Exhibit
4.1


 


Execution
Copy


 


SENIOR
CONVERTIBLE NOTE


 


NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR PROVINCIAL LAWS IN CANADA.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY),
IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR RELEVANT SEUCRITIES LAWS (II)
UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR UNDER APPLICABLE PROVINCIAL SECURITIES
LAWS.


 


ALGAE
DYNAMICS CORP.


 


SENIOR
CONVERTIBLE NOTE


 


	Issuance
    Date: October 19, 2018	Original
    Principal Amount: CAD. $100,000.00


 


FOR
VALUE RECEIVED, ALGAE DYNAMICS CORP., a Canadian federal corporation (the “Company”), hereby
promises to pay to the order of Dax Sukhraj or its registered assigns (“Holder”) the amount set out
above as the Original Principal Amount (as reduced pursuant to the terms hereof pursuant to conversion or otherwise, the “Principal’) when
due, whether upon the Maturity Date (as defined below), acceleration
or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on
any outstanding Principal (as defined below) at the applicable Interest Rate (as defined below) from the date set out above
as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date or acceleration, conversion or otherwise (in each case in accordance with the terms hereof). This
Senior Convertible Note (this “Note”, including all Senior Convertible Notes issued in exchange,
transfer or replacement hereof, collectively, the “Notes”) was initially issued pursuant to the
Note Purchase Agreement (as defined below) on the Closing Date (as defined below) as part of an offering of CAD $100,000 of
Notes which shall rank pari passu. Certain capitalized terms used herein are defined in Section 24.


 


1.
PAYMENTS OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, and accrued and unpaid Interest. Other than as specifically permitted by this Note, the Company may not prepay any
portion of the outstanding Principal, or accrued and unpaid Interest.


 




    	 	 	 



    	 



    

 


2.
INTEREST; INTEREST RATE.



 


(a)
Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve
30-day months and shall be payable in cash on the Maturity Date, subject to adjustment with respect to any Note Reduction.


 


(b)
Prior to the payment of Interest on the Maturity Date or any applicable Conversion Date, Interest on this Note shall accrue at
the Interest Rate and be payable by way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance
with Section 3(d)(i).


 


3.
CONVERSION OF NOTES. This Note shall be convertible into
validly issued, fully paid and
non-assessable Common Shares (as defined below), on the terms and conditions set forth in this Section 3.


 


(a)
Optional Conversion Right. At any time or times on or after the Issuance Date, the Holder shall be entitled to convert
any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued, fully paid and non-assessable
Common Shares in accordance with Section 3(d), at the Conversion Rate (as defined below). The Company shall not issue any fraction
of a Common Share upon any conversion. If the issuance would result in the issuance of a fraction of a Common Share, the Company
shall round such fraction of a Common Share up to the nearest whole share. The Company shall pay any and all transfer, stamp,
issuance and similar taxes that may be payable with respect to the issuance and delivery of Common Shares upon conversion of any
Conversion Amount.


 


(b)
Mandatory Conversion. The Company may elect to cause all but not less than all of the principal amount of the Notes to
convert into a number of fully paid and nonassessable Common Shares equal to the quotient of (i) the principal amount of the Notes
divided by (ii) the Conversion Price in effect on the date of such conversion (the “Mandatory Conversion Date”).
Notwithstanding the foregoing, the Company may not elect to cause the Notes to convert into Common Stock on a Mandatory Conversion
Date if, on the proposed Mandatory Conversion Date (i) the VWAP is equal to or less than CAD $0.50 (as appropriately adjusted
for stock splits, stock dividends, reorganizations, recapitalizations, stock combinations and the like) for any of the twenty
(20) consecutive prior Trading Days ending on the Trading Day immediately prior to such date, or (ii) the Common Shares issuable
upon the mandatory conversion would, immediately upon issuance, not be Tradable.


 


(c)
Conversion Rate. The number of Common Shares issuable upon conversion of any Conversion Amount pursuant to Section
3(a) or 3(b) shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion
Rate”).


