Document:

Exhibit 10.12

 

SHAREHOLDER RIGHTS PLAN AGREEMENT

 

DATED AS OF

 

JANUARY 9, 2014 

 

BETWEEN

 

STELLAR BIOTECHNOLOGIES, INC.

 

AND

 

COMPUTERSHARE INVESTOR SERVICES INC.

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	 	Page
	 	 	 	 
	Article 1 INTERPRETATION	2
	 	 
	 	1.1	Certain Definitions	2
	 	1.2	Currency	15
	 	1.3	Headings	15
	 	1.4	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares	15
	 	1.5	Acting Jointly or in Concert	16
	 	1.6	Generally Accepted Accounting Principles	16
	 	 	 	 
	Article 2 THE RIGHTS	16
	 	 
	 	2.2	Initial Exercise Price; Exercise of Rights; Detachment of Rights	17
	 	2.3	Adjustments to Exercise Price; Number of Rights	20
	 	2.4	Date on Which Exercise Is Effective	25
	 	2.5	Execution, Authentication, Delivery and Dating of Rights Certificates	25
	 	2.6	Registration, Transfer and Exchange	25
	 	2.7	Mutilated, Destroyed, Lost and Stolen Rights Certificates	26
	 	2.8	Persons Deemed Owners of Rights	27
	 	2.9	Delivery and Cancellation of Certificates	27
	 	2.10	Agreement of Rights Holders	27
	 	2.11	Rights Certificate Holder Not Deemed a Shareholder	28
	 	 	 	 
	Article 3 ADJUSTMENTS TO THE RIGHTS	28
	 	 
	 	3.1	Flip-in Event	28
	 	 	 	 
	Article 4 THE RIGHTS AGENT	30
	 	 
	 	4.1	General	30
	 	4.2	Merger, Amalgamation or Consolidation or Change of Name of Rights Agent	31
	 	4.3	Duties of Rights Agent	32
	 	4.4	Change of Rights Agent	34
	 	 	 	 
	Article 5 MISCELLANEOUS	34
	 	 
	 	5.1	Redemption and Waiver	34
	 	5.2	Expiration	37
	 	5.3	Issuance of New Rights Certificates	37
	 	5.4	Supplements and Amendments	37
	 	5.5	Fractional Rights and Fractional Shares	38
	 	5.6	Rights of Action	39
	 	5.7	Regulatory Approvals	39
	 	5.8	Notice of Proposed Actions	39
	 	5.9	Notices	40
	 	5.10	Costs of Enforcement	41
	 	5.11	Successors	41
	 	5.12	Benefits of this Agreement	41
	 	5.13	Governing Law	41
	 	5.14	Severability	41
	 	5.15	Effective Date	41
	 	5.16	Determinations and Actions by the Board of Directors	42
	 	5.17	Compliance With Money Laundering Legislation	42
	 	5.18	Privacy Provision	42
	 	5.19	Declaration as to Non-Canadian Holders	43
	 	5.20	Time of the Essence	43
	 	5.21	Force Majeure	43
	 	5.22	Execution in Counterparts	43

 

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SHAREHOLDER RIGHTS PLAN AGREEMENT

 

MEMORANDUM OF AGREEMENT, dated as
of January 9, 2014 between Stellar Biotechnologies, Inc. (the “Company”), a company continued under the laws
of British Columbia and Computershare Investor Services Inc., a corporation existing under the laws of Canada (the “Rights
Agent”);

 

WHEREAS the Board of Directors of
the Company, in the exercise of its fiduciary duties to the Company, has determined that it is advisable for the Company to adopt
a shareholder rights plan (the “Rights Plan”) to take effect on the Effective Date (as hereinafter defined)
to prevent, to the extent possible, a creeping takeover of the Company and to ensure that any offer to acquire shares of the Company
is made to all shareholders and cannot be completed unless shareholders holding at least 50% of the outstanding shares (other than
the offeror and related parties) are deposited or tendered in acceptance of the offer, to ensure, to the extent possible, the fair
treatment of all shareholders in connection with any take-over bid for the securities of the Company, and to ensure that the Board
of Directors is provided with sufficient time to evaluate unsolicited take-over bids and to explore and develop alternatives to
maximize shareholder value;

 

AND WHEREAS in order to implement
the adoption of a shareholder rights plan as established by this Agreement, the board of directors of the Company has:

 

(a)          authorized
the issuance, effective at the close of business (Vancouver time) on the Effective Date, of one Right (as hereinafter defined)
in respect of each Share (as hereinafter defined) outstanding at the close of business (Vancouver time) on the Effective Date (the
“Record Time”);

 

(b)          authorized
the issuance of one Right in respect of each Voting Share (as hereinafter defined) of the Company issued after the Record Time
and prior to the earlier of the Separation Time (as hereinafter defined) and the Expiration Time (as hereinafter defined); and

 

(c)          authorized
the issuance of Rights Certificates (as hereinafter defined) to holders of Rights pursuant to the terms and subject to the conditions
set forth herein;

 

AND WHEREAS each Right entitles
the holder thereof, after the Separation Time, to purchase securities of the Company pursuant to the terms and subject to the conditions
set forth herein;

 

AND WHEREAS the Company desires
to appoint the Rights Agent to act on behalf of the Company and the holders of Rights, and the Rights Agent is willing to so act,
in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and other matters
referred to herein;

 

NOW THEREFORE, in consideration
of the premises and the respective covenants and agreements set forth herein, and subject to such covenants and agreements, the
parties hereby agree as follows:

 

    	 

    	 

    

 

Article
1

 

INTERPRETATION

 

1.1                       Certain
Definitions

 

For purposes of this Agreement, the following
terms have the meanings indicated:

 

(a)          “1934
Exchange Act” means the Securities Exchange Act of 1934 of the United States, as amended, and the rules and regulations
thereunder as now in effect or as the same may from time to time be amended, re-enacted or replaced;

 

(b)          “Acquiring
Person” shall mean any Person who is the Beneficial Owner of 20% or more of the outstanding Voting Shares; provided,
however, that the term “Acquiring Person” shall not include:

 

(i)          the
Company or any Subsidiary of the Company;

 

(ii)         any
Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of one or any combination of:

 

(A)         a
Voting Share Reduction;

 

(B)         Permitted
Bid Acquisitions;

 

(C)         an
Exempt Acquisition;

 

(D)         Pro
Rata Acquisitions; or

 

(E)         a
Convertible Security Acquisition;

 

provided, however, that if a Person
becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares by reason of one or any combination of the operation
of Paragraphs (A), (B), (C), (D) or (E) above and such Person’s Beneficial Ownership of Voting Shares thereafter increases
by more than 1% of the number of Voting Shares outstanding (other than pursuant to one or any combination of a Voting Share Reduction,
a Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition), then as of the
date such Person becomes the Beneficial Owner of such additional Voting Shares, such Person shall become an “Acquiring
Person”;

 

(iii)        for
a period of ten days after the Disqualification Date (as defined below), any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on Clause 1.1(g)(iii)(B) because
such Person is making or has announced a current intention to make a Take-over Bid, either alone or by acting jointly or in concert
with any other Person. For the purposes of this definition, “Disqualification Date” means the first date of
public announcement that any Person is making or intends to make a Take-over Bid;

 

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(iv)        an
underwriter or member of a banking or selling group that becomes the Beneficial Owner of 20% or more of the Voting Shares in connection
with a distribution of securities of the Company pursuant to an underwriting agreement with the Company; or

 

(v)         a
Person (a “Grandfathered Person”) who is the Beneficial Owner of 20% or more of the outstanding Voting Shares
determined as at the Record Time, provided, however, that this exception shall not be, and shall cease to be, applicable to a Grandfathered
Person in the event that such Grandfathered Person shall, after the Record Time, become the Beneficial Owner of any additional
Voting Shares that increases its Beneficial Ownership of Voting Shares by more than 1% of the number of Voting Shares outstanding,
other than through one or any combination of a Permitted Bid Acquisition, an Exempt Acquisition, a Voting Share Reduction, a Pro
Rata Acquisition or a Convertible Security Acquisition; and provided, further, that a Person shall cease to be a Grandfathered
Person in the event that such Person ceases to Beneficially Own 20% or more of the then outstanding Voting Shares at any time after
the Record Time;

 

(c)          “Affiliate”,
when used to indicate a relationship with a specified Person, shall mean a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, such specified Person;

 

(d)          “Agreement”
or “Shareholder Rights Plan Agreement” shall mean this shareholder rights plan agreement dated as of January
9, 2014 between the Company and the Rights Agent, as amended or supplemented from time to time; “hereof”, “herein”,
“hereto” and similar expressions mean and refer to this Agreement as a whole and not to any particular part
of this Agreement;

 

(e)          “annual
cash dividend” shall mean cash dividends paid in any fiscal year of the Company to the extent that such cash dividends
do not exceed, in the aggregate on a per share basis, in any fiscal year, the greatest of:

 

(i)          200%
of the aggregate amount of cash dividends, on a per share basis, declared payable by the Company on its Shares in its immediately
preceding fiscal year; and

 

(ii)         300%
of the arithmetic mean of the aggregate amounts of the cash dividends, on a per share basis, declared payable by the Company on
its Shares in its three immediately preceding fiscal years;

 

(f)          “Associate”
shall mean, when used to indicate a relationship with a specified Person, a spouse of that Person, any Person of the same or opposite
sex with whom that Person is living in a conjugal relationship outside marriage, a child of that Person or a relative of that Person
if that relative has the same residence as that Person;

 

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(g)          A
Person shall be deemed the “Beneficial Owner” of, and to have “Beneficial Ownership” of,
and to “Beneficially Own”,

 

(i)          any
securities as to which such Person or any of such Person’s Affiliates or Associates is the owner at law or in equity;

 

(ii)         any
securities as to which such Person or any of such Person’s Affiliates or Associates has the right to become the owner at
law or in equity (where such right is exercisable within a period of 60 days, whether or not on condition or on the happening of
any contingency) pursuant to any agreement, arrangement, pledge or understanding, whether or not in writing, or upon the exercise
of any conversion, exchange or purchase right (other than the Rights) attaching to a Convertible Security; other than pursuant
to (x) customary agreements between the Company and underwriters or between underwriters and/or banking group members and/or selling
group members with respect to a distribution of securities by the Company, (y) pledges of securities in the ordinary course of
business), and (z) any agreement between the Company and any Person or Persons relating to a plan of arrangement, amalgamation
or other statutory procedure which is subject to the approval of the holders of Voting Shares;

 

(iii)        any
securities which are Beneficially Owned within the meaning of Clauses 1.1(g)(i) or (ii) by any other Person with which such Person
is acting jointly or in concert;

 

provided, however, that a Person
shall not be deemed the “Beneficial Owner” of, or to have “Beneficial Ownership” of, or to
“Beneficially Own”, any security:

 

(A)         where
such security has been deposited or tendered pursuant to any Take-over Bid or where the holder of such security has agreed pursuant
to a Permitted Lock-Up Agreement to deposit or tender such security pursuant to a Take-Over Bid, in each case made by such Person,
made by any of such Person’s Affiliates or Associates or made by any other Person acting jointly or in concert with such
Person, until such deposited or tendered security has been taken up or paid for, whichever shall first occur;

 

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(B)         where
such Person, any of such Person’s Affiliates or Associates or any other Person referred to in Clause 1.1(g)(iii), holds such
security provided that (1) the ordinary business of any such Person (the “Investment Manager”) includes the
management of mutual funds or investment funds for others (which others, for greater certainty, may include or be limited to one
or more employee benefit plans or pension plans and/or includes the acquisition or holding of securities for a non-discretionary
account of a Client (as defined below) by a dealer or broker registered under applicable securities laws to the extent required)
and such security is held by the Investment Manager in the ordinary course of such business and in the performance of such Investment
Manager’s duties for the account of any other Person or Persons (a “Client”); or (2) such Person (the
“Trust Company”) is licensed to carry on the business of a trust company under applicable laws and, as such,
acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each an
“Estate Account”) or in relation to other accounts (each an “Other Account”) and holds such
security in the ordinary course of such duties for such Estate Accounts or for such Other Accounts, or (3) such Person is a pension
plan or fund registered under the laws of Canada or any Province thereof or the laws of the United States of America (a “Plan”)
or is a Person established by statute for purposes that include, and the ordinary business or activity of such Person (the “Statutory
Body”) includes, the management of investment funds for employee benefit plans, pension plans, insurance plans of various
public bodies; or (4) such Person (the “Administrator”) is the administrator or trustee of one or more Plans
and holds such security for the purposes of its activities as an Administrator; provided, in any of the above cases, that the Investment
Manager, the Trust Company, the Statutory Body, the Administrator or the Plan, as the case may be, is not then making and has not
then announced an intention to make a Take-over Bid (other than an Offer to Acquire Voting Shares or other securities by means
of a distribution by the Company or by means of ordinary market transactions (including prearranged trades) executed through the
facilities of a stock exchange or organized over-the-counter market), alone or by acting jointly or in concert with any other Person;

 

(C)         where
such Person or any of such Person’s Affiliates or Associates is (1) a Client of the same Investment Manager as another Person
on whose account the Investment Manager holds such security, (2) an Estate Account or an Other Account of the same Trust Company
as another Person on whose account the Trust Company holds such security, or (3) a Plan with the same Administrator as another
Plan on whose account the Administrator holds such security;

 

(D)         where
such Person is (1) a Client of an Investment Manager and such security is owned at law or in equity by the Investment Manager,
(2) an Estate Account or an Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company
or (3) a Plan and such security is owned at law or in equity by the Administrator of the Plan; or

 

(E)         where
such person is the registered holder of securities as a result of carrying on the business of or acting as a nominee of a securities
depository.

