THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR QUANTRX BIOMEDICAL CORPORATION SHALL HAVE
RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS
IS NOT REQUIRED.

WARRANT TO PURCHASE

SHARES OF COMMON STOCK

OF

QUANTRX BIOMEDICAL CORPORATION

Expires ______________, 2012

 

No.: __-___

Number of Shares: ___________

Date of Issuance:___________, 2007

 

 

FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, QuantRx Biomedical Corporation, a Nevada corporation (together with
its successors and assigns, the “Issuer”), hereby certifies that
_______________________________ or its registered assigns is entitled to
subscribe for and purchase, during the period specified in this Warrant, up to
____________________________________ (_____________) shares (subject to
adjustment as hereinafter provided) of the duly authorized, validly issued,
fully paid and non-assessable Common Stock of the Issuer, at an exercise price
per share equal to the Warrant Price then in effect, subject, however, to the
provisions and upon the terms and conditions hereinafter set forth. Capitalized
terms used in this Warrant and not otherwise defined herein shall have the
respective meanings specified in Section 9 hereof.

1. Term. The right to subscribe for and purchase shares of Warrant Stock
represented hereby shall commence on _____________, 2007 and shall expire at
5:00 p.m., eastern time, on ___________, 2012 (such period being the “Term”).

2. Method of Exercise Payment; Issuance of New Warrant; Transfer and Exchange.

(a) Time of Exercise. The purchase rights represented by this Warrant may be
exercised in whole or in part at any time and from time to time during the Term.

 

 

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(b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or
in part, by the surrender of this Warrant (with the exercise form attached
hereto duly executed) at the principal office of the Issuer, and by the payment
to the Issuer of an amount of consideration therefor equal to the Warrant Price
in effect on the date of such exercise multiplied by the number of shares of
Warrant Stock with respect to which this Warrant is then being exercised,
payable at such Holder’s election (i) by certified or official bank check or by
wire transfer to an account designated by the Issuer, (ii) by “cashless
exercise” in accordance with the provisions of subsection (c) of this Section 2,
but only when a registration statement under Securities Act providing for the
resale of the Warrant Stock is not then in effect, or (iii) by a combination of
the foregoing methods of payment selected by the Holder of this Warrant.

(c) Cashless Exercise. Notwithstanding any provisions herein to the contrary and
commencing one (1) year following the Original Issue Date, if (i) the Per Share
Market Value of one share of Common Stock is greater than the Warrant Price (at
the date of calculation as set forth below) and (ii) a registration statement
under the Securities Act providing for the resale of the Warrant Stock either
(A) has not been declared effective by the Securities and Exchange Commission by
the date such registration statement is required to be effective pursuant to the
Registration Rights Agreement (as defined in the Purchase Agreement), or (B) is
not effective at the time of exercise of this Warrant, in lieu of exercising
this Warrant by payment of cash, the Holder may exercise this Warrant by a
cashless exercise and shall receive the number of shares of Common Stock equal
to an amount (as determined below) by surrender of this Warrant at the principal
office of the Issuer together with the properly endorsed Notice of Exercise in
which event the Issuer shall issue to the Holder a number of shares of Common
Stock computed using the following formula:

 

 

X = Y - (A)(Y) 

 

 

B

 

Where

 

X =

 

the number of shares of Common Stock to be issued to the Holder.

 

 

Y =

 

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.

 

 

A =

 

the Warrant Price.

 

 

B =

 

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

(d) Issuance of Stock Certificates. In the event of any exercise of the rights
represented by this Warrant in accordance with and subject to the terms and
conditions hereof, (i) certificates for the shares of Warrant Stock so purchased
shall be dated the date of such exercise and delivered to the Holder hereof
within a reasonable time, not exceeding five (5) Trading Days after such
exercise or, at the request of the Holder (provided that a registration
statement under the Securities Act providing for the resale of the Warrant Stock
is then in effect), issued and delivered to the Depository Trust Company (“DTC”)
account on the Holder’s behalf via the Deposit Withdrawal Agent Commission
System (“DWAC”) within a reasonable time, not

 

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exceeding five (5) Trading Days after such exercise, and the Holder hereof shall
be deemed for all purposes to be the holder of the shares of Warrant Stock so
purchased as of the date of such exercise and (ii) unless this Warrant has
expired, a new Warrant representing the number of shares of Warrant Stock, if
any, with respect to which this Warrant shall not then have been exercised (less
any amount thereof which shall have been canceled in payment or partial payment
of the Warrant Price as hereinabove provided) shall also be issued to the Holder
hereof at the Issuer’s expense within such time.

(e) Transferability of Warrant. Subject to Section 2(g), this Warrant may be
transferred by a Holder without the consent of the Issuer. If transferred
pursuant to this paragraph and subject to the provisions of subsection (g) of
this Section 2, this Warrant may be transferred on the books of the Issuer by
the Holder hereof in person or by duly authorized attorney, upon surrender of
this Warrant at the principal office of the Issuer, properly endorsed (by the
Holder executing an assignment in the form attached hereto) and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. This Warrant is exchangeable at the principal office of the Issuer for
Warrants for the purchase of the same aggregate number of shares of Warrant
Stock, each new Warrant to represent the right to purchase such number of shares
of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.

(f) Continuing Rights of Holder. The Issuer will, at the time of or at any time
after each exercise of this Warrant, upon the request of the Holder hereof,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if any such Holder shall fail to make any such request, the
failure shall not affect the continuing obligation of the Issuer to afford such
rights to such Holder.

(g) Compliance with Securities Laws.

(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this
Warrant or the shares of Warrant Stock to be issued upon exercise hereof are
being acquired solely for the Holder’s own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock to be issued
upon exercise hereof except pursuant to an effective registration statement, or
an exemption from registration, under the Securities Act and any applicable
state securities laws.