 


(i)
“Conversion Amount’ means the portion of the Principal to be converted or otherwise with respect to
which this determination is being made, plus all accrued and unpaid Interest with respect to such portion of the Principal amount
with respect to such portion of such Principal and such Interest.


 




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(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, CAD $0.25, subject
to adjustment as provided herein.


 


	 	(d)	Mechanics
    of Conversion.


 


(i)
Optional Conversion. To convert any Conversion Amount into Common Shares on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on
such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit I (the “Conversion
Notice”) to the Company. If required by Section 3(d) (ii), the Holder shall surrender this Note to a nationally
recognized overnight delivery service for delivery to the Company (or an indemnification undertaking with respect to this Note
in the case of its loss, theft or destruction as contemplated by Section
13(b)). On or before the first (1st) Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit II,
of receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”)
. On or before the second (2nd) Trading Day following the date of receipt of a Conversion Notice, the Company
shall (1) provided that the Transfer Agent is participating in The Depository Trust Company’s (“DTC’)
Fast Automated Securities Transfer Program, credit such aggregate number of Common Shares to which the Holder shall be
entitled to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system
or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via
reputable overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the
Holder or its designee, for the number of Common Shares to which the Holder shall be entitled. If this Note is physically surrendered
for conversion and the outstanding Principal of this Note is greater than the Principal portion of the Conversion Amount being
converted, then the Company shall as soon as practicable and in no event later than three (3) Trading Days after receipt of this
Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section 13(d) representing
the outstanding Principal not converted). The Person or Persons entitled to receive the Common Shares issuable upon a conversion
of this Note shall be treated for all purposes as the record holder or holders of such Common Shares on the Conversion Date.


 


(ii) Book-Entry.
Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless
(A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to
the Company following conversion thereof as contemplated by Section 3(d)(i)) or (B) the Holder has provided the Company
with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon
physical surrender of this Note. The Holder and the Company shall maintain records showing the Principal and Interest
converted and/or paid and/or adjusted (as the case may be) and the dates of such conversions and/or payments and/or
adjustments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder and the Company, so as
not to require physical surrender of this Note upon conversion.


 




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(iii)
Pro Rata Conversion: Disputes. In the event of a dispute as to the number of Common Shares issuable to the Holder in connection
with a conversion of this Note, the Company shall issue to the Holder the number of Common Shares not in dispute and resolve such
dispute in accordance with Section 18.


 


4.
RIGHTS UPON EVENT OF DEFAULT.



 


Event
of Default. Each of the following events shall constitute an “Event of Default’:


 


(i)
the Company’s or any Subsidiary’s failure to pay to the Holder
any amount of Principal, Interest,
or other amounts when and as due under this Note or any other agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby and thereby, except, in the case of a failure to pay Interest when and as
due, in which case only if such failure remains uncured for a period of at least thirty (30) days;


 


(ii)
the occurrence of any default under, redemption of or acceleration prior to maturity of an aggregate of any long term debt of
the Company or any of its Subsidiaries;


 


(iii)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not
be dismissed within thirty (30) days of their initiation;


 


(iv)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company
or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign
law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial part
of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts,
or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability
to pay its debts generally as they become due, the taking of corporate action by the Company or any Subsidiary in furtherance
of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other
similar action under federal, state or foreign law;


 




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(v)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of
a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization
or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt
or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order,
judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order,
judgment or other similar document unstayed and in effect for a period of thirty (30) consecutive days;


 


(vi)
other than as specifically set forth in another clause of this Section 4, the Company or any Subsidiary breaches any representation,
warranty, covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other
term or condition that is curable, only if such breach remains uncured for a period of thirty (30) consecutive Trading Days;


 


Then,
or at any time thereafter, unless cured within 30 days, and in each and every such case, unless such Event of Default shall have
been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option
of the Holder and in the Holder’s sole discretion, the Holder may consider this Note immediately due and payable, without
presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly
waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately,
and without expiration of any period of grace, enforce any and all of the Holder’s rights and remedies provided herein or
any other rights or remedies afforded by law.


