Exhibit 10.2

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE
LATER OF (I) DISTRIBUTION DATE TO BE INSERTED, AND (II) THE DATE THE ISSUER
BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.

 

COMMON SHARE PURCHASE WARRANT

 

Algae Dynamics Corp.

 

Warrant Shares: • Initial Issuance Date: •   Termination Date: October 26, 2020

 

THIS COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, • or its assigns (the “Holder”) is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after •(the “Initial Issuance Date”) and on or prior to the
close of business on September 30, 2020 (the “Termination Date”) but not
thereafter, to subscribe for and purchase from ALGAE DYNAMICS CORP., a
corporation organized under the Canada Business Corporations Act (the
“Company”), • common shares (the “Common Shares”) of the capital of the Company
(subject to adjustment hereunder, the “Warrant Shares”); provided that if at any
time the volume weighted average price of the Common Shares on any stock
exchange upon which the Common Shares are listed as may be selected for this
purpose by the Directors of the Corporation, acting reasonably, shall equal or
exceed $1.50 per Common Share for a period of twenty (20) consecutive trading
days (the “Early Expiry Event”), the Corporation shall be entitled, at the
option of the Corporation, to exercise the Early Expiry Event by delivering an
Early Expiry Event notice to the Holders of Warrants.

 

Section 1. Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1:

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Securities Act” means the United States Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Shares are listed or quoted for trading on the date in question: the NYSE
MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the New York Stock Exchange, the OTCQB marketplace or the OTC
Bulletin Board (or any successors to any of the foregoing).

 

“Transfer Agent” means initially the Company, and following the appointment of a
transfer agent for the Company’s Common Shares, such transfer agent and any
successor transfer agent of the Company.

 

All references to “Dollar” or “$” refer to the lawful currency of the United
States, or at the election of the Company, to the Canadian dollar equivalent
thereof.

 

 

 

 

Section 2. Exercise of Warrant.

 

a) Exercise of the purchase rights represented by this Warrant may be made, in
whole or in part, at any time or times on or after the Initial Issuance Date and
on or before the Termination Date by delivery to the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of the Holder appearing on the books of the
Company) of a duly executed facsimile copy of the Notice of Exercise Form
annexed hereto as Exhibit “A”. Within three (3) Trading Days following the date
of exercise as aforesaid, the Holder shall deliver or otherwise satisfy the
aggregate Exercise Price for the shares specified in the applicable Notice of
Exercise in one of the manners specified in Section 2 c). No ink-original Notice
of Exercise shall be required, nor shall any medallion guarantee (or other type
of guarantee or notarization) of any Notice of Exercise form be required.
Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the
final Notice of Exercise is delivered to the Company. Partial exercises of this
Warrant resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the outstanding
number of Warrant Shares purchasable hereunder in an amount equal to the
applicable number of Warrant Shares purchased. The Holder and the Company shall
maintain records showing the number of Warrant Shares purchased and the date of
such purchases. The Company shall deliver any objection to any Notice of
Exercise Form within one (1) Business Day of receipt of such notice. The Holder
and any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.

 

b) Exercise Price. The exercise price per Common Share under this Warrant shall
be CDN$0.75, subject to adjustment hereunder (the “Exercise Price”).

 

c) Payment of Exercise Price. Payment of the Exercise Price shall be made as in
accordance with subsection (i) below at the option of the Holder:

 

(i) Cash Exercise: The Holder may make the required payment due upon exercise of
this Warrant in cash, cashier’s check, or wire transfer, equal to the applicable
Exercise Price (a “Cash Exercise”).

 

d) Mandatory Conversion of Warrants: If at any time the volume weighted average
price of the Common Shares on any stock exchange upon which the Common Shares
are listed as may be selected for this purpose by the Directors of the
Corporation, acting reasonably, shall equal or exceed $1.50 per Common Share for
a period of twenty (20) consecutive trading days, the Corporation shall be
entitled, at the option of the Corporation, to exercise the Early Expiry Event
by delivering an Early Expiry Event notice to the Holder of Warrants. An Early
Expiry Event notice shall be delivered to each Holder within five (5) Business
Days following such Early Expiry Event in the manner in Section 5(g). In such
case the Warrants will expire at 5:00p.m. (Toronto time) on the 30th day after
the date on which such notice is given by the Corporation.

