Document:

regrights.htm

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 30, 2014, by and among MetaStat, Inc., a Nevada corporation (the “Company”), and the purchasers signatory hereto (each, a “Purchaser” and collectively, the “Purchasers”).  This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, by and among the Company and the Purchasers (the “Purchase Agreement”).

The Company and each Purchaser hereby agrees as follows:

        1.                      Definitions.

               Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

            “Advice” shall have the meaning set forth in Section 6(d).

“Effectiveness Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 150th calendar day following the Filing Date and with respect to any additional Registration Statements which may be required pursuant to Section 2(c), the 60th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a “full review” by the Commission, the 90th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth (5th) Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading Day.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Filing Date” means, with respect to the Initial Registration Statement required hereunder, the 90th calendar day following the final Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.

“Losses” shall have the meaning set forth in Section 5(a).

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

“Proceeding(s)” means any writ, injunction, decree, order, judgment, lawsuit, claim, action, arbitration, proceeding, investigation, summons, audit or hearing (in each case, whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any governmental authority.

 

  

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“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means, as of any date of determination, (a) all shares of Common Stock issued pursuant to the Purchase Agreement, (b) all Warrant Shares then issuable upon exercise of the Warrants issued pursuant to the Purchase Agreement (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), (c) all Conversion Shares then issuable upon conversion of the Series A Preferred Stock, if any, issued pursuant to the Purchase Agreement (assuming on such date the Series A Preferred Stock is converted in full without regard to any conversion limitations therein), and (d) any securities issued or then issuable upon any stock split, dividend or other distribution,  recapitalization or similar event with respect to the foregoing; provided, however, that the Holder has completed and delivered to the Company a Selling Stockholder Questionnaire and that with respect to any given Holder, any such Holder’s Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Holder’s Registrable Securities is declared effective by the Commission under the Securities Act and such Holder’s Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Holder’s Registrable Securities have been previously sold in accordance with Rule 144, or (c) such Holder’s securities become eligible for resale without volume or manner-of-sale restrictions pursuant to Rule 144 (assuming that such Registrable Securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company) as reasonably determined by the Company, upon the advice of counsel to the Company, and the Company has delivered to such Holder certificates representing such Registrable Securities without legend,.

“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“Selling Stockholder Questionnaire” means a questionnaire in the form attached as Annex B hereto, or such other form of questionnaire as may reasonably be adopted by the Company from time to time.

“SEC Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements or requests of the Commission staff and (ii) the Securities Act.

  

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      2.           Resale Registration.

(a) On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415.  Each Registration Statement filed hereunder shall be on Form S-1 and shall contain substantially the “Plan of Distribution” attached hereto as Annex A. Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Transfer Agent and the affected Holders (the “Effectiveness Period”).  The Company shall promptly notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement within two Trading Days that the Company telephonically confirms effectiveness with the Commission.  The Company shall file a final Prospectus with the Commission as required by Rule 424.

(b) Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-1 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e).

(c) Notwithstanding any other provision of this Agreement, if the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercially reasonable efforts to advocate with the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:

	
a.  

	
First, the Company shall reduce or eliminate any securities to be included by any Person other than a Holder;

	
b.  

	
Second, the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders); and

	
c.  

	
Third, the Company shall reduce Registrable Securities represented by Conversion Shares (applied, in the case that some Conversion Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Conversion Shares held by such Holders).

In the event of a cutback hereunder, the Company shall give the Holder at least two (2) Trading Days prior written notice along with the calculations as to such Holder’s allotment.  In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-1 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.

 

  

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(d) Each Holder agrees to furnish to the Company a completed Selling Stockholder Questionnaire not more than twenty (20) Business Days following the date of this Agreement. Each Holder further agrees that it shall not be entitled to be named as a selling security holder in the Registration Statement or use the Prospectus for offers and resales of Registrable Securities at any time, unless such Holder has returned to the Company a completed and signed Selling Stockholder Questionnaire. If a Holder of Registrable Securities returns a Selling Stockholder Questionnaire after the deadline specified in the previous sentence, the Company shall use its commercially reasonable efforts to take such actions as are required to name such Holder as a selling security holder in the Registration Statement or any pre-effective or post-effective amendment thereto and to include (to the extent not theretofore included) in the Registration Statement the Registrable Securities identified in such late Selling Stockholder Questionnaire; provided that the Company shall not be required to file an additional Registration Statement solely for such shares. Each Holder acknowledges and agrees that the information in the Selling Stockholder Questionnaire will be used by the Company in the preparation of the Registration Statement and hereby consents to the inclusion of such information in the Registration Statement.

3.           Registration Procedures.

               In connection with the Company’s registration obligations hereunder, the Company shall:

(a) Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than two (2) Trading Days prior to the filing of any related Prospectus or any amendment (including any post-effective amendments) or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder (or Holder’s counsel if requested by Holder) copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the reasonable review of such Holders, and (ii) use its commercially  reasonable efforts to cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Holders advance copies of any universal shelf registration statement registering securities in addition to those required hereunder, or any Prospectus prepared thereto.

