Blueprint





 






Exhibit
4.2



 


METASTAT,
INC.


 


CERTIFICATE
OF DESIGNATION OF PREFERENCES,


 


RIGHTS
AND LIMITATIONS


 


OF


 


SERIES
A-2 CONVERTIBLE PREFERRED STOCK


 


WHEREAS, the
Articles of Incorporation of MetaStat, Inc., a Nevada corporation
(the “Corporation”) provides
for a class of its authorized stock known as preferred stock,
comprised of 10,000,000 shares, issuable from time to time in one
or more series;


 


WHEREAS, the Board
of Directors of the Corporation is authorized to fix the dividend
rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly
unissued series of preferred stock and the number of shares
constituting any Series and the designation thereof, of any of
them; and


 


WHEREAS, it is the
desire of the Board of Directors of the Corporation, pursuant to
its authority as aforesaid, to fix the rights, preferences,
restrictions and other matters relating to a series of the
preferred stock, which shall consist of 1,000,000 shares of the
preferred stock which the corporation has the authority to issue,
classified as Series A-2, as follows:


 


NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash or
exchange of other securities, rights or property and does hereby
fix and determine the rights, preferences, restrictions and other
matters relating to such series of preferred stock as
follows:


 




 

-1-








 






 


TERMS
OF PREFERRED STOCK


 


Section 1.   
    Definitions.  For the
purposes hereof, the following terms shall have the following
meanings:


 


“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.


 


“Common Stock" means the
Corporation's common stock, par value $0.0001 per share, and stock
of any other class into which such shares may hereafter have been
reclassified or changed.


 


“Conversion Shares” shall
have the meaning given such term is Section 5(i)
hereof.


 


“DTC”
shall have the meaning given in Section 5(a).


 


“DWAC Delivery” shall have
the meaning given in Section 5(a).


 


“Exchange Act” means the
Securities Exchange Act of 1934, as amended.


 


“Fundamental Transaction”
shall have the meaning given in Section 6(c).


 


“Holder” shall have the
meaning given such term in Section 2 hereof.


 


“Original Issue Date”
shall mean the date of the first issuance of any shares of the
Preferred Stock regardless of the number of transfers of any
particular shares of Preferred Stock and regardless of the number
of certificates which may be issued to evidence such Preferred
Stock.


 


“Person” means a
corporation, an association, a partnership, an organization, a
business, an individual, a government or political subdivision
thereof or a governmental agency.


 


“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.


 


“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.


 


“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).


 




 

-2-








 






 


Section 2.   
    Designation and Amount;
Rank.


 


(a) Designation
and Amount. The series of preferred stock shall be
designated as its Series A-2 Convertible Preferred Stock (the
“Preferred
Stock”) and the number of shares so designated shall
be one million (1,000,000) shares (which shall not be subject to
increase without the consent of all of the holders of the Preferred
Stock (each, a “Holder” and collectively,
the “Holders”). Capitalized
terms not otherwise defined herein shall have the meaning given
such terms in Section 1 hereof.


 


(b) Rank.
All shares of the Series A-2 Preferred Stock shall rank (i)
pari passu with the Series
A Convertible Preferred Stock and any class or series of capital
stock of the Corporation hereafter created and specifically
ranking, by its terms, on par with the Series A-2 Preferred Stock
and (ii) junior to the Series B Convertible Preferred Stock and any
class or series of capital stock of the Corporation hereafter
created specifically ranking, by its terms, senior to the Series
A-2 Preferred Stock, in each case as to distribution of assets upon
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.


 


Section 3.   
    Voting
Rights. Except as otherwise provided herein and as otherwise
required by law, the Preferred Stock shall have no voting rights.
The Common Stock into which the Preferred Stock is convertible
shall, upon issuance, have all of the same voting rights as other
issued and outstanding Common Stock of the Corporation, and none of
the rights of the Preferred Stock.


