Document:

Securities Purchase Agreement, dated October 9, 2009, with Valens U.S. SPV I

 Exhibit 10.5 
 SECURITIES PURCHASE AGREEMENT 
 This SECURITIES
PURCHASE AGREEMENT (this “Agreement”) is entered into as of the 9th day of October, 2009, by and between PETROALGAE INC., a Delaware corporation (“Seller,” or the “Company”), and VALENS U.S. SPV I,
LLC, a Delaware limited liability company (“Purchaser”). 
 W I T N E S S E T H : 
 WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, 68,625 shares (the “Shares”)
of common stock, par value $0.001 per share, of the Company (the “Common Stock”) and a warrant to purchase 68,625 shares of Common Stock, in the form attached hereto as Exhibit A (the “Warrant”, and together with
the Shares, the “Securities”) upon the terms and subject to the conditions set forth herein. 
 NOW, THEREFORE,
in consideration of the foregoing and the respective representations, warranties, covenants, agreements, undertakings and obligations set forth herein, and intending to be legally bound hereby, the parties hereto agree as follows: 
 ARTICLE 1 
 SALE AND PURCHASE OF THE SECURITIES 
 Section 1.1 Sale and Purchase of the Securities. Upon the
terms and subject to the conditions set forth in this Agreement and on the basis of the representations, warranties, covenants, agreements, undertakings and obligations contained herein, at the Closing (as defined in Section 2.1 hereof),
Seller hereby agrees to sell to Purchaser, and Purchaser hereby agrees to purchase from Seller, the Securities, free and clear of any and all Liens (as defined in Section 8.11 hereof), for the consideration specified in this
Article 1. 
 Section 1.2 Purchase Price. The purchase price for the Securities (the “Purchase
Price”) shall be $549,000.00. 
 Section 1.3 Payment of Purchase Price. Purchaser agrees to pay to Seller
the Purchase Price at the Closing by wire transfer or delivery of other immediately available funds to an account of Seller designated to Purchaser prior to the Closing. For purposes of this Agreement, the term “Business Day” shall
mean any day, other than a Saturday or a Sunday, that is neither a legal holiday nor a day on which banking institutions are generally authorized or required by law or regulation to close in the City of New York. 
 ARTICLE 2 
 CLOSING AND DELIVERY 
 Section 2.1 Closing Date. The closing (the “Closing”) of
the sale and purchase of the Securities (the “Securities Purchase”) shall take place at the offices of Torys LLP, 237 Park Avenue, New York, New York 10017 at 10:00 A.M. (New York City time) on the third (3rd) Business Day
following satisfaction or, if permissible, waiver of the conditions set forth in

 
Article 6 of this Agreement (excluding those conditions which by their nature are to be satisfied as a part of the Closing) or at such other place, time or date as the parties hereto
may agree (the time and date of the Closing being herein referred to as the “Closing Date”). 
 Section 2.2 Deliveries by Seller to Purchaser. On the Closing Date, Seller shall deliver, or cause to be delivered, to Purchaser the following: 
 (a) a certificate or certificates evidencing all of the Shares and the duly executed Warrant; 
 (b) the certificates and other documents and instruments to be delivered pursuant to Section 6.2 hereof; and

 (c) such other closing documents as Seller and Purchaser shall reasonably agree. 
 Section 2.3 Deliveries by Purchaser to Seller. On the Closing Date, Purchaser shall deliver, or cause to be delivered, to Seller
the following: 
 (a) the Purchase Price, in accordance with Section 1.3 hereof; 
 (b) the certificates and other documents and instruments to be delivered pursuant to Section 6.3 hereof; and

 (c) such other closing documents as Seller and Purchaser shall reasonably agree. 
 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 As used herein (i) any reference to any event, change or
effect being “material” with respect to the Company means an event, change or effect which is material in relation to the condition (financial or otherwise), properties, business, operations, prospects, assets or results of
operations of the Company, and (ii) the term “Material Adverse Effect” on the Company means a material adverse effect on (x) the condition (financial or otherwise), properties, business, operations, prospects, assets,
nature of assets, liabilities, or results of operations of the Company and its subsidiaries taken individually and/or as whole, or (y) the ability of the Company to perform its obligations under this Agreement. 
 The Company hereby represents and warrants to Purchaser as follows: 
 Section 3.1 Organization and Good Standing. The Company is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation with full corporate power and authority to conduct its business as it is now being conducted. The Company is duly qualified or licensed to do business as a foreign corporation

  