(b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably practicable to any comments received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably practicable to the Holders true and complete copies of all correspondence from and to the Commission related to and/or applicable to a Holder in the reasonable opinion of the Company relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the Effectiveness Period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

  

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(c) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided, however, in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its Subsidiaries.

(d) Use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(e) Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

(f) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(c).

(g)  Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

  

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(h) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement (solely with respect to Holders a party thereto) and applicable securities laws, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may reasonably request.

(i) Upon the occurrence of any event contemplated by Section 3(c), as promptly as reasonably practicable under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(c) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus.  The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.  In addition, if (i) there is material non-public information regarding the Company which the Company’s Board of Directors (the “Board”) determines not to be in the Company’s best interest to disclose and which the Company is not otherwise required to disclose, (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board determines not to be in the Company’s best interest to disclose, or (iii) the Company is required to file a post-effective amendment to the Registration Statement to incorporate the Company’s quarterly and annual reports and audited financial statements on Forms 10-Q and 10-K, then the Company may (x) postpone or suspend filing of a registration statement for a period not to exceed forty-five (45) consecutive days or (y) postpone or suspend effectiveness of a registration statement for a period not to exceed forty-five (45) consecutive days; provided that the Company may not postpone or suspend effectiveness of a registration statement under this Section for more than ninety (90) days in the aggregate during any three hundred sixty (360) day period; provided, however, that no such postponement or suspension shall be permitted for consecutive twenty (20) day periods arising out of the same set of facts, circumstances or transactions.

(j) Comply in all material respects with all applicable rules and regulations of the Commission.

(k) The Company shall require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control over the shares, pursuant to the Selling Stockholder Questionnaire.

        4.                      Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement.  In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.  In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

  

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        5.                      Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected.  The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware.

(b) Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3(c)(iii)-(vi), to the extent, but only to the extent, related to the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected.  In no event shall the liability of any selling Holder under this Section 5(b) be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

  

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(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

               An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

(d) Contribution. If it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

               The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute pursuant to this Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, except in the case of fraud by a Holder, judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal).

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

  

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        6.                      Miscellaneous.

a) Remedies.  In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of all its rights under this Agreement.  Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.  Notwithstanding anything else contained herein, no party hereto shall seek, nor shall any party hereto be liable for, punitive or exemplary damages, under any tort, contract, equity, or other legal theory, with respect to any breach (or alleged breach) of this Agreement or any provision hereof or any matter otherwise relating hereto or arising in connection herewith.

b) No Piggyback on Registrations; Prohibition on Filing Other Registration Statements.  Except as set forth on Schedule 6(b) attached hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities.  The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) (i) shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement and (ii) shall not prohibit the Company from filing a shelf registration statement on Form S-3 for a primary offering by the Company, provided that the Company makes no offering of securities pursuant to such shelf registration statement prior to the effective date of the Registration Statement required hereunder that includes all of the Registrable Securities.

c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration Statement.

d) Discontinued Disposition.  By its acquisition of Registrable Securities, each Holder agrees that, subject to the limitations set forth in Section 3(i), upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. Nothing in this Section 6(d) or elsewhere shall extend the limitations on the Company’s ability to postpone or suspend.  The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

e) Piggy-Back Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a then effective Registration Statement.

  

-9-

  

 

f) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least a majority of the then outstanding Registrable Securities (for purposes of clarification, this includes any Registrable Securities issuable upon exercise or conversion of any Security).  If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

g) Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities.  Each Holder may assign their respective rights hereunder to any Person to whom such Purchaser assigns or transfers any Registrable Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Registrable Securities, by the provisions of this Agreement and any other Transaction Document that applies to the Purchasers.

i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts in any material respect with the provisions hereof.  Except as set forth on Schedule 6(i), neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

j) Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

k) Governing Law, Jurisdiction.  This Agreement shall be governed by and construed solely and exclusively in accordance with the internal laws of the State of New York without regard to the conflicts of laws principles thereof. The parties hereto hereby expressly and irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement shall be brought solely in a federal or state court located in the City, County and State of New York. By its execution hereof, the parties hereby covenant and irrevocably submit to the in personam jurisdiction of the federal and state courts located in the City, County and State of New York and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in New York City. The parties hereto expressly and irrevocably waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto. In the event of any such action or proceeding, the party prevailing therein shall be entitled to payment from the other party hereto of all of its reasonable counsel fees and disbursements.

 

  

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l) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

m) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

n) Headings. The headings in this Agreement are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

o) Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.

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

 

(Signature Pages Follow)

 

  

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               IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

	 	
METASTAT, INC.

 

 

	 	
By:__________________________________________

     Name:

     Title:

 

 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

  

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[SIGNATURE PAGE OF HOLDERS TO  RRA]

Name of Holder: __________________________

Signature of Authorized Signatory of Holder: __________________________

Name of Authorized Signatory: _________________________

Title of Authorized Signatory: __________________________

[SIGNATURE PAGES CONTINUE]

 

  

-13-

  

 

Schedule 6(b)

Other Securities to be Included on the Registration Statement

[SEE ATTACHED SCHEDULE]

  

-14-

  

 

Annex A

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the principal Trading Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions.  These sales may be at fixed or negotiated prices.  A Selling Stockholder may use any one or more of the following methods when selling securities:

 

	
·

	
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

 

	
·

	
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

 

	
·

	
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

 

	
·

	
an exchange distribution in accordance with the rules of the applicable exchange;

 

	
·

	
privately negotiated transactions;

 

	
·

	
settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;

 

	
·

	
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

 

	
·

	
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

 

	
·

	
a combination of any such methods of sale; or

 

	
·

	
any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.