 


Section 4.   
    Liquidation. Upon any
liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary (a “Liquidation”), the
Holders shall be entitled to receive out of the assets of the
Corporation, whether such assets are capital or surplus, for each
share of Preferred Stock an amount of cash, securities or other
property to which such holder would be entitled to receive with
respect to each such share of Preferred Stock if such shares had
been converted to Common Stock immediately prior to such
Liquidation (without giving effect for such purposes to the
limitations set forth in Section 7), subject to the preferential
rights of holders of any senior securities of the
Corporation.


 


Section 5.   
    Conversion.


 


a)
Conversions at Option of
Holder. Each share of Preferred Stock shall, at any time and
from time to time, at the option of the Holder, be convertible into
ten shares of Common Stock of the Corporation (the
“Conversion
Ratio”).
Holders shall effect conversions by providing the Corporation with
the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”).
Each Notice of Conversion shall specify the number of shares of
Preferred Stock to be converted, the number of shares of Preferred
Stock owned prior to the conversion at issue, the number of shares
of Preferred Stock owned subsequent to the conversion at issue and
the date on which such conversion is to be effected, which date may
not be prior to the date the Holder delivers such Notice of
Conversion to the Corporation by facsimile (the “Conversion Date”). If no
Conversion Date is specified in a Notice of Conversion, the
Conversion Date shall be the date that such Notice of Conversion to
the Corporation is deemed delivered hereunder. The calculations and
entries set forth in the Notice of Conversion shall control in the
absence of manifest or mathematical error. To effect conversions,
as the case may be, of shares of Preferred Stock, a Holder shall
not be required to surrender the certificate(s) representing such
shares of Preferred Stock to the Corporation unless all of the
shares of Preferred Stock represented thereby are so converted, in
which case the Holder shall deliver the certificate representing
such shares of Preferred Stock promptly following the Conversion
Date at issue. Shares of Preferred Stock converted or redeemed in
accordance with the terms hereof shall be canceled and may not be
reissued. Provided the Corporation’s transfer agent is
participating in the Depository Trust Company
(“DTC”)
Fast Automated Securities Transfer program and the applicable
Conversion Shares are either registered for resale or eligible for
resale without restriction pursuant to Rule 144 of the Securities
Act and the Holder delivers a broker’s representation that
all of the applicable Conversion Shares have been sold, the Holder
may request that the applicable Conversion Shares be credited to
the account of the Holder’s prime broker with DTC through its
Deposit Withdrawal at Custodian system (a “DWAC
Delivery”).


 




 

-3-








 






 


b)            Mechanics
of Conversion


 


i.
Delivery of Certificate
Upon Conversion. Not later than three trading days
(“Trading
Days”) after each Conversion Date (the
“Share Delivery
Date”), the Corporation shall deliver to the Holder a
certificate or certificates representing the number of shares of
Common Stock being acquired upon the conversion of shares of
Preferred Stock (the “Conversion Shares”) or in
the case of a DWAC Delivery, electronically transfer such
Conversion Shares by crediting the account of the Holder’s
prime broker with DTC through its DWAC system. If in the case of
any Notice of Conversion such certificate or certificates are not
delivered to or as directed by the applicable Holder by the third
business after the Conversion Date, the Holder shall be entitled to
elect by written notice to the Corporation at any time on or before
its receipt of such certificate or certificates thereafter, to
rescind such conversion, in which event the Corporation shall
immediately return the certificates representing the shares of
Preferred Stock tendered for conversion.


 


ii.
Obligation
Absolute. The Corporation’s obligations to issue and
deliver the Conversion Shares upon conversion of Preferred Stock in
accordance with the terms hereof are absolute and unconditional,
irrespective of any action or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof,
the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder or any other Person of any obligation to the Corporation or
any violation or alleged violation of law by the Holder or any
other person, and irrespective of any other circumstance which
might otherwise limit such obligation of the Corporation to the
Holder in connection with the issuance of such Conversion
Shares.