 

d) Mechanics of Exercise.

 

i. Delivery of Warrant Shares Upon Exercise. The Company shall use best efforts
to cause the Warrant Shares purchased hereunder to be transmitted by the
Transfer Agent to the Holder by crediting the account of the Holder’s broker
with The Depository Trust Company through its Deposit or Withdrawal at Custodian
system (“DWAC”) if the Company is then a participant in such system and either
there is an effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by Holder and otherwise by
instructing the Transfer Agent to credit to the account of the Holder such
number of Common Shares which may be deliverable to the Holder in the Notice of
Exercise by the date that is one (1) Trading Day after the latest of (A) the
delivery to the Company of the Notice of Exercise and (B) surrender of this
Warrant (if required) (such date, the “Warrant Share Delivery Date”). The
Warrant Shares shall be deemed to have been issued, and Holder or any other
Person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the Warrant has been
exercised, with payment to the Company of the Exercise Price prior to the
issuance of such shares, having been paid.

 

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been
exercised in part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder
to purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.

 

iii) Rescission Rights. If the Company fails to cause the Transfer Agent to
transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the
Warrant Share Delivery Date, then the Holder will have the right to rescind such
exercise. In the event of such rescission, Holder shall promptly execute such
documents and take such actions as may be necessary to promptly return to the
Company any Warrant Shares that have been issued and delivered to the Holder
following the Warrant Share Delivery Date.

 

 

 

 

iv) No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.

 

v) Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other incidental expense
in respect of the issuance of such Warrant Shares, all of which taxes and
expenses shall be paid by the Company, and such Warrant Shares shall be issued
in the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event Warrant Shares are to be issued in
a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto as Exhibit
“B” duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees required for
same-day processing of any Notice of Exercise.

 

vi) Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

 

Section 3. Certain Adjustments.

 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Share or any other equity or equity
equivalent securities payable in Common Shares (which, for avoidance of doubt,
shall not include any Common Shares issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding Common Shares into a larger number of
shares, (iii) combines (including by way of reverse stock split) outstanding
Common Shares into a smaller number of shares, or (iv) issues by
reclassification of the Common Shares any shares of capital stock of the
Company, then in each case the Exercise Price shall be multiplied by a fraction
of which the numerator shall be the number of Common Shares (excluding treasury
shares, if any) outstanding immediately before such event and of which the
denominator shall be the number of Common Shares outstanding immediately after
such event, and the number of shares issuable upon exercise of this Warrant
shall be proportionately adjusted such that the aggregate Exercise Price of this
Warrant shall remain unchanged. Any adjustment made pursuant to this Section
3(a) shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

 

b) If the Company, at any time while this Warrant is outstanding, shall
distribute to all holders of Common Shares (and not to the Holder) evidences of
its indebtedness or assets (including cash and cash dividends) or rights or
warrants to subscribe for or purchase any security, then in each such case the
Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date fixed for determination of shareholders
entitled to receive such distribution by a fraction of which the denominator
shall be the ten-day volume-weighted average price (“VWAP”) of the Common Shares
on the Trading Market determined as of the record date mentioned above, and of
which the numerator shall be such VWAP on such record date less the fair market
value at such record date of the portion of such assets or evidence of
indebtedness or rights or warrants so distributed applicable to one outstanding
Common Share as determined by the Board of Directors of the Company in good
faith. In either case the adjustments shall be described in a statement provided
to the Holder of the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one Common Share. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.

