BROKER WARRANT CERTIFICATE NO. [●]

[●] BROKER WARRANTS entitling the holder to purchase one Common Share (as defined below) for each Broker Warrant represented hereby (subject to adjustment as hereinafter provided).

DIAMEDICA INC.

Per:

Name: [●]
Title:   [●]

Exercise FORM

TO:     DIAMEDICA INC.

The undersigned hereby exercises its right to purchase _______________ Common Shares and tenders herewith a certified cheque or bank draft payable to DiaMedica Inc. in the amount of $___________________, being the aggregate purchase price for such Common Shares.

The Common Shares are to be registered as follows:

Name of Registered Holder:     _________________________________________________________________________________________

Address of Registered Holder:  _________________________________________________________________________________________

_________________________________________________________________________________________

Social Insurance Number/

Business Number:

Note: If further nominees are intended, please attach (and initial) a schedule providing these particulars.

DATED this _____ day of _______________, ______.

__________________________                        Per:____________________________________

Signature Guaranteed                                                Name:

Title:

1.

If the Exercise Form indicates that Common Shares are to be issued to a person or persons other than the Holder, the signature of such Holder on the Exercise Form must be guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange, and the Holder must pay any applicable transfer taxes or fees.

2.

If the Exercise Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, this Broker Warrant Certificate must be accompanied by evidence, satisfactory to the Corporation, of the authority of such person to sign the Exercise Form.

1.1

Definitions

(a)

"Broker Warrants" means the warrants to acquire Common Shares represented by this Broker Warrant Certificate;

(b)

"Business Day" means a day other than a Saturday, Sunday or a statutory holiday in Toronto, Ontario and Winnipeg, Manitoba;

(c)

"Common Shares" means the common shares in the capital of the Corporation as such shares existed at the close of business on the Business Day immediately preceding the Effective Date;

(d)

“Current Market Price” of the Common Shares at any date means the volume-weighted average trading price per share for such shares for the last ten consecutive Trading Days ending three trading days prior to such date on the Exchange or, if on such date the Common Shares are not listed on the Exchange, on such stock exchange upon which such shares are listed and as selected by the directors, or, if such shares are not listed on any stock exchange, then on such over the counter market or otherwise as may be determined by the directors, acting reasonably;

(e)

"Effective Date" means [●], 2016;

(f)

“Exchange” means the TSX Venture Exchange;

(g)

"person" includes an individual, corporation, partnership, trustee or any unincorporated organization and words importing persons include individuals, corporations, partnerships, trustees and unincorporated organizations.

(h)

“Trading Day” means, with respect to a stock exchange, a day on which such exchange is open for the transaction of business and with respect to the over-the-counter market means a day on which the Exchange is open for the transaction of business.

1.2

Interpretation Not Affected by Headings

1.3

Applicable Law

2.1

Issue of Broker Warrants

2.2

Additional Broker Warrants

2.3

Issue in Substitution for Lost Broker Warrants

(a)

If any Broker Warrant Certificate becomes mutilated or is lost, destroyed or stolen, the Corporation, subject to applicable law and to Subsection 2.3(b), shall issue a new Broker Warrant Certificate of like tenor as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such mutilated Broker Warrant Certificate, or in lieu of and in substitution for such lost, destroyed or stolen Broker Warrant Certificate, and the Broker Warrants evidenced thereby shall be entitled to the benefits hereof and shall rank equally in accordance with its terms with all other Broker Warrants issued or to be issued hereunder.

(b)

The applicant for the issue of a new Broker Warrant Certificate pursuant to this Section 2.3 shall bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Corporation such evidence of ownership and of the loss, destruction or theft of the Broker Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to the Corporation, in its sole discretion, acting reasonably, and such applicant shall be satisfactory to the Corporation, in its sole discretion, acting reasonably, and such applicant shall also be required to furnish an indemnity or security in amount and form satisfactory to the Corporation, in its sole discretion, and shall pay the reasonable charges of the Corporation in connection therewith.

2.4

Warrantholder Not a Shareholder

3.1

Method of Exercise

(a)

The Holder may exercise the right conferred on such holder to purchase Common Shares by delivering to the Corporation a duly completed and executed exercise form in the form approved by the Corporation and substantially in the form attached hereto (the “Exercise Form”) of the registered holder, or his or her executors, or administrators or other legal representative or his or her attorney duly appointed by an instrument in writing in a form and manner satisfactory to the Corporation, together with such other documentation and the Corporation may reasonably require.

(b)

Each Exercise Form referred to in Subsection 3.1(a) shall be signed by the Holder or the Holder’s executors or administrators or other legal representatives or an attorney of the Holder duly appointed by an instrument in writing satisfactory to the Corporation, acting reasonably, and shall specify the number of Common Shares which the Holder wishes to acquire (being not more than those which the Holder is entitled to acquire pursuant to this Broker Warrant Certificate).

