Exhibit 10.34

 
SUBSCRIPTION AGREEMENT
 
This SUBSCRIPTION AGREEMENT (this “Agreement”) is made and entered into by and
among MetaStat, Inc., a Nevada corporation (the “Company”), and each of the
eligible investors who executes this Agreement and whose names are set forth on
the signature pages hereto (individually, a “Subscriber” and collectively, the
“Subscribers”).
 
RECITALS
 
WHEREAS, the Company is conducting a private placement (the “Offering”) of units
(each a “Unit” and collectively the “Units”) to Subscribers who qualify as
“accredited investors”, as such term is defined in Rule 501(a) of Regulation D
of the Securities Act of 1933, as amended (the “Securities Act”);
 
WHEREAS, the Company is offering up to a maximum of (the “Maximum Offering”) 500
Units or $5,000,000, subject to increase of the Maximum Offering by up to 225
Units or $2,250,000 (the “Over-Allotment”), through [_________________] (the
“Placement Agent”) and such other sub-placement agent(s) or selected dealer(s)
as the Company and the Placement Agent may designate, on a “best efforts” basis;
 
WHEREAS, each Unit consists of (i) 5,000 shares (the “Shares”) of the Company’s
common stock, par value $0.0001 per share (the “Common Stock”), and (ii) a
warrant to purchase 2,500 shares of Common Stock at a purchase price of $3.00
per share and a term of 5 years (the “Warrants”);
 
WHEREAS, the offering price is $10,000 per Unit (the “Purchase Price”);
 
WHEREAS, the Units are being offered pursuant to the Company’s Confidential
Private Placement Memorandum (together with all exhibits, appendices, schedules,
supplements and amendments thereto, collectively the “Memorandum”), to which
this Agreement is attached as Exhibit A;
 
WHEREAS, the Units will be offered through the date 90 days after the date of
the Memorandum, subject to an extension for up to an additional 90-day period as
the Company and the Placement Agent may mutually agree (the “Termination Date”),
 
WHEREAS, the Company may conduct an initial closing on an amount mutually agreed
by the Company and the Placement Agent (the “Initial Closing”) or one or more
subsequent closings at any time following the Initial Closing on or before the
Termination Date. The Company may accept or reject subscriptions in whole or in
part in its discretion for any reason;
 
WHEREAS, following one or more closings of an aggregate of 200 Units or
$2,000,000 in cash subscriptions has been subscribed for, a portion of the
Purchase Price may be paid by certain Subscribers forgiving outstanding
indebtedness in the aggregate amount of up to $2,076,000 owed by the Company as
evidenced by promissory notes held by such Subscribers (the “Note Exchange”), as
more fully described in the Memorandum;
 
WHEREAS, the Company and the Subscribers are executing and delivering this
Agreement in accordance with and in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b)
of Regulation D (“Regulation D”) as promulgated by the United States Securities
and Exchange Commission (the “Commission”) under the Securities Act; and
 
WHEREAS, the Subscriber desires to purchase and the Company desires to sell that
amount of Units set forth on the signature page hereof on the terms and
conditions hereinafter set forth;

 
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AGREEMENT
 
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Subscribers
hereby agree as follows:
 
ARTICLE I
 
Subscription for Units
 
Section 1.1                      Subscription. The Company is offering to each
Subscriber and each Subscriber hereby irrevocably subscribes for and agrees to
purchase from the Company the number of Units as set forth on such Subscriber’s
signature page hereto at a Purchase Price of $10,000 per Unit for aggregate
consideration as set forth on the Subscriber’s signature page hereto (the
“Subscription Proceeds”), subject to a minimum subscription of one (1) Unit
($10,000), unless the Company in its sole discretion agrees to accept a
subscription for a lesser number of Units. All subscriptions are irrevocable by
the Subscriber. The subscription is not transferable or assignable by the
Subscriber.
 
Section 1.2                      Payment.
 
(a)           The Subscription Proceeds shall be paid to Signature Bank, as
escrow agent for the Company (the “Escrow Agent”), by wire transfer of
immediately available funds in U.S. dollars (or in the form of a personal or
cashier’s check) in accordance with the wire and delivery instructions attached
hereto as Exhibit A. The Subscription Proceeds must accompany the documents
indicated in Section 1.3 below.
 