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and is in good standing as a foreign corporation in each jurisdiction in which either the ownership or use of the properties owned or used by it, or the nature of the activities conducted by it,
requires such licensing, qualification or good standing, except for any failure to so license, qualify or be in such good standing, which, when taken together with all other such failures, has not had, does not have and could not reasonably be
expected to have a Material Adverse Effect on the Company. 
 Section 3.2 Capitalization. 
 (a) The authorized capital stock of the Company consists solely of 300,000,000 shares of Common Stock, and 25,000,000 shares
of Preferred Stock, of which 104,612,746 shares of Common Stock are issued and outstanding and of which no shares of Preferred Stock are issued and outstanding. Except for outstanding stock options to purchase 1,072,500 shares of Common Stock, that
certain Warrant exercisable for 68,625 shares of Common Stock issued by the Company to Purchaser on August 28, 2009, that certain Warrant exercisable for 56,375 shares of Common Stock issued by the Company to Valens Offshore SPV I, Ltd. on August
28, 2009, that certain Warrant exercisable for 34,313 shares of Common Stock issued by the Company to Purchaser on September 4, 2009, that certain Warrant exercisable for 28,187 shares of Common Stock issued by the Company to Valens Offshore SPV I,
Ltd. on September 4, 2009 and $10,000,000 of 12% convertible demand notes, there are no options to purchase or rights to subscribe for shares of Common Stock, securities by their terms convertible into, exercisable or exchangeable for shares of
Common Stock, or options to purchase or rights to subscribe for such convertible, exercisable or exchangeable securities issued or outstanding. All of the issued and outstanding shares of capital stock of the Company have been duly authorized and
are validly issued, fully paid and nonassessable and have been issued in compliance with all foreign, federal and state securities laws. 
 (b) The Securities and the shares issuable upon exercise of the Warrant to be issued and sold by the Company to the Purchaser hereunder and thereunder have been duly and validly authorized and, when
issued and delivered against payment therefore as provided herein and therein, will be duly and validly issued and fully paid and non-assessable. 
 Section 3.3 Corporate Authority. The Company has taken all corporate action necessary in order to execute, deliver and perform fully, its obligations under this Agreement and to consummate the
Securities Purchase contemplated hereby. The execution and delivery by the Company of this Agreement and the consummation by the Company of the Securities Purchase contemplated hereby have been duly authorized and approved by the Board of Directors
of the Company and no other corporate proceeding with respect to the Company is necessary to authorize this Agreement or the Securities Purchase contemplated hereby. This Agreement has been duly executed and delivered by the Company and constitutes
a valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. 
 Section 3.4
No Violations; No Consents. The execution and delivery by the Company of this Agreement does not, and the performance and consummation by the Company of the Securities Purchase contemplated hereby will not, directly or indirectly (with or
without the giving of notice or the lapse of time or both): 
 (a) contravene, conflict with, or constitute or
result in a breach or violation of, or a default under (i) any provision of the Company’s Certificate of Incorporation or By-laws or (ii) any resolution adopted by the Board of Directors (or similar governing body) of the Company;

  

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 (b) contravene, conflict with, or constitute or result in a breach or
violation of any Law (as defined below), award, decision, injunction, judgment, decree, settlement, order, process, ruling, subpoena or verdict (whether temporary, preliminary or permanent) entered, issued, made or rendered by any court,
administrative agency, arbitrator, Governmental Entity or other tribunal of competent jurisdiction (“Order”) or give any Governmental Entity or any other Person the right to challenge the Securities Purchase contemplated hereby; or

 (c) require the consent or approval of any Governmental Entity or any third party which has not already been
obtained. 
 For purposes of this Agreement, the term “Law” shall mean any federal, state, local, municipal,
foreign, international, multinational, or other constitution, law, rule, standard, requirement, administrative ruling, order, ordinance, principle of common law, legal doctrine, code, regulation, statute, treaty or process. 
 Section 3.5 Actions. There are no civil, criminal, administrative, investigative or informal actions, audits, demands, suits,
claims, arbitrations, hearings, litigations, disputes, investigations or other proceedings of any kind or nature (“Actions”) or Orders issued, pending or, to the knowledge of the Company, threatened, against the Company or any of
its assets, at law, in equity or otherwise, in, before, by, or otherwise involving, any Governmental Entity, arbitrator or other Person that individually or in the aggregate, (i) have had, do have or could reasonably be expected to have a
Material Adverse Effect on the Company or (ii) question or challenge the validity or legality of, or have the effect of prohibiting, preventing, restraining, restricting, delaying, making illegal or otherwise interfering with, this Agreement,
the consummation of the Securities Purchase contemplated hereby or any action taken or proposed to be taken by the Company pursuant hereto or in connection with the Securities Purchase contemplated hereby. To the knowledge of the Company, no event
has occurred or circumstance exists that could reasonably be expected to give rise to or serve as a basis for the commencement of any such Action or the issuance of any such Order. 
 Section 3.6 SEC Reports. The Company has filed all reports required to be filed by it under the Securities Act and the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials being collectively referred to herein as the “SEC Reports”), on a
timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and regulations

  

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of the Securities and Exchange Commission (the “Commission”) promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. There has been no material change in the financial
condition or results of operations of the Company and its subsidiaries taken individually and/or as whole since the last audited financial statements of the Company included in the SEC Reports. 
 Section 3.7 No Material Adverse Effect. There has been no Material Adverse Effect on the Company since June 30, 2009.

 Section 3.8 Internal Accounting Controls; Sarbanes-Oxley Act of 2002. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and designed such disclosures controls and procedures and internal control over financial reporting to ensure that
material information relating to the Company, is made known to the certifying officers by others within those entities, particularly during the period in which the Company’s Form 10-K or 10-Q, as the case may be, is being prepared, and to
provide reasonable assurance regarding the financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s certifying officers have evaluated the
effectiveness of the Company’s controls and procedures and internal control over financial reporting as of the date of its most recently filed periodic report (such date, the “Evaluation Date”). The Company presented in its
most recently filed periodic report the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures and internal control over financial reporting based on their evaluations as of the Evaluation Date.

 Section 3.9 Trading With the Enemy Act; Patriot Act. To the knowledge of the Company, no sale of the
Company’s securities by the Company nor the Company’s use of the proceeds from such sale has violated the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto. Without limiting the foregoing, the Company (a) is not a person whose property or interests in property are blocked pursuant to Section 1
of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) and (b) to the knowledge of the Company, does not
engage in any dealings or transactions, or be otherwise associated, with any such person. The Company is in compliance with the USA Patriot Act of 2001 (signed into law October 26, 2001). 
  