 

(h)          “Board
of Directors” shall mean the board of directors of the Company or any duly constituted and empowered committee thereof;

 

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(i)          “Business
Day” shall mean any day other than a Saturday, Sunday or a day on which banking institutions in Vancouver, British Columbia
are authorized or obligated by law to close;

 

(j)          “Business
Corporations Act” shall mean the British Columbia Business Corporations Act, S.B.C. 2002, c.57, as amended, and
the regulations made thereunder and any comparable or successor laws or regulations thereto;

 

(k)          “Canadian
Dollar Equivalent” of any amount which is expressed in United States dollars shall mean on any day the Canadian dollar
equivalent of such amount determined by reference to the U.S.- Canadian Exchange Rate in effect on such date;

 

(l)          “close
of business” on any given date shall mean the time on such date (or, if such date is not a Business Day, the time on
the next succeeding Business Day) at which the transfer office of the transfer agent for the Shares (or, after the Separation Time,
the principal transfer office of the Rights Agent) is closed to the public in the city in which such transfer agent or rights agent
has an office for the purposes of this Agreement;

 

(m)         “Competing
Permitted Bid” shall mean a Take-over Bid that:

 

(i)          is
made after a Permitted Bid or another Competing Permitted Bid has been made and prior to the expiry, termination or withdrawal
of such Permitted Bid or Competing Permitted Bid;

 

(ii)         satisfies
all of the provisions of a Permitted Bid other than the condition set forth in Clause (iii) of the definition of a Permitted Bid;
and

 

(iii)        contains,
and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified provision that no
Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the date that is no
earlier than the later of (A) 35 days after the date of the Take-over Bid constituting the Competing Permitted Bid; and (B) 60
days following the date on which the earliest Permitted Bid or Competing Permitted Bid which preceded the Competing Permitting
Bid was made;

 

(n)          “controlled”:
a body corporate is “controlled” by another Person or two or more Persons acting jointly or in concert if:

 

(i)          securities
entitled to vote in the election of directors carrying more than 50% of the votes for the election of directors are held, directly
or indirectly, by or on behalf of the other Person or two or more Persons acting jointly or in concert; and

 

(ii)         the
votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such body corporate;

 

and “controls”,
“controlling” and “under common control with” shall be interpreted accordingly;

 

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(o)          “Convertible
Security” shall mean a security convertible, exercisable or exchangeable into a Voting Share and a “Convertible
Security Acquisition” shall mean an acquisition by a Person of Voting Shares upon the exercise, conversion or exchange
of a Convertible Security received by a Person pursuant to a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition;

 

(p)          “Co-Rights
Agents” shall have the meaning ascribed thereto in Subsection 4.1(a);

 

(q)          “Disposition
Date” shall have the meaning ascribed thereto in Subsection 5.1(d);

 

(r)          “Dividend
Reinvestment Acquisition” shall mean an acquisition of Voting Shares of any class pursuant to a Distribution Reinvestment
Plan;

 

(s)          “Dividend
Reinvestment Plan” shall mean a regular dividend reinvestment or other plan of the Company made available by the Company
to holders of its securities where such plan permits the holder to direct that some or all of:

 

(i)          dividends
paid in respect of shares of any class of the Company;

 

(ii)         proceeds
of redemption of shares of the Company;

 

(iii)        interest
paid on evidences of indebtedness of the Company; or

 

(iv)        optional
cash payments;

 

be applied to the purchase from
the Company of Shares;

 

(t)          “early
warning requirements” shall have the meaning ascribed thereto under National Instrument 62-103 The Early Warning System
promulgated under the Securities Act;

 

(u)          “Effective
Date” shall mean February 14, 2014;

 

(v)         “Election
to Exercise” shall have the meaning ascribed thereto in Clause 2.2(d)(ii);

 

(w)         “Exempt
Acquisition” shall mean an acquisition by a Person of Voting Shares and/or Convertible Securities (i) in respect of which
the Board of Directors has waived the application of Section 3.1 pursuant to the provisions of Subsection 5.1(b), (c) or (d); (ii)
pursuant to a distribution of Voting Shares and/or Convertible Securities made by the Company: (A) to the public pursuant to a
prospectus, provided that such Person does not thereby become the Beneficial Owner of a greater percentage of Voting Shares so
offered than the percentage of Voting Shares Beneficially Owned by such Person immediately prior to such distribution; or (B) pursuant
to a private placement provided that: (x) all necessary stock exchange approvals for such private placement have been obtained
and such private placement complies with the terms and conditions of such approvals; and (y) such Person does not thereby become
the Beneficial Owner of Voting Shares equal in number to more than 25% of the Voting Shares outstanding immediately prior to the
private placement and, in making this determination, the securities to be issued to such Person on the private placement shall
be deemed to be held by such Person but shall not be included in the aggregate number of Voting Shares outstanding immediately
prior to the private placement; or (iii) pursuant to an amalgamation, merger, arrangement or other statutory procedure requiring
shareholder approval;

 

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(x)          “Exercise
Price” shall mean, as of any date, the price at which a holder may purchase the securities issuable upon exercise of
one whole Right which, until adjustment thereof in accordance with the terms hereof, shall be:

 

(i)          until
the Separation Time, an amount equal to three times the Market Price, from time to time, per Share; and

 

(ii)         from
and after the Separation Time, an amount equal to three times the Market Price, as at the Separation Time, per Share;

 

(y)          “Expansion
Factor” shall have the meaning ascribed thereto in Clause 2.3(a)(x);

 

(z)          “Expiration
Time” shall have the meaning ascribed thereto in Clause 5.15(a);

 

(aa)        “Flip-in
Event” shall mean a transaction in or pursuant to which any Person becomes an Acquiring Person;

 

(bb)       “holder”
shall have the meaning ascribed thereto in Section 2.8;

 

(cc)        “Independent
Shareholders” shall mean holders of Voting Shares, other than:

 

(i)          any
Acquiring Person;

 

(ii)         any
Offeror, other than a Person referred to in Clause 1.1(g)(B);

 

(iii)        any
Affiliate or Associate of such Acquiring Person or Offeror;

 

(iv)        any
Person acting jointly or in concert with such Acquiring Person or Offeror; and

 

(v)         any
employee benefit plan, deferred profit sharing plan, stock participation plan and any other similar plan or trust for the benefit
of employees of the Company or a Subsidiary of the Company, unless the beneficiaries of the plan or trust direct the manner in
which the Voting Shares are to be voted or direct whether the Voting Shares are to be tendered to a Take-over Bid;

 

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(dd)       “Market
Price” per share of any securities on any date of determination shall mean the average of the daily closing prices per
share of such securities (determined as described below) on each of the 20 consecutive Trading Days through and including the Trading
Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in
Section 2.3 hereof shall have caused the closing prices used to determine the Market Price on any Trading Days not to be fully
comparable with the closing price on such date of determination or, if the date of determination is not a Trading Day, on the immediately
preceding Trading Day, each such closing price so used shall be appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 hereof in order to make it fully comparable with the closing price on such date of determination
or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The closing price per share of
any securities on any date shall be:

 

(i)          the
closing board lot sale price or, in case no such sale takes place on such date, the average of the closing bid and asked prices
for each of such securities as reported by the principal Canadian stock exchange on which such securities are listed or admitted
to trading;

 

(ii)         if
for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on a Canadian
stock exchange, the last sale price or, in case no such sale takes place on such date, the average of the high bid and low asked
prices for each of such securities in the Canadian over-the-counter market, as quoted by any reporting system then in use; or

 

(iii)        if
for any reason none of such prices is available on such day or the securities are not listed or admitted to trading on a Canadian
stock exchange or quoted by any such reporting system, the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the securities selected in good faith by the Board of Directors;

 

provided, however, that if for
any reason none of such prices is available on such day, the closing price per share of such securities on such date means the
fair value per share of such securities on such date as determined by a nationally or internationally recognized investment dealer
or investment banker with respect to the fair value per share of such securities. The Market Price shall be expressed in Canadian
dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in
United States dollars, such amount shall be translated into Canadian dollars on such date at the Canadian Dollar Equivalent thereof;

 

(ee)        “Meeting
Deadline Date” is the date six months after the Effective Date or if such date is not a Business Day then the next Business
Day following such date.

 

(ff)         “Nominee”
shall have the meaning ascribed thereto in Subsection 2.2(c);

 

(gg)       “Offer
to Acquire” shall include:

 

(i)          an
offer to purchase or a solicitation of an offer to sell or a public announcement of an intention to make such an offer or solicitation;
and

 

(ii)         an
acceptance of an offer to sell, whether or not such offer to sell has been solicited;

 

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or any combination thereof, and
the Person accepting an offer to sell shall be deemed to be making an Offer to Acquire to the Person that made the offer to sell;

 

(hh)       “Offeror”
shall mean a Person who has made a public announcement of a current intention to make or who is making a Take-over Bid but only
so long as the Take-over Bid so announced or made has not been withdrawn or terminated or has not expired;

 

(ii)         “Permitted
Bid” shall mean a Take-over Bid made by an Offeror by way of take-over bid circular which also complies with the following
additional provisions:

 

(i)          
the Take-over Bid is made to all holders of Voting Shares on the books of the Company, other than the Offeror;

 

(ii)         no
Voting Shares are taken up or paid for pursuant to the Take-over Bid unless more than 50% of the Voting Shares held by Independent
Shareholders shall have been deposited or tendered pursuant to the Take-over Bid and not withdrawn;

 

(iii)        the
Take-over Bid contains, and the take-up and payment for securities tendered or deposited is subject to, an irrevocable and unqualified
provision that no Voting Shares will be taken up or paid for pursuant to the Take-over Bid prior to the close of business on the
date which is not less than 60 days following the date of the Take-over Bid;

 

(iv)        the
Take-over Bid contains an irrevocable and unqualified provision that unless the Take-over Bid is withdrawn, Voting Shares may be
deposited pursuant to such Take-over Bid at any time during the period of time between the date of the Take- over Bid and the date
on which Voting Shares may be taken up and paid for and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn
until taken up and paid for; and

 

(v)         the
Take-over Bid contains an irrevocable and unqualified provision that if, on the date on which Voting Shares may be taken up and
paid for, more than 50% of the Voting Shares held by Independent Shareholders shall have been deposited pursuant to the Take-over
Bid and not withdrawn, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits
and tenders of Voting Shares for not less than ten Business Days from the date of such public announcement;

 

For purposes of this Agreement,
(A) should a Take-over Bid which qualified as a Permitted Bid cease to be a Permitted Bid because it ceases to meet any or all
of the requirements mentioned above prior to the time it expires (after giving effect to any extension) or is withdrawn, any acquisition
of Voting Shares made pursuant to such Take-over Bid shall not be a Permitted Bid Acquisition and (B) the term “Permitted
Bid” shall include a Competing Permitted Bid.

 

(jj)         “Permitted
Bid Acquisition” shall mean an acquisition of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted
Bid;

 

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(kk)        “Permitted
Lock-Up Agreement” shall mean an agreement between a Person and one or more holders of Voting Shares pursuant to which
such holders (each a “Locked-Up Person”) agree to deposit or tender Voting Shares to a Take-Over Bid (the “Lock-Up
Bid”) made or to be made by such Person or any of such Person’s Affiliates or Associates or any other Person with
which such Person is acting jointly or in concert, provided that:

 

(i)          the
terms of such agreement are publicly disclosed and a copy of such agreement is made available to the public (including the Company)
not later than the date of the Lock-Up Bid or, if the Lock-Up Bid has been made prior to the date on which such agreement is entered
into, not later than the first business day following the date of such agreement;

 

(ii)         the
agreement permits a Locked-Up Person to terminate its obligation to deposit or tender Voting Shares to or not to withdraw such
Voting Shares from the Lock-Up Bid, and to terminate any obligation with respect to the voting of such Voting Shares, in order
to tender or deposit the Voting Shares to another Take-over Bid or to support another transaction:

 

(A)         where
the price or value of the consideration per Voting Share offered under such other Take-over Bid or transaction:

 

(I)         is
greater than the price or value of the consideration per Voting Share at which the Locked-Up Person has agreed to deposit or tender
Voting Shares to the Lock-Up Bid; or

 

(II)       exceeds
by as much as or more than a specified amount (the “Specified Amount”) the price or value of the consideration
per Voting Share at which the Locked-Up Person has agreed to deposit or tender Voting Shares to the Lock-Up Bid, provided that
such Specified Amount is not greater than 7% of the price or value of the consideration per Voting Share at which the Locked-Up
Person has agreed to deposit or tender Voting Shares to the Lock-Up Bid; and

 

(B)         if
the number of Voting Shares offered to be purchased under the Lock-Up Bid is less than 100% of the Voting Shares held by Independent
Shareholders, where the number of Voting Shares to be purchased under such other Take-over Bid or transaction at a price or value
per Voting Share that is not less than the price or value per Voting Share offered under the Lock-Up Bid:

 

(I)         is
greater than the number of Voting Shares that the Offeror has offered to purchase under the Lock-Up Bid; or

 

(II)       exceeds
by as much as or more than a specified number (the “Specified Number”) the number of Voting Shares that the
Offeror has offered to purchase under the Lock-Up Bid, provided that the Specified Number is not greater than 7% of the number
of Voting Shares offered to purchased under the Lock-Up Bid,

 

    	11

    	 