 

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales.  Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

 

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume.  The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities.  The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

  

-15-

  

 

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales.  In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

 

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities.  The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

 

Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder.  In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the Selling Stockholders.

 

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect.  The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution.  In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities of the common stock by the Selling Stockholders or any other person.  We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

  

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Annex B

 

METASTAT, INC.

 

Selling Stockholder Notice and Questionnaire

 

The undersigned beneficial owner of common stock (the “Registrable Securities”) of METASTAT, INC., a Nevada corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

 

   In order to sell or otherwise dispose of any Registrable Securities pursuant to the Registration Statement, a holder of Registrable Securities generally will be required to be named as a selling stockholder in the related prospectus or a supplement thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to purchasers of Registrable Securities (including pursuant to Rule 172 under the Securities Act) and be bound by the provisions of the Registration Rights Agreement (including certain indemnification provisions, as described below). Holders must complete and deliver this Notice and Questionnaire in order to be named as selling stockholders in the Prospectus. Holders of Registrable Securities who do not complete, execute and return this Notice and Questionnaire within ten (10) Business Days following the date of the Agreement (1) will not be named as selling stockholders in the Resale Registration Statement or the Prospectus and (2) may not use the Prospectus for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

 

NOTICE

 

The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

  

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The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

	
  

	
1.

	
Name.

 

	
  

	 	
(a)

	
Full Legal Name of Selling Stockholder

 

	  
	  

	
  

	 	
(b)

	
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:

 

	  
	  

	
  

	 	
(c)

	
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):

 

	  
	  

 

	
  

	
2.  Address for Notices to Selling Stockholder:

 

	  
	  
	  
	
Telephone:

	
Fax:

	
Contact Person:

	
  

	
3.  Broker-Dealer Status:

 

	
  

	 	
(a)

	
Are you a broker-dealer?

 

                                           Yes   [  ]    No   [  ]

 

	
  

	 	
(b)

	
If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

 

                                           Yes   [  ]    No   [  ]

 

	
  

	 	
Note:

	
If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

	
  

	 	
(c)

	
Are you an affiliate of a broker-dealer?

 

                                           Yes   [  ]    No   [  ]

  

-18-

  

 

	
  

	
(d)

	
If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

 

                                           Yes   [  ]    No   [  ]

 

	
  

	 	
Note:

	
If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

 

	
  

	
4.  Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.

 

Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.

 

	
  

	 	
(a)

	
Type and Amount of other securities beneficially owned by the Selling Stockholder:

 

	  
	  

	
  

	 	
(b)

	
Number of shares of Common Stock to be registered pursuant to this Notice for resale:

 

	
 

	  

	
  

	
5.  Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

 

	
  

	 	
State any exceptions here:

 

	  
	  

 

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.

 

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

 

Date:                                                      Beneficial Owner:                                                                         

                                                                By:                                                                         

                                                                      Name:

                                                                      Title:SECOND AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDED
AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made and entered into effective the 1st day of July, 2014 (the "Effective
Date"), by and between BIOANALYTICAL SYSTEMS, INC., a corporation organized under the laws of the State of Indiana ("BASi"
or the "Company"), and Jacqueline M. Lemke, an individual residing in the State of Indiana ("Employee").

 

Preliminary Statements:

 

A.BASi is engaged in the business
of providing contract research services and manufacturing and distributing scientific instruments (the "Business").

 

B.On April 9, 2012 (the "Start
Date"), BASi and Employee entered into an employment agreement, which was amended as of October 15, 2012 and amended and restated
as of February 7, 2013 (as amended and restated, the "Original Agreement") which sets forth certain terms and conditions
of Employee's employment with BASi.

 

C.The Company and
Employee desire to amend and restate the Original Agreement and to continue Employee's employment on the terms and conditions contained
herein. Employee views entry into this employment as mutually beneficial and represents a long-term investment by the Company and
by Employee as a major career commitment.

 

In consideration of
the premises and mutual covenants and agreements contained herein, the parties hereby agree that the Original Agreement is hereby
amended and restated in its entirety as follows:

 

ARTICLE 1

 

Term, Compensation, and Benefits

 

Section 1.1.
Term. The Company hereby agrees to employ Employee, and Employee hereby accepts employment with the Company, on the terms
and conditions set forth in this Agreement until June 30, 2017, (the "Initial Term"). The Initial Term shall be extended
for successive one-year periods (the "Additional Terms" and, together with the Initial Term, the "Employment Period"),
except that if either Employee or the Company gives the other party written notice at least ninety (90) days before the end of
the Initial Term or any Additional Term, as the case may be, then this Agreement shall not renew and shall expire at the end of
its then current term.