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 Section 3.10 Listing of Common Stock. The Common Stock is eligible to trade and
be quoted on, and is quoted on, the over-the-counter Bulletin Board market maintained by The Nasdaq Stock Market (the “OTCBB”) and the Company has received no notice or other communication indicating that such eligibility is subject
to challenge or review by any applicable regulatory agency, electronic market administrator, or exchange. The Company has not, and shall not take any action that would preclude, or otherwise jeopardize, the inclusion of the Common Stock for
quotation on the OTCBB. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all listing requirements of the OTCBB. 
 ARTICLE 4 
 REPRESENTATIONS AND WARRANTIES OF
PURCHASER 
 Purchaser hereby represents and warrants to Seller as follows: 
 Section 4.1 Organization and Good Standing. Purchaser is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware. 
 Section 4.2 Corporate Authority. Purchaser has the full
legal right, requisite corporate power and authority and has taken all corporate action necessary in order to execute, deliver and perform fully, its obligations under this Agreement and to consummate the Securities Purchase. The execution and
delivery by Purchaser of this Agreement and the consummation by Purchaser of the Securities Purchase have been duly authorized and approved by the governing body of Purchaser and no other corporate proceeding with respect to Purchaser is necessary
to authorize this Agreement or the Securities Purchase contemplated hereby. This Agreement has been duly executed and delivered by Purchaser and constitutes a valid and binding agreement of Purchaser, enforceable against Purchaser in accordance with
its terms. 
 Section 4.3 No Violations. (a) The execution and delivery by Purchaser of this Agreement does not, and
the performance and consummation by Purchaser of the Securities Purchase will not, with respect to Purchaser, directly or indirectly (with or without the giving of notice or the lapse of time or both): 
 (i) contravene, conflict with, or constitute or result in a breach or violation of, or a default under (A) any provision
of the Certificate of Incorporation or By-laws (or equivalent documents) of Purchaser or (B) any resolution adopted by the Board of Directors (or similar governing body) of Purchaser; or 
 (ii) contravene, conflict with, or constitute or result in a breach or violation of, any material Law or Order to which
Purchaser, or any of the assets owned or used by Purchaser, are subject. 
  

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 Section 4.4 Securities Act. Purchaser is acquiring the Securities, and will
acquire the shares of Common Stock issuable upon exercise of the Warrant (“Warrant Shares”), for its own account and not with a view to their distribution within the meaning of Section 2(a)(11) of the Securities Act of 1933, as
amended (the “Securities Act”) in any manner that would be in violation of the Securities Act. 
 Section 4.5 Purchaser Status. At the time Purchaser was offered the Securities, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. 
 Section 4.6 Experience of Purchaser. Purchaser, either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Purchaser
understands that it must be able to bear the economic risk of this investment in the Securities indefinitely, and is able to bear such risk and is able to afford a complete loss of such investment. 
 Section 4.7 Access to Information. Purchaser acknowledges that it has been afforded: (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information (other than material non-public information) about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. 
 Section 4.8 Restricted Securities. Purchaser understands that the Securities are, and the Warrant Shares will be, characterized
as “restricted securities” under the U.S. federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may
be resold without registration under the Securities Act only in certain limited circumstances. 
 ARTICLE 5

 COVENANTS 
 Section 5.1 Public Announcements. Each of the parties hereto shall consult with each other before issuing any press release or making any public statement with respect to this Agreement or the
Securities Purchase contemplated hereby and, except as may be required by applicable law, will not issue any such press release or make any such public statement prior to such consultation and without the consent of the other parties. 
  

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 Section 5.2 Notices of Certain Events. In addition to any other notice required
to be given by the terms of this Agreement, each of the parties shall promptly notify the other parties hereto of: 
 (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the Securities Purchase contemplated by this Agreement; 
 (b) any notice or other communication from any governmental or regulatory agency or authority in connection with the
Securities Purchase contemplated by this Agreement; and 
 (c) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge threatened against, relating to or involving or otherwise affecting such party or that relate to the consummation of the Securities Purchase contemplated by this Agreement. 
 Section 5.3 Issuance of Additional Shares. 
 (a) If the Company shall, at any time or from time to time after the issuance of the Shares and until such time as the
Purchaser no longer owns any shares of Common Stock issued pursuant to this Agreement (including shares issued pursuant to this Section 5.3) or six (6) months after the date of this Agreement, whichever occurs first, issue shares of Common
Stock, options to purchase or rights to subscribe for shares of Common Stock, securities by their terms convertible into, exercisable or exchangeable for shares of Common Stock, or options to purchase or rights to subscribe for such convertible,
exercisable or exchangeable securities without consideration or for consideration per share (including, in the case of such options, rights, or securities, the additional consideration required to be paid to the Company upon exercise, conversion or
exchange) less than the Effective Price Per Share (as hereinafter defined) (each such issuance, a “Triggering Issuance”), then (i) the Company shall issue to the Purchaser, for no additional consideration, such number of shares
of Common Stock which when aggregated with the Shares issued hereunder to Purchaser prior to the applicable Triggering Issuance would result in an effective purchase price per share of Common Stock to the Purchaser (calculated by dividing the
Purchase Price by such aggregate number of shares) equal to the effective price per share of Common Stock of the Triggering Issuance (calculated by dividing the total consideration received by the Company for such issuance (as determined below)
divided by the number of shares issued (as determined below)), and (ii) the Effective Price Per Share shall be adjusted to equal the effective price per share of Common Stock of the Triggering Issuance. “Effective Price Per
Share” shall mean $8.00, as subsequently adjusted pursuant to this Section 5.3. Notwithstanding the foregoing, a Triggering Issuance shall not include any options to purchase shares of Common Stock (or any shares issued in connection
therewith) or other form of incentive equity granted or issued under the Company’s 2009 Equity Compensation Plan, or any shares of Common Stock issued to a strategic partner or licensee in connection with a joint venture, strategic alliance,
licensing agreement, or other similar form of agreement. 
  