    

 

and, for greater clarity, the
agreement may contain a right of first refusal or require a period of delay to give such Person an opportunity to match a higher
price in another Take-over Bid or transaction or other similar limitation on a Locked-up Person’s right to withdraw Voting
Shares from the agreement, so long as the limitation does not preclude the exercise by the Locked-up Person of the right to withdraw
Voting Shares during the period of the other Take-over Bid or transaction; and

 

(iii)        no
“break-up” fees, “top-up” fees, penalties, expenses or other amounts that exceed in aggregate
the greater of:

 

(A)         2.5%
of the price or value of the consideration payable under the Lock-Up Bid to a Locked-Up Person; and

 

(B)         50%
of the amount by which the price or value of the consideration received by a Locked-Up Person under another Take-over Bid or transaction
exceeds the price or value of the consideration that the Locked-Up Person would have received under the Lock-Up Bid,

 

shall be payable by such Locked-Up
Person pursuant to the agreement if the Locked-Up Person fails to deposit or tender Voting Shares to the Lock-Up Bid, withdraws
Voting Shares previously tendered thereto or supports another transaction;

 

(ll)         “Person”
shall include an individual, body corporate, firm, partnership, syndicate or other form of unincorporated association, trust, trustee,
executor, administrator, legal personal representative, group, unincorporated organization, a government and its agencies or instrumentalities,
or other entity whether or not having legal personality;

 

(mm)      “Pro
Rata Acquisition” shall mean an acquisition by a Person of Voting Shares pursuant to:

 

(i)          a
Dividend Reinvestment Acquisition;

 

(ii)         a
stock dividend, stock split or other event in respect of securities of the Company of one or more particular classes or series
pursuant to which such Person becomes the Beneficial Owner of Voting Shares on the same pro rata basis as all other holders of
securities of the particular class, classes or series; or

 

(iii)        the
acquisition or the exercise by the Person of rights to purchase Voting Shares issued by the Company to all holders of securities
of the Company (other than holders resident in any jurisdiction where such issuance is restricted or impractical as a result of
applicable law) of one or more particular classes or series pursuant to a rights offering or pursuant to a prospectus, provided
that such rights are acquired directly from the Company and not from any other Person and the Person does not thereby acquire a
greater percentage of such Voting Shares than the Person’s percentage of Voting Shares Beneficially Owned immediately prior
to such acquisition;

 

    	12

    	 

    

 

(nn)       “Record
Time” has the meaning set forth in the recitals hereto;

 

(oo)       “Redemption
Price” shall have the meaning attributed thereto in Subsection 5.1(a);

 

(pp)       “Right”
shall mean a right to purchase a Share of the Company, upon the terms and subject to the conditions set forth in this Agreement;

 

(qq)       “Rights
Certificate” shall mean a certificate representing the Rights after the Separation Time, which shall be substantially
in the form attached hereto as Attachment 1;

 

(rr)         “Rights
Register” shall have the meaning ascribed thereto in Subsection 2.6(a);

 

(ss)        “Securities
Act” shall mean the Securities Act (British Columbia), as amended, and the regulations thereunder, and any comparable
or successor laws or regulations thereto;

 

(tt)         “Separation
Time” shall mean, subject to Subsection 5.1(d), the close of business on the tenth Trading Day after the earlier of:

 

(i)          the
Share Acquisition Date;

 

(ii)         the
date of the commencement of or first public announcement of the intent of any Person (other than the Company or any Subsidiary
of the Company) to commence a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid); and

 

(iii)        the
date on which a Permitted Bid or Competing Permitted Bid ceases to qualify as such;

 

or such later time as may be
determined by the Board of Directors, provided that, if any Take-over Bid referred to in clause (ii) above expires, is not made,
is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid shall be deemed, for the purposes
of this definition, never to have been commenced, made or announced and further provided that if the Board of Directors determines,
pursuant to Section 5.1, to waive the application of Section 3.1 to a Flip-In Event, then the Separation Time in respect of such
Flip-In Event shall be deemed never to have occurred and further provided that if the foregoing results in the Separation Time
being prior to the Record Time, the Separation Time shall be the Record Time;

 

    	13

    	 

    

 

(uu)       “Share
Acquisition Date” shall mean the first date of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to early warning requirements under applicable securities laws) by the Company or an
Acquiring Person of facts indicating that a Person has become an Acquiring Person;

 

(vv)       “Shares”
shall mean the common shares in the capital of the Company as presently constituted, as such shares may be subdivided, consolidated,
reclassified or otherwise changed from time to time;

 

(ww)      “Subsidiary”:
a Person is a Subsidiary of another Person if:

 

(i)          it
is controlled by:

 

(A)         that
other; or

 

(B)         that
other and one or more Persons each of which is controlled by that other; or

 

(C)         two
or more Persons each of which is controlled by that other; or

 

(ii)         it
is a Subsidiary of a Person that is that other’s Subsidiary;

 

(xx)        “Take-over
Bid” shall mean an Offer to Acquire Voting Shares or Convertible Securities, if, assuming that the Voting Shares or Convertible
Securities subject to the Offer to Acquire are acquired and are Beneficially Owned at the date of such Offer to Acquire by the
Person making such Offer to Acquire, the Voting Shares Beneficially Owned by the Person making the Offer to Acquire would constitute
in the aggregate 20% or more of the outstanding Voting Shares at the date of the Offer to Acquire;

 

(yy)       “Termination
Time” shall mean the time at which the right to exercise Rights shall terminate pursuant to Section 5.1(g);

 

(zz)         “Trading
Day”, when used with respect to any securities, shall mean a day on which the principal Canadian stock exchange on which
such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed
or admitted to trading on any Canadian stock exchange, a Business Day;

 

(aaa)     “U.S.
– Canadian Exchange Rate” on any date shall mean:

 

(i)          if
on such date the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into
Canadian dollars, such rate; and

 

(ii)         in
any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars which is calculated
in the manner which shall be determined by the Board of Directors from time to time acting in good faith;

 

    	14

    	 

    

 

(bbb)     “Voting
Share Reduction” shall mean an acquisition or redemption by the Company of Voting Shares which, by reducing the number
of Voting Shares outstanding, increases the percentage of outstanding Voting Shares Beneficially Owned by any Person to 20% or
more of the Voting Shares then outstanding; and

 

(ccc)      “Voting
Shares” shall mean the Shares and any other shares in the capital of the Company entitled to vote generally in the election
of all directors of the Company.

 

1.2                       Currency

 

All sums of money which are referred to
in this Agreement are expressed in lawful money of Canada, unless otherwise specified.

 

1.3                       Headings

 

The division of this Agreement into Articles,
Sections, Subsections, Clauses, Paragraphs, Subparagraphs or other portions hereof and the insertion of headings, subheadings and
a table of contents are for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

 

1.4                       Calculation
of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares

 

(a)          For
purposes of this Agreement, in determining the percentage of outstanding Voting Shares with respect to which a Person is or is
deemed to be the Beneficial Owner, all unissued Voting Shares of which such person is deemed to be the Beneficial Owner shall be
deemed to be outstanding.

 

(b)          For
purposes of this Agreement, the percentage of Voting Shares Beneficially Owned by any Person shall be and be deemed to be the product
(expressed as a percentage) determined by the formula:

 

100 x A/B

 

where:

 

A          =          the number of votes for
the election of all directors of the Company generally attaching to the Voting Shares Beneficially Owned by such Person; and

 

B          =          the number of votes for
the election of all directors of the Company generally attaching to all outstanding Voting Shares.

 

The percentage of outstanding
Voting Shares represented by any particular group of Voting Shares acquired or held by any Person shall be determined in like manner
mutatis mutandis.

 

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1.5                       Acting
Jointly or in Concert

 

For purposes of this Agreement a Person
is acting jointly or in concert with every Person who is a party to an agreement, commitment, arrangement or understanding, whether
formal or informal or written or unwritten, with the first Person to acquire or Offer to Acquire any Voting Shares or Convertible
Securities (other than (x) customary agreements with and between underwriters and/or banking group members and/or selling group
members with respect to a distribution of securities by the Company, (y) pledges of securities in the ordinary course of business,
and (z) Permitted Lock-Up Agreements).

 

1.6                       Generally
Accepted Accounting Principles

 

Wherever in this Agreement reference is
made to generally accepted accounting principles, such reference shall be deemed to be the recommendations at the relevant time
of the Canadian Institute of Chartered Accountants, or any successor institute, applicable on a consolidated basis (unless otherwise
specifically provided herein to be applicable on an unconsolidated basis) and which incorporates International Financial Reporting
Standards as adopted by the Canadian Accounting Standards Board for periods beginning on or after January 1, 2011, as at the date
on which a calculation is made or required to be made in accordance with generally accepted accounting principles. Where the character
or amount of any asset or liability or item of revenue or expense is required to be determined, or any consolidation or other accounting
computation is required to be made for the purpose of this Agreement or any document, such determination or calculation shall,
to the extent applicable and except as otherwise specified herein or as otherwise agreed in writing by the parties, be made in
accordance with such generally accepted accounting principles applied on a consistent basis.

 

Article
2

 

THE
RIGHTS

 

2.1                       Issue
of Rights: Legend on Common Share Certificates

 

			(a)          One Right shall be issued on the
Effective Date in respect of each Common Share outstanding at the Record Time and one Right shall be issued in respect of each
Common Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time.

 

(b)          Certificates
representing Shares which are issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time,
shall also evidence one Right for each Share represented thereby until the earlier of the Separation Time or the Expiration Time
and shall have impressed on, printed on, written on or otherwise affixed to them the following legend:

 

    	16

    	 

    

 

Until the earlier of the Separation
Time or the Expiration Time (as both terms are defined in the Shareholder Rights Agreement referred to below), this certificate
also evidences and entitles the holder hereof to certain Rights as set forth in the Shareholder Rights Plan Agreement dated as
of January 9, 2014, as may be amended or supplemented from time to time (the “Shareholder Rights Agreement”),
between Stellar Biotechnologies, Inc. (the “Company”) and Computershare Investor Services Inc., as Rights Agent,
the terms of which are incorporated herein by reference and a copy of which is on file at the principal executive offices of the
Company. Under certain circumstances set out in the Shareholder Rights Agreement, the rights may be amended or redeemed, may expire
or may become void (if, in certain cases they are “Beneficially Owned” by an “Acquiring Person”
as such terms are defined in the Shareholder Rights Agreement, whether currently held by or on behalf of such Person or a subsequent
holder) or may be evidenced by separate certificates and no longer evidenced by this certificate. The Company will mail or arrange
for the mailing of a copy of the Shareholder Rights Agreement to the holder of this certificate without charge as soon as practicable
after the receipt of a written request therefor.

 

Certificates representing Shares that are
issued and outstanding at the Record Time shall also evidence one Right for each Share represented thereby notwithstanding the
absence of the foregoing legend, until the earlier of the Separation Time and the Expiration Time.

 

2.2                       Initial
Exercise Price; Exercise of Rights; Detachment of Rights

 

(a)          Subject
to adjustment as herein set forth, each Right will entitle the holder thereof, from and after the Separation Time and prior to
the Expiration Time, to purchase one Share for the Exercise Price as at the Business Day immediately preceding the day of exercise
of the Right (which Exercise Price and number of Shares are subject to adjustment as set forth below). Notwithstanding any other
provision of this Agreement, any Rights held by the Company or any of its Subsidiaries shall be void.

 

(b)          Until
the Separation Time,

 

(i)          the
Rights shall not be exercisable and no Right may be exercised; and

 

(ii)         each
Right will be evidenced by the certificate for the associated Voting Share registered in the name of the holder thereof (which
certificate shall also be deemed to represent a Rights Certificate) and will be transferable only together with, and will be transferred
by a transfer of, such associated Voting Share.

 

(c)          From
and after the Separation Time and prior to the Expiration Time:

 

(i)          
the Rights shall be exercisable; and

 

(ii)         the
registration and transfer of Rights shall be separate from and independent of Voting Shares.

 

    	17

    	 

    

 

Promptly following the Separation
Time, the Company will prepare or cause to be prepared and the Rights Agent will mail to each holder of record of Voting Shares
as of the Separation Time and, in respect of each Convertible Security converted into Voting Shares after the Separation Time and
prior to the Expiration Time, promptly after such conversion, the Company will prepare or cause to be prepared and the Rights Agent
will mail to the holder so converting (other than in either case an Acquiring Person and any Transferee whose rights are or become
null and void pursuant to Section 3.1(b) and, in respect of any Rights Beneficially Owned by such Acquiring Person or Transferee
which are not held of record by such Acquiring Person or Transferee, the holder of record of such Rights (a “Nominee”)),
at such holder’s address as shown by the records of the Company (the Company hereby agreeing to furnish copies of such records
to the Rights Agent for this purpose):

 

(x)          a
Rights Certificate appropriately completed, representing the number of Rights held by such holder at the Separation Time or at
the time of conversion, as applicable, and having such marks of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any law, rule or regulation or judicial or administrative order made pursuant thereto or with any rule
or regulation of any self-regulatory organization, stock exchange or quotation system on which the Rights may from time to time
be listed or traded, or to conform to usage; and

 

(y)          disclosure
statement describing the Rights,

 

provided that a Nominee shall
be sent the materials provided for in (x) and (y) only in respect of all Shares held of record by it which are not Beneficially
Owned by an Acquiring Person. In order for the Company to determine whether any Person is holding Shares which are Beneficially
Owned by another Person, the Company may require such first Person to furnish such information and documentation as the Company
deems necessary.