(ii) Except as provided in paragraph (iii) below, this Warrant and all
certificates representing shares of Warrant Stock issued upon exercise hereof
shall be stamped or imprinted with a legend in substantially the following form:

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

 

 

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AMENDED (THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
AND UNDER APPLICABLE STATE SECURITIES LAWS OR QUANTRX BIOMEDICAL CORPORATION
SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.

(iii) The Issuer agrees to reissue this Warrant or certificates representing any
of the Warrant Stock, without the legend set forth above if at such time, prior
to making any transfer of any such securities, the Holder shall give written
notice to the Issuer describing the manner and terms of such transfer and
removal as the Issuer may reasonably request. Such proposed transfer and removal
will not be effected until: (a) either (i) the Issuer has received an opinion of
counsel reasonably satisfactory to the Issuer, to the effect that the
registration of such securities under the Securities Act is not required in
connection with such proposed transfer, (ii) a registration statement under the
Securities Act covering such proposed disposition has been filed by the Issuer
with the Securities and Exchange Commission and has become effective under the
Securities Act, (iii) the Issuer has received other evidence reasonably
satisfactory to the Issuer that such registration and qualification under the
Securities Act and state securities laws are not required, or (iv) the Holder
provides the Issuer with reasonable assurances that such security can be sold
pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer has
received an opinion of counsel reasonably satisfactory to the Issuer, to the
effect that registration or qualification under the securities or “blue sky”
laws of any state is not required in connection with such proposed disposition,
or (ii) compliance with applicable state securities or “blue sky” laws has been
effected or a valid exemption exists with respect thereto. The Issuer will
respond to any such notice from a holder within ten (10) business days. In the
case of any proposed transfer under this Section 2(g), the Issuer will use
reasonable efforts to comply with any such applicable state securities or “blue
sky” laws, but shall in no event be required, (x) to qualify to do business in
any state where it is not then qualified, or (y) to take any action that would
subject it to tax or to the general service of process in any state where it is
not then subject. The restrictions on transfer contained in this Section 2(g)
shall be in addition to, and not by way of limitation of, any other restrictions
on transfer contained in any other section of this Warrant.

(h) In no event may the Holder exercise this Warrant in whole or in part unless
the Holder is an “accredited investor” as defined in Regulation D under the
Securities Act.

 

 

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3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.

(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that
all shares of Warrant Stock that may be issued upon the exercise of this Warrant
or otherwise hereunder will, upon issuance, be duly authorized, validly issued,
fully paid and non-assessable and free from all taxes, liens and charges created
by or through the Issuer. The Issuer further covenants and agrees that during
the period within which this Warrant may be exercised, the Issuer will at all
times have authorized and reserved for the purpose of the issue upon exercise of
this Warrant a sufficient number of shares of Common Stock to provide for the
exercise of this Warrant.

(b) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

(c) Covenants. The Issuer shall not by any action including, without limitation,
amending the Articles of Incorporation or the by-laws of the Issuer, or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other 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 necessary or appropriate to protect the
rights of the Holder hereof.

(d) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory
to the Issuer of the ownership of and the loss, theft, destruction or mutilation
of any Warrant and, in the case of any such loss, theft or destruction, upon
receipt of indemnity or security satisfactory to the Issuer or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, the Issuer
will make and deliver, in lieu of such lost, stolen, destroyed or mutilated
Warrant, a new Warrant of like tenor and representing the right to purchase the
same number of shares of Common Stock.

 

 

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4. Adjustment of Warrant Price and Warrant Share Number. The number of shares of
Common Stock for which this Warrant is exercisable, and the price at which such
shares may be purchased upon exercise of this Warrant, shall be subject to
adjustment from time to time as set forth in this Section 4. The Issuer shall
give the Holder notice of any event described below which requires an adjustment
pursuant to this Section 4 in accordance with Section 5.

(a) Recapitalization, Reorganization, Reclassification, Consolidation, Merger or
Sale.

(i) In case the Issuer after the Original Issue Date shall do any of the
following (each, a “Triggering Event”): (a) consolidate with or merge into any
other Person and the Issuer shall not be the continuing or surviving corporation
of such consolidation or merger, or (b) permit any other Person to consolidate
with or merge into the Issuer and the Issuer shall be the continuing or
surviving Person but, in connection with such consolidation or merger, any
Capital Stock of the Issuer shall be changed into or exchanged for Securities of
any other Person or cash or any other property, or (c) transfer all or
substantially all of its properties or assets to any other Person, or (d) effect
a capital reorganization or reclassification of its Capital Stock, then, and in
the case of each such Triggering Event, proper provision shall be made so that,
upon the basis and the terms and in the manner provided in this Warrant, the
Holder of this Warrant shall be entitled upon the exercise hereof at any time
after the consummation of such Triggering Event, to the extent this Warrant is
not exercised prior to such Triggering Event, to receive at the Warrant Price in
effect at the time immediately prior to the consummation of such Triggering
Event in lieu of the Common Stock issuable upon such exercise of this Warrant
prior to such Triggering Event, the Securities, cash and property to which such
Holder would have been entitled upon the consummation of such Triggering Event
if such Holder had exercised the rights represented by this Warrant immediately
prior thereto, subject to adjustments (subsequent to such corporate action) as
nearly equivalent as possible to the adjustments provided for elsewhere in this
Section 4.

(ii) Notwithstanding anything contained in this Warrant to the contrary, the
Issuer will not effect any Triggering Event if, prior to the consummation
thereof, each Person (other than the Issuer) which may be required to deliver
any Securities, cash or property upon the exercise of this Warrant as provided
herein shall assume, by written instrument delivered to, and reasonably
satisfactory to, the Holder of this Warrant, (A) the obligations of the Issuer
under this Warrant (and if the Issuer shall survive the consummation of such
Triggering Event, such assumption shall be in addition to, and shall not release
the Issuer from, any continuing obligations of the Issuer under this Warrant)
and (B) the obligation to deliver to such Holder such shares of Securities, cash
or property as, in accordance with the foregoing provisions of this subsection
(a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder an opinion of counsel for such Person stating
that this Warrant shall thereafter continue in full force and effect and the
terms hereof (including, without limitation, all of the provisions of this
subsection (a)) shall be applicable to the Securities, cash or property which
such Person may be required to deliver upon any exercise of this Warrant or the
exercise of any rights pursuant hereto.