(b)           The Subscriber acknowledges and agrees that this Agreement and any
other documents delivered in connection herewith will be held by the Placement
Agent on behalf of the Company, and any Subscription Proceeds will be deposited
in an escrow account (the “Escrow Account”), held by the Escrow Agent. In the
event that this Agreement is not accepted in whole or in part by the Company for
whatever reason, this Agreement and any other documents delivered in connection
herewith will be returned to the Subscriber by the Placement Agent at the
address of the Subscriber as set forth on the Subscriber’s signature page
hereto, and any Subscription Proceeds deposited in the Escrow Account shall be
returned to the Subscriber by the Escrow Agent in accordance with the payment
information provided by the Placement Agent to the Escrow Agent.
 
(c)           In connection with the Note Exchange, certain Subscribers who are
holders of the Company’s indebtedness in an amount of up to $2,076,000 may
tender their indebtedness in the form of promissory notes to the Company in lieu
of payment of the Subscription Proceeds as described in Section 1.2(a) above.
 
Section 1.3                      Documents Required from Subscriber. In order to
subscribe for the Units, each Subscriber will be required to complete, execute
and deliver to the Company the following:

 
(i)           this Agreement;
 
(ii)          the Confidential Private Subscriber Questionnaire, which is
attached as Exhibit B to the Memorandum; and
 
(iii)         the Registration Rights Agreement, which is attached as Exhibit C
to the Memorandum.
 
 
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Section 1.4                      Obligations of the Escrow Agent. The
Subscription Proceeds shall be deposited by the Subscriber on behalf of the
Placement Agent in the Escrow Account pursuant to the instructions in Exhibit A
attached hereto. The Subscriber agrees that the Escrow Agent shall have no
accountability or obligations to the Subscriber whatsoever, and acknowledges
that the Escrow Agent is accountable only to the Company and the Placement
Agent. The Subscriber agrees that when the Subscription Proceeds are deposited
in the Escrow Account, the Escrow Agent’s only duty shall be to deliver the
Subscription Proceeds to the Company or its designees, all solely according to
payment instructions submitted jointly by the Company and the Placement Agent
(the “Payment Instructions”), and the Escrow Agent shall require no further
instructions from the Subscriber in delivering the same to the Company or its
designees. In the event the Company rejects this subscription in whole or in
part, the Escrow Agent shall return the Subscription Proceeds directly to the
investor without interest or deduction there from. The proceeds of the Escrow
Account shall be distributed in accordance with Section 1.5.
 
Section 1.5                      Closings. The Initial Closing  of the purchase
and sale of the Units to be acquired by the Subscribers from the Company under
this Agreement shall take place at such time as Subscribers have executed this
Agreement to purchase an amount as mutually agreed by the Company and the
Placement Agent (which amount shall not include the Note Exchange pursuant to
the terms of Section 1.2(c) hereof), and all of the conditions applicable to the
Initial Closing shall have been fulfilled or waived in accordance herewith (the
“Initial Closing Date”). After the Initial Closing, the Company may conduct any
number of additional closings at any time (each, an “Additional Closing” and,
together with the Initial Closing, a “Closing”) so long as the final Additional
Closing occurs on or before the Termination Date. Subject to all conditions to
Closing having been satisfied or waived, each Closing shall take place at such
time and place as the parties shall agree (a “Closing Date”). For purposes of
this Agreement, a “business day” means a day (A) other than Saturday or Sunday
and (B) on which commercial banks are open for business in New York City, New
York. Closing of the Offering of the Units shall occur in the following manner:

 
(a)           The Escrow Agent shall upon notice of a Closing Date jointly from
the Company and the Placement Agent, release to the Company or its designees the
proceeds of the Offering in accordance with the Payment Instructions.
 
(b)           Within five (5) business days after each Closing Date, the Company
shall irrevocably instruct its transfer agent to deliver to the Subscriber one
or more stock certificates bearing the restrictive legends described herein,
evidencing such number of Shares equal to 5,000 multiplied by the number of
Units the Subscriber is purchasing as is set forth on Subscriber’s signature
page hereto.
 
(c)           Within five (5) business days after each Closing Date, the Company
shall prepare and deliver to the Subscriber one or more Warrants, which is
attached as Exhibit D to the Memorandum, evidencing such number of Warrants
equal to 2,500 multiplied by the number of Units the Subscriber is purchasing as
is set forth on Subscriber’s signature page hereto.
 
ARTICLE II
 
Representations and Warranties of the Company
 
Section 2.1                      Representations and Warranties of the Company.
The Company hereby represents and warrants to the Subscribers, as of the date of
each Closing Date (except for the representations and warranties that speak as
of a specific date, which shall be made as of such date), as follows:
 
(a)           Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada and has the requisite corporate power to own, lease
and operate its properties and assets and to conduct its business as it is now
being conducted. The Company is duly qualified to do business and is in good
standing in every jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary except for any
jurisdiction(s) (alone or in the aggregate) in which the failure to be so
qualified will not have a Material Adverse Effect on the Company’s consolidated
financial condition. “Material Adverse Effect” means any material adverse effect
on the business, operations, properties, or financial condition of the Company
and its Subsidiaries, taken as a whole, and/or any condition, circumstance, or
situation that would prohibit or otherwise materially interfere with the ability
of the Company to perform any of its obligations under this Agreement or the
Transaction Documents (as defined below) in any material respect.
 