 

Section
1.2 Compensation and Benefits.

 

Section 1.2.1.
Salary. BASi will pay Employee a base salary at a rate of $26,000.00 per month from the Effective Date until adjusted by
the Compensation Committee of the Board of Directors. Base salary shall be paid in equal bi-weekly installments in arrears.

 

Section 1.2.2.
Stock Options. Employee shall or may receive the following grants of options, as set forth herein:

 

		(a)	On the Effective Date, Employee shall receive a grant of options to purchase 25,000 BASi shares
under the Company's 2008 Director and Employee Stock Option Plan (the "Option Plan") and an option agreement to be entered
into between the Company and Employee (the "Additional Options"). The exercise price of the Additional Options shall
be the fair market value of the Company's common shares on the trading day prior to the Effective Date (determined as provided
in the Option Plan). The Additional Options will vest and become exercisable in three equal annual installments on the first, second
and third anniversaries of the Effective Date.  The Additional Options will terminate as provided for in the Option Plan
and related agreement, provided that, in the event Employee ceases to serve as an employee of the Company or any of its subsidiaries
due to a termination by the Company without cause or a resignation by Employee for "good reason" (as defined herein),
Employee will be entitled to exercise any Additional Options that are vested on the date Employee's employment terminated for a
period of sixty (60) days following such termination date.

 

 

    	 

    	 

    

 

		(b)	Employee will be eligible to receive additional option grants and other equity awards from time
to time during the Employment Period as determined by the Board or any committee thereof and as may be otherwise provided for in
this Agreement. The exact number, strike price, vesting schedule and other terms of any such options or equity awards will be set
forth in appropriate agreements between the Company and Employee as required by the Option Plan or any additional or successor
plan hereafter adopted by the Company.

 

Section 1.2.3.
Bonus.

 

		(a)	During the Employment Period, Employee shall be eligible to receive an annual cash bonus in an
amount and subject to such conditions as shall be approved by the Compensation Committee of the Board of Directors pursuant to
the Company's Annual Incentive Bonus Plan ("AIBP"), if any, for the applicable fiscal year. If Employee is entitled to
receive a bonus pursuant to the AIBP, it will be paid pursuant to the terms of the AIBP. Any bonus Employee is entitled to receive
for any fiscal year pursuant to this Section 1.2.3(a) is hereinafter referred to as the "Annual Bonus". For the
avoidance of doubt, nothing in the AIBP shall affect Employee's right to receive a pro-rated portion of her Bonus in the circumstances
described in Sections 4.2 and 4.4.

 

		(b)	Employee will also be eligible for bonus grants under bonus plans adopted by the Company or otherwise
at the discretion of the Compensation Committee of the Board.

 

		(c)	On the Company's first regular payroll date after the Effective Date, Employee shall receive a
one-time cash bonus in the amount of $50,000 in recognition of her outstanding service to the Company since the Start Date.

 

Section 1.2.4.
Vacation. Employee will receive twenty-five (25) vacation days per annum to be used in accordance with the Company's vacation
policy.

 

Section 1.2.5.
Commuting Allowance. Commencing on the Effective Date and continuing until such time, if ever, that Employee relocates to
West Lafayette, Indiana, Employee shall be entitled to receive a commuting allowance of $1,400.00 per month.

 

Section 1.2.6.
Expense Reimbursement. Employee will be entitled to reimbursement of travel, entertainment and other out of pocket expenses
incurred by her in the course of her employment in accordance with the Company's standard reimbursement policies.

 

Section 1.2.7.
Other Benefits. During the Employment Period, Employee shall be entitled to participate in all employee benefit plans which
are generally made available to employees of the Company, subject to the eligibility, qualification, waiting period and other terms
and conditions of such plans as they shall be in effect from time to time unless listed herein as exceptions from those terms and
conditions. The highlights of the benefits are as follows: group health insurance; term life insurance (two times base salary);
long term disability insurance; and a 401K deferred tax savings incentive/profit sharing plan. Optional participation benefits
include a flexible spending account, dental, vision, and short-term disability.

 

Section 1.2.8.
Required Withholdings. All amounts to be paid hereunder, including any amounts to be paid under Article 4 or Article
5, shall be paid in accordance with normal payroll procedures of the Company and shall be subject to all required withholdings
and deductions.

 

    	2

    	 

    

 

ARTICLE 2

 

Duties

 

Section 2.1.
Duties. During the Employment Term, Employee shall continue to serve as President and Chief Executive Officer of the Company.
In her role as President and Chief Executive Officer of the Company, Employee shall have such duties as shall be provided in the
Bylaws of the Company or assigned to her by the Board, including, but not limited to, responsibility for the development, implementation
and oversight of appropriate risk management policies and procedures. In such capacity, she shall have full responsibility and
decision-making authority for the day-to-day operations of the Company's business, subject to the general control of the Board.
In addition, Employee is responsible for strengthening existing collaborations, building new partnerships, plus executing programs
and initiatives to suppport the BASi mission statement.