 

 

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(b) Stock Dividends, Subdivisions and Combinations. If at any time the Issuer
shall:

(i) take a record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend payable in, or other distribution of,
Additional Shares of Common Stock,

(ii) subdivide its outstanding shares of Common Stock into a larger number of
shares of Common Stock, or

(iii) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock,

then (1) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which 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 (2) the Warrant Price then in
effect shall be adjusted to equal (A) the Warrant 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.

(c) Certain Other Distributions. If at any time the Issuer shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
any dividend or other distribution of:

(i) cash (other than a cash dividend payable out of earnings or earned surplus
legally available for the payment of dividends under the laws of the
jurisdiction of incorporation of the Issuer),

(ii) any evidences of its indebtedness, any shares of stock of any class or any
other securities or property of any nature whatsoever (other than cash, Common
Stock Equivalents or Additional Shares of Common Stock), or

(iii) any warrants or other rights to subscribe for or purchase any evidences of
its indebtedness, any shares of stock of any class or any other securities or
property of any nature whatsoever (other than cash, Common Stock Equivalents or
Additional Shares of Common Stock),

then (1) the number of shares of Common Stock for which this Warrant is
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 (A) the numerator of which shall be the Per
Share Market Value of Common Stock at the date of taking such record and (B) the
denominator of which shall be such Per Share Market Value 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 Directors of the
Issuer and supported by an opinion

 

 

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from an investment banking firm of recognized national standing acceptable to
the Holder) 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 (2) the Warrant Price then in effect shall be
adjusted to equal (A) the Warrant 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. A
reclassification of the Common Stock (other than a change in par value, or from
par value to no par value or from no par value to par value) into shares of
Common Stock and shares of any other class of stock shall be deemed a
distribution by the Issuer to the holders of its Common Stock of such shares of
such other class of stock within the meaning of this Section 4(c) 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 4(b).

(d) Issuance of Additional Shares of Common Stock.

(i) In the event the Issuer shall at any time following the Original Issue Date
issue any Additional Shares of Common Stock (otherwise than as provided in the
foregoing subsections (a) through (c) of this Section 4), at a price per share
less than the Warrant Price then in effect or without consideration, then the
Warrant Price upon each such issuance shall be adjusted to that price determined
by multiplying the Warrant Price then in effect by a fraction:

(A) the numerator of which shall be equal to the sum of (x) the number of shares
of Outstanding Common Stock immediately prior to the issuance of such Additional
Shares of Common Stock plus (y) the number of shares of Common Stock (rounded to
the nearest whole share) which the aggregate consideration for the total number
of such Additional Shares of Common Stock so issued would purchase at a price
per share equal to the Warrant Price then in effect, and

(B) the denominator of which shall be equal to the number of shares of
Outstanding Common Stock immediately after the issuance of such Additional
Shares of Common Stock.

(ii) No adjustment of the number of shares of Common Stock for which this
Warrant shall be exercisable shall be made under paragraph (i) of Section 4(d)
upon the issuance of any Additional Shares of Common Stock which are issued
pursuant to the exercise of any Common Stock Equivalents, if any such adjustment
shall previously have been made upon the issuance of such Common Stock
Equivalents or upon the issuance of any warrant or other rights therefor
pursuant to Sections 4(e) or 4(f), or in connection with any Permitted
Issuances.

(e) Issuance of Warrants or Other Rights. If at any time the Issuer shall take a
record of the Holders of its Common Stock for the purpose of entitling them to
receive a distribution of, or shall in any manner (whether directly or by
assumption in a merger in which the Issuer is the surviving corporation) issue
or sell any warrants or options, whether or not immediately exercisable, and the
Warrant Consideration (hereafter defined) per share for which Common

 

 

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Stock is issuable upon the exercise of such warrant or option shall be less than
the Warrant Price in effect immediately prior to the time of such issue or sale,
then the Warrant Price then in effect immediately prior to the time of such
issue or sale, shall be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Warrant Price by a fraction: (1) the numerator of
which shall be equal to the sum of (A) the number of shares of Common Stock
outstanding immediately prior to the issuance or sale of such warrants or
options plus (B) the number of shares of Common Stock (rounded to the nearest
whole share) which the Warrant Consideration multiplied by the number of shares
of Common Stock issuable upon the exercise or conversion of all such warrants or
options, would purchase at a price per share equal to the Warrant Price then in
effect, and (2) the denominator of which shall be equal to the number of shares
of Common Stock that would be outstanding assuming the exercise or conversion of
all such warrants and options. No adjustments of the Warrant Price then in
effect shall be made upon the actual issue of such Common Stock or of such
Common Stock Equivalents upon exercise of such warrants or other rights or upon
the actual issue of such Common Stock upon such conversion or exchange of such
Common Stock Equivalents. No adjustments of the Warrant Price shall be required
under this Section 4(e) in connection with any Permitted Issuances.

