Blueprint





 






Exhibit
4.1



 


NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.


 



COMMON STOCK PURCHASE WARRANT


 



 METASTAT, INC.


 


	
Warrant
Shares:[_____]                 



	
 Initial Exercise
Date: [_____], 2016







Warrant
No. W- [_____]


 


THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, [_____] or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date
hereof (the “Initial
Exercise Date”) and on or prior to the close of
business on the five-year anniversary of the Initial Exercise Date
(the “Termination
Date”) but not thereafter, to subscribe for and
purchase from MetaStat, Inc., a Nevada corporation (the
“Company”), up to [_____]
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(c).


Section 1.   
        Definitions. Capitalized terms
used and not otherwise defined herein shall have the meanings set
forth in that certain Subscription Agreement (the
“Subscription
Agreement”), dated [_____], 2016, among the Company
and the subscribers signatory thereto. The following definitions
shall apply for purposes of this Warrant:


a)            “Business
Day” means any day except Saturday, Sunday, any day
which is a federal legal holiday in the United States or any day on
which banking institutions in the State of New York are authorized
or required by law or other governmental action to
close.


b)   
        “Trading Day” means a day
on which the principal Trading Market is open for trading;
provided, that in the event that the Common Stock is not listed or
quoted on a Trading Market, then Trading Day shall mean a Business
Day.


c)
           
“Trading
Market” means whichever of the following markets or
exchanges on which the Common Stock is listed or quoted for trading
on the date in question: the New York Stock Exchange, the NYSE MKT,
the NASDAQ Global Select Market, the NASDAQ Global Market, the
NASDAQ Capital Market, the OTC Bulletin Board or any tier of the
OTC Markets Group, Inc. (or any successors to any of the
foregoing).




 

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Section 2.   
        Exercise.


a)            Exercise
of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company (or such other office
or agency of the Company as it may designate by notice in writing
to the registered Holder at the address of the Holder appearing on
the books of the Company) of a duly executed facsimile copy (or
e-mail attachment) of the Notice of Exercise in the form annexed
hereto. Within the earlier of (i) three (3) Trading Days and (ii)
the number of Trading Days comprising the Standard Settlement
Period (as defined in Section 2(d)(i) herein) following the date of
exercise as aforesaid, the Holder shall deliver the aggregate
Exercise Price for the shares specified in the applicable Notice of
Exercise by wire transfer or cashier’s check drawn on a
United States bank unless the cashless exercise procedure specified
in Section 2(c) below is specified in the applicable Notice of
Exercise. No
ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise form be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three
(3) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of
this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares
available for purchase hereunder at any given time may be less than
the amount stated on the face hereof.


b)            Cashless
Exercise. Notwithstanding any provision herein to the
contrary, commencing six (6) months from the Initial Exercise Date
if the Per Share Market Value (as defined below) of one share of
Common Stock is greater than the Exercise Price (at the date of
calculation as set forth below) and there is not an effective
registration statement under the Securities Act providing for the
resale of the Warrant Shares, in lieu of exercising this Warrant by
payment of cash, the Holder may exercise this Warrant by a cashless
exercise by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Notice of Exercise,
in which event the Company shall issue to the Holder a number of
shares of Common Stock computed using the following
formula:


X = Y x
(B-A)




 

      B


 


Where X
= the number of Warrant Shares to be issued to the
Holder.


 


Y
= the number of Warrant Shares purchasable upon exercise of
all of the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised.


 


A
= the Exercise Price.


 


B
=           the
Per Share Market Value of one share of Common Stock.


 




 

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For
purposes hereof, “Per Share Market Value”
means on any particular date (a) the last closing bid price per
share of the Common Stock on such date on the OTC Bulletin Board or
another registered national stock exchange on which the Common
Stock is then listed, or if there is no such price on such date,
then the closing bid price on such exchange or quotation system on
the date nearest preceding such date, or (b) if the Common Stock is
not listed then on the OTC Bulletin Board or any registered
national stock exchange, the last closing bid price for a share of
Common Stock in the over the counter market, as reported by the OTC
Bulletin Board or by Pink OTC Markets Inc. or similar organization
or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (c) if the Common Stock is not
then reported by the OTC Bulletin Board or by Pink OTC Markets Inc.
(or similar organization or agency succeeding to its functions of
reporting prices), then the average of the “Pink Sheet”
quotes for the five (5) Trading Days preceding such date of
determination, or (d) if the Common Stock is not then publicly
traded the fair market value of a share of Common Stock as
determined by the Company’s board of directors.