 

(d)          Rights
may be exercised, in whole or in part, on any Business Day after the Separation Time and prior to the Expiration Time by submitting
to the Rights Agent at its office in Vancouver, Canada or any other office of the Rights Agent in cities designated from time to
time for that purpose by the Company with the approval of the Rights Agent:

 

(i)          
the Rights Certificate evidencing such Rights;

 

(ii)         an
election to exercise such Rights (an “Election to Exercise”) substantially in the form attached to the Rights
Certificate appropriately completed and duly executed by the holder or such holder’s executors or administrators or other
personal representatives or such holder’s or their legal attorney duly appointed by an instrument in writing in form and
executed in a manner satisfactory to the Rights Agent; and

 

    	18

    	 

    

 

(iii)        payment
by certified cheque, banker’s draft, money order or wire transfer payable to the order of the Rights Agent, of a sum equal
to the Exercise Price multiplied by the number of Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for Shares in a name other than that of the holder of the Rights being exercised.

 

(e)          Upon
receipt of a Rights Certificate, together with a completed Election to Exercise executed in accordance with Clause 2.2(d)(ii),
which does not indicate that such Right is null and void as provided by Subsection 3.1(b), and payment as set forth in Clause 2.2(d)(iii),
the Rights Agent (unless otherwise instructed by the Company in the event that the Company is of the opinion that the Rights cannot
be exercised in accordance with this Agreement) will thereupon as soon as practicable:

 

(i)          requisition
from the transfer agent certificates representing the number of such Shares to be purchased (the Company hereby irrevocably authorizing
its transfer agent to comply with all such requisitions);

 

(ii)         when
appropriate, requisition from the Company the amount of cash to be paid in lieu of issuing fractional Shares;

 

(iii)        after
receipt of the certificates referred to in Clause 2.2(e)(i), deliver the same to or upon the order of the registered holder of
such Rights Certificates, registered in such name or names as may be designated by such holder;

 

(iv)        when
appropriate, after receipt, deliver the cash referred to in Clause 2.2(e)(ii) to or to the order of the registered holder of such
Rights Certificate; and

 

(v)         remit
to the Company all payments received on the exercise of Rights.

 

(f)          In
case the holder of any Rights shall exercise less than all the Rights evidenced by such holder’s Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised (subject to the provisions of Subsection 5.5(a)) will be issued
by the Rights Agent to such holder or to such holder’s duly authorized assigns.

 

(g)          The
Company covenants and agrees that it will:

 

(i)          take
all such action as may be necessary and within its power to ensure that all Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Shares (subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered as fully paid and non-assessable;

 

(ii)         take
all such action as may be necessary and within its power to comply with the requirements of the British Columbia Business Corporations
Act, the Securities Act and the securities laws or comparable legislation of each of the provinces of Canada, and any other applicable
law, rule or regulation, in connection with the issuance and delivery of the Rights Certificates and the issuance of any Shares
upon exercise of Rights;

 

    	19

    	 

    

 

(iii)        use
reasonable efforts to cause all Shares issued upon exercise of Rights to be listed on the stock exchanges and markets on which
such Shares were traded immediately prior to the Separation Time;

 

(iv)        pay
when due and payable, if applicable, any and all federal, provincial and municipal transfer taxes and charges (not including any
income or capital taxes of the holder or exercising holder or any liability of the Company to withhold tax) which may be payable
in respect of the original issuance or delivery of the Rights Certificates, or certificates for Shares to be issued upon exercise
of any Rights, provided that the Company shall not be required to pay any transfer tax or charge which may be payable in respect
of any transfer involved in the transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Shares
in a name other than that of the holder of the Rights being transferred or exercised; and

 

(v)         after
the Separation Time, except as permitted by Sections 5.1 and 5.4, not take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.

 

2.3                       Adjustments
to Exercise Price; Number of Rights

 

The Exercise Price, the number and kind
of securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 2.3.

 

(a)          In
the event the Company shall at any time after the Record Time and prior to the Expiration Time:

 

(i)          declare
or pay a dividend on Shares payable in Shares or Convertible Securities in respect thereof other than pursuant to any Dividend
Reinvestment Plan;

 

(ii)         subdivide
or change the then outstanding Shares into a greater number of Shares;

 

(iii)        consolidate
or change the then outstanding Shares into a smaller number of Shares; or

 

(iv)        issue
any Shares (or Convertible Securities in respect thereof) in respect of, in lieu of or in exchange for existing Shares except as
otherwise provided in this Section 2.3,

 

then the Exercise Price and the
number of Rights outstanding (or, if the payment or effective date therefor shall occur after the Separation Time, the securities
purchasable upon exercise of Rights) shall be adjusted as of the payment or effective date in the manner set forth below.

 

    	20

    	 

    

 

If the Exercise Price and number
of Rights outstanding are to be adjusted:

 

(x)          the
Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment
divided by the number of Shares (or other capital stock) (the “Expansion Factor”) that a holder of one Share
immediately prior to such distribution, subdivision, change, consolidation or issuance would hold thereafter as a result thereof;
and

 

(y)         each
Right held prior to such adjustment will become that number of Rights equal to the Expansion Factor,

 

and the adjusted number of Rights
will be deemed to be distributed among the Shares with respect to which the original Rights were associated (if they remain outstanding)
and the Shares issued in respect of such dividend, subdivision, change, consolidation or issuance, so that each such Share (or
other capital stock) will have exactly one Right associated with it.

 

For greater certainty, if the
securities purchasable upon exercise of Rights are to be adjusted, the securities purchasable upon exercise of each Right after
such adjustment will be the securities that a holder of the securities purchasable upon exercise of one Right immediately prior
to such dividend, subdivision, change, consolidation or issuance would hold thereafter as a result of such dividend, subdivision,
change, consolidation or issuance.

 

If, after the Record Time and
prior to the Expiration Time, the Company shall issue any shares of capital stock other than Shares in a transaction of a type
described in Clause 2.3(a)(i) or (iv), such shares of capital stock shall be treated herein as nearly equivalent to Shares as may
be practicable and appropriate under the circumstances and the Company and the Rights Agent agree to amend this Agreement in order
to effect such treatment.

 

If an event occurs which would
require an adjustment under both this Section 2.3 and Section 3.1, the adjustment provided for in this Section 2.3 shall be in
addition to, and shall be made prior to, any adjustment required under Section 3.1.

 

In the event the Company shall
at any time after the Record Time and prior to the Separation Time issue any Shares otherwise than in a transaction referred to
in this Subsection 2.3(a), each such Share so issued shall automatically have one new Right associated with it, which Right shall
be evidenced by the certificate representing such associated Share.

 

(b)          In
the event the Company shall at any time after the Record Time and prior to the Separation Time fix a record date for the issuance
of rights, options or warrants to all holders of Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Shares (or Convertible Securities in respect of Shares) at a price per Share (or, in
the case of a Convertible Security, having a conversion, exchange or exercise price per share, including the price required to
be paid to purchase such Convertible Security) less than the Market Price per Share on such record date, the Exercise Price to
be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record
date by a fraction:

 

    	21

    	 

    

 

(i)          the
numerator of which shall be the number of Shares outstanding on such record date plus the number of Shares that the aggregate offering
price of the total number of Shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the
Convertible Securities, including the price required to be paid to purchase such Convertible Securities) would purchase at such
Market Price per Share; and

 

(ii)         the
denominator of which shall be the number of Shares outstanding on such record date plus the number of additional Shares to be offered
for subscription or purchase (or into which the Convertible Securities so to be offered are initially convertible, exchangeable
or exercisable).

 

In case such subscription price
may be paid by delivery of consideration, part or all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of Rights. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights, options or warrants are not so issued, or if issued, are
not exercised prior to the expiration thereof, the Exercise Price shall be readjusted to the Exercise Price which would then be
in effect if such record date had not been fixed, or to the Exercise Price which would be in effect based upon the number of Shares
(or securities convertible into, or exchangeable or exercisable for Shares) actually issued upon the exercise of such rights, options
or warrants, as the case may be.

 

For purposes of this Agreement,
the granting of the right to purchase Shares (whether from treasury or otherwise) pursuant to any Dividend Reinvestment Plan or
any employee benefit plan, stock option plan or any similar plan shall be deemed not to constitute an issue of rights, options
or warrants by the Company; provided, however, that, in the case of any Dividend Reinvestment Plan or share purchase plan, the
right to purchase Shares is at a price per Share of not less than 90% of the current market price per share (determined as provided
in such plans) of the Shares.

 

(c)          In
the event the Company shall at any time after the Record Time and prior to the Separation Time fix a record date for the making
of a distribution to all holders of Shares (including any such distribution made in connection with a merger or amalgamation) of
evidences of indebtedness, cash (other than an annual cash dividend or a dividend paid in Common Shares, but including any dividend
payable in securities other than Common Shares), assets or rights, options or warrants (excluding rights, options or warrants expiring
within 45 calendar days after such record date) to purchase Shares or Convertible Securities in respect of Shares, the Exercise
Price in effect after such record date shall be equal to the Exercise Price in effect immediately prior to such record date less
the fair market value (as determined in good faith by the Board of Directors) of the portion of the evidences of indebtedness,
cash, assets, rights, options or warrants so to be distributed applicable to the securities purchasable upon exercise of one Right.

 

    	22

    	 

    

 

(d)          Notwithstanding
anything herein to the contrary, no adjustment in the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least one per cent in the Exercise Price; provided, however, that any adjustments which by reason of
this Subsection 2.3(d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
All calculations under Section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth of a Share. Any adjustment
required by Section 2.3 shall be made as of:

 

(i)          the
payment or effective date for the applicable dividend, subdivision, change, combination or issuance, in the case of an adjustment
made pursuant to Subsection 2.3(a); or

 

(ii)         the
record date for the applicable dividend or distribution, in the case of an adjustment made pursuant to Subsection 2.3(b) or (c),
subject to readjustment to reverse the same if such dividend or distribution shall not be made.

 

(e)          In
the event the Company shall at any time after the Record Time and prior to the Separation Time issue any shares (other than Shares),
or rights, options or warrants to subscribe for or purchase any such shares, or securities convertible into or exchangeable for
any such shares, in a transaction referred to in Clause 2.3(a)(i) or (iv) or Subsections 2.3(b) or (c), if the Board of Directors
acting in good faith determines that the adjustments contemplated by Subsections 2.3(a), (b) and (c) in connection with such transaction
will not appropriately protect the interests of the holders of Rights, the Board of Directors may determine what other adjustments
to the Exercise Price, number of Rights and/or securities purchasable upon exercise of Rights would be appropriate and, notwithstanding
Subsections 2.3(a), (b) and (c), such adjustments, rather than the adjustments contemplated by Subsections 2.3(a), (b) and (c),
shall be made. Subject to Subsection 5.4(b) and (c), the Company and the Rights Agent may, with the prior approval of the holders
of the Shares amend this Agreement as appropriate to provide for such adjustments.

 

(f)          Each
Right originally issued by the Company subsequent to any adjustment made to the Exercise Price hereunder shall evidence the right
to purchase, at the adjusted Exercise Price, the number of Shares purchasable from time to time hereunder upon exercise of a Right
immediately prior to such issue, all subject to further adjustment as provided herein.

 

(g)          Irrespective
of any adjustment or change in the Exercise Price or the number of Shares issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Exercise Price per Share and the number of Shares which
were expressed in the initial Rights Certificates issued hereunder.

 

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(h)          In
any case in which this Section 2.3 shall require that an adjustment in the Exercise Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of Shares and other securities of the Company, if any, issuable upon such exercise
over and above the number of Shares and other securities of the Company, if any, issuable upon such exercise on the basis of the
Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder an appropriate
instrument evidencing such holder’s right to receive such additional shares (fractional or otherwise) or other securities
upon the occurrence of the event requiring such adjustment.

 

(i)          Notwithstanding
anything contained in this Section 2.3 to the contrary, the Company shall be entitled to make such reductions in the Exercise Price,
in addition to those adjustments expressly required by this Section 2.3, as and to the extent that in their good faith judgment
the Board of Directors shall determine to be advisable, in order that any:

 

(i)          consolidation or subdivision of Shares;

 

(ii)         issuance
(wholly or in part for cash) of Shares or securities that by their terms are convertible into or exchangeable for Shares;

 

(iii)        stock
dividends; or

 

(iv)        issuance
of rights, options or warrants referred to in this Section 2.3,

 

hereafter made by the Company
to holders of its Shares, subject to applicable taxation laws, shall not be taxable to such shareholders or shall subject such
shareholders to a lesser amount of tax.

 

(j)          Whenever
an adjustment to the Exercise Price is made pursuant to this Section 2.3, the Company shall:

 

(i)          promptly
prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment; and

 

(ii)         promptly
file with the Rights Agent and with each transfer agent for the Shares a copy of such certificate and mail a brief summary thereof
to each holder of Rights who requests a copy;

 

Failure to file such certificate
or to cause such notice to be given as aforesaid, or any defect therein, shall not affect the validity of any such adjustment or
change.

 

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		2.4	Date on Which Exercise Is Effective

 

Each Person in whose name any certificate
for Shares or other securities, if applicable, is issued upon the exercise of Rights shall for all purposes be deemed to have become
the absolute holder of record of the Shares or other securities, if applicable, represented thereon, and such certificate shall
be dated the date upon which the Rights Certificate evidencing such Rights was duly surrendered in accordance with Subsection 2.2(d)
(together with a duly completed Election to Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer
taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date
of such surrender and payment is a date upon which the Share transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such Shares on, and such certificate shall be dated, the next succeeding Business Day on which
the Share transfer books of the Company are open.