 




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5. RIGHTS
UPON FUNDAMENTAL TRANSACTION; OTHER CORPORATE EVENTS.


 


(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes
in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions
of this Section 5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security
of the Successor Entity evidenced by a written instrument substantially similar in form and substance to the Notes, including,
without limitation, having a principal amount and interest rate equal to the principal amounts then outstanding and the interest
rates of the Notes held by such holder, having similar conversion rights as the Notes and having similar ranking to the Notes,
and satisfactory to the Holder and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose
Common Shares are quoted on or listed for trading on an Eligible Market. Upon the occurrence of any 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 Note and the other Transaction Documents 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 Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there
shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental Transaction,
in lieu of the shares of the Company’s Common Shares (or other securities, cash, assets or other property (except such items
still issuable under under this Note, which shall continue to be receivable thereafter) issuable upon the conversion or redemption
of the Notes prior to such Fundamental Transaction, such shares of the publicly traded Common Shares (or their equivalent) of
the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the happening of
such Fundamental Transaction had this Note been converted immediately prior to such Fundamental Transaction, as adjusted in accordance
with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery of written
notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this Note.


 


(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation
of any Fundamental Transaction pursuant to which holders of Common Shares are entitled to receive securities or other assets with
respect to or in exchange for Common Shares (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon a conversion of this Note (i) in addition to
the Common Shares receivable upon such conversion, such securities or other assets to which the Holder would have been entitled
with respect to such Common Shares had such Common Shares been held by the Holder upon the consummation of such Corporate Event
(without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu of the Common
Shares otherwise receivable upon such conversion, such securities or other assets received by the holders of Common Shares in
connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to receive had
this Note initially been issued with conversion rights for the form of such consideration (as opposed to Common Shares) at a conversion
rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence shall be
in a form and substance satisfactory to the Holder.


 




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(c)
The provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied without regard to any limitations on the
conversion of this Note.


 


6.
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.


 


(a)
Adjustment of Conversion Price upon Issuance of Common Shares. If and whenever on or after
the Closing Date the Company issues or sells, or in accordance with this Section 6(a) is deemed to have issued or sold, any Common
Shares (including the issuance or sale of Common Shares owned or held by or for the account of the Company, but excluding any
Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration per share (the “New
Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such issue or sale
or deemed issuance or sale (such Conversion Price then in effect is referred to herein as the ’‘Applicable Price”)
(the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Conversion
Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including,
without limitation, determining the adjusted Conversion Price and consideration per share
under this Section 6(a)), the following shall be applicable:


 


(i)
Issuance of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which
one Common Share is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible
Securities issuable upon exercise of any such Option is less than the Applicable Price, then such Common Share shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such
price per share. For purposes of this Section 6(a)(i), the “lowest price per share for which one Common Share is issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one Common Share upon the granting or sale of such Option, upon exercise of such
Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option and (y) the
lowest exercise price set forth in such Option for which one Common Share is issuable upon the exercise of any such Options or
upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option, minus (2) the sum
of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of such Option, upon
exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option
plus the value of any other consideration received or receivable by, or benefit conferred on,
the holder of such Option (or
any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance
of such Common Share or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such Common
Share upon conversion, exercise or exchange of such Convertible Securities.


 




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(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest
price per share for which one Common Share is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such Common Share shall be deemed to be outstanding and to have been issued and sold by the Company at the time of
the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 6(a)(ii), the “lowest
price per share for which one Common Share is issuable upon the conversion, exercise or exchange thereof” shall be equal
to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect
to one Common Share upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible
Security and (y) the lowest conversion price set forth in such Convertible Security for which one Common Share is issuable upon
conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security
(or any other Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration received
or receivable by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated
below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such Common Share upon conversion,
exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions of
this Section 6(a), except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such
issue or sale.


 


(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or exchangeable for Common Shares increases or decreases
at any time, the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price
which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially
granted, issued or sold. For purposes of this Section 6(a)(iii), if the terms of any Option or Convertible Security that was outstanding
as of the Closing Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the Common Shares deemed issuable upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such increase or decrease.
No adjustment pursuant to this
Section 6(a) shall be made if such adjustment would result in an increase of the Conversion Price then in effect.


