Document:

Exhibit 4.2

 

Exhibit
4.2

 

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

 

 

COMMON STOCK PURCHASE WARRANT

 

 METASTAT, INC.

 

	
Warrant Shares:
100,000

	
Initial Exercise Date: January 17,
2017

Warrant
No. [_____]   

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, [_____] or its assigns (the “Holder”) is entitled,
upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date
hereof (the “Initial
Exercise Date”) and on or prior to the close of
business on the five-year anniversary of the Initial Exercise Date
(the “Termination
Date”) but not thereafter, to subscribe for and
purchase from MetaStat, Inc., a Nevada corporation (the
“Company”), up to 100,000
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(c).

Section 1. Definitions. Capitalized terms
used and not otherwise defined herein shall have the meanings set
forth in that certain Exchange Agreement (the “Exchange Agreement”),
dated January 17, 2017, among the Company and the subscribers
signatory thereto. The following definitions shall apply for
purposes of this Warrant:

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

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

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

 

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Section 2. Exercise.

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

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

                             
X = Y x
(B-A)

            
                                  
B

 

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

 

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

 

                                  
A =  the Exercise Price.

 

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

 

 

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

 

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

 

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

d)
Mechanics of
Exercise.

i.
Delivery of Warrant Shares
Upon Exercise. Warrant Shares purchased hereunder shall be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder and
the Holder has provided the Company with written representations as
reasonably requested by the Company in connection with such legend
removal or (B) the Warrant Shares are eligible for resale by the
Holder without volume or manner-of-sale limitations pursuant to
Rule 144 and the Holder has provided the Company with written
representations as reasonably requested by the Company in
connection with such legend removal, and otherwise by physical
delivery of a certificate, registered in the Company’s share
register in the name of the Holder or its designee, for the number
of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the address specified by the Holder in the Notice of
Exercise by the date that is the earlier of (i) one (1) Trading Day
and (ii) the number of Trading Days comprising the Standard
Settlement Period after the delivery to the Company of the Notice
of Exercise (such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a cashless
exercise) is received within the earlier of (i) three Trading Days
and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. The
Company agrees to maintain a transfer agent that is a participant
in the FAST program so long as this Warrant remains outstanding and
exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period,
expressed in a number of Trading Days, on the Company’s
primary Trading Market with respect to the Common Stock as in
effect on the date of delivery of the Notice of
Exercise.

 

 

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

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

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

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

 

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

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

e)
Holder’s Exercise
Limitations. The Company shall not effect any exercise of
this Warrant, and a Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2 or otherwise, to the
extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, the Holder
(together with the Holder’s Affiliates, and any other Persons
acting as a group together with the Holder or any of the
Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall

 

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be
determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or
its Affiliates or Attribution Parties since the date as of which
such number of outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be 4.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

Section 3. Certain
Adjustments.

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

 

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

 

 

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and
shares of any other class of stock shall be deemed a distribution
by the Company to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 3(b)
and, if the outstanding shares of Common Stock shall be changed
into a larger or smaller number of shares of Common Stock as a part
of such reclassification, such change shall be deemed a subdivision
or combination, as the case may be, of the outstanding shares of
Common Stock within the meaning of Section 3(a).

 

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

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

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

f)
Notice to
Holder.

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

 

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

Section 4. Transfer of
Warrant.

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

 

-8-

 

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

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

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

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

Section 5. Miscellaneous.

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

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

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

 

-9-

 

 

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

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

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

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

 

-10-

 

 

f)
Governing Law;
Jurisdiction. This Warrant shall be governed by and
construed in accordance with the internal laws of the State of New
York, without giving effect to any of the conflicts of law
principles which would result in the application of the substantive
law of another jurisdiction. Each of the Company and the Holder (i)
hereby irrevocably submits to the jurisdiction of the United States
District Court sitting in the Southern District of New York and the
courts of the State of New York located in New York county for the
purposes of any suit, action or proceeding arising out of or
relating to the Exchange Agreement or any of the other transaction
documents or the transactions contemplated hereby or thereby and
(ii) hereby waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject
to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper.

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

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

i)
Notices. Any and
all notices or other communications or deliveries required or
permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email at the facsimile number or email address of the
addressee at or prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
facsimile or email at the facsimile number or email address of the
addressee on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (c) the second
(2nd)
Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set
forth in the Company’s records.

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

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

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

 

-11-

 

 

m)
Amendment. This
Warrant may be modified or amended or the provisions hereof waived
with the prior written consent of the Company and the Holder.