 

		2.5	 Execution, Authentication, Delivery and Dating of Rights
Certificates

 

(a)          The
Rights Certificates shall be executed on behalf of the Company by any of its Chairman of the Board, President, Chief Executive
Officer and Chief Financial Officer. The signature of any of these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices either before or
after the countersignature and delivery of such Rights Certificates.

 

(b)          Promptly
after the Company learns of the Separation Time, the Company will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for countersignature, and the Rights Agent shall countersign (manually
or by facsimile signature in a manner satisfactory to the Company) and send such Rights Certificates to the holders of the Rights
pursuant to Subsection 2.2(c) hereof. No Rights Certificate shall be valid for any purpose until countersigned by the Rights Agent
as aforesaid.

 

(c)          Each
Rights Certificate shall be dated the date of countersignature thereof.

 

		2.6	Registration, Transfer and Exchange

 

(a)          The
Company will cause to be kept a register (the “Rights Register”) in which, subject to such reasonable regulations
as it may prescribe, the Company will provide for the registration and transfer of Rights. The Rights Agent, at its office in the
City of Vancouver, is hereby appointed registrar for the Rights (the “Rights Registrar”) for the purpose of
maintaining the Rights Register for the Company and registering Rights and transfers of Rights as herein provided and the Rights
Agent hereby accepts such appointment. In the event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all reasonable times.

 

After the Separation Time and
prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, and subject to
the provisions of Subsection 2.6(c), the Company will execute, and the Rights Agent will countersign and deliver, in the name of
the holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new
Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.

 

    	25

    	 

    

  

(b)          All
Rights issued upon any registration of transfer or exchange of Rights Certificates shall be the valid obligations of the Company,
and such Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon such registration of
transfer or exchange.

 

(c)          Every
Rights Certificate surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent, as the case may be, duly executed by the holder
thereof or such holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate
under this Section 2.6, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the reasonable fees and expenses of the Rights Agent) connected
therewith.

 

		2.7	Mutilated, Destroyed, Lost and Stolen Rights Certificates

 

(a)          If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Company shall execute and
the Rights Agent shall countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.

 

(b)          If
there shall be delivered to the Company and the Rights Agent prior to the Expiration Time:

 

(i)          evidence
to their reasonable satisfaction of the destruction, loss or theft of any Rights Certificate; and

 

(ii)         such
Security and indemnity as may be reasonably required by them to save each of them and any of their agents harmless,

 

then, in the absence of notice
to the Company or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Company shall execute
and upon the Company’s request the Rights Agent shall countersign and deliver, in lieu of any such destroyed, lost or stolen
Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost
or stolen.

 

(c)          As
a condition to the issuance of any new Rights Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including
the reasonable fees and expenses of the Rights Agent) connected therewith.

 

(d)          Every
new Rights Certificate issued pursuant to this Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence
the contractual obligation of the Company, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.

 

    	26

    	 

    

  

		2.8	Persons Deemed Owners of Rights

 

The Company, the Rights Agent and any agent
of the Company or the Rights Agent may deem and treat the Person in whose name a Rights Certificate (or, prior to the Separation
Time, the associated Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all
purposes whatsoever. As used in this Agreement, unless the context otherwise requires, the term “holder” of
any Right shall mean the registered holder of such Right (or, prior to the Separation Time, of the associated Share).

 

		2.9	Delivery and Cancellation of Certificates

 

All Rights Certificates surrendered upon
exercise or for redemption, registration of transfer or exchange shall, if surrendered to any Person other than the Rights Agent,
be delivered to the Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Company may at any time
deliver to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall be promptly cancelled by the
Rights Agent. No Rights Certificate shall be countersigned in lieu of or in exchange for any Rights Certificates cancelled as provided
in this Section 2.9, except as expressly permitted by this Agreement. The Rights Agent shall, subject to applicable laws, destroy
all cancelled Rights Certificates and deliver a certificate of destruction to the Company.

 

		2.10	Agreement of Rights Holders

 

Every holder of Rights, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every other holder of Rights:

 

(a)          to
be bound by and subject to the provisions of this Agreement, as amended from time to time in accordance with the terms hereof,
in respect of all Rights held;

 

(b)          that
prior to the Separation Time, each Right will be transferable only together with, and will be transferred by a transfer of, the
associated Voting Share certificate representing such Right;

 

(c)          that
after the Separation Time, the Rights Certificates will be transferable only on the Rights Register as provided herein;

 

(d)          that
prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Voting Share certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the Company or the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Voting Share certificate) is registered
as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on such
Rights Certificate or the associated Voting Share certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary;

 

    	27

    	 

    

  

(e)          that
such holder of Rights has waived his right to receive any fractional Rights or any fractional shares or other securities upon exercise
of a Right (except as provided herein);

 

(f)          that,
subject to the provisions of Section 5.4, without the approval of any holder of Rights or Voting Shares and upon the sole authority
of the Board of Directors, acting in good faith, this Agreement may be supplemented or amended from time to time pursuant to and
as provided herein; and

 

(g)          that
notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this Agreement by
reason of preliminary or permanent injunctions or other order, decree or ruling issued by a court of competent jurisdiction or
by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulations or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation.

 

		2.11	Rights Certificate Holder Not Deemed a Shareholder

 

No holder, as such, of any Rights or Rights
Certificate shall be entitled to vote, receive dividends or be deemed for any purpose whatsoever the holder of any Share or any
other share or security of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed or deemed or confer upon the holder of any Right or Rights
Certificate, as such, any right, title, benefit or privilege of a holder of Shares or any other shares or securities of the Company
or any right to vote at any meeting of shareholders of the Company whether for the election of directors or otherwise or upon any
matter submitted to holders of Shares or any other shares of the Company at any meeting thereof, or to give or withhold consent
to any action of the Company, or to receive notice of any meeting or other action affecting any holder of Shares or any other shares
of the Company except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and provisions
hereof.

 

Article
3

ADJUSTMENTS TO THE RIGHTS

 

		3.1	Flip-in Event

 

(a)          Subject
to Subsection 3.1(b) and Section 5.1, in the event that prior to the Expiration Time a Flip-in Event shall occur, each Right shall
constitute, effective at the close of business on the tenth Trading Day after the Share Acquisition Date, the right to purchase
from the Company, upon exercise thereof in accordance with the terms hereof, that number of Shares having an aggregate Market Price
on the date of consummation or occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to
the Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustment provided for in
Section 2.3 in the event that after such consummation or occurrence, an event of a type analogous to any of the events described
in Section 2.3 shall have occurred).

 

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(b)          Notwithstanding
anything in this Agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are or were Beneficially
Owned on or after the earlier of the Separation Time or the Share Acquisition Date by:

 

(i)          an
Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any other Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of such other Person); or

 

(ii)         a
transferee or other successor in title, directly or indirectly, (a “Transferee”) of Rights held by an Acquiring
Person (or any Affiliate or Associate of an Acquiring Person or any other Person acting jointly or in concert with an Acquiring
Person or any Affiliate or Associate of such other Person), where such Transferee becomes a transferee concurrently with or subsequent
to the Acquiring Person becoming such in a transfer that the Board of Directors acting in good faith has determined is part of
a plan, arrangement or scheme of an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any other Person
acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of such other Person), that has the purpose
or effect of avoiding Clause 3.1(b)(i),

 

shall become null and void without
any further action, and any holder of such Rights (including any Transferee) shall thereafter have no right to exercise such Rights
under any provision of this Agreement and further shall thereafter not have any other rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The holder of any Rights represented by a Rights Certificate which
is submitted to the Rights Agent upon exercise or for registration or transfer or exchange which does not contain the necessary
certifications set forth in the Rights Certificate establishing that such Rights are not null and void under this Clause 3.1(b)
shall be deemed to be an Acquiring Person for the purposes of this Clause 3.1 and such Rights shall become null and void.

 

(c)          From
and after the Separation Time, the Company shall do all such acts and things as shall be necessary and within its power to ensure
compliance with the provisions of this Section 3.1, including without limitation, all such acts and things as may be required to
satisfy the requirements of the British Columbia Business Corporations Act, the Securities Act and the securities laws or comparable
legislation of each of the provinces of Canada in respect of the issue of Shares upon the exercise of Rights in accordance with
this Agreement.

 

(d)          Any
Rights Certificate that represents Rights Beneficially Owned by a Person described in either Clause 3.1(b)(i) or (ii) or transferred
to any nominee of any such Person, and any Rights Certificate issued upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain the following legend:

 

    	29

    	 

    

  

“The Rights represented by
this Rights Certificate were issued to a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Shareholder Rights Agreement) or a Person who was acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate of such Person. This Rights Certificate and the Rights represented hereby are void or shall
become void in the circumstances specified in Subsection 3.1(b) of the Shareholder Rights Agreement.”

 

provided, however, that the Rights
Agent shall not be under any responsibility to ascertain the existence of facts that would require the imposition of such legend
but shall impose such legend only if instructed to do so by the Company in writing or if a holder fails to certify upon transfer
or exchange in the space provided on the Rights Certificate that such holder is not a Person described in such legend and provided
further that the fact that such legend does not appear on a certificate is not determinative of whether any Rights represented
thereby are void under this Section.

 

Article
4

THE RIGHTS AGENT

 

		4.1	General

 

(a)          The
Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents (“Co-Rights
Agents”) as it may deem necessary or desirable. In the event the Company appoints one or more Co-Rights Agents, the respective
duties of the Rights Agent and Co-Rights Agents shall be as the Company may determine with the approval of the Rights Agent and
the Co-Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred
in the administration and execution of this Agreement and the exercise and performance of its duties hereunder (including the fees
and disbursements of any expert or advisor retained by the Rights Agent). The Company also agrees to indemnify the Rights Agent,
and its officers, directors, employees and agents for, and to hold it and them harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or wilful misconduct on the part of the Rights Agent or such persons, for anything
done or omitted by the Rights Agent or such persons in connection with the acceptance and administration of this Agreement, including
legal costs and expenses, which right to indemnification will survive the termination of this Agreement and the resignation or
removal of the Rights Agent.

 

    	30

    	 

    

 

(b)          The
Rights Agent shall be protected and shall incur no liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any certificate for Shares, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper Person or Persons.

 

(c)          The
Company shall inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of
this Agreement by the Rights Agent and, at any time upon request, shall provide to the Rights Agent an incumbency certificate certifying
the then current officers of the Company.

 

(d)          No
provision contained in this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties or in the exercise of any of its rights or powers.

 

		4.2	Merger, Amalgamation or Consolidation or Change of Name
of Rights Agent

 

(a)          Any
Company into which the Rights Agent may be merged or amalgamated or with which it may be consolidated, or any Company resulting
from any merger, amalgamation, statutory arrangement or consolidation to which the Rights Agent is a party, or any Company succeeding
to the shareholder or stockholder services business of the Rights Agent, will be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such Company
would be eligible for appointment as a successor Rights Agent under the provisions of Section 4.4 hereof. In case at the time such
successor Rights Agent succeeds to the agency created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights have not been countersigned, any successor Rights Agent
may countersign such Rights Certificates in the name of the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this Agreement.

 

(b)          In
case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in this Agreement.

 

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		4.3	Duties of Rights Agent

 

The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and conditions, all of which the Company and the holders of
certificates for Shares and the holders of Rights Certificates, by their acceptance thereof, shall be bound:

 

(a)          the
Rights Agent may retain and consult with legal counsel (who may be legal counsel for the Company) and the opinion of such counsel
will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion and the Rights Agent may also consult with such other experts as the Rights Agent may reasonably
consider necessary or appropriate to properly carry out the duties and obligations imposed under this Agreement (at the expense
of the Company) and the Rights Agent shall be entitled to act and rely in good faith on the advice of any such expert;

 

(b)          whenever
in the performance of its duties under this Agreement, the Rights Agent deems it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate
signed by a Person believed by the Rights Agent to be the Chairman of the Board, President, Chief Executive Officer or Chief Financial
Officer of the Company and delivered to the Rights Agent; and such certificate will be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate;

 

(c)          the
Rights Agent will be liable hereunder only for its own gross negligence, bad faith or willful misconduct;

 

(d)          the
Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in
the certificates for Shares, or the Rights Certificates (except its countersignature thereof) or be required to verify the same,
but all such statements and recitals are and will be deemed to have been made by the Company only;

 

(e)          Notwithstanding
any other provision of this Agreement, and whether such losses or damages are foreseeable or unforeseeable, the Rights Agent shall
not be liable under any circumstances whatsoever for any (a) breach by any other party of securities law or other rule of any securities
regulatory authority, (b) lost profits or (c) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses
or damages;

 

(f)          Notwithstanding
any other provision of this Agreement, any liability of the Rights Agent shall be limited, in the aggregate, to the amount of fees
paid by the Company to the Rights Agent under this Agreement in the twelve (12) months immediately prior to the Rights Agent receiving
the first notice of the claim;

 

    	32

    	 

    

  

(g)          the
Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of
any certificate for a Share or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible
for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Subsection 3.1(b) hereof) or
any adjustment required under the provisions of Section 2.3 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise
of Rights after receipt of the certificate contemplated by Section 2.3 describing any such adjustment); nor will it by any act
hereunder be deemed to make any representation or warranty as to the authorization of any Shares to be issued pursuant to this
Agreement or any Rights or as to whether any Shares will, when issued, be duly and validly authorized, executed, issued and delivered
and fully paid and non-assessable;

 

(h)          the
Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement;

 

(i)          the
Rights Agent is hereby authorized and directed to accept instructions in writing with respect to the performance of its duties
hereunder from any individual believed by the Rights Agent to be the Chairman of the Board, President, Chief Executive Officer
or Chief Financial Officer of the Company, and to apply to such individuals for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such individual.
It is understood that instructions to the Rights Agent shall, except where circumstances make it impractical or the Rights Agent
otherwise agrees, be given in writing and, where not in writing, such instructions shall be confirmed in writing as soon as practicable
after the giving of such instructions;

 

(j)          the
Rights Agent and any shareholder or stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in Shares,
Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal
entity; and

 

(k)          the
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect
or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment thereof.