 




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(iv)
Calculation of Consideration Received. If any Option or Convertible Security or Adjustment Right is issued or deemed issued
in connection with the issuance or sale or deemed issuance or sale of any other securities of the Company, together comprising
one integrated transaction, (x) such Option or Convertible Security (as applicable) or Adjustment Right (as applicable) will be
deemed to have been issued for consideration equal to the Black Scholes Consideration Value thereof and (y) the other securities
issued or sold or deemed to have been issued or sold in such integrated transaction shall be deemed to have been issued for consideration
equal to the difference of (I) the aggregate consideration received or receivable by the Company minus (II) the Black Scholes
Consideration Value of each such Option or Convertible Security (as applicable) or Adjustment Right (as applicable). If any Common
Shares, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration
received therefor will be deemed to be the net amount of consideration received by the Company therefor. If any Common Shares,
Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received
by the Company will be the fair value of such consideration,
except where such consideration
consists of publicly traded securities,
in which case the amount of consideration
received by the Company for such securities will be the average of the Closing Bid Price of such security for each Trading Day
during the five (5) Trading Day period immediately preceding the date of receipt. If any Common Shares, Options or Convertible
Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business
of the non-surviving entity as is attributable to such Common Shares, Options or Convertible Securities (as the case may be).
The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and
the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation
(the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent
manifest error and the fees and expenses of such appraiser shall be borne by the Company.


 


(v)
Record Date. If the Company
takes a record of the holders of Common Shares for the purpose of entitling them (A) to receive a dividend or other distribution
payable in Common Shares, Options or in Convertible Securities or (B) to subscribe for or purchase Common Shares, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue or sale of the Common Shares deemed to have been
issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such
right of subscription or purchase (as the case may be).


 


(b)
Adjustment
of Conversion
Price upon
Subdivision or Combination
of Common Shares.
Without limiting any provision of Section 5 or Section 6(a),
if the Company at any time on
or after the Closing Date subdivides (by any stock split,
stock dividend,
stock combination, recapitalization
or other similar transaction)
one or more classes of its outstanding Common Shares into a greater number of shares, the Conversion Price in effect immediately
prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 5 or Section 6(a), if the
Company at any time on or after the Closing Date combines (by any stock split, stock dividend, stock combination, recapitalization
or other similar transaction) one or more classes of its outstanding Common Shares into a smaller number of shares, the Conversion
Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section
6(b) shall become effective immediately after the effective date of such subdivision
or combination. If any event requiring an adjustment under this Section 6(b) occurs during the period that a Conversion Price
is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.


 




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(c)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which
the provisions hereof are not strictly applicable, or, if applicable, would
not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section
6 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect
the rights of the Holder, provided that no such adjustment pursuant to this Section 6(c) will increase the Conversion Price as
otherwise determined pursuant to this Section 6, provided further that if the Holder does not accept such adjustments as appropriately
protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree,
in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose
determination shall be final and binding and whose fees and expenses shall be borne by the Company.


 


7.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation,
Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, 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 Note, and
will at all times in good faith carry out all of the provisions of this Note and take all action as may be required to protect
the rights of the Holder of this Note. Without limiting the generality of the foregoing, the Company (i) shall not increase the
par value of any Common Shares receivable upon conversion of this Note above the Conversion Price then in effect, (ii) shall take
all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable
Common Shares upon the conversion of this Note, and (iii) shall, so long as any of the Notes are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued Common Shares, solely for the purpose of effecting
the conversion of the Notes, the maximum number of Common Shares as shall from time to time be necessary to effect the conversion
of the Notes then outstanding (without regard to any limitations on conversion).


 


8.
[Intentionally Omitted]



 


9.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including,
without limitation, the Canada Business Corporation Law) and as expressly provided in this Note.


 


10.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:


 


(a)
Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or
in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any
Indebtedness, whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at
the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event
of Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute
an Event of Default has occurred and is continuing.