(b)           Corporate Power; Authority and Enforcement. The Company has the
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Warrants and any other
document in connection with the Memorandum (collectively, the “Transaction
Documents”), to carry out the provisions of Transaction Documents and to issue
and sell the Units in accordance with the terms hereof. The execution, delivery
and performance of the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action, and no further consent or
authorization of the Company or its board of directors or stockholders is
required. Each of the Transaction Documents constitutes, or shall constitute
when executed and delivered, a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor’s
rights and remedies or by other equitable principles of general application.
 
 
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(c)           Internal Documents. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated herein and therein do not and will not (i) violate any
provision of its articles of incorporation, by-laws or other organizational or
charter documents including, but not limited to, all documents setting forth
and/or establishing the terms, rights, conditions and/or limitations of any of
the Company’s stock (the “Internal Documents”), (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, mortgage, deed of
trust, indenture, note, bond, license, lease agreement, instrument or obligation
to which the Company is a party or by which it or its properties or assets are
bound, (iii) create or impose a lien, mortgage, security interest, pledge,
charge or encumbrance (collectively, “Lien”) of any nature on any property of
the Company under any agreement or any commitment to which the Company is a
party or by which the Company is bound or by which any of its respective
properties or assets are bound, or (iv) result in a violation of any federal,
state, local or foreign statute, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries are bound or affected, provided, however,
that, excluded from the foregoing in all cases (other than clause (i) above) are
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
 
(d)           Issuance of Units, Etc. The Units, the Shares and the Warrants
comprising the Units, to be issued at each Closing have been duly authorized by
all necessary corporate action and the Shares, when paid for or issued in
accordance with the terms hereof, will be validly issued and outstanding, fully
paid and nonassessable and, immediately after each Closing, the Subscribers will
be the owners of all of such securities and have good and valid title to all of
such securities, free and clear of all encumbrances, except as may be imposed
under federal and state securities laws. When the shares of Common Stock
underlying the Warrants (the “Warrant Shares”) are issued in accordance with the
terms of the Warrants, such Warrant Shares will be duly authorized by all
necessary corporate action and validly issued and outstanding, fully paid and
nonassessable, and the holders will be entitled to all rights accorded to a
holder of Common Stock and will be the record and beneficial owners of all of
such securities and have good and valid title to all of such securities, free
and clear of all encumbrances.
 
(e)           Subsidiaries. Each Subsidiary has been duly incorporated or
otherwise organized and is validly existing and in good standing in each of
their respective jurisdictions of incorporation or organization.  Each
Subsidiary is duly qualified to do business and is in good standing in every
jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary except for any jurisdiction(s) (alone or
in the aggregate) in which the failure to be so qualified will not have a
Material Adverse Effect. There are no outstanding preemptive, conversion or
other rights, options, warrants or agreements granted or issued by or binding
upon any Subsidiary for the purchase or acquisition of any shares of capital
stock of any Subsidiary or any other securities convertible into, exchangeable
for or evidencing the rights to subscribe for any shares of such capital stock.
Neither the Company nor any Subsidiary is subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares of the
capital stock of any Subsidiary or any convertible securities, rights, warrants
or options of the type described in the preceding sentence. Neither the Company
nor any Subsidiary is party to, nor has any knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of any
Subsidiary.  For the purposes of this Agreement, “Subsidiary” shall mean any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by the Company and/or any
of its other Subsidiaries. MetaStat Biomedical Corporation, a Delaware
corporation, is wholly owned by the Company and is the Company’s only
Subsidiary.
 
(f)           Commission Documents, Financial Statements. For the two year
period preceding the date hereof, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Commission pursuant to the reporting requirements of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), including material filed pursuant to
Section 13(a) or 15(d) of the Exchange Act (all of the foregoing including
filings incorporated by reference therein being referred to herein as the
“Commission Documents”). The Company has not provided to the Subscribers any
material non-public information or other information which, according to
applicable law, rule or regulation, was required to have been disclosed publicly
by the Company but which has not been so disclosed, other than (i) with respect
to the transactions contemplated by this Agreement, or (ii) pursuant to a
non-disclosure or confidentiality agreement signed by the Subscribers, if any.
At the time of the respective filings, the Form 10-K’s and the Form 10-Q’s filed
during the two-year period preceding the date hereof complied in all material
respects with the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder and other federal, state and local
laws, rules and regulations applicable to such documents. The financial
statements of the Company included in the Commission Documents (the “Financial
Statements”) complied as of their respective filing dates as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. The Financial Statements have been prepared in
accordance with United States generally accepted accounting principles (“GAAP”)
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in the Financial Statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements), and fairly present in all
material respects the consolidated financial position of the Company as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). The Company is an issuer that is subject to Rule 144(i) under the
Securities Act.
 