(f) Issuance of Common Stock Equivalents. If at any time the Issuer shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a distribution of, or shall in any manner (whether directly or by
assumption in a merger in which the Issuer is the surviving corporation) issue
or sell, any Common Stock Equivalents, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the Common Stock Equivalent
Consideration (hereafter defined) per share for which Common Stock is issuable
upon such conversion or exchange shall be less than the Warrant Price in effect
immediately prior to the time of such issue or sale, then the Warrant Price then
in effect immediately prior to the time of such issue or sale, shall upon each
such issuance or sale be adjusted to that price (rounded to the nearest cent)
determined by multiplying the Warrant Price by a fraction: (1) the numerator of
which shall be equal to the sum of (A) the number of shares of Common Stock
outstanding immediately prior to the issuance or sale of such Common Stock
Equivalents plus (B) the number of shares of Common Stock (rounded to the
nearest whole share) which the Common Stock Equivalent Consideration multiplied
by the number of shares of Common Stock issuable upon the exercise or conversion
of all such Common Stock Equivalents, would purchase at a price per share equal
to the Warrant Price then in effect, and (2) the denominator of which shall be
equal to the number of shares of Common Stock that would be outstanding assuming
the exercise or conversion of all such Common Stock Equivalents. No further
adjustment of the Warrant Price then in effect shall be made under this Section
4(f) upon the issuance of any Common Stock Equivalents which are issued pursuant
to the exercise of any warrants or other subscription or purchase rights
therefor, if any such adjustment shall previously have been made upon the
issuance of such warrants or other rights pursuant to Section 4(e). No further
adjustments of the Warrant Price then in effect shall be made upon the actual
issue of such Common Stock upon conversion or exchange of such Common Stock
Equivalents. No adjustments of the Warrant Price shall be required under this
Section 4(f) in connection with any Permitted Issuances.

(g) Superseding Adjustment. If, at any time after any adjustment of the number
of shares of Common Stock for which this Warrant is exercisable and the Warrant
Price then in

 

 

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effect shall have been made pursuant to Section 4(e) or Section 4(f) as the
result of any issuance of warrants, other rights or Common Stock Equivalents,
and (i) such warrants or other rights, or the right of conversion or exchange in
such other Common Stock Equivalents, shall expire, and all or a portion of such
warrants or other rights, or the right of conversion or exchange with respect to
all or a portion of such other Common Stock Equivalents, as the case may be
shall not have been exercised, or (ii) the consideration per share for which
shares of Common Stock are issuable pursuant to such Common Stock Equivalents,
shall be increased solely by virtue of provisions therein contained for an
automatic increase in such consideration per share upon the occurrence of a
specified date or event, then for each outstanding Warrant such previous
adjustment shall be rescinded and annulled and the Additional Shares of Common
Stock which were deemed to have been issued by virtue of the computation made in
connection with the adjustment so rescinded and annulled shall no longer be
deemed to have been issued by virtue of such computation. Upon the occurrence of
an event set forth in this Section 4(g) above, there shall be a recomputation
made of the effect of such Common Stock Equivalents on the basis of: (i)
treating the number of Additional Shares of Common Stock or other property, if
any, theretofore actually issued or issuable pursuant to the previous exercise
of any such warrants or other rights or any such right of conversion or
exchange, as having been issued on the date or dates of any such exercise and
for the consideration actually received and receivable therefor, and (ii)
treating any such Common Stock Equivalents which then remain outstanding as
having been granted or issued immediately after the time of such increase of the
consideration per share for which shares of Common Stock or other property are
issuable under such Common Stock Equivalents; whereupon a new adjustment of the
number of shares of Common Stock for which this Warrant is exercisable and the
Warrant Price then in effect shall be made, which new adjustment shall supersede
the previous adjustment so rescinded and annulled.

(h) Purchase of Common Stock by the Issuer. If the Issuer at any time while this
Warrant is outstanding shall, directly or indirectly through a Subsidiary or
otherwise, purchase, redeem or otherwise acquire any shares of Common Stock at a
price per share greater than the Per Share Market Value, then the Warrant Price
upon each such purchase, redemption or acquisition shall be adjusted to that
price determined by multiplying such Warrant Price by a fraction (i) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such purchase, redemption or acquisition minus the number
of shares of Common Stock which the aggregate consideration for the total number
of such shares of Common Stock so purchased, redeemed or acquired would purchase
at the Per Share Market Value; and (ii) the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such purchase,
redemption or acquisition. For the purposes of this subsection (h), the date as
of which the Per Share Market Price shall be computed shall be the earlier of
(x) the date on which the Issuer shall enter into a firm contract for the
purchase, redemption or acquisition of such Common Stock, or (y) the date of
actual purchase, redemption or acquisition of such Common Stock. For the
purposes of this subsection (h), a purchase, redemption or acquisition of a
Common Stock Equivalent shall be deemed to be a purchase of the underlying
Common Stock, and the computation herein required shall be made on the basis of
the full exercise, conversion or exchange of such Common Stock Equivalent on the
date as of which such computation is required hereby to be made, whether or not
such Common Stock Equivalent is actually exercisable, convertible or
exchangeable on such date.

 

 

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(i) Other Provisions applicable to Adjustments under this Section. The following
provisions shall be applicable to the making of adjustments of the number of
shares of Common Stock for which this Warrant is exercisable and the Warrant
Price then in effect provided for in this Section 4:

(i) Computation of Consideration. To the extent that any Additional Shares of
Common Stock or any Common Stock Equivalents (or any warrants or other rights
therefor) shall be issued for cash consideration, the consideration received by
the Issuer therefor shall be the amount of the cash received by the Issuer
therefor, or, if such Additional Shares of Common Stock or Common Stock
Equivalents are offered by the Issuer for subscription, the subscription price,
or, if such Additional Shares of Common Stock or Common Stock Equivalents are
sold to underwriters or dealers for public offering without a subscription
offering, the initial public offering price (in any such case subtracting any
amounts paid or receivable for accrued interest or accrued dividends and without
taking into account any compensation, discounts or expenses paid or incurred by
the Issuer for and in the underwriting of, or otherwise in connection with, the
issuance thereof). To the extent that such issuance shall be for a consideration
other than cash, then, except as herein otherwise expressly provided, the amount
of such consideration shall be deemed to be the fair value of such consideration
at the time of such issuance as determined in good faith by the Board of
Directors of the Issuer. The consideration for any Additional Shares of Common
Stock issuable pursuant to any warrants or other rights to subscribe for or
purchase the same shall be the consideration received by the Issuer for issuing
such warrants or other rights divided by the number of shares of Common Stock
issuable upon the exercise of such warrant or right plus the additional
consideration payable to the Issuer upon exercise of such warrant or other right
for one share of Common Stock (together the “Warrant Consideration”). The
consideration for any Additional Shares of Common Stock issuable pursuant to the
terms of any Common Stock Equivalents shall be the consideration received by the
Issuer for issuing such Common Stock Equivalent, divided by the number of shares
of Common Stock issuable upon the conversion or other exercise of such Common
Stock Equivalent, plus the additional consideration, if any, payable to the
Issuer upon the exercise of the right of conversion or exchange in such Common
Stock Equivalent for one share of Common Stock (together the “Common Stock
Equivalent Consideration”). In case of the issuance at any time of any
Additional Shares of Common Stock or Common Stock Equivalents in payment or
satisfaction of any dividends upon any class of stock other than Common Stock,
the Issuer shall be deemed to have received for such Additional Shares of Common
Stock or Common Stock Equivalents a consideration equal to the amount of such
dividend so paid or satisfied.