 

c) Subsequent Rights Offerings. If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Shares (and not to the Holder) entitling them to subscribe for or purchase
Common Shares at a price per share less than the VWAP on the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of Common Shares outstanding on the
date of issuance of such rights, options or warrants plus the number of
additional Common Shares offered for subscription or purchase, and of which the
numerator shall be the number of Common Shares outstanding on the date of
issuance of such rights, options or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered (assuming
receipt by the Company in full of all consideration payable upon exercise of
such rights, options or warrants) would purchase at such VWAP. Such adjustment
shall be made whenever such rights, options or warrants are issued, and shall
become effective immediately after the record date for the determination of
shareholders entitled to receive such rights, options or warrants.

 

 

 

 

d) Fundamental Transaction. If, at any time while this Warrant is outstanding,
(i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person,
(ii) the Company, directly or indirectly, effects any sale, lease, license,
assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct
or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common
Shares are permitted to sell, tender or exchange their shares for other
securities, cash or property and has been accepted by the holders of 50% or more
of the outstanding Common Shares, (iv) the Company, directly or indirectly, in
one or more related transactions effects any reclassification, reorganization or
recapitalization of the Common Shares or any compulsory share exchange pursuant
to which the Common Shares are effectively converted into or exchanged for other
securities, cash or property, or (v) the Company, directly or indirectly, in one
or more related transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person or
group of Persons whereby such other Person or group acquires more than 50% of
the outstanding Common Shares (not including any Common Shares held by the other
Person or other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive,
for each Warrant Share that would otherwise have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction, at
the option of the Holder (without regard to any limitation in Section 2(e) on
the exercise of this Warrant), the number of Common Shares or other securities
of the successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the “Alternate
Consideration”) receivable as a result of such Fundamental Transaction by a
holder of the number of Common Shares for which this Warrant has been exercised
and would have been exercisable immediately prior to such Fundamental
Transaction. For purposes of any such exercise, the determination of the
Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one Common Share in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Shares are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this Warrant in
accordance with the provisions of this Section 3(d) and shall, at the option of
the Holder, deliver to the Holder in exchange for this Warrant a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Warrant which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the Common Shares acquirable and receivable upon exercise of this
Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and with an exercise price which applies
the Exercise Price hereunder, adjusted as applicable in accordance with the
terms of the Fundamental Transaction, to such shares of capital stock. Upon the
occurrence of any such Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Warrant referring to the
“Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the
Company under this Warrant with the same effect as if such Successor Entity had
been named as the Company herein.

 

e) Calculations. All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of Common Shares deemed to be issued and
outstanding as of a given date shall be the sum of the number of Common Shares
(excluding treasury shares, if any) issued and outstanding.

 

f) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall promptly mail to
the Holder a notice setting forth the Exercise Price after such adjustment and
any resulting adjustment to the number of Warrant Shares and setting forth a
brief statement of the facts requiring such adjustment.

 

 

 

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a
dividend (or any other distribution in whatever form) on the Common Shares, (B)
the Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Shares, (C) the Company shall authorize the granting to
all holders of the Common Shares rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of
any shareholders of the Company shall be required in connection with any
reclassification of the Common Shares, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially all of the
assets of the Company, or any compulsory share exchange whereby the Common
Shares are converted into other securities, cash or property, or (E) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company, then, in each case, the Company shall cause to
be mailed to the Holder at its last address as it shall appear upon the Warrant
Register (as defined below) of the Company, at least 10 calendar days prior to
the applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Shares of record to be entitled
to such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Shares
of record shall be entitled to exchange their Common Shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of the Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K. The Holder shall remain entitled to exercise this Warrant during
the period commencing on the date of such notice to the effective date of the
event triggering such notice except as may otherwise be expressly set forth
herein

 

Section 4. Transfer of Warrant.

 

a) Transferability. Subject to compliance with any applicable law, including the
Securities Act and any applicable “blue sky law” (such compliance to be
demonstrated by an opinion of counsel acceptable to the Company, in form and
substance satisfactory to the Company), this Warrant and all rights hereunder
(including, without limitation, any registration rights) are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company or its designated agent, together with a written assignment of this
Warrant in the form attached hereto as Exhibit “B” duly executed by the Holder
or its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled. Notwithstanding anything herein to
the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company unless the Holder has assigned this Warrant in full, in
which case, the Holder shall surrender this Warrant to the Company within three
(3) Trading Days of the date the Holder delivers an assignment form to the
Company assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of
Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants
upon presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall
be dated the Initial Issuance Date of this Warrant and shall be identical with
this Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

c) Warrant Register. The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name
of the registered Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

 

Section 5. Miscellaneous.

