REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of [________], 2016, by and among MetaStat, Inc., a
Nevada corporation (the “Company”), and the
subscribers signatory hereto (each, a “Subscriber” and
collectively, the “Subscribers”). This
Agreement is made pursuant to Subscription Agreement, dated on or
about the date hereof, by and among the Company and the Subscribers
thereto (the “Subscription
Agreement”).
The
Company and each Subscriber hereby agrees as follows:
1. Definitions.
Capitalized
terms used and not otherwise defined herein that are defined in the
Subscription Agreement shall have the meanings given such terms in
the Subscription 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 120th 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 45th
calendar day following the Termination Date of the Offering, 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).
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“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.
“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 and Conversion Shares issued pursuant to the Subscription
Agreement, (b) all Warrant Shares then issuable upon exercise of
the Warrants (assuming on such date the Warrants are exercised in
full without regard to any exercise limitations therein), (c) 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 any such 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 (1) a
Registration Statement with respect to the sale of such Registrable
Securities is declared effective by the Commission under the
Securities Act and such Registrable Securities have been disposed
of by the Holder in accordance with such effective Registration
Statement, (2) such Registrable Securities have been previously
sold in accordance with Rule 144, or (3) such securities become
eligible for resale without public information requirements or
volume or manner-of-sale restrictions pursuant to Rule 144
(assuming that such 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.
“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 public
information requirements or 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; and
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).
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 two (2) Trading Days prior to the filing of each
Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment 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 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 XXXXX 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 Subscription 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. In no event shall the Company name
the Holder as an underwriter in a Registration Statement,
Prospectus or amendment or supplement thereto without the prior
written consent of such Holder.
(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 thirty (30) consecutive days
or (y) postpone or suspend effectiveness of a registration
statement for a period not to exceed thirty (30) consecutive days;
provided that the
Company may not postpone or suspend effectiveness of a registration
statement under this Section for more than forty-five (45) 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
fifteen (15) 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.
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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.
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, to the fullest extent
permitted by applicable law, 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, except to the
extent, 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.
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(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 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. 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.
(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.
-8-
(d) Contribution.
If 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.
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.
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 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.
(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.
-9-
(d) Discontinued
Disposition. By its acquisition of Registrable Securities,
each Holder agrees that, 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. 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.
(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 Subscription 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
Subscriber 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 Subscribers.
-10-
(i)
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.
(j) Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be
determined in accordance with the provisions of this Agreement and
the Subscription Agreement.
(k)
Cumulative
Remedies. The remedies provided herein are cumulative and
not exclusive of any other remedies provided by law.
(l)
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.
(m) 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.
(n)
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)
-11-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
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By:__________________________________________
Name:
Title:
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[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
-12-
[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
To
include: (a) shares of common stock underlying issued PIK dividends
of the Company’s Series B Convertible Preferred Stock
originally issued in March 2015 (the “Series B Preferred”)
issued through the date of the prospectus; (b) shares of common
stock underlying the conversion of shares of Series B Preferred to
be issued pursuant to “full-ratchet” anti-dilution
price protection adjustments, subject to the terms of the Series B
Preferred; (c) common stock underlying the exercise of certain
common stock purchase warrants issued by the Company, and (d)
shares of common stock and shares of common stock underlying
warrants in connection with the private placements on May 26,2016
and June 8, 2016.
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 Subscribers;
● 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”) or any
other exemption from registration, 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 Subscriber of securities, from
the Subscriber) 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).
A-1
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 Subscriber at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).
A-2
Annex B
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 Subscribers 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
twenty (20) 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.
B-1
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
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(b)
Full Legal Name of
Registered Holder (if not the same as (a) above) through which
Registrable Securities are held:
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(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):
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2.
Address for Notices to Selling Stockholder:
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Telephone:
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Fax:
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Contact
Person:
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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
__
(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.
B-2
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 Subscription
Agreement.
(a)
Type and Amount of
other securities beneficially owned by the Selling
Stockholder:
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(b)
Number of shares of
Common Stock to be registered pursuant to this Notice for
resale:
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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:
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The
undersigned agrees to promptly notify the Company of any material
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; provided that the
undersigned shall not be required to notify the Company of any
changes to the number of securities held or owned by the
undersigned or its affiliates.
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:
B-3