 



If Warrant Shares are issued in such a cashless exercise, the
parties acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the
characteristics of the Warrants being exercised, and the holding
period of the Warrant Shares being issued may be tacked on to the
holding period of this Warrant.  The Company agrees not
to take any position contrary to this Section 2(b).


 


c)             
Exercise Price. The
exercise price per share of the Common Stock under this Warrant
shall be $3.00, subject to
adjustment hereunder (the “Exercise
Price”).


d) 
           
Mechanics of
Exercise.


i.   
        Delivery of Warrant Shares Upon
Exercise. Warrant Shares purchased hereunder shall be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder and
the Holder has provided the Company with written representations as
reasonably requested by the Company in connection with such legend
removal (which shall not include representations with respect to
the sale of any securities) or (B) the Warrant Shares are eligible
for resale by the Holder without volume or manner-of-sale
limitations pursuant to Rule 144 and the Holder has provided the
Company with written representations as reasonably requested by the
Company in connection with such legend removal (which shall not
include representations with respect to the sale of any
securities), and otherwise by physical delivery of a certificate,
registered in the Company’s share register in the name of the
Holder or its designee, for the number of Warrant Shares to which
the Holder is entitled pursuant to such exercise to the address
specified by the Holder in the Notice of Exercise by the date that
is the earlier of (i) one (1) Trading Day and (ii) the number of
Trading Days comprising the Standard Settlement Period after the
delivery to the Company of the Notice of Exercise (such date, the
“Warrant Share
Delivery Date”). Upon delivery of the Notice of
Exercise, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date
of delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) three Trading Days
and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. The
Company agrees to maintain a transfer agent that is a participant
in the FAST program so long as this Warrant remains outstanding and
exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Exercise.




 

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ii.
           
Delivery of New Warrants
Upon Exercise. If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon
surrender of this Warrant certificate, at the time of delivery of
the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.


iii.   
        Rescission Rights. If the
Company fails to cause the Transfer Agent to transmit to the Holder
the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share
Delivery Date, then the Holder will have the right to rescind such
exercise.


iv.   
        Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.


v.   
        No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.




 

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vi.
           
Charges, Taxes and
Expenses. Issuance of Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant
Shares, all of which taxes and expenses shall be paid by the
Company, and such Warrant Shares shall be issued in the name of the
Holder or in such name or names as may be directed by the Holder;
provided,
however, that in
the event that Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly
executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any
transfer tax incidental thereto. The Company shall pay all Transfer
Agent fees required for same-day processing of any Notice of
Exercise and all fees to the Depository Trust Company (or another
established clearing corporation performing similar functions)
required for same-day electronic delivery of the Warrant
Shares.


vii.   
        Closing of Books. The Company
will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms
hereof.


e)   
           
Holder’s Exercise
Limitations. The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the
Company, including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be 4.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.


 




 

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Section
3.                      Certain
Adjustments.


a)   
        Adjustments for Stock Splits,
Combinations, Certain Dividends and Distributions. If the
Company shall, at any time or from time to time after the Initial
Exercise Date, effect a split of the outstanding Common Stock (or
any other subdivision of its shares of Common Stock into a larger
number of shares of Common Stock), combine the outstanding shares
of Common Stock into a smaller number of shares of Common Stock, or
make or issue or set a record date for the determination of holders
of Common Stock entitled to receive a dividend or other
distribution payable in shares of Common Stock, then, in each event
(i) the number of shares of Common Stock for which this Warrant
shall be exercisable immediately after the occurrence of any such
event shall be adjusted to equal the number of shares of Common
Stock that a record holder of the same number of shares of Common
Stock for which this Warrant is exercisable immediately prior to
the occurrence of such event would own or be entitled to receive
after the happening of such event, and (ii) the Exercise Price then
in effect shall be adjusted to equal (A) the Exercise Price then in
effect multiplied by the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares of Common Stock for which this
Warrant is exercisable immediately after such
adjustment.