 
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(g)           No Material Adverse Effect. Since November 30, 2015, neither the
Company, nor any Subsidiary has experienced or suffered any Material Adverse
Effect.
 
(h)           No Undisclosed Events or Circumstances.  No event or circumstance
has occurred or exists with respect to the Company or any Subsidiary or their
respective businesses, properties, operations or financial condition, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
 
       (i)           Memorandum, Use of Proceeds. The Memorandum, as of its date
or such later date on which the Memorandum is amended or supplemented, did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. The
Company hereby covenants to use the monies raised from the Offering as described
in the “Use of Proceeds” section of the Memorandum.
 
(j)           Title to Assets. Each of the Company and its Subsidiaries has good
and marketable title to (i) all properties and assets purportedly owned or used
by them as reflected in the Financial Statements, (ii) all properties and assets
necessary for the conduct of their business as currently conducted, and (iii)
all of the real and personal property reflected in the Financial Statements free
and clear of any Lien. All leases are valid and subsisting and in full force and
effect.
 
(k)           Actions Pending. There is no action, suit, claim, investigation,
arbitration, alternate dispute resolution proceeding or any other proceeding
pending or, to the knowledge of the Company, threatened against or involving the
Company or any Subsidiary (i) which questions the validity of this Agreement or
any of the other Transaction Documents or the transactions contemplated hereby
or thereby or any action taken or to be taken pursuant hereto or thereto or (ii)
involving any of their respective properties or assets. To the knowledge of the
Company, there are no outstanding orders, judgments, injunctions, awards or
decrees of any court, arbitrator or governmental or regulatory body against the
Company or any Subsidiary or any of their respective executive officers or
directors in their capacities as such.
 
(l)           Compliance with Law. The Company and each Subsidiary have all
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals necessary for the conduct of their respective
business as now being conducted by it unless the failure to possess such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
 
(m)           No Violation of Law.  The business of the Company and each
Subsidiary is not being conducted in violation of any federal, state, local or
foreign governmental laws, or rules, regulations and ordinances of any of any
governmental entity, except for possible violations which singularly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
The Company is not required under federal, state, local or foreign law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents, or issue and sell the Units in accordance with the terms hereof or
thereof (other than (x) any consent, authorization or order that has been
obtained as of the date hereof, (y) any filing or registration that has been
made as of the date hereof or (z) any filings which may be required to be made
by the Company with the Commission or state securities administrators subsequent
to the Closing).
 
(n)           Taxes. The Company and each Subsidiary, to the extent its
applicable, has accurately prepared and filed all federal, state and other tax
returns required by law to be filed by it, has paid or made provisions for the
payment of all taxes shown to be due and all additional assessments, and
adequate provisions have been and are reflected in the consolidated financial
statements of the Company for all current taxes and other charges to which the
Company or any Subsidiary, if any, is subject and which are not currently due
and payable. None of the federal income tax returns of the Company have been
audited by the Internal Revenue Service. The Company has no knowledge of any
additional assessments, adjustments or contingent tax liability (whether
federal, state or foreign) of any nature whatsoever, whether pending or
threatened against the Company or any Subsidiary for any period, nor of any
basis for any such assessment, adjustment or contingency.
 
(o)           Intellectual Property. Each of the Company and its Subsidiaries
owns or has the lawful right to use all patents, trademarks, domain names
(whether or not registered) and any patentable improvements or copyrightable
derivative works thereof, websites and intellectual property rights relating
thereto, service marks, trade names, copyrights, licenses and authorizations, if
any, and all rights with respect to the foregoing, if any, which are necessary
for the conduct of their respective business as now conducted without any
conflict with the rights of others, except where the failure to so own or
possess would not have a Material Adverse Effect (collectively, the
“Intellectual Property Rights”). The Company has not received a written notice
that any of the Intellectual Property Rights used by the Company violates or
infringes upon the rights of any person. There is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by any person
that the Company’s business as now conducted infringes or otherwise violates any
patent, trademark, copyright, trade secret or other proprietary rights of
another. To the Company’s knowledge, there is no existing infringement by
another person of any of the Intellectual Property Rights that would have or
would reasonably be expected to have a Material Adverse Effect. The Company has
taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their Intellectual Property Rights, except where failure to do
so could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
 