 

Section 2.2.
Other Duties. Employee shall serve the Company by performing such other services as the Company may reasonably require to
conduct the Company’s business. The Company shall also have the absolute right and power to direct and control Employee in
carrying out duties assigned by the Company, including, but not limited to, the right (a) to review, modify and cancel all work
performed, and (b) to assign specific duties to be performed, including the general means and manner by which such duties shall
be performed. Notwithstanding any other provisions of this Agreement, the Company shall not impose employment duties or constraints
of any kind upon Employee which would require Employee to violate any ordinance, regulation, statute or other law. Employee shall
devote her full working time, attention and energy to the performance of the duties imposed hereunder. Employee shall conform to
such hours of work as may from time to time reasonably be required of her and shall not be entitled to receive any additional remuneration
for work outside her normal hours. Employee will NOT be held financially, legally, or otherwise liable for any practice
or action or decision made by BASi, or its predecessors or successors prior to the Start Date.

 

Section 2.3.
Officer Indemnification. Employee shall be entitled to indemnification as provided for the Company's directors and officers
in its articles of incorporation and bylaws, as amended from time to time.

 

ARTICLE 3

 

Confidentiality and Other Matters

 

Section 3.1.
Confidentiality Agreement. Employee, prior to and during the term of employment under this Agreement, has had and will have
access to and has become or will become familiar with information, whether or not originated by Employee, which is used in or related
to the Business of BASi or certain subsidiaries or affiliates of BASi and is (a) proprietary to, about, or created by the Company
its subsidiaries or its affiliates; (b) designated as confidential by the Company, its subsidiaries or its affiliates; or (c) not
generally known to or ascertainable by proper means by the public ("Confidential Information").

 

Further, Employee has
had and will have access to items proprietary to the Company, its subsidiaries or its affiliates ("Proprietary Items").
"Proprietary Items" shall mean all legally-recognized rights which result from or are derived from Employee's work product
or the work product of others made for the Company, its subsidiaries or its affiliates, including all past, present and future
work product made for the Company, its subsidiaries or its affiliates, or with knowledge, use or incorporation of Confidential
Information, including, but not limited to works of authorship, developments, inventions, innovations, designs, discoveries, improvements,
trade secrets, trademarks, applications, techniques, know-how and ideas, whether or not patentable or copyrightable, conceived
or made or developed by Employee (solely or in cooperation with others) or others during the term of this Agreement or prior to
or during her tenure with the Company, or which are reasonably related to the Business or the business of BASi or certain subsidiaries
or affiliates of BASi or the actual or demonstrably anticipated research and development of the Company.

 

Employee agrees that
any Confidential Information and Proprietary Items will be treated in full confidence and shall not be used, directly or indirectly,
by her nor shall the same be disclosed to any other firms, organizations, or persons outside of the Company's employees bound by
similar agreement, during the term of this Agreement or at any time thereafter, except as required in the course of her employment
with the Company. All Confidential Information and Proprietary Items, whether prepared by Employee or otherwise, coming into her
possession, shall remain the exclusive property of the Company and shall not be permanently removed from the premises of the Company
under any circumstances whatsoever, without the prior written consent of the Company.

 

    	3

    	 

    

 

Employee will not be
obliged to keep information confidential to the extent that the information has ceased to be confidential and has entered the public
domain otherwise than due to Employee's acts. The provisions of this Section 3.1 shall be in addition to, and shall not
affect, Employee's common law duty of fidelity to the Company.

 

Section 3.2.
Disclosure and Assignment of Inventions. The parties foresee that Employee may make inventions or create other intellectual
property in the course of her duties hereunder and agree that in this respect Employee has a special responsibility to further
the interests of the Company and its affiliates. In order to protect the Company's interest in its intellectual property, the Company
and Employee have entered into a separate agreement regarding these matters dated as of April 9, 2012.

 

Section 3.3
Non-Solicitation. Employee agrees that during Employee’s employment with the Company and for an additional period
of the two (2) years immediately following termination of Employee’s employment with the Company, Employee shall not directly
or indirectly, as an individual or as a director, officer, contractor, employee, consultant, partner, investor or in any other
capacity with any corporation, partnership or other person or entity, other than the Company (an "Other Entity"), (i)
contact or communicate with any then current material customer or client of the Company in the Business, or any person or entity
with which the Company is then engaged in material discussions regarding that person or entity becoming a client or customer of
the Company in the Business, for the purpose of inducing any such customer or client to move its account from the Company to another
company in the Business; provided, however, that nothing in this sentence shall prevent Employee from becoming employed by or providing
consulting services to any such customer or client of the Company in the Business, or (ii) solicit any other employee of the Company
for employment or a consulting or other services arrangement with an Other Entity.

 

The restrictions of
this Section 3.3 shall not be deemed to prevent Employee from owning not more than 5% of the issued and outstanding shares
of any class of securities of an issuer engaged in the Business whose securities are listed on a national securities exchange or
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended, or from owning any amount of securities
of an issuer who is not engaged in the Business whose securities are listed on a national securities exchange or registered pursuant
to Section 12(g) of the Securities Exchange Act of 1934, as amended. In the event a court of competent jurisdiction determines
that the foregoing restriction is unreasonable in terms of geographic scope or otherwise then the court is hereby authorized to
reduce the scope of said restriction and enforce this Section 3.3 as so reduced. If any sentence, word or provision of this
Section 3.3 shall be determined to be unenforceable, the same shall be severed herefrom and the remainder shall be enforced
as if the unenforceable sentence, word or provision did not exist. Notwithstanding any provision of this Agreement to the contrary,
the terms and conditions of this Section 3.3 shall survive for a period of two (2) years following termination of Employee’s
employment with the Company, at which time the terms and conditions of this Section 3.3 shall terminate.