 


b)   
        Adjustment for Other Dividends and
Distributions. If the Company shall, at any time or from
time to time after the Initial Exercise Date, make or issue or set
a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in (i)
cash, (ii) any evidences of indebtedness, or any other securities
of the Company or any property of any nature whatsoever, other
than, in each case, shares of Common Stock; or (iii) any warrants
or other rights to subscribe for or purchase any evidences of
indebtedness, or any other securities of the Company or any
property of any nature whatsoever, other than, in each case, shares
of Common Stock, then, and in each event, (A) the number of shares
of Common Stock for which this Warrant shall be exercisable shall
be adjusted to equal the product of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to
such adjustment multiplied by a fraction (1) the numerator of which
shall be the last closing bid price per share of the Common Stock
at the date of taking such record and (2) the denominator of which
shall be such last closing bid price per share of the Common Stock
minus the amount allocable to one share of Common Stock of any such
cash so distributable and of the fair value (as determined in good
faith by the Board) of any and all such evidences of indebtedness,
shares of stock, other securities or property or warrants or other
subscription or purchase rights so distributable, and (B) the
Exercise Price then in effect shall be adjusted to equal (1) the
Exercise Price then in effect multiplied by the number of shares of
Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (2) the number of shares of
Common Stock for which this Warrant is exercisable immediately
after such adjustment. A reclassification of the Common Stock
(other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common
Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of its Common Stock of
such shares of such other class of stock within the meaning of this
Section 3(b) and, if the outstanding shares of Common Stock shall
be changed into a larger or smaller number of shares of Common
Stock as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section
3(a).


 


c)   
        Adjustments for Reclassification,
Exchange or Substitution. If the Common Stock for which this
Warrant is exercisable at any time or from time to time after the
Initial Exercise Date shall be changed to the same or different
number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than
by way of a stock split or combination of shares or stock dividends
provided for in Section 3(a), Section 3(b), or a reorganization,
merger, consolidation, or sale of assets provided for in Section
3(d)), then, and in each event, an appropriate revision to the
Exercise Price shall be made and provisions shall be made (by
adjustments of the Exercise Price or otherwise) so that, upon any
subsequent exercise of this Warrant, the Holder shall have the
right to receive, in lieu of Common Stock, the kind and amount of
shares of stock and other securities receivable upon
reclassification, exchange, substitution or other change, by
holders of the number of shares of Common Stock for which this
Warrant was exercisable immediately prior to such reclassification,
exchange, substitution or other change, all subject to further
adjustment as provided herein.


 




 

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d)           
Adjustments for
Reorganization, Merger, Consolidation or Sales of Assets. If
at any time or from time to time after the Initial Exercise Date
there shall be a capital reorganization of the Company (other than
by way of a stock split or combination of shares or stock dividends
or distributions provided for in Section 3(a), and Section 3(b), or
a reclassification, exchange or substitution of shares provided for
in Section 3(c)), or a merger or consolidation of the Company with
or into another corporation where the holders of the
Company’s outstanding voting securities prior to such merger
or consolidation do not own over 50% of the outstanding voting
securities of the merged or consolidated entity, immediately after
such merger or consolidation, or the sale of all or substantially
all of the Company’s properties or assets to any other person
(an “Organic
Change”), then as a part of such Organic Change an
appropriate revision to the Exercise Price shall be made if
necessary and provision shall be made if necessary (by adjustments
of the Exercise Price or otherwise) so that, upon any subsequent
exercise of this Warrant, the Holder shall have the right to
receive, in lieu of Common Stock, the kind and amount of shares of
stock and other securities or property of the Company or any
successor corporation resulting from the Organic Change. In any
such case, appropriate adjustment shall be made in the application
of the provisions of this Section 3(d) with respect to the rights
of the Holder after the Organic Change to the end that the
provisions of this Section 3(d) (including any adjustment in the
Exercise Price then in effect and the number of shares of stock or
other securities deliverable upon exercise of this Warrant) shall
be applied after that event in as nearly an equivalent manner as
may be practicable.


e)   
        Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of
this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.


f)   
        Notice to Holder.