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 (b) For the purposes of calculating the number of shares of Common Stock
issuable and the adjustment in the Effective Price Per Share pursuant to paragraph (a) of this Section 5.3, the following provisions shall be applicable: 
 (i) In the case of the issuance of shares of Common Stock for cash in a public offering or private placement, the
consideration shall be deemed to be the amount of cash paid therefor before deducting therefrom any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance and sale
thereof. 
 (ii) In the case of the issuance of shares of Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the Fair Market Value (as defined in the Warrant) thereof. 
 (iii) In the case of the issuance of options to purchase or rights to subscribe for shares of Common Stock, securities by their terms convertible into, exercisable or exchangeable for shares of Common
Stock, or options to purchase or rights to subscribe for such convertible, exercisable or exchangeable securities: 
 (1) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for shares of Common Stock shall be deemed to have been issued at the time such options or rights were
issued and for a consideration equal to the consideration, if any, received by the Company upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the shares of Common Stock covered thereby;

 (2) the aggregate maximum number of shares of Common Stock deliverable upon conversion of, exercise, or in
exchange for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible, exercisable or exchangeable securities and subsequent conversion, exercise or exchange thereof
shall be deemed to have been issued at the time such securities, options, or rights were issued and for a consideration equal to the consideration received by the Company for any such securities and related options or rights (excluding any cash
received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights; 

(3) no further adjustment of the Effective Price Per Share adjusted upon the issuance of any such options, rights,
convertible securities or exchangeable securities shall be made as a result of the actual issuance of shares of Common Stock or the exercise of any such rights or options or any conversion or exchange of any such securities. 
 Section 5.4 Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of
the Common Stock as a dividend or other distribution on outstanding Common Stock or any preferred stock issued by the Company, (b)

  

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subdivide its outstanding shares of Common Stock, (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, the
Effective Price Per Share shall be adjusted to a number determined by multiplying the Effective Price Per Share immediately prior to any such event by a fraction of which (a) the numerator is the number of issued and outstanding shares of
Common Stock immediately prior to any such event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately after to any such event. 
 Section 5.5 Lock Up Agreement. The parties acknowledge and agree that the Shares, the Warrant Shares, and any additional shares
issuable in connection with this Agreement or the Warrant, shall be “Common Stock” under, and subject to, that certain Lock-Up Letter Agreement executed by the Purchaser in favor of the Company on December 28, 2008. 
 ARTICLE 6 
 CONDITIONS PRECEDENT 
 Section 6.1 Conditions to Each Party’s Obligations to Consummate. The
respective obligations of each party to consummate the Securities Purchase contemplated by this Agreement shall be subject to the fulfillment or waiver at or prior to the Closing of the following conditions: 
 (a) No Termination. This Agreement shall not have been terminated pursuant to Section 7.1. 
 (b) Absence of Litigation; No Orders. No formal or informal action or proceeding shall have been instituted on or
before the Closing Date before any court or governmental body or authority pertaining to the Securities Purchase, the result of which would prevent or make illegal the consummation of such Securities Purchase or which could have a Material Adverse
Effect on the Company. Neither the Company nor Purchaser shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction which either enjoins or prohibits the consummation of the Securities Purchase. 
 Section 6.2 Conditions Precedent to Purchaser’s Obligations. The obligations of Purchaser to consummate the Securities
Purchase contemplated hereby shall be subject to the fulfillment or waiver (in whole or in part by Purchaser) at or prior to the Closing of the following conditions: 
 (a) Representations and Warranties. Each of the representations and warranties of the Company set forth in this
Agreement shall in each case be true and correct in all material respects (if not qualified by “materiality” or “Material Adverse Effect”) and in all respects (if qualified by “materiality” or “Material Adverse
Effect”) as of the date of this Agreement and as of the Closing Date, with the same effect as though such representations and warranties had been made on and as of the Closing Date; 
  

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 (b) Covenants. All of the covenants, agreements, undertakings and
obligations that the Company is required to perform or to comply with pursuant to this Agreement at or prior to the Closing, shall have been duly performed and complied with; the Company must have delivered to Purchaser each of the documents
required to be delivered by Seller pursuant to Section 2.2 hereof; 
 (c) Officer’s
Certificate. The Company shall have delivered to Purchaser a certificate, dated as of the Closing Date and signed by the Chief Executive Officer of the Company, representing that the conditions referred to in Section 6.2(a) and
Section 6.2(b) hereof have been satisfied; 
 (d) Good Standing Certificate. The Company shall
have furnished Purchaser with a good standing and existence certificate for the Company in its jurisdiction of incorporation and any jurisdictions in which it is qualified to do business as Purchaser reasonably requests; and 
 (e) Other Documentation. Purchaser shall have received such other documents, certificates, opinions or statements as
Purchaser may reasonably request, including legal opinions from the Company’s counsel covering such matters requested by the Purchaser. 
 Section 6.3 Conditions Precedent to the Company’s Obligations. The obligations of the Company to consummate the transactions contemplated hereby shall be subject to the fulfillment or
waiver (in whole or in part by the Company) at or prior to the Closing of the following conditions: 
 (a)
Representations and Warranties. Each of the representations and warranties of Purchaser set forth in this Agreement shall in each case be true and correct in all material respects (if qualified by “Materiality” or “Material
Adverse Effect”) as of the date of this Agreement and as of the Closing Date, with the same effect as though such representations and warranties had been made on and as of the Closing Date; 
 (b) Covenants. All of the covenants, agreements, undertakings and obligations that Purchaser is required to perform or
to comply with pursuant to this Agreement at or prior to the Closing, shall have been duly performed and substantially complied with. Purchaser must have delivered to the Company each of the documents required to be delivered by Purchaser pursuant
to Section 2.3 hereof; 
 (c) Officer’s Certificate. Purchaser shall have delivered to
the Company a certificate, dated as of the Closing Date and signed by a senior executive officer or officers of Purchaser, representing that the conditions referred to in Section 6.3(a) and Section 6.3(b) hereof have been
satisfied; and 
 (d) Payment of Purchase Price. The Company shall have received the Purchase Price in
accordance with Section 1.3. 
  