 


iii.
Reservation of Shares
Issuable Upon Conversion. The Corporation covenants that it
will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock solely for the purpose of
issuance upon conversion of the Preferred Stock, free from
preemptive rights or any other actual contingent purchase rights of
persons other than the Holders, not less than such number of shares
of the Common Stock as shall be issuable (taking into account the
adjustments and restrictions of herein) upon the conversion of all
outstanding shares of Preferred Stock. The Corporation covenants
that all shares of Common Stock that shall be so issuable shall,
upon issue, be duly and validly authorized, issued and fully paid,
nonassessable.


 


iv.
Transfer Taxes. The
issuance of certificates for shares of the Common Stock on
conversion of the Preferred Stock shall be made without charge to
the Holders thereof for any documentary stamp or similar taxes that
may be payable in respect of the issue or delivery of such
certificate, provided that the Corporation shall not be required to
pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of such shares
of Preferred Stock so converted and the Corporation shall not be
required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid
to the Corporation the amount of such tax or shall have established
to the satisfaction of the Corporation that such tax has been
paid.


 




 

-4-








 






 


Section 6.   
    Certain
Adjustments.


 


a)
Stock Dividends and Stock
Splits. If the Corporation, at any time while the Preferred
Stock is outstanding: (A) shall pay a stock dividend or otherwise
make a distribution or distributions on shares of its Common Stock
or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Corporation
pursuant to this Preferred Sock), (B) subdivide outstanding shares
of Common Stock into a larger number of shares, (C) combine
(including by way of reverse stock split) outstanding shares of
Common Stock into a smaller number of shares, or (D) issue by
reclassification of shares of the Common Stock any shares of
capital stock of the Corporation, then the Holders shall receive,
upon conversion, the number of shares of Common Stock such Holder
would have been entitled to receive assuming such Holder converted
such Preferred Stock immediately prior to the applicable event. Any
adjustment made pursuant to this Section shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and
shall become effective immediately after the effective date in the
case of a subdivision, combination or
re-classification.


 


b)
Pro Rata
Distributions. If the Corporation, at any time while
Preferred Stock is outstanding, shall distribute to all holders of
Common Stock (and not to Holders) evidences of its indebtedness or
assets or rights or warrants to subscribe for or purchase any
security, then in each such case, the Holders shall receive, upon
conversion, the number of shares of Common Stock or other property
such Holder would have been entitled to receive assuming such
Holder converted such Preferred Stock immediately prior to the
applicable event.


 


c)
Fundamental
Transaction. If, at any time while the Preferred Stock is
outstanding, (A) the Corporation effects any merger or
consolidation of the Corporation with or into another Person (other
than a merger in which the Corporation is the surviving or
continuing entity and its Common Stock is not exchanged for or
converted into other securities, cash or property), (B) the
Corporation effects any sale of all or substantially all of its
assets in one transaction or a series of related transactions, (C)
any tender offer or exchange offer (whether by the Corporation or
another Person) is completed pursuant to which all of the Common
Stock is exchanged for or converted into other securities, cash or
property, or (D) the Corporation effects any reclassification of
the Common Stock or any compulsory share exchange pursuant (other
than as a result of a dividend, subdivision or combination covered
by Section C.7(b) above) to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then,
upon any subsequent conversion of the Preferred Stock the Holders
shall have the right to receive, in lieu of the right to receive
Conversion Shares, for each Conversion Share that would have been
issuable upon such conversion immediately prior to the occurrence
of such Fundamental Transaction, the same kind and amount of
securities, cash or property as it would have been entitled to
receive upon the occurrence of such Fundamental Transaction if it
had been, immediately prior to such Fundamental Transaction, the
holder of one share of Common Stock (the “Alternate
Consideration”). For purposes of any such subsequent
conversion, the determination of the Conversion Ratio shall be
appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and
the Corporation shall adjust the Conversion Ratio in a reasonable
manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in
a Fundamental Transaction, then the Holders shall be given the same
choice as to the Alternate Consideration it receives upon any
conversion of the Preferred Stock following such Fundamental
Transaction. The terms of any agreement to which the Corporation is
a party and pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving
entity to comply with the provisions of this Section 6(c) and
insuring that the Preferred Stock will be similarly adjusted upon
any subsequent transaction analogous to a Fundamental Transaction.
The Corporation shall cause to be delivered to each Holder, at its
last address as it shall appear upon the stock books of the
Corporation, written notice of any Fundamental Transaction at least
20 calendar days prior to the date on which such Fundamental
Transaction is expected to become effective or close.