 

a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the
Holder to any voting rights, dividends or other rights as a shareholder of the
Company prior to the exercise hereof as set forth in Section 2(d)(i), except as
expressly set forth in Section 3.

 

 

 

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such date of cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such right may be
exercised on the next succeeding Business Day.

 

d) Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it
will reserve from its authorized and unissued Common Shares a sufficient number
of shares to provide for the issuance of all of the Warrant Shares that may be
issued upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such
reasonable action as may be necessary to assure that such Warrant Shares may be
issued as provided herein without violation of any applicable law or regulation,
or of any requirements of the Trading Market upon which the Common Shares may be
listed. The Company covenants that all Warrant Shares which may be issued upon
the exercise of the purchase rights represented by this Warrant will, upon
exercise of the purchase rights represented by this Warrant and payment for such
Warrant Shares in accordance herewith, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges created by the
Company in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company
shall not by any action, including, without limitation, amending its articles of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the amount payable
therefor upon exercise immediately prior to such increase in par value, (ii)
take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof, as may be necessary to
enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any public regulatory body or bodies
having jurisdiction thereof.

 

e) Jurisdiction. This Warrant shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein.

 

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, will have restrictions upon
resale imposed by provincial, state and federal securities laws. By exercising
this Warrant, the Holder consents to any restrictive legend the Company may
require to ensure compliance with the provincial, state and federal securities
laws, if applicable.

 

g) Notices. All notices and other communications given or made pursuant to this
Warrant shall be in writing and shall be deemed effectively given upon the
earlier of actual receipt or (i) personal delivery to the party to be notified;
(ii) when sent, if sent by electronic mail or facsimile during the recipient’s
normal business hours, and if not sent during normal business hours, then on the
recipient’s next business day; (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid; or (iv)
one (1) business day after the business day of deposit with a nationally
recognized overnight courier, freight prepaid, specifying next-day delivery,
with written verification of receipt. All communications shall be sent to the
respective parties at their addresses as set forth in the Warrant Register or
another address specified by the Holder in writing given pursuant to this
subparagraph (h), or, if to the Company, at 4120 Ridgeway Drive, Unit 37,
Mississauga, Ontario L5L 5S9, Canada. If notice is given to the Company, a copy
shall also be sent to J.P. Galda & Co., 143 Clover Hollow Road, Easton, PA,
18045.

 

 

 

 

h) Limitation of Liability. No provision hereof, in the absence of any
affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any
Common Shares or as a shareholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

 

i) Remedies. The Holder, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive and
not to assert the defense in any action for specific performance that a remedy
at law would be adequate.

 

j) Successors and Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors and permitted assigns of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of any Holder from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.

 

k) Amendment. This Warrant may be modified or amended or the provisions hereof
waived with the written consent of both the Company and the Holder.

 

l) Severability. Wherever possible, each provision of this Warrant shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.

 

m) Headings. The headings used in this Warrant are for convenience of reference
only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.

 

 

  ALGAE DYNAMICS CORP.         By:        Name: Paul Ramsay     Title: President

 

 

 

 

 

EXHIBIT A

 

WARRANT EXERCISE FORM

 

ANY TRANSFER OF WARRANTS WILL REQUIRE COMPLIANCE WITH APPLICABLE SECURITIES
LEGISLATION. TRANSFERORS AND TRANSFEREES ARE URGED TO CONTACT LEGAL COUNSEL
BEFORE EFFECTING ANY SUCH TRANSFER.

 

TO:         Algae Dynamics Corp. (the “Corporation”)

 

The undersigned holder of the Warrants evidenced by this Warrant Certificate
hereby exercises the right to acquire (A) common shares of the Corporation.