 

Section 3.4.
Code of Conduct. Employee agrees to abide by all the conditions of the Company Code of Conduct and Ethics.

 

ARTICLE 4

 

Termination of Employment

 

Section 4.1.
Resignation by Employee. Employee may resign from her employment with the Company at any time by providing written notice
to the Company of resignation at least ten (10) days prior to the effective date of the resignation (such effective date, the "Resignation
Date"). Employee may resign at any time for "good reason" due to (a) a material breach of this Agreement by the
Company (b) the assignment to Employee of duties materially inconsistent with this Agreement other than in accordance with the
terms of this Agreement, (c)  any material decrease in base compensation, or (d) a requirement by the Company for the Employee
to be based more than fifty miles from the location the Employee is employed upon the Effective Date of this Agreement and the
Company has not rectified such “good reason” within thirty (30) days after Employee has given the Company written notice
of such "good reason”.

 

    	4

    	 

    

 

A termination by Employee
for "good reason" shall entitle Employee to the same compensation and benefits as if Employee had been terminated by
the Company without cause. In the event of a termination by Employee for "good reason," the provisions of Section
3.3 shall not apply and shall be of no force or effect. Upon any resignation by Employee, Employee shall use reasonable best
efforts to assist the Company in good faith to effect a smooth transition. If Employee voluntarily resigns her position without
"good reason" prior to the termination of this contract, the compensation terms of this agreement are null and void.

 

Section 4.2.
Termination by the Company without Cause. At any time, the Company may, in its sole and absolute discretion, terminate Employee's
employment with the Company (the actual date of termination being referred to as the "Termination Date") without cause,
by providing written notice thereof to Employee ("Termination Notice") at least ten (10) days prior to the Termination
Date. In the event of termination of Employee's employment pursuant to this Section, the Company shall continue to pay to Employee
her then current annual salary throughout such ten (10) day notice period and shall pay Employee as compensation for loss of office
(a) eighteen (18) months base salary at Employee’s then current salary in equal bi-weekly installments over the eighteen
(18) month period following the Termination Date (the "Severance Period"), (b) a pro-rated Bonus for the completed portion
of any fiscal year in which the Termination Date occurs, and (c) all vacation pay accrued as of the Termination Date calculated
in accordance with Section 1.2.4. Upon receipt by Employee of a Termination Notice pursuant to this Section 4.2,
(x) Employee shall assist the Company in good faith to effect a smooth transition, and (y) the Company may request Employee to
vacate the premises owned by the Company and used in connection with the Business within a reasonable time; provided, that the
obligation of the Company to make payments to Employee pursuant to this Section 4.2 and the other provisions of this Agreement
shall not be affected; provided further, that in the event of a termination by the Company without cause pursuant to this Section
4.2, the provisions of Section 3.3 shall not apply and shall be of no further force or effect. Amounts payable pursuant
to clauses (a) and (b) of this Section 4.2 shall be paid to Employee on the first regular payroll date of the Company following
the delivery to the Company by Employee of a duly executed release, in form and substance acceptable to the Company, of all claims
Employee may have against the Company, which release is no longer subject to revocation. All other amounts payable pursuant to
this Section 4.2 shall be paid to Employee no later than the first regular payroll date of the Company following the effective
date of the termination of her employment.

 

Section 4.3.
Termination by the Company with Cause. This Agreement shall be deemed to be terminated for cause and the employment relationship
between Employee and the Company shall be deemed severed upon written notice to Employee by the Company after the occurrence of
any of the following:

 

		(a)	The final, non-appealable imposition of any restrictions
or limitations by any governmental authority having jurisdiction over Employee to such an extent that she cannot render the services
for which she was employed.

 

		(b)	Employee (i) willfully and continually fails or refuses
(without proper cause) to substantially perform the duties of her employment and to adhere in all material respects to the provisions
of this Agreement and the written policies of the Company, which failure shall not be remedied within thirty (30) days after written
notice from the Company to Employee, or (ii) conducts herself in a fraudulent manner, or (iii) conducts herself in an unprofessional
or unethical manner which in the reasonable judgment of the Board of the Company is detrimental to the Company.

 

		(c)	Employee willfully and continually fails or refuses
to adhere to any written agreements to which Employee and the Company or any of its affiliates are parties, which failure shall
not be remedied within thirty (30) days after written notice from the Company to Employee.

 

If Employee's employment is terminated
by the Company for cause pursuant to this Section 4.3, the Company shall pay to Employee any unpaid base salary for the
period ending on the termination date, plus the amount of any accrued vacation as of the termination date.