i.      Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall
promptly deliver to the Holder a notice by facsimile or email
setting forth the Exercise Price after such adjustment and any
resulting adjustment to the number of Warrant Shares and setting
forth a brief statement of the facts requiring such
adjustment.


ii.      Notice
to Allow Exercise by Holder. If (A) the Company shall
declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock,
(C) the Company shall authorize the granting to all holders of the
Common Stock rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the
approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale
or transfer of all or substantially all of the assets of the
Company, or any compulsory share exchange whereby the Common Stock
is converted into other securities, cash or property, or (E) the
Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in
each case, the Company shall cause to be delivered by facsimile or
email to the Holder at its last facsimile number or email address
as it shall appear upon the Warrant Register of the Company, at
least 20 calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which
a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the
Common Stock of record shall be entitled to exchange their shares
of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to
deliver such notice or any defect therein
or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the
extent that any notice provided in this Warrant constitutes, or
contains, material, non-public information regarding the Company or
any of the Subsidiaries, the Company shall simultaneously file such
notice with the Commission pursuant to a Current Report on Form
8-K. The Holder shall remain entitled to exercise this Warrant
during the period commencing on the date of such notice to the
effective date of the event triggering such notice except as may
otherwise be expressly set forth herein.


 




 

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Section
4.                      Transfer
of Warrant.


a)   
        Transferability. Subject to
compliance with any applicable securities laws, this Warrant and
all rights hereunder (including, without limitation, any
registration rights) are transferable, in whole or in part, upon
surrender of this Warrant at the principal office of the Company or
its designated agent, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by
the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or
denominations reasonably requested in such instrument of
assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days
of the date the Holder delivers an assignment form to the Company
assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.


b)   
        New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the Initial Exercise Date and shall be substantially
identical with this Warrant except as to the number of Warrant
Shares issuable pursuant thereto.


c)   
        Warrant Register. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.


d)       
    Transfer Restrictions.
If, at the time of the surrender of this Warrant in
connection with any transfer of this Warrant, the transfer of this
Warrant shall not be either (i) registered pursuant to an effective
registration
statement under the Securities Act
and under applicable state
securities or blue sky laws or (ii) eligible for resale without
volume or manner-of-sale restrictions or current public information
requirements pursuant to Rule 144, the Company may require, as a
condition of allowing such transfer, that the Holder or transferee
of this Warrant, as the case may be, comply with the provisions of
the Subscription Agreement and applicable securities
laws.


e)   
        Representation by the Holder.
The Holder, by the acceptance hereof, represents and warrants that
it is acquiring this Warrant and, upon any exercise hereof, will
acquire the Warrant Shares issuable upon such exercise, for its own
account and not with a view to or for distributing or reselling
such Warrant Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, except
pursuant to sales registered or exempted under the Securities
Act.


Section
5.                      Miscellaneous.


a)   
        No Rights as Stockholder Until
Exercise. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a stockholder of the
Company prior to the exercise hereof as set forth in Section
2(d)(i), except as expressly set forth in Section 3.


 




 

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b)
           
Loss, Theft, Destruction
or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any
stock certificate relating to the Warrant Shares, and in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.


c)   
        Saturdays, Sundays, Holidays,
etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein
shall not be a Business Day, then, such action may be taken or such
right may be exercised on the next succeeding Business
Day.


d)   
        Automatic Exercise upon
Expiration. In the event that, upon the Termination Date,
the Per Share Market Value of one share of Common Stock (or other
security issuable upon the exercise hereof) as determined in
accordance with this Warrant above is greater than the Exercise
Price in effect on such date, then this Warrant shall automatically
be deemed on and as of such date to be exercised pursuant to a
Cashless Exercise as to all shares (or such other securities) for
which this Warrant shall not previously have been exercised or
converted, and the Company shall promptly deliver the shares (or
such other securities) issued upon such exercise to the Holder;
provided,
however, to the
extent that the foregoing automatic exercise would result in the
Holder exceeding the Beneficial Ownership Limitation, then the
Holder shall not be entitled to the Warrant Shares issuable upon
such automatic exercise to such extent and the remainder of such
Warrant Shares shall be held in abeyance for the benefit of the
Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership
Limitation.


e)            Authorized
Shares. The Company covenants that, during the period the
Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for
the issuance of the Warrant Shares upon the exercise of any
purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of
the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).


Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of
all such actions as may be reasonably necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares
above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (ii) take all such action as
may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant and (iii) use
commercially reasonable efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having
jurisdiction thereof, as may be, reasonably necessary to enable the
Company to perform its obligations under this Warrant.


Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be reasonably
necessary from any public regulatory body or bodies having
jurisdiction thereof.




 

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f)   
        Governing Law; Jurisdiction.
This Warrant 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. Each of
the Company and the Holder (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 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.


g)             Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the
exercise of this Warrant will have restrictions upon resale imposed
by state and federal securities laws.


h)
           
Nonwaiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s
rights, powers or remedies, notwithstanding the fact that all
rights hereunder terminate on the Termination Date. If the Company
willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the
Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.


i)   
        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 facsimile or email at
the facsimile number or email address of the addressee at or prior
to 5:30 p.m. (New York City time) on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile or email at the facsimile
number or email address of the addressee 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 in the
Company’s records.


j)   
        Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.


k)   
        Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.


l)   
        Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.


 




 

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m)   
     Amendment. This Warrant may be
modified or amended or the provisions hereof waived with the prior
written consent of the Company and the
holders of a majority of the Warrant Shares underlying the then
outstanding Warrants issued pursuant to the Subscription
Agreement.


n)   
        Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.


o)   
        Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.


 


********************


 


 




 

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IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.


 


 


	
 

	


METASTAT, INC.


 


 


 


	
 

	

By:__________________________________________


     Name:


     Title:


 







 


 


 




 

-12-








 










 



NOTICE OF EXERCISE


 


TO:            METASTAT,
INC.


 


(1)           The
undersigned hereby elects to purchase ________ Warrant Shares of
the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if
any.


(2)           Please
issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is
specified below:


_______________________________


 


 


The
Warrant Shares shall be delivered to the following DWAC Account
Number or by physical delivery of a certificate to:


 


_______________________________


 


_______________________________


 


_______________________________


 


(3)
Accredited
Investor. The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.


 


(4)           The
undersigned intends that payment of the Exercise Price shall be
made as (check one):


Cash
Exercise_______


Cashless
Exercise_______


If the
Holder has elected a Cash Exercise, the Holder shall pay the sum of
$________ by certified or official bank check (or via wire
transfer) to the Company in accordance with the terms of the
Warrant.


If the
Holder has elected a Cashless Exercise, a certificate shall be
issued to the Holder for the number of shares equal to the whole
number portion of the product of the calculation set forth below,
which is ___________. The Company shall pay a cash adjustment in
respect of the fractional portion of the product of the calculation
set forth below in an amount equal to the product of the fractional
portion of such product and the Per Share Market Value on the date
of exercise, which product is ____________.


X = Y x
(B-A)


     B


 



 

-13-







 






 


Where:


 


The
number of shares of Common Stock to be issued to the Holder is
(“X”).


 


The
number of shares of Common Stock purchasable upon exercise of all
of the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being exercised is
(“Y”).


 


The
Exercise Price is (“A”).


 


The Per
Share Market Value of one share of Common Stock is
(“B”).


 


[SIGNATURE
OF HOLDER]


 


Name of
Investing Entity:
_________________________________________________________________


 


Signature of Authorized Signatory of Investing
Entity:
___________________________________________


 


Name of
Authorized Signatory:
_____________________________________________________________


 


Title
of Authorized Signatory:
______________________________________________________________


 


Date:
__________________________________________________________________________________


 


 




 

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ASSIGNMENT FORM


 


(To
assign the foregoing warrant, execute


this
form and supply required information.


Do not
use this form to exercise the warrant.)


 


 


 


FOR
VALUE RECEIVED, [____ all of or [_______ shares of the foregoing
Warrant and all rights evidenced thereby are hereby assigned
to


 


_______________________________________________
whose address is


 


_______________________________________________________________.


 


 


 


_______________________________________________________________


 


Dated:
______________, _______


 


 


	
 

	
 Holder’s
Signature: ________________________________________________ 
     


 


	
 

	
 Holder’s
Address:  
________________________________________________





                                 
________________________________________________








 


 




 

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