 
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(p)           Securities Act of 1933. Assuming the accuracy of the
representations and warranties of the Subscribers set forth in Section 3.1
hereof, the Company has complied with all applicable federal and state
securities laws in connection with the offer, issuance and sale of the Shares
and Warrants hereunder. Neither the Company nor anyone acting on its behalf,
directly or indirectly, has or will sell, offer to sell or solicit offers to buy
any of the Shares, the Warrants or similar securities to, or solicit offers with
respect thereto from, or enter into any preliminary conversations or
negotiations relating thereto with, any person, or has taken or will take any
action so as to bring the issuance and sale of any of the shares of Common Stock
and the Warrants in violation of the registration provisions of the Securities
Act and applicable state securities laws, and neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
any of the shares of Common Stock and the Warrants.
 
(q)           Governmental Approvals. Except for the filing of any notice prior
or subsequent to the Closing Date that may be required under applicable state
and/or federal securities laws (which if required, shall be filed on a timely
basis), including the filing of a Form D, Current Report on Form 8-K and a
registration statement or statements pursuant to the Registration Rights
Agreement, no authorization, consent, approval, license, exemption of, filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution or delivery of the Shares, or for the
performance by the Company of its obligations under the Transaction Documents.
 
(r)           Investment Company Act. The Company is not, and is not an
affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an affiliate of, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.  The Company shall conduct its
business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.
 
(s)           No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any security or solicited any offers to
buy any security under circumstances that would cause the Offering and/or sale
of the Units pursuant to this Agreement to be integrated with prior offerings by
the Company for purposes of the Securities Act which would prevent the Company
from selling the Units pursuant to Rule 506 under the Securities Act, nor will
the Company or any of its affiliates take any action or steps that would cause
the offering and/or sale of the Units to be integrated with other offerings.
 
(t)           Sarbanes-Oxley Act. The Company is in compliance in all material
respects with the applicable provisions of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”), and the rules and regulations promulgated thereunder,
that are effective and for which compliance by the Company is required as of the
date hereof.  The Company has established disclosure controls and procedures (as
such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) for
the Company and designed such disclosure controls and procedures to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms. The
Company’s certifying officers have evaluated the effectiveness of the Company’s
disclosure controls and procedures as of the end of the period covered by the
Company’s most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there
have been no changes in the Company’s internal control over financial reporting
(as such term is defined in the Exchange Act) that has materially affected, or
is reasonably likely to materially affect, the Company’s internal control over
financial reporting.
 
(u)           Certain Fees. Except as disclosed in the Memorandum, no brokers
fees, finders’ fees or financial advisory fees or commissions will be payable by
the Company with respect to the transactions contemplated by this Agreement and
the other Transaction Documents.
 
(v)           Listing and Maintenance Requirements. The Common Stock is
registered pursuant to Section 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from the OTCQB to the effect
that the Company is not in compliance with the listing or maintenance
requirements of the OTCQB. The Company is, and has no reason to believe that it
will not in the foreseeable future continue to be, in compliance with all such
listing and maintenance requirements.
 
 
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.
ARTICLE III
 
Representations and Warranties of the Subscribers

 
Section 3.1                      Representations and Warranties of Each of the
Subscribers. Each Subscriber, severally and not jointly with the other
Subscribers, hereby makes the following representations and warranties to the
Company as of the date hereof, with respect solely to itself and not with
respect to any other Subscriber:
 
(a)           Authorization and Power. Each Subscriber has the requisite power
and authority to enter into and perform this Agreement and each of the other
Transaction Documents to which such Subscriber is a party and to purchase the
Units being sold to it hereunder. The execution, delivery and performance of
this Agreement and each of the other Transaction Documents to which such
Subscriber is a party by such Subscriber and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate, partnership or limited liability company action, and no
further consent or authorization of such Subscriber or its board of directors,
stockholders, partners, members, or managers, as the case may be, is required.
This Agreement and each of the other Transaction Documents to which such
Subscriber is a party has been duly authorized, executed and delivered by such
Subscriber and constitutes, or shall constitute when executed and delivered, a
valid and binding obligation of such Subscriber enforceable against such
Subscriber in accordance with the terms hereof.
 