 

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		4.4	Change of Rights Agent

 

The Rights Agent may resign and be discharged
from its duties under this Agreement upon 60 days notice (or such lesser notice as is acceptable to the Company) in writing mailed
to the Company and to each transfer agent of Shares by registered or certified mail and to the holders of Rights in accordance
with Section 5.9. The Company may remove the Rights Agent upon 30 days notice in writing, mailed to the Rights Agent and to each
transfer agent of the Shares by registered or certified mail and to the holders of Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of acting, the Company will appoint a successor to the Rights
Agent. If the Company fails to make such appointment within a period of 30 days after such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then by prior written notice to the
Company the resigning Rights Agent or the holder of any Rights (which holder shall, with such notice, submit such holder’s
Rights Certificate, if any, for inspection by the Company), may apply, at the Company’s expense, to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such
a court, shall be a Company incorporated under the laws of Canada or a province thereof authorized to carry on the business of
a trust company in the Province of British Columbia. After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall, upon payment in full of any outstanding amounts owing by the Company to the Rights Agent under
this Agreement, deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Shares,
and mail a notice thereof in writing to the holders of the Rights in accordance with Section 5.9. Failure to give any notice provided
for in this Section 4.4, however, or any defect therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of any successor Rights Agent, as the case may be.

 

Article
5

MISCELLANEOUS

 

		5.1	Redemption and Waiver

 

(a)          The
Board of Directors acting in good faith may, with the prior approval of the holders of Voting Shares or of the holders of Rights
given in accordance with Section 5.1(i) or (j), as the case may be, at any time prior to the occurrence of a Flip-in Event as to
which the application of Section 3.1 has not been waived pursuant to the provisions of this Section 5.1, elect to redeem all but
not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3 in the event that an event of the type analogous to any of the
events described in Section 2.3 shall have occurred (such redemption price being herein referred to as the “Redemption
Price”).

 

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(b)          The
Board of Directors acting in good faith may, with the prior approval of the holders of Voting Shares given in accordance with Section
5.1(i), determine, at any time prior to the occurrence of a Flip-in Event as to which the application of Section 3.1 has not been
waived pursuant to this Section 5.1, if such Flip-in Event would occur by reason of an acquisition of Voting Shares otherwise than
pursuant to a Take-over Bid made by means of a take-over bid circular to all holders of record of Voting Shares and otherwise than
in the circumstances set forth in Subsection 5.1(d), to waive the application of Section 3.1 to such Flip-in Event. In the event
that the Board of Directors proposes such a waiver, the Board of Directors shall extend the Separation Time to a date subsequent
to and not more than ten Business Days following the meeting of shareholders called to approve such waiver.

 

(c)          The
Board of Directors acting in good faith may, until the occurrence of a Flip-in Event and upon prior written notice delivered to
the Rights Agent, determine to waive the application of Section 3.1 to such particular Flip-in Event, provided that the Flip-in
Event would occur by reason of a Take-over Bid made by way of take-over bid circular sent to all holders of Voting Shares (which
for greater certainty shall not include the circumstances described in Subsection 5.1(d)); provided that if the Board of Directors
waives the application of Section 3.1 to a particular Flip-in Event pursuant to this Subsection 5.1(c), the Board of Directors
shall be deemed to have waived the application of Section 3.1 to any other Flip-in Event subsequently occurring by reason of any
Take-over Bid which is made by means of a take-over bid circular to all holders of Voting Shares prior to the expiry of any Take-over
Bid in respect of which a waiver is, or is deemed to have been, granted under this Subsection 5.1(c).

 

(d)          Notwithstanding
the provisions of Subsections 5.1(b) and (c) hereof, the Board of Directors may waive the application of Section 3.1 in respect
of the occurrence of any Flip-in Event if the Board of Directors has determined within ten Trading Days following a Stock Acquisition
Date that a Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become,
an Acquiring Person under this Agreement, and in the event such waiver is granted by the Board of Directors, such Stock Acquisition
Date shall be deemed not to have occurred. Any such waiver pursuant to this Subsection 5.1(d) must be on the condition that such
Person, within 14 days after the foregoing determination by the Board of Directors or such earlier or later date as the Board of
Directors may determine (the “Disposition Date”), has reduced its Beneficial Ownership of Voting Shares such
that the Person is no longer an Acquiring Person. If the Person remains an Acquiring Person at the close of business on the Disposition
Date, the Disposition Date shall be deemed to be the date of occurrence of a further Stock Acquisition Date and Section 3.1 shall
apply thereto.

 

(e)          The
Board of Directors, shall, without further formality, be deemed to have elected to redeem the Rights at the Redemption Price on
the date that a Person which has made a Permitted Bid, a Competing Permitted Bid or a Take-Over Bid in respect of which the Board
of Directors has waived, or is deemed to have waived, pursuant to Subsection 5.1(c) the application of Section 3.1, takes up and
pays for Voting Shares in connection with such Permitted Bid, Competing Permitted Bid or Take-over bid, as the case may be.

 

    	35

    	 

    

 

(f)          Where
a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn or otherwise terminated after the Separation Time has occurred
and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the outstanding Rights at the Redemption
Price. Upon the Rights being redeemed pursuant to this Subsection 5.1(f), all the provisions of this Agreement shall continue to
apply as if the Separation Time had not occurred and Rights Certificates representing the number of Rights held by each holder
of record of Shares as of the Separation Time had not been mailed to each such holder and for all purposes of this Agreement the
Separation Time shall be deemed not to have occurred.

 

(g)          If
the Board of Directors elects or is deemed to have elected to redeem the Rights, and, in circumstances in which Subsection 5.1(a)
is applicable, such redemption is approved by the holders of Voting Shares or the holders of Rights in accordance with Subsection
5.1(i) or (j), as the case may be, the right to exercise the Rights, will thereupon, without further action and without notice,
terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.

 

(h)          Within
10 Business Days after the Board of Directors elects or is deemed to elect, to redeem the Rights or if Subsection 5.1(a) is applicable
within 10 Business Days after the holders of Shares of the holders of Rights have approved a redemption of Rights in accordance
with Section 5.1(i) or (j), as the case may be, the Company shall give notice of redemption to the holders of the then outstanding
Rights by mailing such notice to each such holder at his last address as it appears upon the registry books of the Rights Agent
or, prior to the Separation Time, on the registry books of the transfer agent for the Voting Shares. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made. The Company may not redeem, acquire or purchase
for value any Rights at any time in any manner other than specifically set forth in this Section 5.1 or in connection with the
purchase of Shares prior to the Separation Time.

 

(i)          If
a redemption of Rights pursuant to Subsection 5.1(a) or a waiver of a Flip-in Event pursuant to Section 5.1(b) is proposed at any
time prior to the Separation Time, such redemption or waiver shall be submitted for approval to the holders of Voting Shares. Such
approval shall be deemed to have been given if the redemption or waiver is approved by the affirmative vote of a majority of the
votes cast by Independent Shareholders represented in person or by proxy at a meeting of such holders duly held in accordance with
applicable laws.

 

(j)          If
a redemption of Rights pursuant to Subsection 5.1(a) is proposed at any time after the Separation Time, such redemption shall be
submitted for approval to the holders of Rights. Such approval shall be deemed to have been given if the redemption is approved
by holders of Rights by a majority of the votes cast by the holders of Rights represented in person or by proxy at and entitled
to vote at a meeting of such holders. For the purposes hereof, each outstanding Right (other than Rights which are Beneficially
Owned by any Person referred to in clauses (i) to (v) inclusive of the definition of Independent Shareholders) shall be entitled
to one vote, and the procedures for the calling, holding and conduct of the meeting shall be those, as nearly as may be, which
are provided in the Company’s by-laws and the British Columbia Business Corporations Act with respect to meetings of shareholders
of the Company.

 

    	36

    	 

    

 

		5.2	Expiration

 

No Person shall have any rights whatsoever
pursuant to this Agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in Section
4.1 of this Agreement.

 

		5.3	Issuance of New Rights Certificates

 

Notwithstanding any of the provisions of
this Agreement or the Rights to the contrary, the Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board of Directors to reflect any adjustment or change in the number or kind or class of securities
purchasable upon exercise of Rights made in accordance with the provisions of this Agreement.

 

		5.4	Supplements and Amendments

 

(a)          The
Company may make amendments to this Agreement to correct any clerical or typographical error or which are required to maintain
the validity of this Agreement as a result of any change in any applicable legislation or regulations or rules thereunder. The
Company may, prior to the date of the shareholders’ meeting to be held prior to the Meeting Deadline Date referred to in
Section 5.15(b), supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights without the
approval of any holders of Rights or Voting Shares in order to make any changes which the Board of Directors acting in good faith
may deem necessary or desirable. Notwithstanding anything in this Section 5.4 to the contrary, no such supplement or amendment
shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent to such supplement or amendment.

 

(b)          Subject
to Subsection 5.4(a) and the prior approval of the Toronto Stock Exchange (if required), the Company may, with the prior approval
of the holders of Voting Shares obtained as set forth below, at any time before the Separation Time, supplement, amend, vary, rescind
or delete any of the provisions of this Agreement and the Rights (whether or not such action would materially adversely affect
the interests of the holders of Rights generally). Such consent shall be deemed to have been given if the action requiring such
approval is authorized by the affirmative vote of a majority of the votes cast by Independent Shareholders present or represented
at and entitled to be voted at a meeting of the holders of Voting Shares duly called and held in compliance with applicable laws
and the articles and by-laws of the Company.

 

(c)          Subject
to Subsection 5.4(a), the Company may, with the prior approval of the holders of Rights, at any time on or after the Separation
Time, supplement, amend, vary, rescind or delete any of the provisions of this Agreement and the Rights (whether or not such action
would materially adversely affect the interests of the holders of Rights generally), provided that no such amendment, variation
or deletion shall be made to the provisions of Article 4 except with the written concurrence of the Rights Agent thereto.

 

    	37

    	 

    

 

(d)          Any
approval of the holders of Rights shall be deemed to have been given if the action requiring such approval is authorized by the
affirmative votes of the holders of Rights present or represented at and entitled to be voted at a meeting of the holders of Rights
and representing a majority of the votes cast in respect thereof. For the purposes hereof, each outstanding Right (other than Rights
which are void pursuant to the provisions hereof) shall be entitled to one vote, and the procedures for the calling, holding and
conduct of the meeting shall be those, as nearly as may be, which are provided in the Company’s by-laws with respect to meetings
of shareholders of the Company.

 

(e)          Any
amendments made by the Company to this Agreement pursuant to Subsection 5.4(a) which are required to maintain the validity of this
Agreement as a result of any change in any applicable legislation or regulations or rules thereunder shall:

 

(i)          if
made before the Separation Time, be submitted to the shareholders of the Company at the next meeting of shareholders and the shareholders
may, by the majority referred to in Subsection 5.4(b), confirm or reject such amendment;

 

(ii)         if
made after the Separation Time, be submitted to the holders of Rights at a meeting to be called for on a date not later than immediately
following the next meeting of shareholders of the Company and the holders of Rights may, by resolution passed by the majority referred
to in Subsection 5.4(d), confirm or reject such amendment.

 

Any such amendment shall be effective
from the date of the resolution of the Board of Directors adopting such amendment, until it is confirmed or rejected or until it
ceases to be effective (as described in the next sentence) and, where such amendment is confirmed, it continues in effect in the
form so confirmed. If such amendment is rejected by the shareholders or the holders of Rights or is not submitted to the shareholders
or holders of Rights as required, then such amendment shall cease to be effective from and after the termination of the meeting
(or any adjournment of such meeting) at which it was rejected or to which it should have been but was not submitted or from and
after the date of the meeting of holders of Rights that should have been but was not held, and no subsequent resolution of the
Board of Directors to amend this Agreement to substantially the same effect shall be effective until confirmed by the shareholders
or holders of Rights as the case may be.

 

		5.5	Fractional Rights and Fractional Shares

 

(a)          The
Company shall not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights.
After the Separation Time, in lieu of issuing fractional Rights, the Company shall pay to the holders of record of the Rights Certificates
(provided the Rights represented by such Rights Certificates are not void pursuant to the provisions of Subsection 3.1(b), at the
time such fractional Rights would otherwise be issuable), an amount in cash equal to the fraction of the Market Price of one whole
Right that the fraction of a Right that would otherwise be issuable is of one whole Right.

 

    	38

    	 

    

 

(b)          The
Company shall not be required to issue fractions of Shares upon exercise of Rights or to distribute certificates which evidence
fractional Shares. In lieu of issuing fractional Shares, the Company shall pay to the registered holders of Rights Certificates,
at the time such Rights are exercised as herein provided, an amount in cash equal to the fraction of the Market Price of one Share
that the fraction of a Share that would otherwise be issuable upon the exercise of such Right is of one whole Share at the date
of such exercise.