(ii) When Adjustments to Be Made. The adjustments required by this Section 4
shall be made whenever and as often as any specified event requiring an
adjustment shall occur, except that any adjustment of the number of shares of
Common Stock for which this Warrant is exercisable that would otherwise be
required may be postponed (except in the case of a subdivision or combination of
shares of the Common Stock, as provided for in Section 4(b)) up to, but not
beyond the date of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than one percent (1%) of
the shares of Common Stock for which this Warrant is exercisable immediately
prior to the making of such adjustment. Any adjustment representing a change of
less than such minimum amount (except as aforesaid) which is postponed shall be
carried forward and made as soon as such adjustment,

 

 

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together with other adjustments required by this Section 4 and not previously
made, would result in a minimum adjustment or on the date of exercise. For the
purpose of any adjustment, any specified event shall be deemed to have occurred
at the close of business on the date of its occurrence.

(iii) Fractional Interests. In computing adjustments under this Section 4,
fractional interests in Common Stock shall be taken into account to the nearest
one one-hundredth (1/100th) of a share.

(iv) When Adjustment Not Required. If the Issuer shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.

(j) Form of Warrant after Adjustments. The form of this Warrant need not be
changed because of any adjustments in the Warrant Price or the number and kind
of Securities purchasable upon the exercise of this Warrant.

(k) Escrow of Warrant Stock. If after any property becomes distributable
pursuant to this Section 4 by reason of the taking of any record of the holders
of Common Stock, but prior to the occurrence of the event for which such record
is taken, and the Holder exercises this Warrant, any shares of Common Stock
issuable upon exercise by reason of such adjustment shall be deemed the last
shares of Common Stock for which this Warrant is exercised (notwithstanding any
other provision to the contrary herein) and such shares or other property shall
be held in escrow for the Holder by the Issuer to be issued to the Holder upon
and to the extent that the event actually takes place, upon payment of the
current Warrant Price. Notwithstanding any other provision to the contrary
herein, if the event for which such record was taken fails to occur or is
rescinded, then such escrowed shares shall be cancelled by the Issuer and
escrowed property returned.

5. Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number
shall be adjusted pursuant to Section 4 hereof (for purposes of this Section 5,
each an “adjustment”), the Issuer shall cause an executive officer to prepare
and execute a certificate setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board made any determination hereunder), and the Warrant Price and Warrant Share
Number after giving effect to such adjustment, and shall cause copies of such
certificate to be delivered to the Holder of this Warrant promptly after each
adjustment. Any dispute between the Issuer and the Holder of this Warrant with
respect to the matters set forth in such certificate may at the option of the
Holder of this Warrant be submitted to one of the national accounting firms
currently known as the “big five” selected by the Holder, provided that the
Issuer shall have ten (10) days after receipt of notice from such Holder of its
selection of such

 

 

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firm to object thereto, in which case such Holder shall select another such firm
and the Issuer shall have no such right of objection. The firm selected by the
Holder of this Warrant as provided in the preceding sentence shall be instructed
to deliver a written opinion as to such matters to the Issuer and such Holder
within thirty (30) days after submission to it of such dispute. Such opinion
shall be final and binding on the parties hereto.

6. Fractional Shares. No fractional shares of Warrant Stock will be issued in
connection with and exercise hereof, but in lieu of such fractional shares, the
Issuer shall make a cash payment therefor equal in amount to the product of the
applicable fraction multiplied by the Per Share Market Value then in effect.

7. Call. Notwithstanding anything herein to the contrary, commencing one (1)
year following the date the Registration Statement (as defined below) is
declared effective by the Securities and Exchange Commission, the Issuer may
call up to one hundred percent (100%) of this Warrant then still outstanding by
providing the Holder of this Warrant written notice pursuant to Section 13 (the
“Call Notice”); provided, that, in connection with any call by the Issuer under
this Section 7, (A) the Per Share Market Value of the Common Stock has been
greater than $3.00 for a period of twenty (20) consecutive Trading Days
immediately prior to the date of delivery of the Call Notice (a “Call Notice
Period”); (B) a registration statement under the Securities Act providing for
the resale of the (i) Warrant Stock and (ii) the shares of Common Stock and the
shares of Common Stock issuable upon conversion of the Issuer’s Series A
Preferred Stock which are not saleable in the public securities market pursuant
to the exemption from registration under the Securities Act provided by Rule
144(k) of Regulation D, issued pursuant to the Purchase Agreement, (the
“Registration Statement”) is then in effect and has been effective, without
lapse or suspension of any kind, for a period of sixty (60) consecutive calendar
days, (C) trading in the Common Stock shall not have been suspended by the
Securities and Exchange Commission or the OTC Bulletin Board (or other exchange
or market on which the Common Stock is trading) and (D) the Issuer is in
material compliance with the terms and conditions of this Warrant and the other
Loan Documents (as defined in the Purchase Agreement); provided, further, that
the Registration Statement must be effective from the date of delivery of the
Call Notice until the date which is the later of (i) the date the Holder
exercises the Warrant pursuant to the Call Notice and (ii) the 20th day after
the Holder receives the Call Notice (the “Early Termination Date”). The rights
and privileges granted pursuant to this Warrant with respect to the shares of
Warrant Stock subject to the Call Notice (the “Called Warrant Shares”) shall
expire on the Early Termination Date if this Warrant is not exercised with
respect to such Called Warrant Shares prior to such Early Termination Date. In
the event this Warrant is not exercised with respect to the Called Warrant
Shares, the Issuer shall remit to the Holder of this Warrant (i) $.01 per Called
Warrant Share and (ii) a new Warrant representing the number of shares of
Warrant Stock, if any, which shall not have been subject to the Call Notice upon
the Holder tendering to the Issuer the applicable Warrant certificate.