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

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

 

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

 

-12-

 

 

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

 

 

	

METASTAT, INC.

 

 

 

	

By:__________________________________________

     Name:

     Title:

 

 

 

 

-13-

 

 

NOTICE OF EXERCISE

 

TO:            

METASTAT,
INC.

 

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

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

_______________________________

 

 

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

 

_______________________________

 

_______________________________

 

_______________________________

 

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

 

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

Cash
Exercise_______

Cashless
Exercise_______

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

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

X = Y x
(B-A)

 
B

 

Where:

 

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

 

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

 

The
Exercise Price is (“A”).

 

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

 

 

-14-

 

 

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
_________________________________________________________________

 

Signature of Authorized Signatory of Investing
Entity:
___________________________________________

 

Name of
Authorized Signatory:
_____________________________________________________________

 

Title
of Authorized Signatory:
______________________________________________________________

 

Date:
__________________________________________________________________________________

 

 

 

 

 

-15-

 

 

ASSIGNMENT FORM

 

(To
assign the foregoing warrant, execute

this
form and supply required information.

Do not
use this form to exercise the warrant.)

 

 

 

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

 

_______________________________________________
whose address is

 

_______________________________________________________________.

 

 

 

_______________________________________________________________

 

Dated:
______________, _______

 

 

Holder’s
Signature:

_____________________________

 

Holder’s
Address:

_____________________________

 

  

_____________________________

 

 

-16-Exhibit 10.1

 

 
Exhibit 10.1

EXCHANGE AGREEMENT

 

This
EXCHANGE AGREEMENT (this “Agreement”) is made
effective as of January 17, 2017 (the “Execution Date”) by and
among MetaStat, Inc., a Nevada corporation (the “Company”) and Dolphin
Offshore Partners, L.P. (the “Investor”).

 

RECITALS

 

WHEREAS, the
Company and the Investor entered into that certain Note Purchase
Agreement dated July 30, 2015 (the “Note Purchase
Agreement”), pursuant to which the Company issued to
the Investor a non-convertible promissory note (the
“Promissory
Note”), in the aggregate principal amount of
$1,200,000 and having an initial maturity date of July 31, 2016, in
accordance with the terms of the Note Purchase
Agreement;

 

WHEREAS, the
Company and the Investor entered into that certain Amendment No. 1
to Promissory Note effective February 12, 2016 (the
“Note
Amendment”), pursuant to which the Company and the
Investor amended certain terms of the Promissory Note and extended
the maturity date thereof to December 31, 2016 (the
“Note Maturity
Date”);

 

WHEREAS, effective
October 21, 2016, $600,000 principal amount of the Promissory Note
plus $48,000 of accrued interest thereon were automatically
exchanged into the securities issued in Company’s private
placement, consisting of shares of the Company’s common
stock, par value $0.0001 per share (the “Common Stock”), shares of
the Company’s Series A-2 Preferred Stock, convertible into
Common Stock and common stock purchase warrants to purchase shares
of Common Stock;

WHEREAS, $600,000
principal amount of the Promissory Note plus accrued and unpaid
interest (the “Note
Outstanding Balance”) are currently
outstanding;

WHEREAS, the
Company and the Investor entered into that certain OID Note
Purchase Agreement dated February 12, 2016 (the “OID Note Purchase
Agreement”), pursuant to which the Company issued to
the Investor a non-convertible original issue discount promissory
note (the “OID
Note”), in the aggregate principal amount of $240,000
and having an initial maturity date of August 12, 2016, in
accordance with the terms of the OID Note Purchase
Agreement;

 

WHEREAS, the
Company and the Investor entered into that certain Amendment No. 1
to the OID Note effective August 12, 2016 (the “Note Amendment”),
pursuant to which the Company and the Investor amended certain
terms of the OID Note, including increasing the principal amount to
$264,000, extending the maturity date to November 12, 2016, and
granting the Company an option (the “Extension Option”) to
further extend the OID Note Maturity Date by increasing the OID
Principal Amount an additional 10%;

 

WHEREAS, effective
November 12, 2016, the Company exercised the Extension Option, and
the principal amount of the OID Note was increased to $290,400 (the
“OID Note
Outstanding Balance”) and the maturity date was
extended to February 12, 2017 (the “OID Note Maturity
Date”);

 

