project. A ceremony shall be held on a date that is mutually acceptable to the Lender and the Borrower. The Borrower consents to having the Minister responsible for the Lender, or a designate, participate in any such ceremony.

		
	14.4
	The Borrower agrees to the distribution by the Lender of information about the Project as part of public communication initiatives including, but not limited to, feature stories, news releases, speeches, web content, Lender promotional materials and special publications.

		
	14.5
	The Lender may, at its sole discretion, withdraw the requirement of the Borrower’s acknowledgment of the Lender’s Contribution in all public communications of the Project.

Aqua Bounty Canada Inc
Our File #2018-00827
July 10, 2018
Page 8 of 11

15.0    FREEDOM OF INFORMATION AND PROTECTION OF PRIVACY ACT
		
	15.1
	Information in this Letter of Offer will be treated in accordance with the Prince Edward Island Freedom of Information and Protection of Privacy Act. For additional information see: www.gov.pe.ca/foipp.

		
	15.2
	Notwithstanding the provisions of the Freedom of Information and Protection of Privacy Act, it is acknowledged that acceptance of this letter of offer constitutes, in the event of any

		
	(a)
	classification of the loan balance by the Lender as uncollectible, or

		
	(b)
	write-off, cancellation, discharge, or release of any loan balance owing by the Borrower to the Lender,

consent to the disclosure of the identity of the Borrower or the Guarantor, if any, as a borrower who has had a loan classified as uncollectible, or who has had a loan written­off, cancelled, discharged or released, including the amount of the applicable debt, by the Minister, pursuant to the Financial Administration Act.
16.0    NOTICE
		
	16.1
	Any notice or correspondence to the Lender, including all inquiries with respect to this Agreement, should be directed to:

Attn: Chris Silvaggio, Account Manager
Prince Edward Island Century 2000 Fund Inc.
PO Box 1176, Charlottetown, PE  C1A 7M8
T: (902) 368-6234, F: (902) 368-6201, E: cgsilvaggio@gov.pe.ca
		
	16.2
	Any notice or correspondence to the Borrower, including all inquiries with respect to this Agreement, should be directed to:

Attn: Dawn Runighan
718 Bay Fortune Road
Souris, PE C0A 2B0
17.0    COUNTERPARTS
		
	17.1
	This letter of offer may be executed in one or more counterparts and by the different parties to it on separate counterparts, each of which, when so executed will be deemed to be an original; such counterparts, together, will constitute one and the same agreement. This letter of offer may be executed and delivered by fax or email pdf transmission of a manually signed counterpart.

18.0    ACCEPTANCE
If you agree with the terms and conditions as set forth in this Offer to Finance, please signify your acceptance by signing and returning the enclosed duplicate of this Offer to Finance, signed by each Borrower and Guarantor, to the Lender by August 22, 2018. Failing such acceptance, this offer shall be of no further force or effect.

Aqua Bounty Canada Inc
Our File #2018-00827
July 10, 2018
Page 9 of 11

Upon receipt of the written acceptance, the Lender Will have the required security documents prepared. All legal and any other related fees regarding this transaction will be on the account of the Borrower and will be due and payable upon invoice.
To further assist economic development and wealth creation in Prince Edward Island, the Borrower is encouraged to purchase materials, supplies, equipment and services from local Prince Edward Island companies, provided that these firms are able to supply your company with these goods and services at competitive prices, and of equal quality and service.
Prince Edward Island Century 2000 Fund Inc. is pleased to provide this offer to you and extends its best wishes for the success of your business.
Yours truly,
/s/ Jamie Aiken
Jamie Aiken, CPA, CA
Executive Director

Aqua Bounty Canada Inc
Our File #2018-00827
July 10, 2018
Page 10 of 11

The undersigned does hereby accept this offer and agrees to all of the terms contained herein.

Dated the 20 day of August, 2018.

	
		
	Signed sealed and delivered in the
presence of:

/s/ Christopher H. Martin                                          
	Aqua Bounty Canada Inc

Per: /s/ David A. Frank                                           

Per:                                                                        

I/We have the authority to bind the company

The undersigned Guarantors, do acknowledge receipt of this offer and the terms contained herein.

Dated the 20 day of August, 2018.

	
		
	Signed sealed and delivered in the
presence of:

/s/ Christopher H. Martin                                          
	Aqua Bounty Technologies Inc

Per: /s/ David A. Frank                                           

Per:                                                                        

I/We have the authority to bind the company

Aqua Bounty Canada Inc
Our File #2018-00827
July 10, 2018
Page 11 of 11

Schedule A

	
		
	Loan Fact Sheet for Public Disclosure

	Borrower:
	Aqua Bounty Canada Inc.
718 Fortune Bay Road
Souris, PE

	Lender:
	Prince Edward Island Century 2000 Fund Inc.

	Date:
	June 26, 2018

	Authorized Amount of Loan:
	$2,700,000

	Interest Rate:
	Fixed, 4%, 5-year term

	Purpose of Loan:
	Purchase /Improvement of Capital Assets

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