Exhibit 4.1





 






Exhibit
4.1


 


THIS
NOTE HAS 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 UNLESS METASTAT, INC. SHALL HAVE RECEIVED
AN OPINION OF COUNSEL THAT THE REGISTRATION OF SUCH SECURITIES
UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE
STATE SECURITIES LAWS IS NOT REQUIRED.


 


METASTAT,
INC.


 


Convertible
Promissory Note


 


	
 U.S. $1,000,000

	
 Issuance Date: January
17,2017



	
 No.: [_____] 


	
 Maturity Date: September 30,
2017














FOR VALUE RECEIVED, MetaStat, Inc., a
Nevada corporation (the “Company”), hereby
promises to pay to the order of [_____] or any permitted holder of
this convertible promissory note (the “Payee”), at the principal
office of the Payee set forth herein, or at such other place as the
Payee may designate in writing to the Company, the principal sum of
$1,000,000 with interest on the unpaid principal balance hereof at
a rate equal to ten percent (10%) per annum commencing effective as
of January 1, 2017 (the “Commencement Date”), in
such currency of the United States of America as at the time shall
be legal tender for the payment of public and private debts and in
immediately available funds, as provided in this convertible
promissory note (this “Note”). This Note has
been entered into pursuant to the terms of an exchange agreement
(the “Exchange
Agreement”) dated as of January 17, 2017 by and among
the Payee and the Company. Unless otherwise separately defined
herein, each capitalized term used in this Note shall have the same
meaning as set forth in the Exchange Agreement.


1. Principal and Interest Payments and
Prepayment.


(a) The Company shall repay
the entire principal balance plus accrued and unpaid interest
thereon (the “Outstanding Balance”)
then outstanding under this Note no later than September 30, 2017
(the “Maturity
Date”).


(b) Interest on the
outstanding principal balance of this Note shall accrue at a rate
of ten percent (10%) per annum commencing on the Commencement Date,
which interest shall be computed on the basis of the actual number
of days elapsed and a year of three hundred and sixty-five (365)
days. Furthermore, upon the occurrence of an Event of Default (as
defined below), then to the extent permitted by applicable law, the
Company will pay interest to the Payee on the then outstanding
principal balance of the Note from the date of the Event of Default
until this Note is paid in full at the rate of twelve percent (12%)
per annum.


(c) At the Company’s
sole option, the Company may prepay all or a portion of the
outstanding principal amount of this Note and/or all or a portion
of the accrued and unpaid interest hereon at any time prior to the
Maturity Date in cash by providing the Payee with written notice of
its intention to prepay this Note at least ten (10) days prior to
such payment. Any payments made under this Note shall be applied
first to the accrued and unpaid interest, if any, and the remainder
to the unpaid principal amount. Notwithstanding the foregoing, the
holder of this Note shall retain the right to convert this Note in
accordance with Section 2 below, for a period of ten days following
the Company’s notice of its intention to prepay this
Note.


 




 

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2. Voluntary Conversion of Principal and
Interest. Subject to the terms and conditions of this
Section 2 and provided this Note remains outstanding, the Payee
shall have the right, at the Payee’s option, to convert (the
“Conversion
Option”) the Outstanding Balance in full or in part
(the “Conversion
Amount”) into such number of fully paid and
non-assessable shares of the Company’s common stock (the
“Conversion
Shares”) as is determined in accordance with the
following formula: (the Conversion Amount as of the date of the
exercise of the Conversion Option) / ($2.00). If the Payee desires to exercise
the Conversion Option, the Payee shall, by personal delivery or
nationally-recognized overnight carrier, surrender the original of
this Note and give written notice to the Company (the
“Conversion
Notice”), which Conversion Notice shall (a) state the
Payee’s election to exercise the Conversion Option, (b) state
the Conversion Amount, and (c) provide for a representation and
warranty of the Payee to the Company that, as of the date of the
Conversion Notice, the Payee has not assigned or otherwise
transferred all or any portion of the Payee’s rights under
this Note to any third parties. The Company shall, as soon as
practicable thereafter, issue and deliver (or cause its transfer
agent to issue and deliver) to the Payee the number of Conversion
Shares to which the Payee shall be entitled upon exercise of the
Conversion Option and, in the event the entire Outstanding Balance
is not converted pursuant to the Conversion Option, the Company
shall issue the Payee a new Note in the remaining outstanding
principal balance.