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 ARTICLE 7 
 TERMINATION 
 Section 7.1 Termination.
This Agreement may be terminated and the sale of Securities may be abandoned at any time prior to the Closing: 
 (a) by mutual written consent of the parties hereto; 
 (b) by either the Company or Purchaser if the
Closing shall not have occurred on or before September 16, 2009 (unless the failure to consummate the transactions by such date shall be due to the action or failure to act of the party seeking to terminate this Agreement); 
 (c) by Purchaser if: (i) the Company shall have failed to comply in any material respect with any of the covenants or
agreements contained in this Agreement to be complied with or performed by the Company; or (ii) any representations and warranties of Seller contained in this Agreement shall not have been true when made, or on and as of the Closing Date as if
made on and as of the Closing Date (except to the extent it relates to a particular date); or 
 (d) by the
Company if: (i) Purchaser shall have failed to comply in any material respect with any of the covenants or agreements contained in this Agreement to be complied with or performed by Purchaser; or (ii) any representations and warranties of
Purchaser contained in this Agreement shall not have been true when made, or on and as of the Closing Date as if made on and as of the Closing Date (except to the extent it relates to a particular date). 
 Section 7.2 Effect of Termination. In the event of the termination and abandonment of this Agreement pursuant to
Section 7.1 of this Agreement, this Agreement (other than Section 8.3 (Fees and Expenses), Section 8.5 (Governing Law) and Section 8.6 (Consent to Jurisdiction; Waiver of Jury Trial), which shall
remain in full force and effect) shall forthwith become null and void and no party hereto shall have any Liability or further obligation to any other party hereto, except as provided in this Section 7.2; provided, however,
that if this Agreement is terminated by a party because of the breach of this Agreement by the other party or because one or more of the conditions of the terminating party’s obligations under this Agreement is not satisfied as a result of the
other party’s failure to fully comply with its obligations under this Agreement, the terminating party’s rights to pursue all legal remedies will survive such termination unimpaired. 
 ARTICLE 8 
 MISCELLANEOUS 
 Section 8.1 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly
given (a) on the date received if delivered personally or by facsimile or (b) on the date received if mailed by registered or certified mail

  

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(return receipt requested), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice): 
 If to Seller: 
 PetroAlgae Inc. 
 1901 S. Harbor City Boulevard 
 Suite 300 
 Melbourne, Florida 32901 

	 	Attn:	David Szostak 

 Facsimile:
(321) 723-7047 
 With a copy (which shall not constitute notice) to: 
 Torys LLP 
 237
Park Avenue 
 20th Floor 
 New York, New York 10017 

	 	Attn:	Andrew J. Beck 

	 	 	Daniel P. Raglan 

 Facsimile:
(212) 682-0200 
 If to Purchaser: 
 Valens U.S. SPV I, Ltd. 
 c/o Valens Capital Management LLC 
 335 Madison Avenue 
 10th Floor 
 New York, New York 10017 
 Attn: Pat Regan 
 Facsimile: (212) 541-4410 
 Section 8.2 Amendments; No Waivers. 
 (a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is
signed, in the case of an amendment, by the Company and Purchaser; or in the case of a waiver, by the party against whom the waiver is to be effective. 
 (b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. 
  

 13 

 Section 8.3 Fees and Expenses. Except as otherwise expressly provided herein,
all costs and expenses incurred in connection with this Agreement and the obligations contemplated hereby shall be paid by the party incurring such cost or expense. In the event of termination of this Agreement, the obligation of each party to pay
its own expenses will be subject to any rights of such party arising from a breach of this Agreement by another party. 
 Section 8.4 Successors and Assigns; No Third-Party Beneficiaries. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided
that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, but any such transfer or assignment will not relieve the appropriate party of its
obligations hereunder. Nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Agreement or any provision of this Agreement. 
 Section 8.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York, without giving effect to the principles of conflicts of law thereof. 
 Section 8.6 Consent to Jurisdiction;
Waiver of Jury Trial. 
 (a) Any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement or the Securities Purchase contemplated hereby may be brought in any federal or state court located in the City of New York, Borough of Manhattan, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.1
shall be deemed effective service of process on such party. 
 (b) Each party hereto hereby acknowledges and
agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues, and therefore each such party hereby irrevocably and unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to this Agreement, any document referred to in this Agreement or the Securities Purchase contemplated hereby. 
 Section 8.7 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. No
provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder. 
  

 14 

 Section 8.8 Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter hereof. 
 Section 8.9 Captions. The captions herein are included for convenience of reference only and shall be ignored in the
construction or interpretation hereof. 
 Section 8.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the Securities Purchase contemplated hereby is not affected in any manner materially adverse to any parties. Upon such a determination, the parties
shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to
the fullest extent possible. 
 Section 8.11 Definition and Usage. 
 For purposes of this Agreement: 
 “Governmental Entity” means any foreign, federal, state, local, municipal, county or other governmental, quasi-governmental, administrative or regulatory authority, body, agency, court,
tribunal, commission or other similar entity (including any branch, department or official thereof). 
 “Liability” means any debt, liability, commitment or obligation of any kind, character or nature whatsoever, whether known or unknown, choate or inchoate, secured or unsecured, accrued, fixed, absolute, contingent or
otherwise, and whether due or to become due. 
 “Lien” means any charges, claims, community property interests,
conditions, conditional sale or other title retention agreements, covenants, easements, encumbrances, equitable interests, exceptions, liens, mortgages, options, pledges, reservations, rights of first refusal, security interests, or restrictions of
any kind, including any restrictions on use, voting, transfer, alienation, receipt of income, or exercise of any other attribute of ownership. 
 Section 8.12 Survival. All covenants contained herein shall survive the Closing. The representations and warranties contained herein shall not survive the Closing; provided that the
representations and warranties of the Company set forth in Section 3.1, Section 3.2 and Section 3.3, and the representations and warranties of the Purchaser set forth in Section 4.4,
Section 4.5, Section 4.6, Section 4.7 and Section 4.8, shall each survive the Closing. 
  