(b)           No Conflicts. The execution, delivery and performance of this
Agreement and each of the other Transaction Documents to which such Subscriber
is a party and the consummation by such Subscriber of the transactions
contemplated hereby and thereby or relating hereto do not and will not (i)
result in a violation of such Subscriber’s charter documents, bylaws, operating
agreement, partnership agreement or other organizational documents or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of any agreement, indenture
or instrument or obligation to which such Subscriber is a party or by which its
properties or assets are bound, or result in a violation of any law, rule, or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to such Subscriber or its properties (except for such conflicts,
defaults and violations as would not, individually or in the aggregate, have a
material adverse effect on such Subscriber). Such Subscriber is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or any other
Transaction Document to which such Subscriber is a party or to purchase the
Units in accordance with the terms hereof, provided, that for purposes of the
representation made in this sentence, such Subscriber is assuming and relying
upon the accuracy of the relevant representations and agreements of the Company
herein.
 
(c)           Status of Subscribers. Such Subscriber is an “accredited investor”
as defined in Regulation D under the Securities Act and as set forth on such
Confidential Private Subscriber Questionnaire attached as Exhibit B to the
Memorandum. Such Subscriber is not required to be registered as a broker-dealer
under Section 15 of the Exchange Act and such Subscriber is not a broker-dealer,
nor an affiliate of a broker-dealer, unless indicated on such Confidential
Private Subscriber Questionnaire.
 
(d)           Acquisition for Investment. Such Subscriber is acquiring the Units
and underlying securities solely for its own account for the purpose of
investment and not with a view to or for sale in connection with a distribution.
Such Subscriber does not have a present intention to sell Units or underlying
securities, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of the Units or underlying securities to or
through any person or entity; provided, however, that by making the
representations herein, such Subscriber does not agree to hold the Units or
underlying securities for any minimum or other specific term and reserves the
right to dispose of the Units or underlying securities at any time in accordance
with federal and state securities laws applicable to such disposition. Each
Subscriber acknowledges that it is able to bear the financial risks associated
with an investment in the Units and that it has been given full access to such
records of the Company and to the officers of the Company and received such
information as it has deemed necessary or appropriate to conduct its due
diligence investigation and has sufficient knowledge and experience in investing
in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.
 
(e)           Opportunities for Additional Information. Such Subscriber
acknowledges that such Subscriber has had the opportunity to ask questions of
and receive answers from, or obtain additional information from, the executive
officers of the Company concerning the financial and other affairs of the
Company.
 
(f)           No General Solicitation. Such Subscriber acknowledges that the
Units and the underlying securities were not offered to such Subscriber by means
of any form of general or public solicitation or general advertising, or
publicly disseminated advertisements or sales literature, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media, or broadcast over television or radio, or
(ii) any seminar or meeting to which such Subscriber was invited by any of the
foregoing means of communications.
 
 
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(g)           Rule 144. Such Subscriber understands that the Units and the
Shares and Warrants comprising the Units must be held indefinitely unless such
Shares and Warrant Shares are registered under the Securities Act or an
exemption from registration is available. Such Subscriber acknowledges that such
Subscriber is familiar with Rule 144, of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act (“Rule 144”),
and that such person has been advised that Rule 144 permits resales only under
certain circumstances. Such Subscriber understands that to the extent that Rule
144 is not available, such Subscriber will be unable to sell any Shares or
Warrant Shares without either registration under the Securities Act or the
existence of another exemption from such registration requirement.
 
(h)           General. Such Subscriber understands that the Units and underlying
securities are being offered and sold in reliance on a transactional exemption
from the registration requirements of federal and state securities laws and the
Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of such Subscriber
set forth herein in order to determine the applicability of such exemptions and
the suitability of such Subscriber to acquire the Units and underlying
securities.
 
(i)           Independent Investment. Except as may be disclosed in any filings
with the Commission by the Subscribers under Section 13 and/or Section 16 of the
Exchange Act, no Subscriber has agreed to act with any other Subscriber for the
purpose of acquiring, holding, voting or disposing of the Units or underlying
securities purchased hereunder for purposes of Section 13(d) under the Exchange
Act, and each Subscriber is acting independently with respect to its investment
in the Units and underlying securities.
 
(j)           Company’s Business. The Memorandum reflects the Company’s current
intentions and business, financial and other information currently available to
the Company and, as such, the Subscriber understands and acknowledges that the
precise nature of the Company’s operations, use of proceeds, capital needs, and
other factors inherent in the Company’s business can be expected to change from
time to time.
 
(k)           Legend. The undersigned hereby agrees that the Company will insert
the following legends on the face of the Shares, Warrants and the Warrant Shares
in compliance with applicable securities laws:

 
“THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION
OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.”
 