8. Certain Exercise Restrictions.

(a) Notwithstanding anything to the contrary set forth in this Warrant, at no
time may a Holder of this Warrant exercise this Warrant if the number of shares
of Common Stock to be issued pursuant to such exercise would cause the number of
shares of Common Stock

 

 

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owned by the Holder at such time to exceed, when aggregated with all other
shares of Common Stock owned by such Holder at such time, the number of shares
of Common Stock which would result in such Holder beneficially owning (as
determined in accordance with Section 13(d) of the Exchange Act and the rules
thereunder) in excess of 4.9% of all of the Common Stock outstanding at such
time; provided, however, that upon the Holder of this Warrant providing the
Issuer with seventy-five (75) days notice (pursuant to Section 13 hereof) (the
“Waiver Notice”) that such Holder would like to waive this Section 8(a) with
regard to any or all shares of Common Stock issuable upon exercise of this
Warrant, this Section 8(a) will be of no force or effect with regard to all or a
portion of the Warrant referenced in the Waiver Notice; provided, further, that
this provision shall be of no further force or effect (i) during the
seventy-five (75) days immediately preceding the expiration of the term of this
Warrant or (ii) upon the Holder’s receipt of a Call Notice.

(b) Notwithstanding anything to the contrary set forth in this Warrant, at no
time may a Holder of this Warrant exercise this Warrant if the number of shares
of Common Stock to be issued pursuant to such exercise would cause the number of
shares of Common Stock owned by the Holder at such time to exceed, when
aggregated with all other shares of Common Stock owned by such Holder at such
time, the number of shares of Common Stock which would result in such Holder
beneficially owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) in excess of 9.9% of all of the Common
Stock outstanding at such time; provided, however, that upon a holder of this
Warrant providing the Issuer with a Waiver Notice that such holder would like to
waive this Section 8(b) with regard to any or all shares of Common Stock
issuable upon exercise of this Warrant, this Section 8(b) shall be of no force
or effect with regard to those shares of Warrant Stock referenced in the Waiver
Notice; provided, further, that this provision shall be of no further force or
effect (i) during the seventy-five (75) days immediately preceding the
expiration of the term of this Warrant or (ii) upon the Holder’s receipt of a
Call Notice.

9. Definitions. For the purposes of this Warrant, the following terms have the
following meanings:

“Additional Shares of Common Stock” means all shares of Common Stock (including
Common Stock Equivalents) issued by the Issuer after the Original Issue Date,
and all shares of Other Common, if any, issued by the Issuer after the Original
Issue Date, except for Permitted Issuances.

“Board” shall mean the Board of Directors of the Issuer.

“Capital Stock” means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.

 

 

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“Certificate of Incorporation” means the Certificate of Incorporation of the
Issuer as in effect on the Original Issue Date, and as hereafter from time to
time amended, modified, supplemented or restated in accordance with the terms
hereof and thereof and pursuant to applicable law.

“Common Stock” means the Common Stock, par value $.001 per share, of the Issuer
and any other Capital Stock into which such stock may hereafter be changed.

“Common Stock Equivalent” means any Convertible Security or warrant, option or
other right to subscribe for or purchase any Additional Shares of Common Stock
or any Convertible Security.

“Common Stock Equivalent Consideration” has the meaning specified in Section 4
(i) (i) hereof.

“Convertible Securities” means evidences of Indebtedness, shares of Capital
Stock or other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common Stock. The term “Convertible
Security” means one of the Convertible Securities.

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

“Governmental Authority” means any governmental, regulatory or self-regulatory
entity, department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.

“Holders” mean the Persons who shall from time to time own any Warrant. The term
“Holder” means one of the Holders.

“Independent Appraiser” means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the Holder
of any Warrant.

“Issuer” means QuantRx Biomedical Corporation, a Nevada corporation, and its
successors.

“Majority Holders” means at any time the Holders of Warrants exercisable for a
majority of the shares of Warrant Stock issuable under the Warrants at the time
outstanding.

“Original Issuance Date” means __________, 2007.

“OTC Bulletin Board” means the over-the-counter electronic bulletin board.

 

 

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“Other Common” means any other Capital Stock of the Issuer of any class which
shall be authorized at any time after the date of this Warrant (other than
Common Stock) and which shall have the right to participate in the distribution
of earnings and assets of the Issuer without limitation as to amount.

“Outstanding Common Stock” means, at any given time, the aggregate amount of
outstanding shares of Common Stock, assuming full exercise, conversion or
exchange (as applicable) of all options, warrants and other Securities which are
convertible into or exercisable or exchangeable for, and any right to subscribe
for, shares of Common Stock that are outstanding at such time.