WHEREAS, the
Company desires, and the Investor agrees, that the Investor
exchange (the “Exchange”) the Promissory
Note and the OID Note for a new convertible promissory note (the
“Convertible
Note”), in the form attached hereto as Exhibit A, upon the terms and
conditions set forth herein. The Convertible Note shall have a
principal balance of $1,000,000, a maturity date of September 30,
2017, accrue interest at a rate of ten (10%) per annum, and a
conversion price equal to $2.00 per share. The shares of Common
Stock the Convertible Note are exercisable into shall be referred
to as the “Conversion
Shares”;

 

WHEREAS, in
consideration for the Exchange, the Company will issue to the
Investor a five-year common stock purchase warrant to purchase
100,000 shares of Common Stock with an exercise price per share of
$3.00 (the “Exchange
Warrant”), upon the terms and conditions set forth
herein. The shares of Common Stock the Exchange Warrant are
exercisable into shall be referred to as the “Warrant Shares”;
and

 

 

-1-

 

 

WHEREAS, each of
the Convertible Note, the Conversion Shares, the Exchange Warrant
and the Warrant Shares is intended to qualify as an exempted
security under Section 3(a)(9) of the Securities Act of 1933, as
amended (the “Securities
Act”).

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company
and the Investor agree as follows:

 

ARTICLE I

THE EXCHANGE

 

1.1           Closing.
Subject to the terms and conditions set forth in this Agreement,
the Company and the Investor shall exchange the Promissory Note at
the Note Outstanding Balance and the OID Note at the OID Note
Outstanding Balance in consideration for the issuance of the
Convertible Note with a total principal balance of $1,000,000 and
the Exchange Warrant. The closing of the Exchange and issuance of
the Convertible Note and the Exchange Warrant (the
“Closing”) shall take
place at the offices of the Company, 27 Drydock Ave., 2nd Floor, Boston, MA
02210 on the date hereof or such other date as the parties shall
agree (the “Closing
Date”).

 

1.2           Exchange.

 

(a)           Investor
Obligations. At the Closing, the Investor shall deliver or
promptly cause to be delivered to the Company (i) the original
Promissory Note, (ii) the original OID Note, and (iii) an executed
copy of this Agreement.

 

(b)           Company
Obligations. At the Closing, the Company shall deliver or
promptly cause to be delivered to the Investor (i) the Convertible
Note, (ii) the Exchange Warrant, and (iii) an executed copy of this
Agreement.

 

(c)           
Promissory Note and OID
Note. Effective as of the Closing Date, the Promissory Note
and the OID Note shall be deemed automatically canceled and of no
further force or effect and shall thereafter represent only the
right to receive the Convertible Note and the Exchange Warrant
(sometimes collectively referred to herein as the
“New
Securities”).

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

 

2.1           Investor
Representations and Warranties. The Investor hereby
represents and warrants to the Company as follows on the Execution
Date and the Closing Date:

 

(a)           Organization;
Authority. The Investor, if not a natural person, is an
entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. The Investor has
the requisite power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder. This Agreement has been duly
executed by the Investor, and when delivered by the Investor in
accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Investor, enforceable against it
in accordance with its terms.

 

(b)           
Ownership of the
Promissory Note and OID Note. The Investor is the sole owner
of the Promissory Note and the OID Note, free and clear of any and
all liens, claims and encumbrances of any kind.

 

 

 

-2-

 

 

(c)           Investment
Intent. The Investor is acquiring the New Securities as
principal for its own account for investment purposes only and not
with a view to or for distributing or reselling such New Securities
or any part thereof, except pursuant to sales that are exempt from
the registration requirements of the Securities Act and/or sales
registered under the Securities Act. The Investor does not have any
agreement or understanding, directly or indirectly, with any person
or entity to distribute the New Securities. Notwithstanding
anything in this Section
2.1(c) to the contrary, by making the representations
herein, the Investor does not agree to hold the New Securities for
any minimum or other specific term and reserves the right to
dispose of the New Securities at any time in accordance with or
pursuant to a registration statement or an exemption from the
registration requirements under the Securities Act.

 

(d)           Investor
Status. At the time the Investor was offered the New
Securities, it was, and at the date hereof it is, an
“accredited investor” as defined in Rule 501(a) of
Regulation D under the Securities Act. The Investor is not a
broker-dealer.

 

(e)           General
Solicitation. The Investor is not acquiring the New
Securities as a result of or subsequent to any advertisement,
article, notice or other communication regarding the New Securities
published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other
general solicitation or general advertisement.