 




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(b)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of
a majority in aggregate principal amount of the Notes then outstanding, issue any Indebtedness that would rank senior to the Notes.


 


11.
AMENDING THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change or amendment
to this Note.


 


12.
TRANSFER. This Note and any Common Shares issued upon conversion of this Note may be offered, sold, assigned or transferred
by the Holder without the consent of the Company, subject only to the provisions of the Note Purchase Agreement.


 


 13. REISSUANCE OF THIS NOTE.



 


(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 13(d)), registered as the
Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding
Principal is being transferred, a new Note (in accordance with Section 13(d)) to the Holder representing the outstanding Principal
not being transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of Section 3(d)(ii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this
Note may be less than the Principal stated on the face of this Note.


 


(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below
shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder
to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note,
the Company shall execute and deliver to the Holder a new Note (in accordance with Section 13(d)) representing the outstanding
Principal.


 


(c) Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at
the principal office of the Company, for a new Note or Notes (in accordance with Section 13(d) and in principal amounts of at
least $1,000) representing in the aggregate the outstanding Principal of this Note, and each such new Note will
represent such portion of such outstanding Principal as is designated by the Holder at
the time of such surrender.


 


(d) Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i)
shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the
Principal remaining outstanding (or in the case of a new Note being issued pursuant to Section 13(a) or Section 13(c), the
Principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection
with such issuance, does not exceed the Principal remaining outstanding under this Note immediately prior to such issuance of
new Notes), (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the Issuance
Date of this Note, (iv) shall have the same rights and conditions as this Note, and (v) shall represent accrued and unpaid
Interest and Late Charges on the Principal and Interest of this Note, from the Issuance Date.


 




    	 	 11	 



    	 



    

 


14.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and
consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder
that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth
or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to
be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company shall provide all information and documentation to the Holder that is requested by the
Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note (including, without
limitation, compliance with Section 6).


 


15.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection
or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts
due under this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership
of the Company or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the
Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements. The
Company expressly acknowledges and agrees that no amounts due under this Note shall be affected, or limited, by the fact that
the purchase price paid for this Note was less than the original Principal amount hereof.


 


16.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be
construed against any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form
part of, or affect the interpretation of, this Note. Terms used in this Note but defined in the other Transaction Documents shall
have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to
in writing by the Holder.


 


17.
FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is
in writing and signed by an authorized representative of the waiving party.


 




    	 	 12	 



    	 



    

 


18.DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Conversion Price (including, without limitation, any disputed
adjustment thereto or any dispute as to whether any issuance or sale or deemed issuance or sale was an issuance or sale or deemed
issuance or sale of Excluded Securities), the Conversion Price, the Closing Bid Price, the Closing Sale Price or fair market value
(as the case may be) or the arithmetic calculation of the Conversion Rate, or any Note Reduction (as the case may be), the Company
or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may be) via
facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or
the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder learned of the circumstances
giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation within two
(2) Business Days of such disputed determination or arithmetic calculation (as the case may be) being submitted to the Company
or the Holder (as the case may be), then the Company shall, within two (2) Business Days, submit via facsimile (a) the disputed
determination of the Conversion Price, the Closing Bid Price, the Closing Sale Price or fair market value (as the case may be)
to an independent, reputable investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Conversion Rate, or any Note Reduction (as the case may be) to an independent, outside accountant selected
by the Holder that is reasonably acceptable to the Company. The Company shall cause at its expense the investment bank or the
accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company and
the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations
(as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall
be binding upon all parties absent demonstrable error.


 


19.
NOTICES: CURRENCY: PAYMENTS.



 


(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(t) of the Note Purchase Agreement. The Company shall provide the Holder with prompt written
notice of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason
therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately
upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment
and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the Common Shares, or (B) for determining rights to vote with respect to any Fundamental
Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to
or in conjunction with such notice being provided to the Holder.