(c)

Notwithstanding the foregoing in this Section 3.1, a holder who exercises Broker Warrants pursuant to this Section 3.1 will be deemed to have certified that the Holder is not a resident of the United States or a U.S. Person on the Exercise Date. “United States” and “U.S. Person” are as defined in Regulations S under the United States Securities Act of 1933, as amended.

3.2

Effect of Exercise

3.3

Partial Exercise; Fractions

(a)

The Holder may exercise less than the total number of Broker Warrants represented hereby, in which case, the Corporation shall mail or deliver or cause to be mailed or delivered to the Holder at the Holder's address set out herein or, if so specified by the Holder, as set out in the applicable Exercise Form, a Broker Warrant Certificate duly executed by the Corporation representing the balance of the Broker Warrants not so exercised by the Holder within five Business Days of the applicable Exercise Date.

(b)

Notwithstanding anything herein contained, including any adjustment provided for in Article 4, the Corporation shall not be required, upon the exercise of any Broker Warrants (and after taking into account the aggregate number of Common Shares purchased pursuant to the exercise of all Broker Warrants by a particular Holder on a particular Exercise Date), to issue fractions of Common Shares or to distribute certificates which evidence a fractional Common Shares. The Corporation shall not be required to make any payment to a holder who, absent this Subsection 3.3(b), would otherwise have been entitled to receive a fractional share.

3.4

Expiration

3.5

Securities Restrictions

4.1

Common Shares

4.2

Notice to Regulatory Authorities

4.3

Legends

4.4

Transfer Taxes

5.1

Adjustments of Exercise Price and Number of Common Shares Issuable

(a)

if and whenever at any time from the date hereof and prior to the Time of Expiry, the Corporation shall:

(i)

subdivide, redivide or change its outstanding Common Shares into a greater number of shares;

(ii)

reduce, combine or consolidate its outstanding Common Shares into a smaller number of shares; or

(iii)

issue Common Shares or securities exchangeable for or convertible into Common Shares to all or substantially all the holders of the then outstanding Common Shares by way of stock dividend or otherwise (other than the issue of Common Shares to holders of Common Shares pursuant to their exercise of options or the exercise of previously granted warrants, including the Warrants issued hereunder, or as dividends in the form of Common Shares in lieu of dividends paid in the ordinary course on the Common Shares);

(b)

if and whenever at any time from the date hereof and prior to the Time of Expiry, there is a reclassification of the Common Shares or a capital reorganization of the Corporation other than as described in Subsection 5.1(a) or a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other body corporate, trust, partnership or other entity, or a sale, lease, exchange or transfer of the property and assets of the Corporation as an entirety or substantially as an entirety to any other body corporate, trust, partnership or other entity, the Holder shall be entitled to receive and shall accept, in lieu of the number of Common Shares originally sought to be acquired by it, the number of shares or other securities or property of the Corporation or of the body corporate, trust, partnership or other entity resulting from such consolidation, amalgamation, arrangement or merger, or to which such sale, lease, exchange or transfer may be made, as the case may be, that such Holder would have been entitled to receive on such reclassification, capital reorganization, consolidation, amalgamation, arrangement or merger, sale, lease, exchange or transfer, if, on the record date or the effective date thereof, as the case may be, the Holder had been the registered holder of the number of Common Shares originally sought to be acquired by it and to which it was entitled to acquire upon the exercise of the Warrants.

(c)

if and whenever at any time after the date hereof and prior to the Time of Expiry:

(i)

the Corporation shall fix a record date for the issuance of rights, options or warrants to all or substantially all of the holders of Common Shares entitling them to subscribe for or purchase Common Shares (or securities convertible into or exchangeable for Common Shares) at a price per share (or having a conversion price per share or exchange price per share) less than 95% of the Current Market Price on such record date, and

(ii)

the Corporation does not fix a record date for the same date as the record date provided in (c)(i) for the issuance to the Holders of equivalent rights, options or warrants as provided to holders of Common Shares in the event described in (c)(i) and on equivalent terms thereto,

A

=

Total number of Common Shares outstanding on the record date

B

=

Aggregate gross price of the total number of additional Common Shares offered for subscription or purchase (or the aggregate conversion or exchange price of the convertible or exchangeable securities so offered)

C

=

Current Market Price on the record date

D

=

Total number of additional Common Shares offered for subscription or purchase (or into or for which the convertible or exchangeable securities so offered are convertible or exchangeable)