3. Rank. This Note shall rank
senior to the Company’s issued and outstanding equity
securities and shall be senior with respect to payment to all
existing and future indebtedness of the Company except as otherwise
required by applicable law.


4. Additional Indebtedness. The
Company shall not, without first obtaining the consent of from the
Payee (which consent will not be unreasonably withheld), incur any
new indebtedness (indebtedness of the Company which does not exist
as of the date of this Note) while this Note is outstanding;
provided,
however, that with
respect to indebtedness incurred in the ordinary course of business
or from any strategic investors, the consent of the Payee will not
be required.


5. Prohibition on Liens. So long
as this Note is outstanding, the Company shall not create or impose
any material lien, charge or encumbrance upon any material property
or assets (including intellectual property) of the Company or any
of its subsidiaries pursuant to the terms of any agreement or
instrument to which any of them is a party or by which any of them
may be bound or to which any of their property or any of them is
subject, except for Permitted Liens (as defined below). Failure to
comply with the terms of this Section 5 shall be deemed an Event of
Default pursuant to Section 8 of this Note. “Permitted Liens” shall
mean: (1) liens in connection with the purchase of equipment
secured by such equipment; (2) liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or
other obligations of a like nature, in each case, other than for
the payment of debt incurred in the ordinary course of business;
(3) liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently
concluded; provided that any reserve or other appropriate provision
as is required in conformity with GAAP has been made therefor; (4)
pledges or deposits by a person under worker’s compensation
laws, unemployment insurance laws or similar legislation; (5) liens
imposed by law, such as carriers’, warehousemen’s,
landlord’s and mechanics’ liens, in each case, incurred
in the ordinary course of business; (6) judgment liens not giving
rise to an Event of Default so long as such lien is adequately
bonded and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceedings may
be initiated shall not have expired; (7) liens arising solely by
virtue of any statutory or common law provision relating to
banker’s liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a
creditor depository institution; and (8) liens under licensing
agreements entered into by the Company for use of intellectual
property entered into in the ordinary course of
business.


6. Non-Business Days. Whenever any
payment to be made shall be due on a Saturday, Sunday or a public
holiday under the laws of the State of New York, such payment may
be due on the next succeeding business day and such next succeeding
day shall be included in the calculation of the amount of accrued
interest payable on such date.


 




 

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7. Representations and Warranties of the
Company. The Company represents and warrants to the Payee as
follows:


(a) The Company has been
incorporated and is validly existing and in good standing under the
laws of the State of Nevada, with full corporate power and
authority to own, lease and operate its properties and to conduct
its business as currently conducted.


(b) This Note has been duly
authorized, validly executed and delivered on behalf of the Company
and is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by
bankruptcy or other laws affecting the enforcement of
creditors’ rights generally.


(c) The execution, delivery
and performance of this Note will not: (i) conflict with or result
in a material breach of or a default under any of the terms or
provisions of, (A) the Company’s articles of incorporation or
by-laws, or (B) any material provision of any indenture, mortgage,
deed of trust or other material agreement or instrument to which
the Company is a party or by which it or any of its material
properties or assets is bound; (ii) result in a violation of any
material provision of any law, statute, rule, regulation, or any
existing applicable decree, judgment or order by any court, Federal
or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company, or any of
its material properties or assets; or (iii) result in the creation
or imposition of any material lien or encumbrance upon any material
property or assets of the Company pursuant to the terms of any
agreement or instrument to which the Company is a party or may be
bound or to which the Company or any of its property is
subject.


(d) No consent, approval or
authorization of or designation, declaration or filing with any
governmental authority on the part of the Company is required in
connection with the valid execution and delivery of this
Note.


8. Events of Default. The
occurrence of any of the following events shall be an
“Event of
Default” under this Note:


(a) the Company shall fail to
make the payment of any principal amount outstanding for a period
of ten (10) business days after the date such payment shall become
due and payable hereunder; or


(b) the Company shall fail to
make the payment of any accrued and unpaid interest for a period of
ten (10) business days after the date such interest shall become
due and payable hereunder; or


(c) any material breach by the
Company of any representations or warranties made by the Company
herein; or


(d) the holder of any
indebtedness of the Company shall accelerate any payment of any
amount or amounts of principal or interest on any such indebtedness
(the “Indebtedness”) (other
than with respect to this Note and notes of like tenor) prior to
its stated maturity or payment date, the aggregate principal amount
of which Indebtedness is in excess of $500,000, whether such
Indebtedness now exists or shall hereinafter be created, and such
accelerated payment entitles the holder thereof to immediate
payment of such Indebtedness which is due and owing and such
indebtedness has not been discharged in full or such acceleration
has not been stayed, rescinded or annulled within fifteen (15)
business days of such acceleration; or