 

Exercise Price Payable:             ((A) multiplied by CDN$0.75, subject to
adjustment)

 

The undersigned hereby exercises the right of such holder to be issued, and
hereby subscribes for, Common Shares that are issuable pursuant to the exercise
of such Warrants on the terms specified in such Warrant Certificate and in the
Warrant Indenture.

 

The undersigned hereby represents, warrants and certifies as follows (one (only)
of the following must be checked):

 

A. [  ] The undersigned holder at the time of exercise of the Warrants (a) is
not in the United States;

 

(b) is not a U.S. person and is not exercising the Warrants on behalf of a U.S.
person or a person in the United States; and (c) represents and warrants that
the exercise of the Warrants and the acquisition of the Common Shares upon
exercise thereof occurred in an “offshore transaction” (as defined under
Regulation S under the United States Securities Act of 1933, as amended (the
“U.S. Securities Act”)); OR

 

B. [  ] The undersigned holder has delivered to the Warrant Agent an opinion of
counsel of recognized standing in form and substance reasonably satisfactory to
the Corporation and the Warrant Agent to the effect that the exercise of the
Warrants and the issuance of the Common Shares does not require registration
under the U.S. Securities Act or any applicable state securities laws.

 

The undersigned holder understands that unless Box A above is checked, the
certificate representing the Common Shares will be issued in definitive physical
certificated form and bear a legend restricting transfer without registration
under the U.S. Securities Act and applicable state securities laws unless an
exemption from registration is available (in the form set out in the Warrant
Indenture and the subscription documents).

 

“U.S. person” and “United States” are as defined under Regulation S under the
U.S. Securities Act.

 

The undersigned hereby irrevocably directs that the said Common Shares be
issued, registered and delivered as follows:

 

Name(s) in Full   Address(es)   Number of Common Shares                        
                                   

 

 

 

 

Please print full name in which certificates representing the Common Shares are
to be issued. If any Common Shares are to be issued to a person or persons other
than the registered holder, the registered holder must pay to the Warrant Agent
all exigible transfer taxes or other government charges, if any, and the Form of
Transfer must be duly executed.

 

Once completed and executed, this Exercise Form must be mailed or delivered to
Algae Dynamics Corp. (original copy).

 

DATED this_____ day of _____, 20___ .

 

  )     )     )   Witness ) (Signature of Warrantholder, to be the same as it
appears on   ) the face of this Warrant Certificate. If an entity, the signatory
  ) represents that he or she has authority to bind such entity   ) and duly
execute this form.

 

 

 

 

EXHIBIT B

 

FORM OF TRANSFER

 

ANY TRANSFER OF WARRANTS WILL REQUIRE COMPLIANCE WITH APPLICABLE SECURITIES
LEGISLATION. TRANSFERORS AND TRANSFEREES ARE URGED TO CONTACT LEGAL COUNSEL
BEFORE EFFECTING ANY SUCH TRANSFER.

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to

 

 

[image_005.jpg]

 

 

[image_006.jpg]

00

 

(print name and address) the Warrants of Algae Dynamics Corp. (the
“Corporation”) represented by this Warrant Certificate and hereby irrevocable
constitutes and appoints ______________________________as its attorney with full
power of substitution to transfer the said securities on the appropriate
register of the Warrant Agent.

 

THE UNDERSIGNED TRANSFEROR HEREBY CERTIFIES AND DECLARES that the Warrants are
not being offered, sold or transferred to, or for the account or benefit of, a
“U.S. person” or a person within the “United States” (as such terms are defined
in Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S.
Securities Act”)) unless registered under the U.S. Securities Act and any
applicable state securities laws or unless an exemption from such registration
is available.

 

DATED this_____ day of __________, 20_____.

 

SPACE FOR GUARANTEES OF SIGNATURES )   (BELOW) )      )      )  Signature of
Transferor   )      )   Guarantor’s Signature/Stamp )  Name of Transferor   )  
  )  

 

REASON FOR TRANSFER – FOR US RESIDENTS ONLY (WHERE THE INDIVIDUAL(S) OR
CORPORATION RECEIVING THE SECURITIES IS A US RESIDENT). PLEASE SELECT ONLY ONE
(SEE INSTRUCTIONS BELOW).