 

(f)           
Reliance. The
Investor understands and acknowledges that (i) the New
Securities are being offered and sold to it without registration
under the Securities Act in a transaction that is exempt from the
registration provisions of the Securities Act, and (ii) the
availability of such exemption depends in part on, and the Company
will rely upon the accuracy and truthfulness of, the foregoing
representations, and the Investor hereby consents to such
reliance.

 

(g)           
Brokers and
Finders. The Investor has no knowledge of any person who
will be entitled to or make a claim for payment of any finder fee
or other compensation as a result of the consummation of the
transactions contemplated by this Agreement.

 

2.2           Company
Representations and Warranties. The Company hereby makes the
following representations and warranties to each Investor on the
Execution Date and on the Closing Date:

 

(a)           Organization
and Qualification. The Company is a corporation
incorporated, validly existing and in good standing under the laws
of the State of Nevada, with the requisite corporate power and
authority to own and use its properties and assets and to carry on
its business as currently conducted. The Company is duly qualified
as a foreign corporation to do business and is in good standing in
every jurisdiction where the nature of the business it conducts
makes such qualification necessary, except where the failure to do
so would not have a material adverse effect on the
Company.

 

(b)           
Authorization;
Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions
contemplated by this Agreement and to issue the Convertible Note
and the Conversion Shares, upon conversion of the Convertible Note
in accordance with the terms of the Convertible Note, to issue the
Exchange Warrant and Warrant Shares, upon exercise of the Exchange
Warrant in accordance with the terms of the Exchange Warrant and
otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance of this Agreement and any
other agreements and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by the
Company’s Board of Directors, and no further consent or
authorization of the Company, its Board of Directors (including any
committee thereof) or any class of the Company’s stockholders
is required. This Agreement, the Convertible Note, and the Exchange
Warrant have been duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the valid and
binding obligations of the Company enforceable against the Company,
in accordance with their terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

 

 

 

-3-

 

 

(c)           Issuance
of the New Securities. The Convertible Note, the Conversion
Shares, the Exchange Warrant, and the Warrant Shares when issued at
the Closing, will be duly authorized, validly issued, fully paid
and non-assessable and will be free and clear of all taxes, liens,
options or other encumbrances of any nature (except for those
imposed under applicable securities laws).

 

(d)           
No Conflicts. The
execution, delivery and performance of this Agreement, the Joinder
Agreement and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and reservation for issuance, as applicable, of the
Conversion Shares and Warrant Shares will not, (i) result in a
violation of the certificate of incorporation of the Company (the
“Certificate of
Incorporation”) or the bylaws of the Company (the
“Bylaws”) or (ii) result
in a violation of any law, rule, regulation, order, judgment or
decree (including United States federal and state securities laws
and regulations and rules or regulations of any self-regulatory
organizations to which either the Company or its securities are
subject) applicable to the Company or by which any property or
asset of the Company is bound or affected. The Company is not in
violation of its Certificate of Incorporation, Bylaws or other
organizational documents. The Company is not in default (and no
event has occurred which, with notice or lapse of time or both,
would put the Company in default) under, nor has there occurred any
event giving others (with notice or lapse of time or both) any
rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company is a
party except for such violations, defaults or events that have had
a material adverse effect.

 

(e)           
Absence of Certain
Changes. Since August 31, 2016, there has been no material
adverse change and no material adverse development in the business,
properties, operations, prospects, financial condition or results
of operations of the Company, except as disclosed in the reports,
schedules, forms, statements and other documents (including all
financial statements and schedules thereto and all exhibits
included therein and documents incorporated by reference therein)
required to be filed by the Company with the Securities and
Exchange Commission (the “SEC”) pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as
amended, filed before the date hereof. The Company has not taken
any steps, and does not currently expect to take any steps, to seek
protection pursuant to any bankruptcy or receivership law nor does
the Company have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings
with respect to the Company.

 

(f)           
Certain Fees. No
fees or commissions will be payable by the Company to any broker,
financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement.

 

ARTICLE III

OTHER COVENANTS

 

3.1           Securities
Laws. The Investor acknowledges that the Convertible Note,
the Conversion Shares, Exchange Warrant and Warrant Shares have not
been registered under the Securities Act and may only be disposed
of pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities
Act.

 

3.2           Restrictive
Legend. The Investor agrees to the imprinting of the
following legend on the Convertible Note and Exchange
Warrant:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.

 

 

 

-4-

 

 

3.3           

Reservation of Shares. The
Company shall at all times have authorized and reserved for the
purpose of issuance a sufficient number of Conversion Shares and
Warrant Shares.