(e) A judgment or judgments
for the payment of money shall be rendered against the Company for
an amount in excess of $500,000 in the aggregate (net of any
applicable insurance coverage) for all such judgments that shall
remain unpaid for a period of sixty (60) consecutive days or more
after its entry or issue or that shall not be discharged, released,
dismissed, stayed or bonded (due to an appeal or otherwise) within
the sixty (60) consecutive day period after its entry or issue;
or


 




 

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(f) the Company shall (i)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property or assets,
(ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under the Federal Bankruptcy Code,
as amended (the “Bankruptcy Code”) or
under the comparable laws of any jurisdiction (foreign or
domestic), (iv) file a petition seeking to take advantage of any
bankruptcy, insolvency, moratorium, reorganization or other similar
law affecting the enforcement of creditors’ rights generally,
or (v) acquiesce in writing to any petition filed against it in an
involuntary case under the Bankruptcy Code or under the comparable
laws of any jurisdiction (foreign or domestic); or


(g) a proceeding or case shall be
commenced in respect of the Company without its application or
consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up,
or composition or readjustment of its debts, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like of it or
of all or any substantial part of its assets or (iii) similar
relief in respect of it under any law providing for the relief of
debtors, and such proceeding or case described in clause (i), (ii)
or (iii) shall continue undismissed, or unstayed and in effect, for
a period of forty-five (45) consecutive days or any order for
relief shall be entered in an involuntary case under the Bankruptcy
Code or under the comparable laws of any jurisdiction (foreign or
domestic) against the Company or any of its subsidiaries and shall
continue undismissed, or unstayed and in effect for a period of
forty-five (45) consecutive days.


9. Remedies Upon An Event of
Default. If an Event of Default shall have occurred and
shall be continuing, the Payee of this Note may at any time at its
option, (a) declare, by providing the Company with not less than
ten (10) business days’ prior written notice, the entire
unpaid principal balance of this Note together with all interest
accrued and unpaid hereon, due and payable, and upon the
Company’s receipt of such notice, the same shall be
accelerated and so due and payable; provided, however, that upon the
occurrence of an Event of Default described in (i) Sections 8(f)
and (g), without presentment, demand, protest, or notice, all of
which are hereby expressly unconditionally and irrevocably waived
by the Company, the outstanding principal balance and accrued and
unpaid interest hereunder shall be immediately due and payable, and
(ii) Sections 8(a) through (e), the Payee may exercise or otherwise
enforce any one or more of the Payee’s rights, powers,
privileges, remedies and interests under this Note or applicable
law. No course of delay on the part of the Payee shall operate as a
waiver thereof or otherwise prejudice the right of the Payee. No
remedy conferred hereby shall be exclusive of any other remedy
referred to herein or now or hereafter available at law, in equity,
by statute or otherwise. Notwithstanding anything to the contrary
contained in this Note, Payee agrees that its rights and remedies
hereunder are limited to receipt of cash or shares of the
Company’s common stock in the amounts described
herein.


10. Replacement. Upon receipt of a
duly executed and notarized written statement from the Payee with
respect to the loss, theft or destruction of this Note (or any
replacement hereof), and without requiring an indemnity bond or
other security, or, in the case of a mutilation of this Note, upon
surrender and cancellation of such Note, the Company shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen,
destroyed or mutilated Note.


11. Parties in Interest;
Transferability. This Note shall be binding upon the Company
and its successors and assigns and the terms hereof shall inure to
the benefit of the Payee and its successors and permitted assigns.
This Note may not be transferred or sold, pledged, hypothecated or
otherwise granted as security by the Payee without the prior
written consent of the Company, which consent will not be
unreasonably withheld.


12. Amendments. This Note may not
be modified or amended in any manner except in writing executed by
the Company and the Payee.


 




 

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13. Notices. Any notice, demand,
request, waiver or other communication required or permitted to be
given hereunder shall be in writing and shall be effective (a) upon
hand delivery by telecopy or facsimile at the address or number
designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to
be received) or (b) on the second business day following the date
of mailing by express courier service, fully prepaid, addressed to
such address, or upon actual receipt of such mailing, whichever
shall first occur.