 


(b)
Currency. All dollar amounts referred to in this Note are in Canadian Dollars (“CAD
Dollars”), and all amounts owing under this Note shall be paid in Canadian Dollars. All amounts denominated in other
currencies (if any) shall be converted into the Canadian Dollar equivalent amount in accordance with the Exchange Rate on the
date of calculation. “Exchange Rate” means, in relation to any amount of currency to be converted into
Canadian Dollars pursuant to this Note, the Canadian Dollar exchange rate as published by the Bank of Canada on the relevant date
of calculation (it being understood and agreed that where an amount is calculated with reference to, or over, a period of time,
the date of calculation shall be the final date of such period of time).


 




    	 	 13	 



    	 



    

 


(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise
expressly set forth herein, such payment shall be made in lawful money of Canada by a certified check drawn on the account of
the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing,
provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds by providing
the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever any
amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be
due on the next succeeding day which is a Business Day.


 


20.
CANCELLATION. After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full,
this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.


 


21.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest
and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note
and the Note Purchase Agreement.


 


22.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Note shall be governed by, the laws of the Province
of Ontario and the applicable Federal laws of Canada applicable therein, without giving effect to any choice of law or conflict
of law provision or rule (whether of the Province of Ontario or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the Province of Ontario. The Company hereby irrevocably submits to the exclusive jurisdiction
of the courts of Ontario, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral
or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. 


 


23.
MAXIMUM PAYMENTS. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or
other charges in excess of the maximum
permitted by applicable law.
In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law,
any payments in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to
the Company.


 




    	 	 14	 



    	 



    

 


24.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:


 


(a)
“1934 Act” means the United States Securities Exchange Act of 1934, as amended.


 


(b)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or
with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 6) of Common Shares that could
result in a decrease in the net consideration received by the Company in connection with, or with respect to, such securities
(including, without limitation, any cash settlement rights, cash adjustment or other similar rights).


 


(c)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors
of the Company prior to or subsequent to the date hereof pursuant to which Common Shares and standard options to purchase Common
Shares may be issued to any employee, officer or director for services provided to the Company in their capacity as such.


 


(d) “Black Scholes
Consideration Value” means the
value of the applicable Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance
thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Shares on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of
such Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to
the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as
the case may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be),
(iii) a zero cost of borrow and (iv) an expected volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day
immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be).


 


(e)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The
Province of Ontario are authorized or required by law to remain closed.


 




    	 	 15	 



    	 



    

 


(f)
“Change of Control” means
any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned Subsidiaries
with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the Common Shares
in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting
power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities)
after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely for the
purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.


 


(g)
“Closing Bid Price” and “Closing Sale Price” means,
for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does
not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is
not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively,
of such security on the principal securities exchange or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in
the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask
prices, respectively, of any market makers for such security as reported in the “pink sheets” by OTC Markets Group
Inc. (formerly Pink Sheets LLC).


 


(h)
“Closing Date”
shall have the meaning
set forth in the Note Purchase Agreement, which date is the date the Company initially issued the Note pursuant to the terms of
the Note Purchase Agreement.


 


(i)
“Common Shares” means
(i) the Company’ s Common Shares, $0.0001 par value per share, and (ii) any capital stock into which such Common Shares
shall have been changed or any share capital resulting from a reclassification of such Common Shares.


 


(j)
“Convertible Securities” means
any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible
into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any Common Shares.


 


(k)
“Eligible Market” means
the NASDAQ Global Market, the NASDAQ Global Select Market, the NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca,
the NYSE MKT, the OTCQX Marketplace or the OTCQB Marketplace operated by OTC Markets Group Inc. (or any successor to any of the
foregoing) or the Principal Market.