 

ARTICLE IV

MISCELLANEOUS

 

4.1           Fees
and Expenses. Except as set forth in this Section 4.1, each
party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other taxes and duties levied in connection
with the issuance of the New Securities.

 

4.2           Entire
Agreement; Amendments. This Agreement together with the
exhibits and schedules hereto, dated as of the Execution Date,
contains the entire understanding of the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents,
exhibits and schedules.

 

4.3           Notices.
Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email at the email address
specified in this Section prior to 6:00 p.m. (New York City time)
on a business day, against electronic confirmation thereof, (ii)
the business day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or
email at the email address specified in this Agreement later than
6:00 p.m. (New York City time) on any date, against electronic
confirmation thereof, (iii) the business day following the date of
mailing, if sent by nationally recognized overnight courier
service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and
communications shall be as follows:

 

If to the
Company: 

MetaStat,
Inc.

27
Drydock Ave., 2nd Floor

Boston,
MA 02210

Facsimile No.:
(646) 304-7086

Email:
dschniederman@metastat.com

Attn:
Daniel Schneiderman

 

With
copies to (which shall     

not
constitute notice):  
                 
           Loeb & Loeb
LLP

           
      
                                                             
345 Park Ave.

New
York, NY 10154

Facsimile No.:
(212) 898-1184

Email:
dlevine@loeb.com

Attn:
David Levine

 

If to the
Investors: 

At the address of
the Investor set forth on Schedule 2.1 to this
Agreement.

 

or such
other address as may be designated in writing hereafter, in the
same manner, by such person or entity.

 

4.4           Amendments;
Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an
amendment, by the Company and by the Investor. No waiver of any
default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of either party to exercise
any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.

 

 

 

-5-

 

 

4.5           Headings.
The headings herein 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.

 

4.6           Successors
and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted
assigns. The Investor may not assign this Agreement or any rights
or obligations hereunder without the prior written consent of the
Company.

 

4.7           No
Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other person or
entity.

 

4.8         
Governing Law. This
Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. The Company
and the Investor irrevocably consent to the jurisdiction of the
United States federal courts and state courts located in the State
of New York in any suit or proceeding based on or arising under
this Agreement and irrevocably agree that all claims in respect of
such suit or proceeding may be determined in such
courts.

 

4.9           Survival.
The representations and warranties contained herein shall survive
until the expiration of the first anniversary following the
Closing. The agreements and covenants contained herein shall
survive the Closing and the delivery of the New Securities until
the expiration of the applicable statute of limitations (if any)
therefor.

 

4.10        
Execution. This
Agreement may be executed in one 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 all parties need not sign the same counterpart. In the event
that any signature is delivered by facsimile transmission or a
scanned copy via electronic mail, such signature shall create a
valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and
effect as if such facsimile or scanned signature page were an
original thereof.

 

4.11         
Severability. In
case any one or more of the provisions of this Agreement shall be
invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this
Agreement shall not in any way be affected or impaired thereby and
the parties will attempt to agree upon a valid and enforceable
provision which shall be a reasonable substitute therefor, and upon
so agreeing, shall incorporate such substitute provision in this
Agreement.

 

4.12        
Further Assurances.
The parties hereto agree that each shall execute and deliver any
and all further agreements, instruments, certificates and other
documents, and shall take any and all action, as any of the parties
hereto may reasonably deem necessary or desirable in order to carry
out the intent of the parties to this Agreement.

4.13         
Attorneys’
Fees. If either party shall commence an action or proceeding
to enforce any provisions relating to the obligations to close the
transactions contemplated by this Agreement prior to the Closing,
then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred with the investigation,
preparation and prosecution of such action or
proceeding.

 

[signature
page follows]

 

-6-

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Exchange
Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

COMPANY:

 

METASTAT,
INC.

 

By:
________________________

Name:
Douglas A. Hamilton

Title:
President & CEO

 

 

 

[additional
signature page follows]

 

[Company
Signature Page to Exchange Agreement]

 

-7-

 

 

 

INVESTOR:

 

DOLPHIN OFFSHORE PARTNERS, L.P.

 

 

By:                                                       

Name:

Title: 

 

 

 

 

[Investor
Signature Page to Exchange Agreement]

 

-8-

 

 

Exhibit A

 

[Form
of Convertible Note]

 

 

 

-9-

 

 

Exhibit B

 

[Form
of Exchange Warrant]

 

 

-10-

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