“Permitted Issuances” means (i) the issuance of the Warrant Stock; (ii)
issuances in connection with strategic license agreements or other partnering
arrangements so long as such issuances are not for the exclusive purpose of
raising capital; (iii) issuances (other than for cash) in connection with a
merger, acquisition or consolidation of the Issuer or any of its Subsidiaries;
(iv) issuances in connection with a bona fide firm underwritten public offering
by the Issuer of its shares of Common Stock; (v) issuances after the Original
Issue Date by the Issuer of Securities that result from commitments of the
Issuer that are either described in the Issuer’s periodic filings with the
Securities and Exchange Commission or otherwise arose on or prior to the date
hereof; (vi) issuances after the Original Issue Date of so many shares of Common
Stock and the grant of options and warrants after the Original Issue Date to the
Issuer’s officers, directors and employees (“Issuer’s Personnel” and each such
issuance and grant an “Issuance and/or Grant to Issuer Personnel”), which

 

(A)

shares of Common Stock issued to Issuer Personnel plus

 

(B)

the shares of Common Stock issuable upon the exercise of such options and
warrants granted to Issuer Personnel,

in aggregate, would not exceed 10% (the “Issuance Limit”) of the aggregate of
the number of the Issuer’s shares of Common Stock

 

(C)

outstanding plus

 

(D)

issuable upon the exercise, conversion or exchange of all Common Stock
Equivalents outstanding (excluding, however, from this subclause D shares
issuable upon exercise of warrants and options which are more than 125% of the
Per Share Market Value of the Common Stock at the time of such Issuance and/or
Grant to Issuer Personnel),

at the time the Permitted Issuance and/or Grant to Issuer Personnel is being
calculated; provided that (1) the exercise price of such options and warrants at
the time granted to Issuer Personnel shall not be less than the then Per Share
Market Value of the Common Stock and (2) during the period from the Original
Issuance Date through the twelve-

 

 

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month anniversary of the Original Issuance Date, the Issuance and/or Grant to
Issuer Personnel shall not in the aggregate exceed one-third of the Issuance
Limit at the time of such Issuance and/or Grant to Issuer Personnel, and during
the period from the Original Issuance Date through the twenty-four month
anniversary of the Original Issuance Date, the Issuance and/or Grant to Issuer
Personnel shall not in aggregate exceed two-thirds of the then Issuance Limit at
the time of such Issuance and/or Grant to Issuer Personnel; (vii) common stock
or warrants to third party providers of goods or services provided or in
satisfaction of outstanding liabilities, as approved by the Company’s Board of
Directors; (viii) securities issued upon the exercise, conversion or exchange of
any Common Stock Equivalents outstanding on the Original Issue Date and shares
of Common Stock hereafter issued upon the exercise of options hereafter granted
pursuant to the Company’s stock option plan as it now exists; (ix) any warrants,
shares of Common Stock or other securities issued to a placement agent and its
designees for the transactions contemplated by the Purchase Agreement or in any
other sales of the Company’s securities and any securities issued in connection
with any financial advisory agreements of the Issuer and the shares of Common
Stock issued upon exercise of any such warrants or conversion of any such other
securities and (x) any Securities issued in connection with the Qualified
Financing (as defined in the 8% Convertible Promissory Note issued by the Issuer
on the date hereof.

“Person” means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.

“Per Share Market Value” means on any particular date (a) the closing bid price
for a share of Common Stock in the over-the-counter market, as reported by the
OTC Bulletin Board or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (b) if the Common Stock is not then reported
by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices),
then the average of the “Pink Sheet” quotes for the relevant conversion period,
as determined in good faith by the holder, or (c) if the Common Stock is not
then publicly traded the fair market value of a share of Common Stock as
determined by the Board in good faith; provided, however, that the Majority
Holders, after receipt of the determination by the Board, shall have the right
to select, jointly with the Issuer, an Independent Appraiser, in which case, the
fair market value shall be the determination by such Independent Appraiser; and
provided, further that all determinations of the Per Share Market Value shall be
appropriately adjusted for any stock dividends, stock splits or other similar
transactions during such period. The determination of fair market value shall be
based upon the fair market value of the Issuer determined on a going concern
basis as between a willing buyer and a willing seller and taking into account
all relevant factors determinative of value, and shall be final and binding on
all parties. In determining the fair market value of any shares of Common Stock,
no consideration shall be given to any restrictions on transfer of the Common
Stock imposed by agreement or by federal or state securities laws, or to the
existence or absence of, or any limitations on, voting rights.

 

 

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“Purchase Agreement” means the Loan Letter Agreement dated as of ___________,
2007 among the Issuer and the lenders party thereto.

“Securities” means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for
Securities or a Security, and any option, warrant or other right to purchase or
acquire any Security. “Security” means one of the Securities.

“Securities Act” means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.

“Subsidiary” means any corporation at least 50% of whose outstanding Voting
Stock shall at the time be owned directly or indirectly by the Issuer or by one
or more of its Subsidiaries, or by the Issuer and one or more of its
Subsidiaries.

“Term” has the meaning specified in Section 1 hereof.

“Trading Day” means (a) a day on which the Common Stock is traded on the OTC
Bulletin Board, or (b) if the Common Stock is not traded on the OTC Bulletin
Board, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding its functions of reporting prices); provided,
however, that in the event that the Common Stock is not listed or quoted as set
forth in (a) or (b) hereof, then Trading Day shall mean any day except Saturday,
Sunday and any day which shall be a legal holiday or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

“Voting Stock” means, as applied to the Capital Stock of any corporation,
Capital Stock of any class or classes (however designated) having ordinary
voting power for the election of a majority of the members of the Board of
Directors (or other governing body) of such corporation, other than Capital
Stock having such power only by reason of the happening of a contingency.

“Warrants” means the Warrants issued and sold pursuant to the Purchase
Agreement, including, without limitation, this Warrant, and any other warrants
of like tenor issued in substitution or exchange for any thereof pursuant to the
provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other
Warrants.

“Warrant Consideration” has the meaning specified in Section 4(i)(i) hereof.

“Warrant Price” initially means U.S. $1.25, as such price may be adjusted from
time to time as shall result from the adjustments specified in this Warrant,
including Section 4 hereto.

 

 

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“Warrant Share Number” means at any time the aggregate number of shares of
Warrant Stock which may at such time be purchased upon exercise of this Warrant,
after giving effect to all prior adjustments and increases to such number made
or required to be made under the terms hereof.

“Warrant Stock” means Common Stock issuable upon exercise of any Warrant or
Warrants or otherwise issuable pursuant to any Warrant or Warrants.