(iii)

any Common Shares owned by or held for the account of the Corporation or any Subsidiary of the Corporation shall be deemed not to be outstanding for the purpose of any such computation;

(iv)

such adjustment shall be made successively whenever such a record date is fixed;

(v)

to the extent that any such rights, options or warrants are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Exercise Price shall then 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 then be in effect based upon the number and aggregate price of Common Shares (or securities convertible into Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be; and

(vi)

upon any adjustment of the Exercise Price pursuant to this subsection 5.1(c), the number of Common Shares subject to the right of purchase under each Broker Warrant shall be contemporaneously adjusted by multiplying the number of Common Shares theretofore obtainable on the exercise thereof by a fraction of which the numerator shall be the respective Exercise Price in effect immediately prior to such adjustment and the denominator shall be the respective Exercise Price resulting from such adjustment;

(d)

if and whenever at any time after the date hereof and prior to the Time of Expiry:

(i)

the Corporation shall fix a record date for the making of a distribution to all or substantially all the holders of its outstanding Common Shares of:

(A)

securities of any class, whether of the Corporation or any other corporation (other than a distribution of securities in respect of which an adjustment is provided for in Section 5.1(a), (b) or (c));

(B)

evidence of its indebtedness; or

(C)

assets or property of the Corporation; and

(ii)

the Corporation does not fix a record date for the same date as the record date provided for in (d)(i) for the issuance to Holders of equivalent shares, evidence of indebtedness, assets or property as provided to holders of Common Shares in the event described in (d)(i) and on equivalent terms thereto,

A

=

Total number of Common Shares outstanding on such record date

B

=

Current Market Price on such record date

C

=

Aggregate fair market value of such securities, evidence of indebtedness or assets so distributed

(iii)

any Common Shares owned by or held for the account of the Corporation or any Subsidiary of the Corporation shall be deemed not to be outstanding for the purpose of any such computation;

(iv)

such adjustment shall be made successively whenever such a record date is fixed;

(v)

to the extent that such distribution is not so made or any rights, options or warrants distributed are not exercised prior to their expiration thereof, the Exercise Price shall then 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 then be in effect based upon such shares, evidences of indebtedness or assets actually distributed, as the case may be; and

(vi)

upon any adjustment of the Exercise Price pursuant to Subsection 5.1(d), the number of Common Shares subject to the right of purchase under each Warrant shall be contemporaneously adjusted by multiplying the number of Common Shares theretofore obtainable on the exercise thereof by a fraction of which the numerator shall be the respective Exercise Price in effect immediately prior to such adjustment and the denominator shall be the respective Exercise Price resulting from such adjustment;

(e)

the adjustments provided for in this Article 5 in the number of Common Shares and classes of securities which are to be received on the exercise of Broker Warrants are cumulative. After any adjustment pursuant to this Section 5.1, the term "Common Shares" where used herein shall be interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section 5.1, the Holder is entitled to receive upon the exercise of its Broker Warrant, and the number of Common Shares indicated by any exercise made pursuant to a Broker Warrant shall be interpreted to mean the number of Common Shares or other property or securities a Holder is entitled to receive, as a result of such adjustment and all prior adjustments pursuant to this Section 5.1, upon the full exercise of a Broker Warrant;

(f)

subject only to this Article 5, no Holder shall be entitled to receive at any time cash or property of any kind in lieu of those Common Shares issuable on the exercise of the Broker Warrants held by such Holder; and

(g)

if and whenever at any time from the date hereof and prior to the Time of Expiry, the Corporation shall take any action affecting or relating to the Common Shares, other than any action described in this Article, which in the opinion of the Corporation would prejudicially affect the rights of any holders of Broker Warrants, the number of Common Shares to be issued on the exercise of Broker Warrants and the exercise price thereof will, subject to the approval of the Exchange, be adjusted by the Corporation in such manner, if any, and at such time, as the Corporation may in its sole discretion determine to be equitable in the circumstances.

5.2

No De Minimis Adjustments

5.3

Entitlement to Shares on Exercise of Warrant

5.4

Determination by Corporation's Auditors

5.5

Proceedings Prior to any Action Requiring Adjustment

6.1

Covenants of the Corporation

(a)

subject to Subsection 5.1(b), it will at all times maintain its corporate existence and will carry on its business as currently carried on;

(b)

it will reserve and there will remain unissued out of its authorize capital a sufficient number of Common Shares to satisfy the rights of acquisition provided for in the Broker Warrant Certificate; and

(c)

all Common Shares issued upon exercise of the right to purchase provided for herein shall, upon payment of the Exercise Price therefore, be issued as fully paid and non assessable shares.

7.1

Transfer of Broker Warrants

8.1

Amendments Generally

9.1

Notices