 

		5.6	Rights of Action

 

Subject to the terms of this Agreement,
all rights of action in respect of this Agreement, other than rights of action vested solely in the Rights Agent, are vested in
the respective holders of the Rights. Any holder of Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other holders of Rights
enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce such holder’s right
to exercise such holder’s Rights, or Rights to which such holder is entitled, in the manner provided in such holder’s
Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.

 

		5.7	Regulatory Approvals

 

Any obligation of the Company or action
or event contemplated by this Agreement shall be subject to the receipt of any requisite approval or consent from any governmental
or regulatory authority, including without limiting the generality of the foregoing, any necessary approvals of The Toronto Stock
Exchange, or any other applicable stock exchange or market.

 

		5.8	Notice of Proposed Actions

 

In case the Company shall propose after
the Separation Time and prior to the Expiration Time to effect the liquidation, dissolution or winding up of the Company or the
sale of all or substantially all of the Company’s assets, then, in each such case, the Company shall give to each holder
of a Right, in accordance with Section 5.9 hereof, a notice of such proposed action, which shall specify the date on which such
Flip-in Event, liquidation, dissolution, or winding up is to take place, and such notice shall be so given at least 20 Business
Days prior to the date of taking of such proposed action by the Company.

 

    	39

    	 

    

 

		5.9	Notices

 

(a)          Notices
or demands authorized or required by this Agreement to be given or made by the Rights Agent or by the holder of any Rights to or
on the Company shall be sufficiently given or made if delivered, sent by registered or certified mail, postage prepaid (until another
address is filed in writing with the Rights Agent), or sent by facsimile or other form of recorded electronic communication, charges
prepaid and confirmed in writing, as follows:

 

Stellar Biotechnologies, Inc.

332 East Scott Street

Port Hueneme, California

93041 U.S.A.

 

Attention:          President and CEO

Facsimile:           (805) 488-2889

 

(b)          Notices
or demands authorized or required by this Agreement to be given or made by the Company or by the holder of any Rights to or on
the Rights Agent shall be sufficiently given or made if delivered, sent by registered or certified mail, postage prepaid (until
another address is filed in writing with the Company), or sent by facsimile or other form of recorded electronic communication,
charges prepaid and confirmed in writing, as follows:

 

Computershare Investor Services Inc.

3rd Floor

510 Burrard Street

Vancouver, BC V6C 3B9

Attention:          General Manager, Client Services

Facsimile:           (604) 661-9401

 

(c)          Notices
or demands authorized or required by this Agreement to be given or made by the Company or the Rights Agent to or on the holder
of any Rights shall be sufficiently given or made if delivered or sent by first class mail, postage prepaid, addressed to such
holder at the address of such holder as it appears upon the register of the Rights Agent or, prior to the Separation Time, on the
register of the Company for its Shares. Any notice which is mailed or sent in the manner herein provided shall be deemed given,
whether or not the holder receives the notice.

 

(d)          Any
notice given or made in accordance with this Section 5.9 shall be deemed to have been given and to have been received on the day
of delivery, if so delivered, on the third Business Day (excluding each day during which there exists any general interruption
of postal service due to strike, lockout or other cause) following the mailing thereof, if so mailed, and on the day of telegraphing,
telecopying or sending of the same by other means of recorded electronic communication (provided such sending is during the normal
business hours of the addressee on a Business Day and if not, on the first Business Day thereafter). Each of the Company and the
Rights Agent may from time to time change its address for notice by notice to the other given in the manner aforesaid.

 

    	40

    	 

    

 

		5.10	Costs of Enforcement

 

The Company agrees that if the Company
fails to fulfil any of its obligations pursuant to this Agreement, then the Company will reimburse the holder of any Rights for
the costs and expenses (including legal fees) incurred by such holder, on a solicitor and his own client basis, to enforce his
rights pursuant to any Rights or this Agreement.

 

		5.11	Successors

 

All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind and enure to the benefit of their respective successors
and assigns hereunder.

 

		5.12	Benefits of this Agreement

 

Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the holders of the Rights any legal or equitable right, remedy
or claim under this Agreement; further, this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the holders of the Rights.

 

		5.13	Governing Law

 

This Agreement and each Right issued hereunder
shall be deemed to be a contract made under the laws of the Province of British Columbia and for all purposes shall be governed
by and construed in accordance with the laws of such Province applicable to contracts to be made and performed entirely within
such Province.

 

		5.14	Severability

 

If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term or
provision shall be ineffective only as to such jurisdiction and to the extent of such invalidity or unenforceability in such jurisdiction
without invalidating or rendering unenforceable or ineffective the remaining terms and provisions hereof in such jurisdiction or
the application of such term or provision in any other jurisdiction or to circumstances other than those as to which it is specifically
held invalid or unenforceable.

 

		5.15	Effective Date

 

(a)          Subject
to Section 5.15(b), this Agreement:

 

(i)          shall
be effective and in full force and effect in accordance with its terms from and after the Effective Date, and shall constitute
the entire agreement between the parties pertaining to the subject matter hereof, as of such time on the Effective Date; and

 

    	41

    	 

    

 

(ii)         shall
expire and be of no further force or effect from and after the earlier of (the “Expiration Time”): (i) the Termination
Time, and (ii) the time at which the annual meeting of shareholders of the Company held in 2017 terminates.

 

(b)          Notwithstanding
Section 5.15(a), if this Agreement is not confirmed by a resolution passed by a majority of the votes cast by Independent Shareholders
who vote in respect of approval of this Agreement and the Rights Plan at a meeting of shareholders to be held not later than the
Meeting Deadline Date, then this Plan and all outstanding Rights shall terminate and be null and void and of no further force and
effect from and after the Close of Business on the Meeting Deadline Date.

 

		5.16	Determinations and Actions by the Board of Directors

 

All actions, calculations and determinations
(including all omissions with respect to the foregoing) which are done or made or approved by the Board of Directors in connection
herewith, in good faith, shall not subject the Board of Directors or any director of the Company to any liability to the holders
of the Rights.

 

		5.17	Compliance With Money Laundering Legislation

 

The Rights Agent shall retain the right
not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the
Rights Agent reasonably determines that such an act might cause it to be in non-compliance with any applicable anti-money laundering
or anti-terrorist legislation, regulation or guideline. Further, should the Rights Agent reasonably determine at any time that
its acting under this Agreement has resulted in it being in non-compliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline, then it shall have the right to resign on 10 days’ written notice to the Company, provided:
(i) that the Rights Agent’s written notice shall describe the circumstances of such non-compliance; and (ii) that if such
circumstances are rectified to the Rights Agent’s satisfaction within such 10-day period, then such resignation shall not
be effective.

 

		5.18	Privacy Provision

 

The parties acknowledge that federal and/or
provincial legislation that addresses the protection of individual’s personal information (collectively, “Privacy
Laws”) may apply to obligations and activities under this Agreement. Despite any other provision of this Agreement, neither
party will take or direct any action that would contravene, or cause the other to contravene, applicable Privacy Laws. The Company
will, prior to transferring or causing to be transferred personal information to the Rights Agent, obtain and retain required consents
of the relevant individuals to the collection, use and disclosure of their personal information, or will have determined that such
consents either have previously been given upon which the parties can rely or are not required under applicable Privacy Laws.

 

    	42

    	 

    

 

		5.19	Declaration as to Non-Canadian Holders

 

If in the opinion of the Board of Directors
(who may rely upon the advice of counsel) any action or event contemplated by this Agreement would require compliance by the Company
with the securities laws or comparable legislation of a jurisdiction outside Canada or the United States, the Board of Directors
acting in good faith shall take such actions as it may deem appropriate to ensure such compliance. In no event shall the Company
or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to persons who are citizens,
residents or nationals of any jurisdiction other than Canada or the United States, in which such issue or delivery would be unlawful
without registration of the relevant Persons or securities for such purposes.

 

		5.20	Time of the Essence

 

Time shall be of the essence in this Agreement.

 

		5.21	Force Majeure

 

No party shall be liable to the other,
or held in breach of this Agreement, if prevented, hindered, or delayed in the performance or observance of any provision contained
herein by reason of act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or
any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or
failures). Performance times under this Agreement shall be extended for a period of time equivalent to the time lost because of
delay that is excusable under this Section.

 

		5.22	Execution in Counterparts

 

This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall
together constitute one and the same instrument.

 

[REMAINDER OF THIS PAGE IS INTENTIONALLY
LEFT BLANK]

 

    	43

    	 

    

  

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of January 9, 2014.

 

STELLAR BIOTECHNOLOGIES, INC.

 

	Per:	/s/ Frank R. Oakes	 
	 	Frank R. Oakes, President/CEO	 
	 	 	 
	Per:	/s/ Kathi Niffenegger	 
	 	Kathi Niffenegger, Chief Financial Officer	 
	 	 	 
	COMPUTERSHARE INVESTOR SERVICES INC.
	 	 	 
	Per:	 	 
	 	Authorized Signatory	 
	 	 	 
	Per:	 	 
	 	Authorized Signatory	 

 

    	44

    	 

    

  

ATTACHMENT 1

 

STELLAR BIOTECHNOLOGIES, INC.

 

SHAREHOLDER RIGHTS AGREEMENT (as defined
below)

 

[Form of Rights Certificate]

 

	Certificate No.	Rights

 

THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION OF THE COMPANY, AND AMENDMENT OR TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT (AS DEFINED
BELOW). UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.1(b) OF THE SHAREHOLDER RIGHTS AGREEMENT (AS DEFINED BELOW)), RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED
PARTIES, MAY BECOME VOID.

 

Rights Certificate

 

This certifies that , or registered assigns,
is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject
to the terms, provisions and conditions of the Shareholder Rights Plan Agreement, dated as of January 9, 2014 as the same may be
amended or supplemented from time to time (the “Shareholder Rights Agreement”), between Stellar Biotechnologies,
Inc., a Company continued under the British Columbia Business Corporations Act, (the “Company”) and Computershare
Investor Services Inc., a trust company incorporated under the laws of Canada (the “Rights Agent”) (which term
shall include any successor Rights Agent under the Shareholder Rights Agreement), to purchase from the Company at any time after
the Separation Time (as such term is defined in the Shareholder Rights Agreement) and prior to the Expiration Time (as such term
is defined in the Shareholder Rights Agreement), one fully paid common share of the Company (a “Share”) at the
Exercise Price referred to below, upon presentation and surrender of this Rights Certificate with the Form of Election to Exercise
(in the form provided hereinafter) duly executed and submitted to the Rights Agent at its principal office in any of the cities
of Vancouver and Toronto. Until adjustment thereof in certain events as provided in the Shareholder Rights Agreement, the Exercise
Price shall be:

 

(a)          until
the Separation Time, an amount equal to three times the Market Price (as such term is defined in the Shareholder Rights Agreement),
from time to time, per Share; and

 

(b)          from
and after the Separation Time, an amount equal to three times the Market Price, as at the Separation Time, per Share.

 

In certain circumstances described in the
Shareholder Rights Agreement, each Right evidenced hereby may entitle the registered holder thereof to purchase or receive assets,
debt securities or shares of the Company other than Shares, or more or less than one Share, all as provided in the Shareholder
Rights Agreement.

 

    	 

    	 

    

 

This Rights Certificate is subject to all
of the terms and provisions of the Shareholder Rights Agreement, which terms and provisions are incorporated herein by reference
and made a part hereof and to which Shareholder Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Shareholder Rights Agreement are on file at the registered office of the Company and are available
upon request.

 

This Rights Certificate, with or without
other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights equal to
the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate
shall be exercised in part, the registered holder shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.

 

Subject to the provisions of the Shareholder
Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed
by the Company at a redemption price of $0.00001 per Right.

 

No fractional Shares will be issued upon
the exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the Shareholder
Rights Agreement.

 

No holder of this Rights Certificate, as
such, shall be entitled to vote or receive dividends or be deemed for any purpose the holder of Shares or of any other securities
which may at any time be issuable upon the exercise hereof, nor shall anything contained in the Shareholder Rights Agreement or
herein be construed to confer upon the holder hereof, 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, or to receive notice of meetings or other actions affecting shareholders (except as provided in
the Shareholder Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Shareholder Rights Agreement.

 

    	2

    	 

    

 

This Rights Certificate shall not be valid
or obligatory for any purpose until it shall have been countersigned by the Rights Agent.

 

WITNESS the facsimile signature of the
proper officer of the Company and its corporate seal.

 

	Date:	 	 
	 	 	 
	STELLAR BIOTECHNOLOGIES, INC.
	 	 	 
	Per:	 	 
	 	Authorized Signatory	 
	 	 	 
	Per:	 	 
	 	Authorized Signatory	 
	 	 	 
	Countersigned:
	 	 	 
	COMPUTERSHARE INVESTOR SERVICES INC.
	 	 	 
	Per:	 	 
	 	Authorized Signatory	 

 

    	3

    	 

    

  

FORM OF ASSIGNMENT

 

(To be executed by the registered holder
if such holder desires to transfer the Rights Certificate.)

 

FOR VALUE RECEIVED
_____________________________________________ hereby sells, assigns and transfers unto
____________________________________________________________________________________________________

 

 

(Please print name and address of transferee.)

 

the Rights represented by this Rights
Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint __________________________________________________________________________________,

as attorney, to transfer the within Rights on the books of the Company, with full power of substitution.

 

	Dated:	 	 	 
	 	 	 	Signature
	 	 	 	 
	 	 	 	 
	 	 	 	(Please print name of Signatory)

 

Signature Guaranteed: (Signature must correspond
to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change
whatsoever.)