10. Other Notices. In case at any time:

 

(A)

the Issuer shall make any distributions to the holders of Common Stock; or

 

(B)

the Issuer shall authorize the granting to all holders of its Common Stock of
rights to subscribe for or purchase any shares of Capital Stock of any class or
of any Common Stock Equivalents or other rights; or

 

(C)

there shall be any reclassification of the Capital Stock of the Issuer; or

 

(D)

there shall be any capital reorganization by the Issuer; or

 

(E)

there shall be any (i) consolidation or merger involving the Issuer or (ii)
sale, transfer or other disposition of all or substantially all of the Issuer’s
property, assets or business (except a merger or other reorganization in which
the Issuer shall be the surviving corporation and its shares of Capital Stock
shall continue to be outstanding and unchanged and except a consolidation,
merger, sale, transfer or other disposition involving a wholly-owned
Subsidiary); or

 

(F)

there shall be a voluntary or involuntary dissolution, liquidation or winding-up
of the Issuer or any partial liquidation of the Issuer or distribution to
holders of Common Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least ten (10)
days prior to the

 

 

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action in question and not less than ten (10) days prior to the record date or
the date on which the Issuer’s transfer books are closed in respect thereto.
This Warrant entitles the Holder to receive copies of all financial and other
information distributed or required to be distributed to the holders of the
Common Stock.

11. Amendment and Waiver. Any term, covenant, agreement or condition in this
Warrant may be amended, or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), by a
written instrument or written instruments executed by the Issuer and the
Majority Holders; provided, however, that no such amendment or waiver shall
reduce the Warrant Share Number, increase the Warrant Price, shorten the period
during which this Warrant may be exercised or modify any provision of this
Section 11 without the consent of the Holder of this Warrant.

12. Governing Law. 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. This Warrant shall not be interpreted
or construed with any presumption against the party causing this Warrant to be
drafted.

13. 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 earlier of (i) the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile telephone
number specified for notice prior to 5:00 p.m., eastern time, on a Trading Day,
(ii) the Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified for notice later than 5:00 p.m., eastern time, on any date and earlier
than 11:59 p.m., eastern time, on such date, (iii) the Trading Day following the
date of mailing, if sent by nationally recognized overnight courier service or
(iv) actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be with respect to the Holder of
this Warrant or of Warrant Stock issued pursuant hereto, addressed to such
Holder at its last known address or facsimile number appearing on the books of
the Issuer maintained for such purposes, or with respect to the Issuer,
addressed to:

 

 

QuantRx Biomedical Corporation
100 S. Main Street
Suite 300
Doylestown, PA 18901
Attn:Mr. Walter Witoshkin
Tel. No.: (267) 880-1595
Fax No.:(267) 880-1596

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

14. Warrant Agent. The Issuer may, by written notice to each Holder of this
Warrant, appoint an agent having an office in New York, New York for the purpose
of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
subsection (b) of Section 2 hereof,

 

 

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exchanging this Warrant pursuant to subsection (d) of Section 2 hereof or
replacing this Warrant pursuant to subsection (d) of Section 3 hereof, or any of
the foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.

15. Remedies. The Issuer stipulates that the remedies at law of the Holder of
this Warrant in the event of any default or threatened default by the Issuer in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.

16. Successors and Assigns. This Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors and assigns of the
Issuer, the Holder hereof and (to the extent provided herein) the Holders of
Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock.

17. Modification and Severability. If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision
hereof is found to be unenforceable, then such provision shall be deemed
modified to the extent necessary to make it enforceable by such court or agency.
If any such provision is not enforceable as set forth in the preceding sentence,
the unenforceability of such provision shall not affect the other provisions of
this Warrant, but this Warrant shall be construed as if such unenforceable
provision had never been contained herein.

18. Headings. The headings of the Sections of this Warrant are for convenience
of reference only and shall not, for any purpose, be deemed a part of this
Warrant.

19. No Rights of Stockholder. The Holder shall not have, solely on account of
such status, any rights of a stockholder of the Issuer, either at law or in
equity, or to any notice of meetings of stockholders or of any other proceedings
of the Issuer, except as provided in this Warrant.

20. Piggyback Registration. If the Company at any time proposes to register any
of its securities under the Securities Act for sale to the public, whether for
its own account or for the account of other security holders or both (except
with respect to registration statements on Forms S-4 or S-8 or another form not
available for registering the registrable securities for sale to the public), it
will give written notice to the Holder of its intention so to do. Upon the
written request of the Holder, received by the Company within 30 days after the
giving of any such notice by the Company, to register any of the Holder’s
Warrant Shares, the Company will use reasonable best efforts to cause the
Holder’s Warrant Shares as to which registration shall have been so requested to
be included in the securities to be covered by the registration statement
proposed to be filed by the Company. If any registration pursuant to this
Section 10 shall be, in whole or in part, an underwritten public offering of
Common Stock, the number of the Holder’s Warrant Shares to be included in such
an underwriting may be reduced on a pari passu basis, or eliminated entirely, if
and to the extent that the managing underwriter shall be of the opinion that
such inclusion would adversely affect the marketing of the securities to be sold
by the Company. At such time that the underlying shares issued upon exercise of
this warrants are eligible to be sold pursuant to Rule 144(k) under the
Securities Act, this section shall no longer apply.

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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
first above written.

 

 

 

 

 

QUANTRX BIOMEDICAL CORPORATION

 

 

 

 

By: 

 

 

 

 

 

Name: Walter W. Witoshkin

 

 

 

 

 

Title: Chairman & CEO

 

 

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EXERCISE FORM

WARRANT

QUANTRX BIOMEDICAL CORPORATION

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of QuantRx
Biomedical Corporation covered by the within Warrant.

 

Dated:

 

 

Signature

 

 

 

Address

 

 

 

 

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the date of Exercise determined in accordance with Section 16
of the Securities Exchange Act of 1934, as amended: _________________________

ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

 

Dated:

 

 

Signature

 

 

 

Address

 

 

 

 

PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

 

Dated:

 

 

Signature

 

 

 

Address

 

 

 

 

FOR USE BY THE ISSUER ONLY:

 

 

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This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.

 

 

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