 


	
 Address of the
Payee:

	
[_____]             

 [_____]

[_____]


Attention:
[_____]


Tel.
No.: [_____]


Fax
No.: [_____]


Email:
[_____]




	
 

	
 


	
 Address of the
Company:

	

MetaStat,
Inc.

27 Drydock Ave.,
2nd
Floor

Boston, MA
02110

Attention: Chief
Executive Officer

Tel. No.: (617)
531-6500

Fax No.: (617)
482-3337

Email: dhamilton@metastat and
dschneiderman@metastat.com









               
     


 

 


14. Governing Law. This Note shall
be governed by and construed in accordance with the internal laws
of the State of New York, without giving effect to the choice of
law provisions. This Note shall not be interpreted or construed
with any presumption against the party causing this Note to be
drafted.


15. Headings. Article and section
headings in this Note are included herein for purposes of
convenience of reference only and shall not constitute a part of
this Note for any other purpose.


16. Remedies, Characterizations, Other
Obligations, Breaches and Injunctive Relief. The remedies
provided in this Note shall be cumulative and in addition to all
other remedies available under this Note, at law or in equity
(including, without limitation, a decree of specific performance
and/or other injunctive relief), no remedy contained herein shall
be deemed a waiver of compliance with the provisions giving rise to
such remedy and nothing herein shall limit a Payee’s right to
pursue actual damages for any failure by the Company to comply with
the terms of this Note. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable and material
harm to the Payee and that the remedy at law for any such breach
may be inadequate. Therefore the Company agrees that, in the event
of any such breach or threatened breach, the Payee shall be
entitled, in addition to all other available rights and remedies,
at law or in equity, to seek and obtain such equitable relief,
including but not limited to an injunction restraining any such
breach or threatened breach, without the necessity of showing
economic loss and without any bond or other security being
required.


17. Failure or Delay Not Waiver. No
failure or delay on the part of the Payee in the exercise of any
power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.


 




 

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18. Enforcement Expenses. The
Company agrees to pay all reasonable costs and expenses of
enforcement of this Note, including, without limitation, reasonable
attorneys’ fees and expenses.


19. Binding Effect. The obligations
of the Company and the Payee set forth herein shall be binding upon
the successors and permitted assigns of each such
party.


20. Compliance with Securities
Laws. The Payee acknowledges and agrees that this Note is
being acquired solely for the Payee’s own account and not as
a nominee for any other party, and for investment purposes only and
not with a view to the resale or distribution of any part thereof,
and that the Payee shall not offer, sell or otherwise dispose of
this Note other than in compliance with applicable federal and
state laws. The Payee understands that this Note constitutes
“restricted securities” under applicable federal and
state securities laws and that such securities have not been, and
will not be, registered under the Securities Act of 1933, as
amended (the “Securities Act”). The
Payee represents and warrants to the Company that the Payee is an
“accredited investor” as such term is defined in Rule
501 of Regulation D promulgated under the Securities Act. This Note
and any Note issued in substitution or replacement therefore shall
be stamped or imprinted with a legend in substantially the
following form:


“THESE
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 UNLESS METASTAT, INC. SHALL
HAVE RECEIVED AN OPINION OF COUNSEL THAT THE REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.”


21. Severability. The provisions of
this Note are severable, and if any provision shall be held invalid
or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall not in any manner affect such
provision in any other jurisdiction or any other provision of this
Note in any jurisdiction.


22. Consent to Jurisdiction. Each
of the Company and the Payee (i) hereby irrevocably submits to the
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 Note 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 Payee consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the
address set forth in 13 hereof and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing in this Section 13 shall affect or limit any right
to serve process in any other manner permitted by applicable
law.


23. Waivers. Except as otherwise
specifically provided herein, the Company hereby waives
presentment, demand, notice of nonpayment, protest and all other
demands and notices in connection with the delivery, acceptance,
performance and enforcement of this Note, and does hereby consent
to any number of renewals or extensions of the time for payment
hereof and agrees that any such renewals or extensions may be made
without notice and without affecting its liability herein, AND DOES
HEREBY WAIVE TRIAL BY JURY. No delay or omission on the part of the
Payee in exercising its rights under this Note, or course of
conduct relating hereto, shall operate as a waiver of such rights
or any other right of the Payee, nor shall any waiver by the Payee
of any such right or rights on any one occasion be deemed a waiver
of the same right or rights on any future occasion.


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


 


METASTAT,
INC.


By:                                                               




Name:
Douglas A. Hamilton


Title:
President & CEO




 

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