 




 

-5-








 






 


d)
Calculations. All
calculations under this Section shall be made to the nearest cent
or the nearest 1/100th of a share, as the case may be. The number
of shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the
Corporation, and the description of any such shares of Common Stock
shall be considered on issue or sale of Common Stock. For purposes
of this Section 6, 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.


 


e)
Notice to Holders;
Adjustment to Conversion Ratio. Whenever the Conversion
Ratio is adjusted pursuant to any of this Section, the Corporation
shall promptly mail to each Holder a notice setting forth the
Conversion Ratio after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.


 


Section 7.   
    Conversion
Restrictions.


 


a)
Notwithstanding anything to the contrary set forth in this
Certificate of Designation, at no time may a Holder of shares of
Preferred Stock convert shares of the Preferred Stock if the number
of shares of Common Stock to be issued pursuant to such conversion
would exceed, when aggregated with all other shares of Common Stock
owned by such Holder and its affiliates at such time, the number of
shares of Common Stock which would result in such Holder and its
affiliates beneficially owning (as determined in accordance with
Section 13(d) of the Exchange Act, and the rules thereunder) in
excess of 4.99% of all of the Common Stock outstanding at such
time; provided,
however, that upon
a Holder providing the Corporation with sixty-one (61) days’
notice (pursuant to Section 8(a) hereof) (the "Waiver Notice") that such
Holder would like to waive Section 7(a) of this Certificate of
Designation with regard to any or all shares of Common Stock
issuable upon conversion of Preferred Stock, this Section 7(a)
shall be of no force or effect with regard to those shares of
Preferred Stock referenced in the Waiver Notice.


 


b)
Notwithstanding anything to the contrary set forth in this
Certificate of Designation, at no time may a Holder of shares of
Preferred Stock convert shares of the Preferred Stock if the number
of shares of Common Stock to be issued pursuant to such conversion
would exceed, when aggregated with all other shares of Common Stock
owned by such Holder and its affiliates at such time, would result
in such Holder and its affiliates beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act,
and the rules thereunder) in excess of 9.99% of the Common Stock
outstanding at such time; provided, however, that upon a Holder
providing the Corporation with a Waiver Notice that such Holder
would like to waive Section 7(b) of this Certificate of Designation
with regard to any or all shares of Common Stock issuable upon
conversion of Preferred Stock, this Section 7(b) shall be of no
force or effect with regard to those shares of Preferred Stock
referenced in the Waiver Notice.


 


Section 8.   
    Miscellaneous.


 


a)
Notices. Any and
all notices or other communications or deliveries to be provided by
the Holders hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by
facsimile, by email, sent by a nationally recognized overnight
courier service, addressed to the Corporation. Any and all notices
or other communications or deliveries to be provided by the
Corporation hereunder shall be in writing and delivered personally,
by facsimile, by email, sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile telephone
number, email address, or address of such Holder appearing on the
books of the Corporation, or if no such facsimile telephone number
or address appears, at the principal place of business of the
Holder. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number or via email at the
email address specified in this Section prior to 5:30 p.m. (New
York City time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the
facsimile telephone number or via email at the email address
specified in this Section later than 5:30 p.m. (New York
City
time) on any date and earlier than 11:59 p.m. (New York City time)
on such date, (iii) the second Business Day following the date of
mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.