 15 

 Section 8.13 Further Assurances. From time to time, each party hereto will
execute such additional instruments and take such actions as may be reasonably required to carry out the intent and purposes of this Agreement. 
 Section 8.14 Review of Agreement. Each party hereto acknowledges that it has had time to review this Agreement and, as desired, consult with counsel. In the interpretation of this Agreement,
no adverse presumption shall be made against any party on the basis that it has prepared, or participated in the preparation of, this Agreement. 
 Section 8.15 Brokerage. Each party hereto represents and warrants to the other that there are no claims for brokerage commissions or finder’s fees or agent’s commissions or other
like payment in connection with this Agreement or the transactions contemplated hereby, except for such commissions and fees incurred by reason of any action taken by a party hereto that will be paid by and be the responsibility of such party.

 [SIGNATURE PAGE FOLLOWS] 
  

 16 

 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered as of the day and
year first above written by the duly authorized officers of Seller and Purchaser. 
  

			
	SELLER:
	
	PETROALGAE INC.
		
	By:	 	/s/ David Szostak
		 	Name: David Szostak
		 	Title: President

  

			
	 PURCHASER:

	
	 VALENS U.S. SPV I, LLC

		
	By:	 	 Valens Capital Management, LLC
 its investment manager

		
	By:	 	/s/ Patrick Regan
		 	Name: Patrick Regan
		 	Title: Authorized Signatory

 [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT] 
  

 17Warrant, dated October 9, 2009, with Valens U.S. SPV I, LLC

 Exhibit 10.6 
 THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE
COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO PPM TECHNOLOGIES HOLDINGS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. 
 Right to
Purchase up to 68,625 Shares of Common Stock of 
 PetroAlgae Inc. 
 (subject to adjustment as provided herein) 
 COMMON STOCK
PURCHASE WARRANT 
  

			
	 No. 9
	 	Issue Date: October 9, 2009

 PETROALGAE INC., a corporation organized under the laws of the State of Delaware (the
“Company”), hereby certifies that, for value received, VALENS U.S. SPV I, LLC, a Delaware limited liability company, or assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the
Company (as defined herein) from and after the Issue Date of this Warrant and at any time prior to October 9, 2014, up to 68,625 (subject to adjustment as provided herein) fully paid and nonassessable shares of Common Stock (as hereinafter
defined), no par value per share, at the applicable Exercise Price per share (as defined below). The number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein.

 As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

 (a) The term “Common Stock” includes (i) the Company’s Common Stock, no par value
per share; and (ii) any other securities into which or for which any of the securities described in the preceding clause (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or
otherwise. 
 (b) The term “Company” shall include PetroAlgae Inc. and any person or entity
which shall succeed, or assume the obligations of, PetroAlgae Inc. hereunder. 
 (c) The “Exercise
Price” applicable under this Warrant shall be $15.00 per share, subject to adjustment as provided herein. 

 (d) The term “Other Securities” refers to any stock (other
than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the holder of the Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in
addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise. 
 1. Exercise of Warrant. 
 1.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original
or fax copy of an exercise notice in the form attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 
 1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean: 
 (a) If the Company’s Common Stock is
traded on the American Stock Exchange or another national exchange or is quoted on the Global Market, the Global Select Market or the Capital Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last sale price,
respectively, reported for the last business day immediately preceding the Determination Date. 
 (b) If the
Company’s Common Stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the NASDAQ Over The Counter Bulletin Board, then the mean of the average of the closing bid and asked prices
reported for the last business day immediately preceding the Determination Date. 
 (c) Except as provided in
clause (d) below, if the Company’s Common Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American Arbitration
Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided. 
 (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then all
amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under
the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date. 
 1.3 Company Acknowledgment. The Company will, at the time of the exercise of this Warrant, upon the request of the
holder hereof acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to

  

 2 

 
be entitled after such exercise in accordance with the provisions of this Warrant. If the holder shall fail to make any such request, such failure shall not affect the continuing obligation of
the Company to afford to such holder any such rights. 
 1.4 Trustee for Warrant Holders. In the event
that a bank or trust company shall have been appointed as trustee for the holders of this Warrant pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1. 
 2. Procedure for Exercise. 
 2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased
upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance
herewith. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of
duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such holder would otherwise be entitled, cash
equal to such fraction multiplied by the then Fair Market Value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to
Section 1 or otherwise. 
 2.2 Exercise. 
 (a) Payment may be made either (i) in cash of immediately available funds or by certified or official bank check payable
to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of this Warrant in accordance with the formula set forth in
subsection (b) below, or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any adjustment in the total number of
shares of Common Stock issuable to the Holder per the terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein. 
  

 3 

 (b) Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined
below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following formula: 
  

			
	X=	  	    Y(A-B)    
		  	        A
		
	Where X =	  	the number of shares of Common Stock to be issued to the Holder
		
	Y =	  	the number of shares of Common Stock purchasable under this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being exercised (at the
date of such calculation)
		
	A =	  	the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)
		
	B =	  	the Exercise Price per share (as adjusted to the date of such calculation)