 

    	5

    	 

    

 

Section 4.4.
Death or Disability. This Agreement and Employee's employment with the Company shall terminate upon the death or Disability
of Employee. In either such event, the Company shall pay to Employee or her estate (a) Employee's unpaid base salary for
the period ending on the termination date; (b) a pro-rated Bonus for the completed portion of any fiscal year in which the
termination date occurs; and (c) all vacation pay accrued as of the Termination Date calculated in accordance with Section 1.2.4.
For purposes of this Agreement, "Disability" means that Employee meets one of the following requirements: (i) Employee
is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that
can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) Employee
is, by reason of medically determinable physical or mental impairment that can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than
3 months under an accident and health plan covering employee of the Company.

 

Section 4.5.
Non-Renewal by Company. If the Company provides Employee with written notice of its intent not to renew this Agreement as
provided in Section 1.1, then Employee shall be entitled to the same severance benefits described in this Agreement as if
her employment was terminated by the Company without cause.

 

Section 4.6.
Continuation of Health Insurance Benefits. If Employee is terminated by the Company without cause, or resigns her employment
with the Company for "good reason", then Employee shall be entitled to participate in the Company’s group health
plan as an active employee, at the active employee rate, throughout the entire Severance Period.  Upon the conclusion of the
Severance Period, Employee will then be eligible to participate in the Company’s group health plan and elect continuation
of health coverage pursuant to Section 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”). 
Employee’s participation in the Company’s group medical plan during the Severance Period will NOT run concurrently
with the allotted eighteen-month period under COBRA and any law requiring continuation of health care coverage.  If the terms
of the Company's group health plan at the time of the termination of Employee's employment as described in this section do not
permit Employee to continue to participate as an active employee as described herein and Employee elects continuation of health
care coverage under COBRA, then the Company shall reimburse Employee an amount equal to her monthly COBRA premiums for the Severance
Period. Notwithstanding the foregoing, Employee's participation in the Company's group health plan shall cease immediately upon
Employee’s becoming entitled to other health insurance.

 

ARTICLE 5

 

Change in Control

 

The Board has determined
that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication
of Employee, notwithstanding the possibility or occurrence of a Change in Control of the Company. The Board believes it is imperative
to diminish the inevitable distraction of Employee by virtue of personal uncertainties and risks created by a pending or threatened
Change in Control and to encourage Employee’s full attention and dedication to the Company currently and in the event of
any pending, threatened or actual Change in Control and to provide Employee with compensation and benefits arrangements upon a
Change in Control which are consistent with Employee’s significant leadership position and which are competitive. (See Addendum
A for Definition of Change in Control)

 

Section 5.1.
Involuntary Termination/Change in Control. In the case of involuntary termination of Employee by the Company within one
(1) year after a Change in Control of the Company (which shall include any termination as to which notice is given by the Company
within such one (1) year period, notwithstanding the effective date of termination) Employee will be paid compensation in terminal
pay and participation in benefits, savings and retirement plans as set forth in Section 5.2, 5.3 and 5.4 of
this Agreement.

 

Section 5.2.
Terminal Pay. Employee will receive terminal pay equal to eighteen (18) months base salary at the monthly rate in effect
on the date of termination ("Terminal Pay"), to be paid over a eighteen-month period in equal bi-weekly installments
beginning with the first regular pay period of the Company following such termination.

 

    	6

    	 

    

 

Section 5.3.
Special Bonus. In addition to the Terminal Pay, Employee will be eligible, based on performance, for any special bonus program
which may be instituted by the Company in recognition of particular assignments, duties or responsibilities required during the
crucial transition period leading up to, or following, the Change in Control.

 

Section 5.4.
Benefits, Savings and Retirement Plans. During the period of terminal payments, Employee will remain in employee status
for benefits purposes only and will be entitled to participate in all benefits, savings and retirement plans, practices, policies
and programs of the Company applicable generally to other peer executives of the Company, with the expectation that Employee continue
to make all applicable employee contributions to said program(s). If the terms of the Company's group health plan at the time of
the termination of Employee's employment as described in Section 5.1 do not permit Employee to continue to participate as
an active employee as described herein and Employee elects continuation of health care coverage under COBRA, then the Company shall
reimburse Employee an amount equal to her monthly COBRA premiums for the eighteen-month period following such termination.

 

Section 5.5.
Interaction with Article 4 of this Agreement. To the extent any of the provisions of this Article 5 are in conflict
with the provisions of Article 4 of this Agreement (e.g., as to Terminal Pay due upon involuntary termination), in circumstances
in which this Article 5 applies, the terms of Article 5 shall control and shall supersede and replace any varying
provisions set forth in Article 4; provided, however, that nothing in this Section 5.5 shall be deemed to limit or
eliminate any rights of Employee or the Company under any provision of Article 4 not so superseded and replaced.

 

ARTICLE 6

 

Miscellaneous

 

Section 6.1.
Relationship between the Parties. The relationship between the Company and Employee shall be that of an employer and an
employee, and nothing contained herein shall be construed or deemed to give Employee any interest in any of the assets of the Company.