 

Signature must be guaranteed by a Canadian
chartered bank or trust company, a member firm of a recognized stock exchange in Canada, a registered national securities exchange
in the United States, a member of the Investment Dealers Association of Canada or National Association of Securities Dealers,
Inc. or a commercial bank or trust company having an office or correspondent in Canada or the United States or a member of the
Securities Transfer Association Medallion (Stamp) Program. 

 

 

 

CERTIFICATE

(To be completed if true.)

 

The undersigned party transferring Rights
hereunder, hereby represents, for the benefit of all holders of Rights and Shares, that the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof or a Person acting jointly or in concert with any of the foregoing. Capitalized terms shall have the meaning
ascribed thereto in the Shareholder Rights Agreement.

 

	 	 
	 	Signature
	 	 
	 	 
	 	(Please print name of Signatory)

 

 

(To be attached to each Rights Certificate.)

 

    	4

    	 

    

 

FORM OF ELECTION TO EXERCISE

 

(To be executed by the registered holder
if such holder desires to exercise the Rights Certificate.)

 

	TO:	 	 

 

The undersigned hereby irrevocably elects
to exercise _____________________ whole Rights represented by the attached Rights Certificate to purchase the Shares or other securities,
if applicable, issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name
of:

 

	 
	(Name)
	 
	(Address)
	 
	(City and Province)
	 
	Social Insurance Number or other taxpayer identification number.

 

	Dated:	 	 	 
	 	 	 	Signature
	 	 	 	 
	 	 	 	 
	 	 	 	(Please print name of Signatory)

 

If such number of Rights shall not be all
the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in
the name of and delivered to:

 

	 
	(Name)
	 
	(Address)
	 
	(City and Province)
	 
	Social Insurance Number or other taxpayer identification number.

 

	Dated:	 	 	 
	 	 	 	Signature
	 	 	 	 
	 	 	 	 
	 	 	 	(Please print name of Signatory)

 

Signature Guaranteed: (Signature must correspond
to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change
whatsoever.)

 

Signature
must be guaranteed by a Canadian chartered bank or trust company, a member firm of a recognized stock exchange in Canada a registered
national securities exchange in the United States, a member of the Investment Dealers Association of Canada or National Association
of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in Canada or the United States
or a member of the Securities Transfer Association Medallion (Stamp) Program.

 

    	5

    	 

    

 

CERTIFICATE

(To be completed if true.)

 

The undersigned party exercising Rights
hereunder, hereby represents, for the benefit of all holders of Rights and Shares, that the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof or a Person acting jointly or in concert with any of the foregoing. Capitalized terms shall have the meaning
ascribed thereto in the Shareholder Rights Agreement.

 

	 	 
	 	Signature
	 	 
	 	 
	 	(Please print name of Signatory)

 

 

(To be attached to
each Rights Certificate.)

 

    	6

    	 

    

 

NOTICE

 

In the event the certification set forth
above in the Forms of Assignment and Election to Exercise is not completed, the Company will deem the Beneficial Owner of the Rights
evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Shareholder
Rights Agreement). No Rights Certificates shall be issued in exchange for a Rights Certificate owned or deemed to have been owned
by an Acquiring Person or an Affiliate or Associate thereof, or by a Person acting jointly or in concert with an Acquiring Person
or an Affiliate or Associate thereof.

 

    	7Exhibit 10.14

 

 

 

STELLAR BIOTECHNOLOGIES,
INC.

(the “Company”)

 

ADVANCE NOTICE POLICY

(Initially adopted by the Board of Directors on October 31, 2013)

 

 

 

INTRODUCTION

 

The Company is committed
to: (i) facilitating an orderly and efficient annual general or, where the need arises, special meeting, process; (ii) ensuring
that all shareholders receive adequate notice of the director nominations and sufficient information with respect to all nominees;
and (iii) allowing shareholders to register an informed vote.

 

The purpose of this Advance
Notice Policy (the “Policy”) is to provide shareholders, directors and management of the Company with direction
on the nomination of directors. This Policy is the framework by which the Company seeks to fix a deadline by which holders of record
of common shares of the Company must submit director nominations to the Company prior to any annual or special meeting of shareholders
and sets forth the information that a shareholder must include in the notice to the Company for the notice to be in proper written
form.

 

It is the position of
the Company that this Policy is beneficial to shareholders and other stakeholders. This policy will be subject to an annual review,
and will reflect changes as required by securities regulatory agencies or stock exchanges, or so as to meet industry standards.

 

NOMINATION OF DIRECTORS

 

1.Subject only to
the Business Corporations Act (British Columbia) (the “BCA”), only persons who are nominated in accordance
with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to
the board of directors of the Company (the “Board”) may be made at any annual meeting of shareholders, or at
any special meeting of shareholders (but only if the election of directors is a matter specified in the notice of meeting given
by or at the direction of the person calling such special meeting):

 

(a)by or
at the direction of the Board or an authorized officer of the Company, including pursuant to a notice of meeting;

 

(b)by or
at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the BCA
or a requisition of the shareholders made in accordance with the provisions of the BCA; or

 

(c)by any
person (a “Nominating Shareholder”):

 

(i)who, at
the close of business on the date of the giving of the notice provided for below in this Policy and on the record date for notice
of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting
or who beneficially owns shares that are entitled to be voted at such meeting; and

 

(ii)who complies
with the notice procedures set forth below in this Policy.

 

    	 

    	 

    

 

2.In addition to
any other applicable requirements, for a nomination to be made by a Nominating Shareholder, such person must have given (i) timely
notice thereof in proper written form to the Corporate Secretary of the Company at the principal executive offices of the Company
in accordance with this Policy and (ii) the representation and agreement with respect to each candidate for nomination as required
by, and within the time period specified in §5 of this Policy.

 

3.To be timely under
§2(i) of this Policy, a Nominating Shareholder’s notice to the Corporate Secretary of the Company must be made:

 

(a)in the
case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders;
provided, however, that in the event that the annual meeting of shareholders is called for a date that is less than 40 days after
the date (the “Notice Date”) on which the first public announcement of the date of the annual meeting was made,
notice by the Nominating Shareholder may be made not later than the tenth (10th) day following the Notice Date; and

 

(b)in the
case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether
or not called for other purposes), not later than the fifteenth (15th) day following the day on which the first public announcement
of the date of the special meeting of shareholders was made.

 

Notwithstanding the foregoing,
the Board may, in its sole discretion, waive any requirement in this §3.

 

4.To be in proper
written form, a Nominating Shareholder’s notice to the Corporate Secretary of the Company, under §2(i) of this Policy
must set forth:

 

(a)as to
each person whom the Nominating Shareholder proposes to nominate for election as a Director:

 

(i)the name,
age, business address and residence address of the person;

 

(ii)the principal
occupation or employment of the person;

 

(iii)the
class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record
by the person as of the record date for the Meeting of Shareholders (if such date shall then have been made publicly available
and shall have occurred) and as of the date of such notice;

 

(iv)a statement
as to whether such person would be “independent” of the Company (within the meaning of sections 1.4 and 1.5 of National
Instrument 52-110 – Audit Committees of the Canadian Securities Administrators, as such provisions may be amended
from time to time) if elected as a Director at such meeting and the reasons and basis for such determination; and

 

(v)any other
information relating to the person that would be required to be disclosed in a dissident’s proxy circular in connection with
solicitations of proxies for election of directors pursuant to the BCA and Applicable Securities Laws (as defined below); and

 

(b)as to
the Nominating Shareholder giving the notice:

 

(i)any information
relating to such Nominating Shareholder that would be required to be made in a dissident’s proxy circular in connection with
solicitations of proxies for election of directors pursuant to the BCA and Applicable Securities Laws, and

 

    	 

    	 

    

 

(ii)the class
or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record
by the Nominating Shareholder as of the record date for the Meeting of Shareholders (if such date shall then have been made publicly
available and shall have occurred) and as of the date of such notice.

 

5.To be eligible
to be a candidate for election as a director of the Company and to be duly nominated, a candidate must be nominated in the manner
prescribed in this Policy and the candidate for nomination, whether nominated by the Board or otherwise, must have previously delivered
to the Corporate Secretary of the Company at the principal executive offices of the Company, not less than 5 days prior to the
date of the Meeting of Shareholders, a written representation and agreement (in form provided by the Company) that such candidate
for nomination, if elected as a director of the Company, will comply with all applicable corporate governance, conflict of interest,
confidentiality, share ownership, majority voting and insider trading policies and other policies and guidelines of the Company
applicable to directors and in effect during such person’s term in office as a director (and, if requested by any candidate
for nomination, the Corporate Secretary of the Company shall provide to such candidate for nomination all such policies and guidelines
then in effect).

 

6.No person shall
be eligible for election as a director of the Company unless nominated in accordance with the provisions of this Policy; provided,
however, that nothing in this Policy shall be deemed to preclude discussion by a shareholder (as distinct from nominating directors)
at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the
provisions of the BCA. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance
with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing
provisions, to declare that such defective nomination shall be disregarded.

 

7.For purposes of
this Policy:

 

(a)“Affiliate”,
when used to indicate a relationship with a person, shall mean a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such specified person;

 

(b)“Applicable
Securities Laws” means the Securities Act (British Columbia) and the equivalent legislation in the other provinces
and in the territories of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any
such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities
commissions and similar regulatory authorities of each of the applicable provinces and territories of Canada;

 

(c)“Associate”,
when used to indicate a relationship with a specified person, shall mean (A) any corporation or trust of which such person owns
beneficially, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities
of such corporation or trust for the time being outstanding, (B) any partner of that person, (C) any trust or estate in which such
person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity, (D) a spouse
of such specified person, (E) any person of either sex with whom such specified person is living in conjugal relationship outside
marriage or (F) any relative of such specified person or of a person mentioned in clauses (D) or (E) of this definition if that
relative has the same residence as the specified person;

 

(d)“Derivatives
Contract” shall mean a contract between two parties (the “Receiving Party” and the “Counterparty”)
that is designed to expose the Receiving Party to economic benefits and risks that correspond substantially to the ownership by
the Receiving Party of a number of shares in the capital of the Company or securities convertible into such shares specified or
referenced in such contract (the number corresponding to such economic benefits and risks, the “Notional Securities”),
regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, shares
in the capital of the Company or securities convertible into such shares or other property, without regard to any short position
under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options, broad-based
index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate governmental authority
shall not be deemed to be Derivatives Contracts;

 

    	 

    	 

    

 

(e)“Meeting
of Shareholders” shall mean such annual shareholders meeting or special shareholders meeting, whether general or not,
at which one or more persons are nominated for election to the Board by a Nominating Shareholder;

 

(f)“owned
beneficially” or “owns beneficially” means, in connection with the ownership of shares in the capital
of the Company by a person, (A) any such shares as to which such person or any of such person’s Affiliates or Associates
owns at law or in equity, or has the right to acquire or become the owner at law or in equity, where such right is exercisable
immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any
payment, upon the exercise of any conversion right, exchange right or purchase right attaching to any securities, or pursuant to
any agreement, arrangement, pledge or understanding whether or not in writing; (B) any such shares as to which such person or any
of such person’s Affiliates or Associates has the right to vote, or the right to direct the voting, where such right is exercisable
immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any
payment, pursuant to any agreement, arrangement, pledge or understanding whether or not in writing; (C) any such shares which are
beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty’s Affiliates or Associates) under
any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to
which such person or any of such person’s Affiliates or Associates is a Receiving Party; provided, however that the number
of shares that a person owns beneficially pursuant to this clause (C) in connection with a particular Derivatives Contract shall
not exceed the number of Notional Securities with respect to such Derivatives Contract; provided, further, that the number of securities
owned beneficially by each Counterparty (including their respective Affiliates and Associates) under a Derivatives Contract shall
for purposes of this clause be deemed to include all securities that are owned beneficially, directly or indirectly, by any other
Counterparty (or any of such other Counterparty’s Affiliates or Associates) under any Derivatives Contract to which such
first Counterparty (or any of such first Counterparty’s Affiliates or Associates) is a Receiving Party and this proviso shall
be applied to successive Counterparties as appropriate; and (D) any such shares which are owned beneficially within the meaning
of this definition by any other person with whom such person is acting jointly or in concert with respect to the Company or any
of its securities;

 

(g)“public
announcement” shall mean disclosure in a press release reported by a national news service in Canada, or in a document
publicly filed by the Company or its agents under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com;
and

 

(h)the
symbol § followed by a number or some combination of numbers and letters refers to the section, paragraph or subparagraph
of this Policy so designated.

 

8.Notwithstanding
any other provision to this Policy, notice or any delivery given to the Corporate Secretary of the Company pursuant to this Policy
may only be given by personal delivery, facsimile transmission or by email (provided that the Corporate Secretary of the Company
has stipulated an email address for purposes of this notice, at such email address as stipulated from time to time), and shall
be deemed to have been given and made only at the time it is served by personal delivery, email (at the address as aforesaid) or
sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the Corporate
Secretary at the address of the principal executive offices of the Company; provided that if such delivery or electronic communication
is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then
such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.

 

    	 

    	 

    

 

9.In no event shall
any adjournment or postponement of a Meeting of Shareholders or the announcement thereof commence a new time period for the giving
of a Nominating Shareholder’s notice as described in §3 of this Policy or the delivery of a representation and agreement
as described in §5 of this Policy.

 

CURRENCY

 

This Policy was last
revised and approved by the Board on October 31, 2013.

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