 3. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 

3.1 Reorganization, Consolidation, Merger, Etc. If there occurs any capital reorganization or any reclassification
of the Common Stock of the Company, the consolidation or merger of the Company with or into another person or entity (other than a merger or consolidation of the Company in which the Company is the continuing entity and which does not result in any
reorganization or reclassification of its outstanding Common Stock) or the sale or conveyance of all or substantially all of the assets of the Company to another person or entity, then, as a condition precedent to any such reorganization,
reclassification, consolidation, merger, sale or conveyance, the Holder will be entitled to receive upon surrender of this Warrant to the Company (x) to the extent there are cash proceeds resulting from the consummation of such reorganization,
reclassification, consolidation, merger, sale or conveyance, in exchange for this Warrant, cash in an amount equal to the cash proceeds that would have been payable to the Holder had the Holder exercised this Warrant in its entirety immediately
prior to the consummation of such reorganization, reclassification, consolidation, merger, sale or conveyance, less the aggregate exercise price payable upon exercise of this Warrant in its entirety, and (y) to the extent that the Holder would
be entitled to receive securities (in addition to or in lieu of cash in connection with any such reorganization, reclassification, consolidation, merger, sale or conveyance), the same kind and amounts of securities or other assets, or both, that are
issuable or distributable to the holders of outstanding Common Stock of the Company with respect to their Common Stock upon such reorganization, reclassification, consolidation, merger, sale or conveyance, as would have been deliverable to the
Holder had the Holder exercised this Warrant in its entirety immediately prior to the consummation of such reorganization, reclassification, consolidation, merger, sale or conveyance less an amount of such securities having a value equal to the
aggregate exercise price payable upon exercise of this Warrant in its entirety. 
  

 4 

 3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the stock and
other securities and property (including cash, where applicable) receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to a bank or trust company specified by the Holder and having its principal
office in New York, NY as trustee for the Holder. 
 3.3 Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other
securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon
the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the
terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company’s securities and property
(including cash, where applicable) receivable by the Holder will be delivered to the Holder or the Trustee as contemplated by Section 3.2. 
 3.4 Adjustments to Exercise Price and Effective Price Per Share. The Exercise Price and Effective Price Per Share (as defined below) shall each be subject to adjustment from time to time as
follows: 
 (a) If the Company shall, at any time or from time to time after the date hereof until six
(6) months thereafter, issue any Common Stock, options to purchase or rights to subscribe for shares of Common Stock), securities by their terms convertible into, exercisable or exchangeable for shares of Common Stock, or options to purchase or
rights to subscribe for such convertible, exercisable or exchangeable securities without consideration or for consideration per share (including, in the case of such options, rights, or securities, the additional consideration required to be paid to
the Company upon exercise, conversion or exchange) less than the Exercise Price per share in effect immediately prior to the issuance of such shares of Common Stock or securities, then such Exercise Price shall forthwith be lowered to a price equal
to the price per share for which such shares of Common Stock were issued (calculated by dividing the total consideration received by the Company for such issuance (as determined below) divided by the number of shares issued (as determined below)).
Notwithstanding the foregoing, the foregoing provisions shall not be triggered by any options to purchase shares of Common Stock (or any shares issued in connection therewith) or other form of incentive equity granted or issued under the
Company’s 2009 Equity Compensation Plan, or any shares of Common Stock issued to a strategic partner or licensee in connection with a joint venture, strategic alliance, licensing agreement, or other similar form of agreement. 
  

 5 

 (b) If the Company shall, at any time or from time to time after the
issuance of Common Stock or Other Securities pursuant to the exercise of this Warrant, and until such time as the Holder no longer owns any shares of Common Stock or Other Securities issued pursuant to the exercise of this Warrant (including shares
issued pursuant to this Section 3.4(b)) or six (6) months after the date of this Warrant, whichever occurs first, issue shares of Common Stock, options to purchase or rights to subscribe for shares of Common Stock, securities by their
terms convertible into, exercisable or exchangeable for shares of Common Stock, or options to purchase or rights to subscribe for such convertible, exercisable or exchangeable securities without consideration or for consideration per share
(including, in the case of such options, rights, or securities, the additional consideration required to be paid to the Company upon exercise, conversion or exchange) less than the Effective Price Per Share (each such issuance, a “Triggering
Issuance”), then (i) the Company shall issue to the Purchaser, for no additional consideration, such number of shares of Common Stock or Other Securities which when aggregated with the shares of Common Stock or Other Securities issued
hereunder to Holder prior to the applicable Triggering Issuance would result in an effective Exercise Price (calculated by dividing the aggregate Exercise Price therefor by such aggregate number of shares) equal to the effective price per share of
Common Stock of the Triggering Issuance (calculated by dividing the total consideration received by the Company for such issuance (as determined below) divided by the number of shares issued (as determined below)), and (ii) the Effective Price
Per Share shall be adjusted to equal the effective price per share of Common Stock of the Triggering Issuance. “Effective Price Per Share” shall mean the Exercise Price at which shares of Common Stock or Other Securities were issued
hereunder, as subsequently adjusted pursuant to this Section 3.4(b). Notwithstanding the foregoing, a Triggering Issuance shall not include any options to purchase shares of Common Stock (or any shares issued in connection therewith) or other
form of incentive equity granted or issued under the Company’s 2009 Equity Compensation Plan, or any shares of Common Stock issued to a strategic partner or licensee in connection with a joint venture, strategic alliance, licensing agreement,
or other similar form of agreement. 
 (c) For the purposes of any adjustment of the Exercise Price pursuant to
paragraph (a) of this Section 3.4, and for the purposes of calculating the number of shares of Common Stock issuable and the adjustment in the Effective Price Per Share pursuant to paragraph (b) of this Section 3.4, the following
provisions shall be applicable: 
 (i) In the case of the issuance of shares of Common Stock for cash in a
public offering or private placement, the consideration shall be deemed to be the amount of cash paid therefor after deducting therefrom any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in
connection with the issuance and sale thereof. 
  