 

[  ] GIFT [  ] ESTATE [  ] PRIVATE SALE [  ] OTHER (OR NO CHANGE

 

IN OWNERSHIP) DATE OF EVENT (DATE OF GIFT, DEATH OR SALE): VALUE PER WARRANT ON
THE DATE OF EVENT:

  

[image_014.jpg] 

 

 

 

 

Warrants shall only be transferable in accordance with the Warrant Indenture and
all applicable laws. Without limiting the foregoing, if the Warrant Certificate
bears a legend restricting the transfer of the Warrants except pursuant to an
exemption from registration under the U.S. Securities Act, this Form of Transfer
must be accompanied by a Form of Declaration for Removal of Legend in the form
attached as Schedule B to the Warrant Indenture (or such other form as the
Corporation may prescribe from time to time), or a written opinion of counsel of
recognized standing in form and substance reasonably satisfactory to the
Corporation and to the Warrant Agent to the effect that the transfer is exempt
from registration under the U.S. Securities Act and applicable state securities
laws.

 

In the case of a Warrant Certificate that does not contain a U.S. restrictive
legend, if the proposed transfer is to, or for the account or benefit of, a U.S.
Person or a person in the United States, the transferor hereby represents,
warrants and certifies that the transfer of the Warrants is being completed
pursuant to an exemption from the registration requirements of the U.S.
Securities Act and any applicable state securities laws, in which case the
transferor has furnished to the Corporation and the Warrant Agent an opinion of
counsel of recognized standing in form and substance reasonably satisfactory to
the Corporation to such effect.

 

[  ][  ]  If transfer is to, or for the account or benefit of, a U.S. Person or
a person in the United States, check this box.

 

In the event of the transfer of the Warrants represented by this Warrant
Certificate to a Warrantholder to, or for the account or benefit of a U.S.
Person or a person in the United States, the Transferor acknowledges and agrees
that the Warrant Certificate(s) representing such Warrants issued in the name of
the transferee will be endorsed with the legend required by 2.8(1) of the
Indenture.

 

CERTAIN REQUIREMENTS RELATING TO TRANSFERS – READ CAREFULLY

 

The signature(s) of the transferor(s) must correspond with the name(s) as
written upon the face of this certificate(s), in every particular, without
alteration or enlargement, or any change whatsoever. The signature(s) on this
form must be guaranteed in accordance with the transfer agent’s then current
guidelines and requirements at the time of transfer. Notarized or witnessed
signatures are not acceptable as guaranteed signatures. As at the time of
closing, you may choose one of the following methods (although subject to change
in accordance with industry practice and standards):

 

  (a) Canada and the U.S.: A Medallion Signature Guarantee obtained from a
member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE
MSP). Many commercial banks, savings banks, credit unions, and all broker
dealers participate in a Medallion Signature Guarantee Program. The Guarantor
must affix a stamp bearing the actual words “Medallion Guaranteed”, with the
correct prefix covering the face value of the certificate.         (b) Canada: A
Signature Guarantee obtained from the Guarantor must affix a stamp bearing the
actual words “Signature Guaranteed”. Signature Guarantees are not accepted from
Treasury Branches, Credit Unions or Caisse Populaires unless they are members of
a Medallion Signature Guarantee Program. For corporate holders, corporate
signing resolutions, including certificate of incumbency, are also required to
accompany the transfer, unless there is a “Signature & Authority to Sign
Guarantee” Stamp affixed to the transfer (as opposed to a “Signature Guarantee”
Stamp) obtained from an authorized officer of a major Canadian Schedule 1
chartered bank.         (c) Outside North America: For holders located outside
North America, present the certificates(s) and/or document(s) that require a
guarantee to a local financial institution that has a corresponding Canadian or
American affiliate which is a member of an acceptable Medallion Signature
Guarantee Program. The corresponding affiliate will arrange for the signature to
be over-guaranteed.