 
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ARTICLE IV
 
Indemnification
 
Section 4.1                     General Indemnity. The Company agrees to
indemnify and hold harmless the Subscribers (and their respective directors,
officers, managers, partners, members, shareholders, affiliates, agents,
successors and assigns) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation,
reasonable attorneys’ fees, charges and disbursements) incurred by the
Subscribers as a result of any breach of the representations, warranties or
covenants made by the Company herein. Each Subscriber severally but not jointly
agrees to indemnify and hold harmless the Company and its directors, officers,
affiliates, agents, successors and assigns from and against any and all losses,
liabilities, deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys’ fees, charges and disbursements) incurred by
the Company as a result of any breach of the representations, warranties or
covenants made by such Subscriber herein. The maximum aggregate liability of
each Subscriber pursuant to its indemnification obligations under this Article
IV shall not exceed the portion of the Purchase Price paid by such Subscriber
hereunder. In no event shall any “Indemnified Party” (as defined below) be
entitled to recover consequential or punitive damages resulting from a breach or
violation of this Agreement.

 
       Section 4.2                      Indemnification Procedure. Any party
entitled to indemnification under this Article IV (an “Indemnified Party”) will
give written notice to the indemnifying party of any matters giving rise to a
claim for indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article IV except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
Indemnified Party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the Indemnified Party a conflict of interest between it
and the indemnifying party may exist with respect of such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
Indemnified Party. In the event that the indemnifying party advises an
Indemnified Party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
Indemnified Party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the Indemnified Party’s costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The Indemnified Party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party, which relates to such action or claim. The indemnifying
party shall keep the Indemnified Party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such action or claim, then the
Indemnified Party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent, provided, however, that the indemnifying party shall
be liable for any settlement if the indemnifying party is advised of the
settlement but fails to respond to the settlement within thirty (30) days of
receipt of such notification. Notwithstanding anything in this Article IV to the
contrary, the indemnifying party shall not, without the Indemnified Party’s
prior written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
Indemnified Party or which does not include, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the Indemnified Party of a
release from all liability in respect of such claim. The indemnity agreements
contained herein shall be in addition to (a) any cause of action or similar
rights of the Indemnified Party against the indemnifying party or others, and
(b) any liabilities the indemnifying party may be subject to pursuant to the
law.
 
ARTICLE V
 
Miscellaneous
 
Section 5.1                     Fees and Expenses. Except as otherwise set forth
in this Agreement and the other Transaction Documents, each party shall pay the
fees and expenses of its advisors, counsel, accountants and other experts, if
any, and all other expenses, incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
 
Section 5.2                     Consent to Jurisdiction. Each of the Company and
the Subscribers (i) hereby irrevocably submits to the exclusive jurisdiction of
the United States District Court sitting in the Southern District of New York
and the courts of the State of New York located in New York county for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Transaction Documents or the transactions
contemplated hereby or thereby and (ii) hereby waives, and agrees not to assert
in any such suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such court, that the suit, action or proceeding
is brought in an inconvenient forum or that the venue of the suit, action or
proceeding is improper. Each of the Company and the Subscribers consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this Section 5.2 shall affect
or limit any right to serve process in any other manner permitted by law. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address for such notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law.
 
 
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Section 5.3                    Entire Agreement; Amendment. This Agreement and
the other Transaction Documents contains the entire understanding and agreement
of the parties with respect to the matters covered hereby and, except as
specifically set forth herein or in the Transaction Documents, neither the
Company nor any of the Subscribers makes any representations, warranty, covenant
or undertaking with respect to such matters and they supersede all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement nor any of the Transaction
Documents may be waived or amended other than by a written instrument signed by
the Company and the holders of over fifty percent (50%) of the Shares then
outstanding (the “Majority Holders”), and no provision hereof may be waived
other than by a written instrument signed by the party against whom enforcement
of any such waiver is sought. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Shares then outstanding.
No consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of any of the Transaction Documents
unless the same consideration is also offered to all of the parties to the
Transaction Documents.
 
Section 5.4                    Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of:
(a) the date of transmission, if such notice or communication is delivered via
electronic mail or “Email” at the Email address set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day
(defined below), (b) the next Trading Day after the date of transmission, if
such notice or communication is delivered via Email at the Email address set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto. For
purposes hereof, “Trading Day” means a day on which the OTCQB is open for
trading.
 
Section 5.5                    Waivers. No waiver by any party of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any other
provisions, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.
 
Section 5.6                    Headings. The section headings contained in this
Agreement (including, without limitation, section headings and headings in the
exhibits and schedules) are inserted for reference purposes only and shall not
affect in any way the meaning, construction or interpretation of this Agreement.
Any reference to the masculine, feminine, or neuter gender shall be a reference
to such other gender as is appropriate. References to the singular shall include
the plural and vice versa.
 