 6 

 (ii) In the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the Fair Market Value thereof. 
 (iii) In the case of the issuance of options to purchase or rights to subscribe for shares of Common Stock, securities by their terms convertible into, exercisable or exchangeable for shares of Common
Stock, or options to purchase or rights to subscribe for such convertible, exercisable or exchangeable securities: 
 (1) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for shares of Common Stock shall be deemed to have been issued at the time such options or rights were
issued and for a consideration equal to the consideration, if any, received by the Company upon the issuance of such options or rights plus the minimum purchase price provided in such options or rights for the shares of Common Stock covered thereby;

 (2) the aggregate maximum number of shares of Common Stock deliverable upon conversion of, exercise, or in
exchange for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible, exercisable or exchangeable securities and subsequent conversion, exercise or exchange thereof
shall be deemed to have been issued at the time such securities, options, or rights were issued and for a consideration equal to the consideration received by the Company for any such securities and related options or rights (excluding any cash
received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights; 

(3) no further adjustment of the Exercise Price or Effective Price Per Share and number of shares issuable, as
applicable, adjusted upon the issuance of any such options, rights, convertible securities or exchangeable securities shall be made as a result of the actual issuance of shares of Common Stock or the exercise of any such rights or options or any
conversion or exchange of any such securities. 
 4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of Common Stock,
(c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock, then, in each such event, (i) the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as
provided in Section 1, be entitled to receive shall be adjusted to a number determined by multiplying the number of shares of Common Stock that would otherwise (but for the provisions of this Section 4) be issuable on such exercise by a
fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately after such any such event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately
prior to any such event, and (ii) the Exercise Price shall be accordingly adjusted so that the aggregate Exercise Price prior to such adjustment shall equal to the aggregate Exercise Price following such adjustment. 
  

 7 

 5. Certificate as to Adjustments. In each case of any adjustment or readjustment
(i) in the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, (ii) of the Exercise Price, or (iii) the Effective Per Share Price, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold,
(b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price, the Effective Per Share Price and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the holder and any warrant agent of the Company
(appointed pursuant to Section 9 hereof). 
 6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant. 
 7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced
hereby, may be transferred by any registered holder hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, a legal opinion from the Transferor’s
counsel (at the Company’s expense) that such transfer is exempt from the registration requirements of applicable securities laws, the Company at its expense (but with payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the
face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor. 
 8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 
  

 8 

 9. Warrant Agent. The Company may, by written notice to the each Holder of the
Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 
 10. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered holder hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary. 
 11. Rights of Shareholders. No Holder shall be entitled to vote
or receive dividends or be deemed the holder of the shares of Common Stock or any other securities of the Company which may at any time be issuable upon exercise of this Warrant for any purpose (the “Warrant Shares”), nor shall
anything contained herein be construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or
to give or withhold consent to any corporate action (whether upon the recapitalization, issuance of shares, reclassification of shares, change of nominal value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise, in each case, until the earlier to occur of (x) the date of actual delivery to Holder (or its designee) of the Warrant Shares issuable upon the exercise hereof or (y) the third
business day following the date such Warrant Shares first become deliverable to Holder, as provided herein. 
 12. Notices,
Etc. All notices and other communications from the Company to the Holder shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until
any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder who has so furnished an address to the Company. 
 13. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change,
waiver, discharge or termination is sought. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT CONCERNING THE TRANSACTIONS
CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT THE HOLDER MAY CHOOSE TO WAIVE THIS PROVISION AND BRING AN ACTION OUTSIDE THE STATE OF
NEW YORK. The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable
attorneys’ fees and costs. In the event that any provision of this Warrant 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

  

 9 

 
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 Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the
validity or enforceability of any other provision hereof. The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party. 
 [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; 
 SIGNATURE PAGE FOLLOWS] 
  

 10 

 IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written
above. 
  

									
		 		 	PETROALGAE INC.
				
	WITNESS:	 		 	By:	 	/s/ David Szostak
		 		 	Name:	 	David Szostak
	 /s/ Susan Canipe
	 		 	Title:	 	President

  

 11 

 EXHIBIT A 
 FORM OF SUBSCRIPTION 
 (To Be Signed Only On Exercise Of
Warrant) 
  

	TO:	PETROALGAE INC. 

	 	_____________________ 

	 	_____________________ 

 Attention: Chief Financial Officer 
 The undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable box): 
  

			
	 ̈	 	________ shares of the common stock covered by such warrant; or
		
	 ̈	 	the maximum number of shares of common stock covered by such warrant pursuant to the cashless exercise procedure set forth in Section 2.

 The undersigned herewith makes payment of the full Exercise Price for such shares at
the price per share provided for in such Warrant, which is $            . Such payment takes the form of (check applicable box or boxes): 
  

			
	 ̈	 	$__________ in lawful money of the United States; and/or
		
	 ̈	 	the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for
purposes of this calculation); and/or
		
	 ̈	 	the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2.2, to exercise this Warrant with respect to the
maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

 The undersigned requests that the certificates for such shares be issued in the name
of, and delivered to ____________________ _____________ whose address is ___________________________________________________________________________. 
 The undersigned represents and warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common
Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to an exemption from registration under the Securities Act. 
  

									
				
	Dated:	 	 	 		 	 
		 		 		 	(Signature must conform to name of holder as specified on the face of the Warrant)
		 		 		 	Address:	 	 
		 		 		 		 	 

  

 12 

 EXHIBIT B 
 FORM OF TRANSFEROR ENDORSEMENT 
 (To Be Signed Only On
Transfer Of Warrant) 
 For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below
under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of PetroAlgae Inc. into which the within Warrant relates specified under the headings
“Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of PetroAlgae Inc. with full power of
substitution in the premises. 
  

							
	 Transferees
	  	Address	  	Percentage
Transferred	  	Number 
Transferred
		  		  		  	
		  		  		  	
		  		  		  	
		  		  		  	
		  		  		  	

									
		 		 	
				
	 Dated:
	 	 	 		 	 
		 		 		 	(Signature must conform to name of holder as specified on the face of the Warrant)
		 		 		 	Address:	 	 
		 		 		 		 	 
				
		 		 		 	SIGNED IN THE PRESENCE OF:
				
		 		 		 	 
		 		 		 	(Name)

  

	
	ACCEPTED AND AGREED: [TRANSFEREE]
	
	  
	(Name)

  

 13

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