 

Section 6.2.
Notices. Any notice required or permitted to be given under this Agreement shall be in writing and delivered personally
or sent by certified mail, addressed to the party entitled to receive said notice, at the following addresses:

 

	 	If to Company:	Bioanalytical Systems Inc.
	 	 	2701 Kent Avenue
	 	 	West Lafayette, IN  47906
	 	 	 
	 	 	 
	 	If to Employee:	Jacqueline Lemke
	 	 	address on file with employee’s records

  

or at such other address as may be specified
from time to time in notices given in accordance with the provisions of this Section 6.2.

 

Section 6.3.
Enforceability. Both the Company and Employee stipulate and agree that if any portion, paragraph sentence, term or provision
of this Agreement shall to any extent be declared illegal, invalid or unenforceable by a duly authorized court of competent jurisdiction,
then, (a) the remainder of this Agreement or the application of such portion, paragraph, sentence, term or provision in circumstances
other than those as to which it is so declared illegal, invalid or unenforceable, shall not be affected thereby, (b) this Agreement
shall be construed in all respects as if the illegal, invalid or unenforceable matter had been omitted and each portion and provision
of this Agreement shall be valid and enforceable to the fullest extent permitted by law and (c) the illegal, invalid or unenforceable
portion, paragraph, sentence, term or provision shall be replaced by a legal, valid and enforceable provision which most closely
reflects the intention of the parties hereto as reflected herein.

 

    	7

    	 

    

 

Section 6.4.
Nonwaiver. The failure of either party hereto to insist in any one or more instances upon performance of any of the provisions
of this Agreement or to pursue its or her rights hereunder shall not be construed as a waiver of any such provisions or as the
relinquishment of any such rights.

 

Section 6.5.
Succession. This Agreement shall inure to the benefit of and be binding upon the parties hereto and upon their heirs, personal
representatives, and successor entities. This Agreement may not be assigned by either party without prior written agreement of
both parties.

 

Section 6.6.
Governing Law. The laws of the State of Indiana shall govern the construction and enforceability of this Agreement.

 

Section 6.7.
Entire Agreement. This Agreement constitutes the entire Agreement between the parties as to the subject matter contained
herein and all other agreements or understandings are hereby superseded and terminated.

 

Section 6.8.
Collective Agreements. There are no collective agreements which directly affect the terms and conditions of Employee's employment.

 

Section 6.10.
Heading. The headings of the sections are inserted for convenience only and do not affect the interpretation or construction
of the sections.

 

Section 6.11.
Remedies. Employee acknowledges that a remedy at law for any breach or threatened breach of the provisions of Sections
3.1 through 3.3 of this Agreement would be inadequate and therefore agrees that the Company shall be entitled to injunctive
relief, both preliminary and permanent, in addition to any other available rights and remedies in case of any such breach or threatened
breach; provided, however, that nothing contained herein shall be construed as prohibiting the Company from pursuing any other
remedies available for any such breach or threatened breach. Employee further acknowledges and agrees that in the event of a breach
by Employee of any provision of Sections 3.1 through 3.3 of this Agreement, the Company shall be entitled, in addition
to all other remedies to which the Company may be entitled under this Agreement to recover from Employee its reasonable costs including
attorney's fees if the Company is the prevailing party in an action by the Company. This Agreement is entered into by the Company
for itself and in trust for each of its affiliates with the intention that each company will be entitled to enforce the terms of
this Agreement directly against Employee.

 

 

Signature page follows

    	8

    	 

    

 

IN WITNESS WHEREOF, the Company and Employee
have executed, or caused to be executed, this Agreement as of the Effective Date.

 

	"COMPANY"	 	"EMPLOYEE"	 
	 	 	 	 	 
	BIOANALYTICAL SYSTEMS, INC.	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ John B. Landis	 	 /s/ Jacqueline M. Lemke	 
	 	John B. Landis, Ph.D.	 	Jacqueline M. Lemke	 
	 	Chairman of the Board	 	 	 
	 	 	 	 	 

 

 

    	9

    	 

    

 

ADDENDUM A

 

Definition of Change in Control

 

A "Change in Control" shall mean
the occurrence of any of the following events:

 

		1.	Approval by shareholders of the Company of (a) any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or pursuant to which shares of stock of the Company would be converted
into cash, securities or other property, other than a consolidation or merger of the Company in which holders of its common shares
immediately prior to the consolidation or merger have substantially the same proportionate ownership of voting common stock of
the surviving corporation immediately after the consolidation or merger as immediately before, or (b) a sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company.

 

		2.	A change in the majority of members of the Board of Directors of the Company within a twenty-four
(24) month period unless the election, or nomination for election by the Company shareholders, of each new director was approved
by a vote of two-thirds (2/3) of the directors then still in office who were in office at the beginning of the twenty-four (24)
month period.

 

		3.	The Company combines with another company and is the surviving corporation but, immediately after
the combination, the shareholders of the Company immediately prior to the combination do not hold, directly or indirectly, more
than fifty percent (50%) of the share of voting common stock of the combined company (there being excluded from the number of shares
held by such shareholders, but not from the shares of voting common stock of the combined company, any shares received by affiliates
(as defined in the rules of the SEC) of such other company in exchange for stock of such other company).

 

 

 

    	10

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