 




    	 	 16	 



    	 



    

 


(1)
“Excluded
Securities”
means any (i) Common
Shares or standard options to purchase Common Shares to directors, officers or employees of the Company in their capacity as such
pursuant to an Approved Stock Plan (as defined below), provided that (A) all such issuances (taking into account the Common Shares
issuable upon exercise of such options granted after the date of this Note, but not such shares issuable upon exercise of such
options granted before the date of this Note) after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed
more than 15.0% of the Common Shares issued and outstanding immediately prior to the date hereof and (B) the exercise price of
any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none
of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the
Buyers; (ii) Common Shares issued upon the conversion or exercise of Convertible Securities (other than standard options to purchase
Common Shares issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date hereof,
provided that the conversion price of any such Convertible Securities (other than standard options to purchase Common Shares issued
pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities (other
than standard options to purchase Common Shares issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are amended to increase the number of shares issuable thereunder or extend the maturity date or expiration date of such Convertible
Securities (other than standard options to purchase Common Shares issued pursuant to an Approved Stock Plan that are covered by
clause (i)above) and none of the terms or conditions of any such Convertible Securities (other than standard options to purchase
Common Shares issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed
in any manner that adversely affects any of the Buyers; (iii) the Common Shares issuable upon conversion of the Notes or otherwise
pursuant to the terms of the Notes and (iv) any Common Shares issued to the Holder or any of its affiliates. “Approved
Stock Plan” shall mean the Company’s 2014 Stock Incentive Plan.


 


(m) “Fundamental
Transaction” means
that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in
one or more related transactions, (1)
consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation) any
other Person, or
(2) sell, lease, license, assign, transfer, convey
or otherwise dispose of all or substantially all of its respective properties or assets to any other Person, or (3) allow
any other Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the
outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company
held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination
(including, without
limitation, a
reorganization, recapitalization, spin-off
or scheme of arrangement) with any other Person whereby such other Person acquires more than 50% of the outstanding shares of
Voting Stock of the Company (not including any shares of Voting Stock of the Company 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), or
(ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the
1934 Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of
the Company.


 




    	 	 17	 



    	 



    

 


(n)
“GAAP’ means United States generally accepted accounting principles, consistently applied.


 


(o)
“Indebtedness” means (i) all indebtedness for borrowed money or for the deferred purchase price of property
or services (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business) and all obligations
under leases which are or should be under GAAP, recorded as capital leases, in respect of which the Company is directly or contingently
liable as borrower, guarantor, endorser or otherwise, or in respect of which the Company otherwise assures a creditor against
loss, (ii) all obligations for borrowed money or for the deferred purchase price of a property or services secured by (or for
which the holder has an existing right, contingent or otherwise, to be secured by) any encumbrance upon property (including without
limitation accounts receivable and contract rights) owned by the Company, whether or not the Company has assumed or become liable
for the payment thereof and (iii) all other liabilities and obligations which would be classified in accordance with GAAP as liabilities
of the Company on a balance sheet.


 


(p)
“Interest Rate” means ten percent (___%) per annum, as may be adjusted from time to time in accordance
with Section 2.


 


(q)
“Maturity Date” shall mean October ____, 2021; provided, however, the Maturity Date may be extended
at the option of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing
or any event shall have occurred and be continuing that with the passage of time and the failure to cure would result in an Event
of Default or (ii) through the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the
event that a Fundamental Transaction is publicly announced or a Fundamental Transaction Notice is delivered prior to the Maturity
Date.


 


(r)
“Note Purchase Agreement” means the agreement providing for the issuance of the Notes between the Company
and the initial Holder of the Notes.


 


(s)
“Note Reduction” means a reduction in the Principal amount of the Notes.


 


(t)
“Options” means
any rights, warrants or options to subscribe for or purchase Common Shares or Convertible Securities.


 


(u)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person
and whose Common Shares or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one
such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation
of the Fundamental Transaction.


 




    	 	 18	 



    	 



    

 


(v)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.


 


(w) “Principal
Market” means the OTC (or any successor thereto).


 


(x)
“SEC’ means the United States Securities and Exchange Commission or the successor
thereto.


 


(y)
“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations
adopted by the SEC.


 


(z)
“Subsidiaries” shall all corporations or other entities, if any, of which at least a majority of the
securities or other ownership interest having ordinary voting power for the election of directors or other persons performing
similar functions are at the time owned directly or indirectly by the Company and/or any of its other Subsidiaries.


 


(aa)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by,
resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with
which such Fundamental Transaction shall have been entered into.