 




 

-6-








 






 


b)
Absolute
Obligation. Except as expressly provided herein, no
provision of this Certificate of Designation shall alter or impair
the obligation of the Corporation, which is absolute and
unconditional, to pay the liquidated damages (if any) on, the
shares of Preferred Stock at the time, place, and rate, and in the
coin or currency, herein prescribed.


 


c)
Lost or Mutilated
Preferred Stock Certificate. If a Holder’s Preferred
Stock certificate shall be mutilated, lost, stolen or destroyed,
the Corporation shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated certificate,
or in lieu of or in substitution for a lost, stolen or destroyed
certificate, a new certificate for the shares of Preferred Stock so
mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such certificate,
and of the ownership hereof, and indemnity, if requested, all
reasonably satisfactory to the Corporation.


 


d)
Transfer and
Assignment. The rights of each Holder hereunder shall be
automatically assignable by each Holder to any Person (other than a
known competitor of the Corporation) of all or a portion of the
Preferred Stock if: (i) the Holder agrees in writing with the
transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Corporation within a reasonable time
after such assignment, (ii) the Corporation is, within a reasonable
time after such transfer or assignment, furnished with written
notice of (a) the name and address of such transferee or assignee,
and (b) the number of shares of Preferred Stock with respect to
which are being transferred or assigned, and (iii) following such
transfer or assignment the further disposition of such Preferred
Stock is restricted under the Securities Act and applicable state
securities laws. The rights to transfer and assign the Preferred
Stock shall apply to the Holders (and to subsequent) successors and
assigns.


 


e)
Waiver. Any waiver
by the Corporation or the Holder of a breach of any provision of
this Certificate of Designation shall not operate as or be
construed to be a waiver of any other breach of such provision or
of any breach of any other provision of this Certificate of
Designation. The failure of the Corporation or the Holder to insist
upon strict adherence to any term of this Certificate of
Designation on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Certificate
of Designation. Any waiver must be in writing.


 


f)
Severability. If
any provision of this Certificate of Designation is invalid,
illegal or unenforceable, the balance of this Certificate of
Designation shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it
shall be found that any interest or other amount deemed interest
due hereunder violates applicable laws governing usury, the
applicable rate of interest due hereunder shall automatically be
lowered to equal the maximum permitted rate of
interest.


 


g)
Next Business Day.
Whenever any payment or other obligation hereunder shall be due on
a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.


 


h)
Headings. The
headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designation and shall not
be deemed to limit or affect any of the provisions
hereof.


 




 

-7-








 






 


IN
WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true this
5th day of
October, 2016.


 


 


	
 

	
 METASTAT,
INC.

 


	
 

	
 

By:
/s/ Daniel H.
Schneiderman


Name:
Daniel H. Schneiderman


Title:
Vice President, Finance, and Secretary









 


 


 




 

-8-








 






 


ANNEX
A


 


NOTICE
OF CONVERSION


 


(TO BE
EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF
SERIES A-2 PREFERRED STOCK)


 


The
undersigned hereby elects to convert the number of shares of Series
A-2 Convertible Preferred Stock indicated below, into shares of
common stock (the "Common
Stock"), of MetaStat, Inc., a Nevada corporation (the
"Corporation"),
according to the conditions hereof, as of the date written below.
If shares are to be issued in the name of a person other than
undersigned, the undersigned will pay all transfer taxes payable
with respect thereto and is delivering herewith such certificates
and opinions as reasonably requested by the Corporation in
accordance therewith. No fee will be charged to the Holder for any
conversion, except for such transfer taxes, if any.


 


Conversion
calculations:


 


Date to
Effect Conversion: ___________________


 


 


Number
of shares of Preferred Stock owned prior to Conversion:
___________________


 


 


Number
of shares of Preferred Stock to be Converted:
____________________


 


 


Number
of shares of Common Stock to be Issued:
____________________


 


 


 


[HOLDER]


 


 


By:
____________________


       Name:


       Title:


 


 


 


 


 


 


 




 

A-1