Section 5.7                    Successors and Assigns.  This Agreement may not
be assigned by a party hereto without the prior written consent of the Company
or the Subscribers, as applicable, provided, however, that, subject to federal
and state securities laws and as otherwise provided in the Transaction
Documents, a Subscriber may assign its rights and delegate its duties hereunder
in whole or in part (i) to a third party acquiring all or substantially all of
its shares of Common Stock or Warrants in a private transaction or (ii) to an
affiliate, in each case, without the prior written consent of the Company or the
other Subscribers, after notice duly given by such Subscriber to the Company
provided, that no such assignment or obligation shall affect the obligations of
such Subscriber hereunder and that such assignee agrees in writing to be bound,
with respect to the transferred securities, by the provisions hereof that apply
to the Subscribers.  The provisions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
 
Section 5.8                    No Third Party Beneficiaries. This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other person.
 
Section 5.9                     Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York,
without giving effect to any of the conflicts of law principles which would
result in the application of the substantive law of another jurisdiction. This
Agreement shall not be interpreted or construed with any presumption against the
party causing this Agreement to be drafted.
 
Section 5.10                  Survival. The representations and warranties of
the Company and the Subscribers shall survive the execution and delivery hereof
and the Closing hereunder for a period of one (1) year following the Closing
Date.
 
 
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Section 5.11                   Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together shall constitute one and the same
Agreement and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being understood that all
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
 
Section 5.12                  Publicity. The Company agrees that it will not
disclose, and will not include in any public announcement, the name of the
Subscribers without the consent of the Subscribers unless and until such
disclosure is required by law or applicable regulation, and then only to the
extent of such requirement.
 
Section 5.13                   Severability. The provisions of this Agreement
and the Transaction Documents are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement or the Transaction Documents
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement or the Transaction
Documents and such provision shall be reformed and construed as if such invalid
or illegal or unenforceable provision, or part of such provision, had never been
contained herein, so that such provisions would be valid, legal and enforceable
to the maximum extent possible.
 
Section 5.14                   Further Assurances. From and after the date of
this Agreement, upon the request of any Subscriber or the Company, each of the
Company and the Subscribers shall execute and deliver such instrument, documents
and other writings as may be reasonably necessary or desirable to confirm and
carry out and to effectuate fully the intent and purposes of this Agreement, the
Shares, the Warrants, the Warrant Shares, the Registration Rights Agreement and
the other Transaction Documents.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.
 

METASTAT, INC.
 
 
 
By:__________________________________________
     Name: Douglas A. Hamilton
     Title: President & Chief Executive Officer
 
 
Address for Notice:
 
MetaStat, Inc.
27 Drydock Ave., 2nd Floor
Boston, MA 02210
Attention: Douglas A. Hamilton, CEO; or
Daniel Schneiderman, Vice President, Finance
Telephone No.: (617) 531-6500
Facsimile No. (646) 304-7086
Email: dhamilton@metastat.com and dschneiderman@metastat.com
 
With a copy to (which shall not constitute notice):
 
 
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Attention:  David J. Levine, Esq.
Telephone No.: 212-407-4923
Facsimile No.: 212-818-1184
Email: dlevine@loeb.com
 
 

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SUBSCRIBER SIGNATURE PAGE TO SUBSCRIPTION AGREEMENT

IN WITNESS WHEREOF, the undersigned have caused this Subscription Agreement to
be duly executed by their respective authorized signatories as of the date first
indicated above.
 
Name of Subscriber: ________________________
 
Signature of Authorized Signatory of Subscriber: ________________________
 
Name of Authorized Signatory: ________________________
 
Title of Authorized Signatory: ________________________
 
Email Address of Authorized Signatory: ___________________
_____
Phone Number of Authorized Signatory: ________________________
 
Facsimile Number of Authorized Signatory: ________________________
 
Address for Notice to Subscriber:

________________________

________________________

________________________

Address for Delivery of Securities to Subscriber (if not same as address for
notice):

________________________

________________________

________________________

Number of Units Subscribed For: __________

Subscription Proceeds (Number of Units Subscribed For x Purchase Price of
$10,000): $__________

Shares to be Issued to Subscriber (Number of Units Subscribed For x 5,000):
__________

Warrant to be Issued to Subscriber (Number of Units Subscribed For x 2,500):
__________

Subscriber’s Tax I.D. or Social Security Number: __________
 
 
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EXHIBIT A
TO THE SUBSCRIPTION AGREEMENT

ESCROW WIRE INSTRUCTIONS
 
 
 
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