 


(bb)
“Tradeable” means the Common Shares in question may be resold by non-affiliates without registration
under the Securities Act.


 


(cc)
“Trading Day” means any day on which the Common Shares are traded on the Principal Market, or, if the
Principal Market is not the principal trading market for the Common Shares, then on the principal securities exchange or securities
market on which the Common Shares are then traded, provided that “Trading
Day” shall
not include any day on which the Common Shares are scheduled to trade on such exchange or market for less than 4.5 hours or any
day that the Common Shares are suspended from trading during the final hour of trading on such exchange or market (or if such
exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder.


 


(dd)
“Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which
the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board
of directors, managers, trustees or other similar governing body of such Person (irrespective of whether or not at the time capital
stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).


(ee)
“VWAP” means the Volume Weighted Average Price of the Common Shares on a Trading Day as reported by
Bloomberg or as determined by the Company in accordance with the procedures normally applicable on Bloomberg if the VWAP is not
otherwise reported on Bloomberg.


 


25.
DISCLOSURE. Upon receipt or delivery by the Company of any notice in accordance with the terms
of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material,
non-public information relating to the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after
any such receipt or delivery publicly disclose such material, non-public information on a Current Report on Form 8-K or otherwise.
In the event that the Company believes that a notice contains material, non-public information relating to the Company or any
of its Subsidiaries, the Company so shall indicate to such Holder contemporaneously with delivery of such notice, and in the absence
of any such indication, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material,
non-public information relating to the Company or its Subsidiaries.


 


[signature
page follows]


 




    	 	 19	 



    	 



    

 


IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.


 


	 	ALGAE DYNAMICS CORP.
	 	 	 
	 	By:	                             
	 	Name: 	 
	 	Title:	 



 



    	 	 	 



    		 



    

 


 


EXHIBIT
I


 


ALGAE
DYNAMICS CORP.


CONVERSION NOTICE


 


Reference
is made to
the Convertible
Note (the “Note”)
issued to the undersigned by Algae Dynamics Corp.
(the “Company”).
In accordance with and pursuant to the Note,
the undersigned hereby elects
to convert
the Conversion
Amount (as defined in the Note) of the Note indicated below
into
Common
Shares,
no par value per share (the “Common Shares”),
of the Company, as
of the date specified below Capitalized
terms not defined herein shall have the meaning as set
forth in the Note.


 


Date
of Conversion:  _____________________________________________________________________


 


Aggregate
Principal to be converted:            _________________________________________________


 


Aggregate
accrued and unpaid Interest and


accrued
and unpaid Late Charges with

 respect to such portion of the Aggregate 

Principal and such Aggregate Interest to be





	 	converted:	 




 


AGGREGATE
CONVERSION AMOUNT








	 	TO
BE CONVERTED:	 



 


Please
confirm the following information:


 


Conversion
Price:  _____________________________________________________________________


 


Number
of Common Shares to be issued:  ____________________________________________________


 


Please
issue the Common Shares into which the Note is being converted in the following name and to the following address:


 


Issue
to:       ___________________________________________________________________________


 


___________________________________________________________________________


 


___________________________________________________________________________


 


Facsimile
Number:  _____________________________________________________________________


 


Holder:
              ________________________________________________________________________


 


By: ______________________________________________________________________________


 


Title:___________________________________________________________________________


 


Dated:_____________________________________________________________________________________


 


Account
Number:                              ___________________________________________________________


  (if
electronic book entry transfer)


 


Transaction
Code Number:             ____________________________________________________________


  (if
electronic book entry transfer)


 




    	 	 	 



    		 



    

 


EXHIBIT
II


 


ACKNOWLEDGMENT


 


The
Company hereby acknowledges this Conversion Notice and hereby directs _______________to issue the above indicated
number of Common Shares in accordance with the Transfer Agent Instructions dated ________ 20__ acknowledged and agreed to by
_________________


 


	 	ALGAE DYNAMICS CORP.
	 	 	 
	 	By:	          
	 	Name:     	 
	 	Title: