Document:

Exhibit 10.5

 

Exhibit 10.5

 

ESCROW AGREEMENT

 

(Basic Three Party Escrow)

 

THIS
ESCROW AGREEMENT is entered into as of December 14, 2017, by and
among Preprogen LLC, a Delaware limited liability company
(“Party A”), QuantRx Biomedical Corporation, a Nevada
corporation (“Party B”, and together with Party A,
sometimes referred to individually as “Party”
and collectively as the
“Parties”), and JPMorgan Chase Bank, N.A. (the
“Escrow Agent”).

 

WHEREAS, the Parties have agreed to deposit in escrow
certain funds and wish such deposit to be subject to the terms and
conditions set forth herein.

 

1.            

Appointment. The Parties hereby appoint
Escrow Agent as their escrow agent for the purposes set forth
herein, and Escrow Agent hereby accepts such appointment under the
terms and conditions set forth herein.

 

2.            

Fund; Investment. (a) Party A agrees to
deposit with Escrow
Agent the sum of $ 400,000 (“Escrow Deposit”). Escrow
Agent shall hold the Escrow Deposit in one or more demand deposit
accounts and shall invest and reinvest the Escrow Deposit and the
proceeds thereof (“Fund”) in an interest bearing demand
deposit account at JPMorgan Chase Bank, N.A., or a successor
investment offered by Escrow Agent. Interest bearing demand deposit
accounts have rates of interest or compensation that may vary from
time to time as determined by the Escrow Agent.

 

Instructions
to make any other investment (“Alternative
Investment”), and any instruction to change investments must
be in a joint writing and executed by an Authorized Representative
(as defined in Section 3 below), of each of the Parties and shall
specify the type and identity of the investments to be purchased
and/or sold.

 

(b) All
interest or other income earned under this Agreement shall be
allocated to Party B and reported, by Escrow Agent to the IRS, or
any other taxing authority, on IRS Form 1099 or 1042S (or other
appropriate form) as income earned from the Escrow Deposit by Party
B whether or not said income has been distributed during such year.
The Parties hereby represent to Escrow Agent that no other tax
reporting of any kind is required given the underlying transaction
giving rise to this Agreement.

 

3.            

Disposition and Termination. (a) The
Parties may at any time jointly deliver to the Escrow Agent
instructions in substantially the form of Exhibit A-1 attached
hereto executed by an Authorized Representative of each Party
instructing the Escrow Agent to distribute all or a portion of the
Fund. Within three (3) Business Days after the date on which the
Escrow Agent receives (i) joint instructions in substantially the
form of Exhibit A-1 attached hereto executed by an Authorized
Representative of each Party or (ii) a Final Order directing
payment of all or a portion of the Fund, the Escrow Agent shall
disburse the portion of the Fund set forth in such joint written
instructions or Final Order, as applicable, to the persons or
accounts designated in such joint written instructions or Final
Order. For purposes of this Agreement, a “Final Order”
means a final and non-appealable order, judgment or decree of a
court of competent jurisdiction accompanied by a written
certification from counsel for Party A or Party B, as applicable,
attesting that such order, judgment or decree is final and not
subject to further proceedings or appeal along with a written
instruction from an Authorized Representative of Party A or Party
B, as applicable, given to effectuate such order, judgment or
decree and the Escrow Agent shall be entitled conclusively to rely
upon any such certification and instruction and shall have no
responsibility to review the order, judgment or decree to which
such certification and instruction refers or to make any
determination as to whether such order, judgment or decree is
final.

 

(b)
Notwithstanding anything to the contrary set forth in Section 8,
any instructions setting forth, claiming, objecting to, or in any
way related to the transfer or distribution of the Fund, must be in
writing and executed by the appropriate Party or Parties as
evidenced by the signatures of the person or persons signing this
Agreement or one of their designated persons as set forth on the
Designation of Authorized Representatives attached hereto as
Schedules 1-A and 1-B (each an “Authorized
Representative”). Each Designation of Authorized
Representatives shall be signed by the Secretary, any Assistant
Secretary or other duly authorized officer of the named Party. No
such instruction shall be deemed delivered and effective unless
Escrow Agent actually shall have received it on a Business Day by
facsimile or as a Portable Document Format (“PDF”)
attached to an email at the fax number or email address set forth
in Section 8 and in the case of a facsimile, as evidenced by a
confirmed transmittal to the Party’s or Parties’
transmitting fax number and Escrow Agent has been able to satisfy
any applicable security procedures as may be required hereunder.
Escrow Agent shall not be liable to any Party or other person for
refraining from acting upon any instruction for or related to the
transfer or distribution of the Fund if delivered to any other fax
number or email address, including but not limited to a valid email
address of any employee of Escrow Agent.

 

 

 

-1-

 

 

 

(c) The
persons designated as Authorized Representatives and telephone
numbers for same may be changed only in a writing executed by an
Authorized Representative or other duly authorized officer of the
applicable Party setting forth such changes and actually received
by Escrow Agent via facsimile or as a PDF attached to an email.
Escrow Agent will confirm any such change in Authorized
Representatives by a telephone callback or email confirmation to an
Authorized Representative and Escrow Agent may rely and act upon
the confirmation of anyone purporting to be that Authorized
Representative.

 

(d)
Escrow Agent and other financial institutions, including the
beneficiary’s bank, may rely upon the identifying number of
the beneficiary, the beneficiary’s bank or any intermediary
bank included in a funds transfer instructions, even if it
identifies a person different from the beneficiary, the
beneficiary’s bank or intermediary bank identified by
name.

 

(e) As
used in this Section 3, “Business Day” shall mean any
day other than a Saturday, Sunday or any other day on which Escrow
Agent located at the notice address set forth below is authorized
or required by law or executive order to remain closed. The Parties
acknowledge that the security procedures set forth in this Section
3 are commercially reasonable. Upon delivery of the Fund in full by
Escrow Agent pursuant to this Section 3, this Agreement shall
terminate and the related account(s) shall be closed, subject to
the provisions of Sections 6 and 7.

 

(f)
Notwithstanding anything to the contrary contained in this
Agreement, in the event that an electronic signature is affixed to
an instruction issued hereunder to disburse or transfer funds, such
instruction shall be confirmed by a verifying callback (or email)
to an Authorized Representative.

 

4.            

Escrow Agent. Escrow Agent shall have
only those duties as are specifically and expressly provided
herein, and no other duties, including but not limited to any
fiduciary duty, shall be implied. Escrow Agent has no knowledge of,
nor any obligation to comply with, the terms and conditions of any
other agreement between the Parties, nor shall Escrow Agent be required to
determine if any Party has complied with any other agreement.
Escrow Agent may conclusively rely upon any written notice,
document, instruction or request delivered by the Parties believed
by it to be genuine and to have been signed by an Authorized
Representative(s), as applicable, without inquiry and without
requiring substantiating evidence of any kind and Escrow Agent
shall be under no duty to inquire into or investigate the validity,
accuracy or content of any such document, notice, instruction or
request. Escrow Agent shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith except to the
extent that Escrow Agent's gross negligence, willful misconduct or
fraud was the cause of any direct loss to either Party. Escrow
Agent may execute any of its powers and perform any of its duties
hereunder directly or through affiliates or agents. In the event
Escrow Agent shall be uncertain, or believes there is some
ambiguity, as to its duties or rights hereunder, or receives
instructions, claims or demands from any Party hereto which in
Escrow Agent’s judgment conflict with the provisions of this
Agreement, or if Escrow Agent receives conflicting instructions
from the Parties, Escrow Agent shall be entitled either to: (a)
refrain from taking any action until it shall be given (i) a joint
written direction executed by Authorized Representatives of the
Parties which eliminates such conflict or (ii) a court order issued
by a court of competent jurisdiction (it being understood that
Escrow Agent shall be entitled conclusively to rely and act upon
any such court order and shall have no obligation to determine
whether any such court order is final); or (b) file an action in
interpleader. Escrow Agent shall have no duty to solicit any
payments which may be due it or the Fund, including, without
limitation, the Escrow Deposit nor shall the Escrow Agent have
any duty or obligation to confirm or verify the accuracy or
correctness of any amounts deposited with it hereunder. The Parties
grant to Escrow Agent a lien and security interest in the Escrow
Fund in order to secure any indemnification obligations of the
Parties or obligation for fees or expenses owed to the Escrow Agent
hereunder. Anything in this Agreement to the contrary
notwithstanding, in no event shall Escrow Agent be liable for
special, incidental, punitive, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if Escrow Agent has been advised of the likelihood
of such loss or damage and regardless of the form of
action.

 

 

 

-2-

 

 

 

5.            

Succession. Escrow Agent may resign and
be discharged from its duties or obligations hereunder by giving
not less than thirty (30) days advance notice in writing of such
resignation to the Parties, or may be removed, with or without
cause, by the Parties at any time after giving not less than thirty
(30) days prior joint written notice to the Escrow Agent. Escrow
Agent’s sole responsibility after such applicable thirty (30)
day notice period expires shall be to hold the Fund (without any
obligation to reinvest the same) and to deliver the same to a
designated substitute escrow agent, if any, appointed by the
Parties, or such other person designated by the Parties, or in
accordance with the directions of a final court order, at which
time Escrow
Agent’s obligations hereunder shall cease and terminate. If
prior to the effective resignation or removal date, the Parties
have failed to appoint a successor escrow agent, or to instruct the
Escrow Agent to deliver the Fund to another person as provided
above, or if such delivery is contrary to applicable law, at any
time on or after the effective resignation date, Escrow Agent
either (a) may interplead the Fund with a court located in the
State of New York and the costs, expenses and reasonable
attorney’s fees which are incurred in connection with such
proceeding may be charged against and withdrawn from the Fund; or
(b) appoint a successor escrow agent of its own choice. Any
appointment of a successor escrow agent shall be binding upon the
Parties and no appointed successor escrow agent shall be deemed to
be an agent of Escrow Agent. Escrow Agent shall deliver the Fund to
any appointed successor escrow agent, at which time Escrow
Agent’s obligations under this Agreement shall cease and
terminate. Any entity into which Escrow Agent may be merged or
converted or with which it may be consolidated, or any entity to
which all or substantially all of the escrow business may be
transferred, shall be the Escrow Agent under this Agreement without
further act.

 

6.            

Compensation; Acknowledgment.
(a) The Parties agree
jointly and severally to pay Escrow Agent upon execution of this
Agreement and from time to time thereafter reasonable compensation
for the services to be rendered hereunder, which unless otherwise
agreed in writing, shall be as described in Schedule 2; provided,
however, solely as between the Parties, Party A agrees that it
shall be responsible to pay the entire $2,500 Annual Administration
Fee set forth on Schedule 2.

 

           (b)
Each of the Parties further agrees to the disclosures and
agreements set forth in Schedule 2.

 

7.            

Indemnification and Reimbursement. The
Parties agree jointly and severally to indemnify and hold harmless
Escrow Agent and its agents, employees, officers and directors (the
“Indemnitees”) from and against any and all losses,
damages, claims, liabilities, costs or expenses (including
attorneys’ fees) (collectively “Losses”),
resulting directly or indirectly from (a) Escrow Agent’s
performance of this Agreement, except to the extent that such
Losses are determined by a court of competent jurisdiction to have
been caused by the gross negligence, bad faith, willful misconduct
or fraud of such Indemnitee; and (b) Escrow Agent’s
following, accepting or acting upon any instructions or directions
whether joint or several from the Parties received in accordance
with this Agreement. The Parties hereby grant Escrow Agent a right
of set-off against the Fund for the payment of any claim for
indemnification, fees, expenses and amounts owing to Escrow Agent
or an Indemnitee. The obligations set forth in this Section 7 shall
survive the resignation, replacement or removal of Escrow Agent or
the termination of this Agreement.

 

8.            

Notices. Except as otherwise expressly
required in Section 3, all communications hereunder shall be in
writing or set forth in a PDF attached to an email, , and shall be
delivered by facsimile, email or overnight courier only to the
appropriate fax number, email address, or notice address set forth
for each party as follows:

 

 If
to Party A: Preprogen LLC

4
Lemberg Court, Suite 304

Monroe
NY 10950

Attention: E.
Goldberger

Tel
No.: (845) 538-3889

Email
Address: eli@egoldco.com

 

 

If to
Party
B:                             
QuantRx Biomedical Corporation

171
Sherwood Lane

Raynham, MA
02767

Attention: Michael
Abrams

Tel
No.: (212) 980-2235

Email
Address: mabrams@burnhamhill.com

 

If to
Escrow
Agent:                          
JPMorgan Chase Bank, N.A.

 
    
                                                   
Escrow Services

4 New
York Plaza, Floor 11

New
York, NY 10004

Attention: Nadia
Moneva / Renfred Pico

Fax
No.: 212-552-2812

                                                          
Email Address:ec.escrow@jpmorgan.com

 

 

 

-3-

 

 

 

9.            

Compliance with Court Orders. In the
event that a legal garnishment, attachment, levy restraining notice
or court order is served with respect to any of the Fund, or the
delivery thereof shall be stayed or enjoined by an order of a
court, Escrow Agent is hereby expressly authorized, in its sole
discretion, to obey and comply with all such orders so entered or
issued, and in the event that Escrow Agent obeys or complies with
any such order it shall not be liable to any of the Parties hereto
or to any other person by reason of such compliance notwithstanding
such order be subsequently reversed, modified, annulled, set aside
or vacated.

 

10.            

Miscellaneous. (a) The provisions of this Agreement
may be waived, altered, amended or supplemented only by a writing
signed by the Escrow Agent and the Parties. This Agreement and any
right or interest hereunder may be assigned by a Party only in a
writing agreed upon and signed by the Agent and the Parties. This
Agreement shall be governed by and construed under the laws of the
State of New York. Each Party and Escrow Agent irrevocably waives
any objection on the grounds of venue, forum non-conveniens or any
similar grounds and irrevocably consents to service of process by
mail or in any other manner permitted by applicable law and
consents to the exclusive jurisdiction of any state or federal
court sitting in New York, New York. To the extent that in any
jurisdiction either Party may now or hereafter be entitled to claim
for itself or its assets, immunity from suit, execution, attachment
(before or after judgment) or other legal process, such Party shall
not claim, and hereby irrevocably waives, such immunity. Escrow
Agent and the Parties further hereby waive any right to a trial by
jury with respect to any lawsuit or judicial proceeding arising or
relating to this Agreement.

 

(b) No
party to this Agreement is liable to any other party for losses due
to, or if it is unable to perform its obligations under the terms
of this Agreement because of, acts of God, fire, war, terrorism,
floods, strikes, electrical outages, equipment or transmission
failure, or other causes reasonably beyond its control. This
Agreement and any joint instructions from the Parties may be
executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the
same instrument or instruction, as applicable. This Agreement may
be executed and transmitted by facsimile or as a PDF attached to an
email and each such execution shall be of the same legal effect,
validity and enforceability as a manually executed, original,
wet-inked
signature. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, the validity of the remaining
portions of this Agreement shall not be affected. The Parties each
represent, warrant and covenant that (i) each document, notice,
instruction or request provided by such Party to Escrow Agent shall
comply with applicable laws and regulations; (ii) such Party has
full power and authority to enter into, execute and deliver this
Agreement and to perform all of the duties and obligations to be
performed by it hereunder; and (iii) the person(s) executing this
Agreement on such Party’s behalf and certifying Authorized
Representatives in the applicable Schedule 1 have been duly and
properly authorized to do so, and each Authorized Representative of
such Party has been duly and properly authorized to take the
actions specified for such person in the applicable Schedule 1.
Except as expressly provided in Section 7 above, nothing in this
Agreement, whether express or implied, shall be construed to give
to any person or entity other than Escrow Agent and the Parties any
legal or equitable right, remedy, interest or claim under or in
respect of the Fund or this Agreement.

 

[Signature
Page Follows]

 

 

 

 

-4-

 

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date set forth above.

 

 

 

PARTY A

 

PREPROGEN LLC

 

 

 

By: /s/ Mayer
Goldberger

 

Name: Mayer
Goldberger

 

Title: Founder

 

 

 

 

 

PARTY
B

 

QUANTRX BIOMEDICAL CORPORATION

 

 

 

By: /s/ Shalom Z.
Hirschman

 

Name: Dr. Shalom Z.
Hirschman

 

Title: Chief Executive
Officer

 

 

 

 

 

JPMORGAN
CHASE BANK, N.A.,

 

As
Escrow Agent

 

 

 

By: /s/
Christopher Palermo

 

Name:
Christopher Palermo

 

Title:
Vice President

 

 

 
[Signature Page to Escrow
Agreement]

 

-5-

 

EXHIBIT
A-1

 

Form of Escrow Release Notice – Joint
Instructions

 

 

JPMorgan
Chase Bank, N.A., Escrow Services

[Address]

[Fax
No.]

[Email
Address]

 

Date:

 

Re:
Preprogen LLC, QuantRx Biomedical Corporation – Escrow
Agreement dated [ ]

Escrow
Account no. [ ]

 

Dear
Sir/Madam:

 

We
refer to an escrow agreement dated [ ] between Preprogen LLC,
QuantRx Biomedical Corporation and JPMorgan Chase Bank, N.A., as
Escrow Agent (the “Escrow Agreement”).

 

Capitalized
terms in this letter that are not otherwise defined shall have the
same meaning given to them in the Escrow Agreement.

 

The
Parties instruct the Escrow Agent to release the Fund, or the
portion specified below, to the specified party as instructed
below.

 

Amount

(In
writing)

Beneficiary

City

Country

 

US Instructions:

 

Bank

Bank
address

ABA
Number:

Credit
A/C Name:

Credit
A/C #:

Credit
A/C Address:

If
Applicable:

FFC A/C
Name:

FFC A/C
#:

FFC A/C
Address:

 

 

-6-

 

 

International Instructions:

 

Bank
Name:

Bank
Address

SWIFT
Code:

US Pay
Through ABA:

Credit
A/C Name:

Credit
A/C # (IBAN #):

Credit
A/C Address:

If
Applicable:

FFC A/C
Name:

FFC A/C
# (IBAN #):

FFC A/C
Address:

 

 

FOR AND ON BEHALF OF PARTY A:

 

 

__________________________

Name:

Date:

Title:

 

 

 

FOR AND ON BEHALF OF PARTY B:

 

 

_________________________________

Name:

Date:

Title:

 

 

 

 

-7-

 

Schedule 1-A

 

Preprogen
LLC

 

 

 

DESIGNATION OF AUTHORIZED

 

REPRESENTATIVES

 

 

 

The
undersigned, Mayer Goldberger, being the duly elected, qualified
and acting President of Preprogen LLC (“Party A”), does
hereby certify:

 

 

 

That
each of the following Representatives is at the date hereof an
Authorized Representative, as such term is defined in the Escrow
Agreement, dated December ___, 2017, by and among Party A, Party B
and Escrow Agent (the “Escrow Agreement”), that the
signature appearing opposite each Authorized Representative’s
name below is the true and genuine signature of such Authorized
Representative, and that each Authorized Representative’s
contact information is current and up-to-date at the date hereof.
Each of the Authorized Representatives is authorized to issue
instructions, confirm funds transfer instructions by callback or
email confirmation and effect changes in Authorized
Representatives, all in accordance with the terms of the Escrow
Agreement. Callbacks or emails confirming an instruction shall be
made to an Authorized Representative other than the Authorized
Representative who issued the instruction unless (a) only a single
Authorized Representative is designated below, (b) the information
set forth below changes and is not updated by Party A such that
only the Authorized Representative who issued the instruction is
available to receive a callback or email confirmation, or (c) Party
A is an individual. Party A acknowledges that pursuant to this
Schedule, Escrow Agent is offering an option for callback or email
confirmation to a different Authorized Representative, and if Party
A nevertheless names only a single Authorized Representative or
fails to update Authorized Representative information, Party A
agrees to be bound by any instruction, whether or not authorized,
confirmed by callback to the issuer of the
instruction.

 

 

	

NAME

	

SIGNATURE

	

TELEPHONE, CELL
NUMBERS and EMAIL ADDRESSES

	

 

Mayer
Goldberger

	

 

________________

	

 

___________________________(cell)______________________(email)____________________

 

 

 

1.

Email confirmation
is only permitted to a corporate email address for purposes of this
Schedule. Any personal email addresses provided will not be used
for email confirmation.

2.

This Schedule may
be signed in counterparts and the undersigned certifies any
signature set forth on an attachment to this Schedule is the true
and genuine signature of any Authorized Representative and that
each such Representative's contact information is current and
up-to-date at the date hereof.

3.

That pursuant to
Party A’s governing documents, as amended, the undersigned
has the power and authority to execute this Designation on behalf
of Party A, and that the undersigned has so executed this
Designation this _____ day of December, 2017.

4.

Notwithstanding the
above, if Party A is an individual, no signature will be required
below.

 

 

	
 

	

 

Signature:
_____________________________

	
 

	

 

Name:
Mayer Goldberger

	
 

	

 

Title:
President

 

FOR YOUR SECURITY, PLEASE CROSS OUT ALL UNUSED SIGNATURE LINES ON
THIS SCHEDULE 1-A

 

       All
instructions, including but not limited to funds transfer
instructions, whether transmitted by facsimile or set forth in a
PDF attached to an email, must include the signature (or electronic
signature subject to the conditions set forth in the Escrow
Agreement), of the Authorized Representative authorizing said funds
transfer on behalf of such Party.

 

 

 

 

 

-8-

 

Schedule 1-B

 

QuantRx
Biomedical Corporation

 

 

 

 DESIGNATION
OF AUTHORIZED

 

REPRESENTATIVES

 

 

 

The
undersigned, ________________________, being the duly elected,
qualified and acting ________________________ of QuantRx Biomedical
Corporation (“Party B”), does hereby
certify:

 

 

 

That
each of the following persons is at the date hereof an Authorized
Representative, as such term is defined in the Escrow Agreement,
dated ________________, 2017, by and among Party A, Party B and
Escrow Agent (the “Escrow Agreement”), that the
signature appearing opposite each Authorized Representative’s
name below is the true and genuine signature of such Authorized
Representative, and that each Authorized Representative’s
contact information is current and up-to-date at the date hereof.
Each of the Authorized Representatives is authorized to issue
instructions, confirm funds transfer instructions by callback or
email confirmation and effect changes in Authorized
Representatives, all in accordance with the terms of the Escrow
Agreement. Callbacks or emails confirming an instruction shall be
made to an Authorized Representative other than the Authorized
Representative who issued the instruction unless (a) only a single
Authorized Representative is designated below, (b) the information
set forth below changes and is not updated by Party B such that
only the Authorized Representative who issued the instruction is
[available] to receive a callback or email confirmation, or (c)
Party B is an individual. Party B acknowledges that pursuant to
this Schedule, Escrow Agent is offering an option for callback or
email confirmation to a different Authorized Representative, and if
Party B nevertheless names only a single Authorized Representative
or fails to update Authorized Representative information, Party B
agrees to be bound by any instruction, whether or not authorized,
confirmed by callback to the issuer of the
instruction.

 

 

	

NAME

	

SIGNATURE

	

TELEPHONE, CELL
NUMBERS and EMAIL ADDRESSES

	

 

___________________________

	

 

___________________________

	

 

___________________________(cell)______________________

(email)____________________

	

 

___________________________

	

 

___________________________

	

 

___________________________(cell)______________________

	

 

___________________________

	

 

___________________________

	

(email)____________________

___________________________(cell)______________________

(email)____________________

 

 

 

-9-

 

 

 

1.

Email confirmation
is only permitted to a corporate email address for purposes of this
Schedule. Any personal email addresses provided will not be used
for email confirmation.

2.

This Schedule may
be signed in counterparts and the undersigned certifies any
signature set forth on an attachment to this Schedule is the true
and genuine signature of any Authorized Representative and that
each such Representative's contact information is current and
up-to-date at the date hereof.

5.

That pursuant to
Party B’s governing documents, as amended, the undersigned
has the power and authority to execute this Designation on behalf
of Party B, and that the undersigned has so executed this
Designation this _____ day of ______, 2017.

6.

Notwithstanding the
above, if Party B is an individual, no signature will be required
below.

 

 

 

	
 

	

 

Signature:
_____________________________

	
 

	

 

Name:
_____________________________

	
 

	

 

Title:
_____________________________

 

 

 

FOR YOUR SECURITY, PLEASE CROSS OUT ALL UNUSED SIGNATURE LINES ON
THIS SCHEDULE 1-B

 

       All
instructions, including but not limited to funds transfer
instructions, whether transmitted by facsimile or set forth in a
PDF attached to an email, must include the signature (or electronic
signature subject to the conditions set forth in the Escrow
Agreement) of the Authorized Representative authorizing said funds
transfer on behalf of such Party.

 

 

 

 

 

 

 

-10-Exhibit 10.6

 

Exhibit 10.6

  

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. SUCH
SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

 

 

 

	

Dated:
December 14, 2017

 

	

Warrant Number: CSW-___

 

WARRANT TO PURCHASE

COMMON STOCK

OF

QUANTRX BIOMEDICAL CORPORATION

 

This
certifies that RASHBI CAPITAL GROUP, LLC, or its permitted assigns
(each a “Holder”), for value received, is
entitled to purchase, at an exercise price equal to $0.05 per share
(the “Exercise
Price”) from QUANTRX BIOMEDICAL CORPORATION, a Nevada
corporation (the “Company”), up to fifteen million
(15,000,000) shares of fully paid and nonassessable shares of the
Company’s Common Stock, $0.01 par value (“Common Stock”).

 

This
Warrant shall be exercisable at any time from time to time from and
after the date hereof up to and including 5:00 p.m. (Pacific Time)
on December 14, 2022.

 

1.           Exercise.

 

1.1           Method
of Exercise. The Holder hereof may exercise this Warrant, in
whole or in part, by the surrender of this Warrant (with the Form
of Subscription attached hereto duly completed and executed) at the
principal office of the Company, and (i) by the payment to the
Company of an amount of consideration therefor equal to the
Exercise Price in effect on the date of such exercise multiplied by
the number of shares of Common Stock with respect to which this
Warrant is then being exercised, payable at such Holder's election
by certified or official bank check or by wire transfer to an account designated by the
Company, or (ii) by a “cashless exercise” in accordance
with Section 1.2. If this Warrant is submitted in connection
with any exercise pursuant to this Section 1 and the number of
Warrant Shares represented by this Warrant submitted for exercise
is greater than the number of Warrant Shares being acquired upon an
exercise, then the Company shall as soon as practicable and in no
event later than three (3) business days after any exercise and at
its own expense, issue a new Warrant in the same form as this
Warrant representing the right to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which
this Warrant is exercised. Issuance of Warrant Shares shall be made
without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate,
all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in
such name or names as may be directed by the Holder.

 

1.2           Payment
of Exercise Price. The Holder may pay the Exercise Price in
immediately available funds by wire transfer to an account
designated by the Company or by certified or official bank check
or, alternatively, in its sole discretion satisfy its obligation to
pay the Exercise Price through a “cashless exercise”,
in which event the Company shall issue to the Holder the number of
Warrant Shares determined as follows:

 

X = Y
[(A-B)/A]

 

where:

 

“X”
equals the number of Warrant Shares to be issued to the
Holder;

 

“Y”
equals the total number of Warrant Shares with respect to which
this Warrant is being exercised;

 

“A”
equals the arithmetic average of the Closing Sale Prices (defined
below) of the shares of Common Stock for the five (5) consecutive
Trading Days ending on the date immediately preceding the Exercise
Date; and

 

“B”
equals the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.

 

 

 

 

-1-

 

 

For
purposes of this Warrant, “Closing Sale Price” means, for
any security as of any date, the last trade price for such security
on the Principal Trading Market for such security, as reported by
Bloomberg Financial Markets, or, if such Principal Trading Market
begins to operate on an extended hours basis and does not designate
the last trade price, then the last trade price of such security
prior to 4:00 P.M., New York City time, as reported by Bloomberg
Financial Markets, or if the foregoing do not apply, the last trade
price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by
Bloomberg Financial Markets, or, if no last trade price is reported
for such security by Bloomberg Financial Markets, the average of
the bid prices, or the ask prices, respectively, of any market
makers for such security as reported in the “pink
sheets” by Pink Sheets LLC. If the Closing Sale Price cannot
be calculated for a security on a particular date on any of the
foregoing bases, the Closing Sale Price of such security on such
date shall be the fair market value as determined in good faith by
the Board of Directors of the Company. All such determinations
shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the
applicable calculation period.

 

1.3           Holder’s
Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 1 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s affiliates, and any
other individuals or entities acting as a group together with the
Holder or any of the Holder’s affiliates), would beneficially
own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such
determination is being made, but shall exclude the number of shares
of Common Stock which would be issuable upon (i) exercise of the
remaining, nonexercised portion of this Warrant beneficially owned
by the Holder or any of its affiliates and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its affiliates. Except as set forth
in the preceding sentence, for purposes of this Section 1.3,
beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)
and the rules and regulations promulgated thereunder. To the extent
that the limitation contained in this Section 1.3 applies, the
determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any
affiliates) and of which portion of this Warrant is exercisable
shall be in the sole discretion of the Holder, and the submission
of a Form of Subscription shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any
affiliates) and of which portion of this Warrant is exercisable, in
each case subject to the Beneficial Ownership Limitation, and the
Company shall have no obligation to verify or confirm the accuracy
of such determination. In addition, a determination as to any group
status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 1.3, in
determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock
as reflected in (A) the Company’s most recent periodic or
annual report filed with the United States Securities and Exchange
Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or its transfer agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral
request of a Holder, the Company shall within two trading days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its affiliates since the
date as of which such number of outstanding shares of Common Stock
was reported. The “Beneficial Ownership Limitation”
shall be 4.999% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of
shares of Common Stock issuable upon exercise of this Warrant. The
Holder, upon not less than 61 days’ prior notice to the
Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this 1.3, provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section
1.3 shall continue to apply. Any such increase or decrease will not
be effective until the 61st day after such notice is delivered to
the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity
with the terms of this Section 1.3 to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the
intended Beneficial Ownership Limitation herein contained or to
make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this
Warrant.

 

 

 

 

-2-

 

 

 

2.           

Shares to be Fully Paid; Reservation
of Shares. The Company covenants and agrees that all shares
of Common Stock which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free
from all preemptive rights of any shareholder and free of all
taxes, liens and charges with respect to the issue thereof. The
Company further covenants and agrees that during the period within
which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved, for the
purpose of issue or transfer upon exercise of the subscription
rights evidenced by this Warrant, a sufficient number of shares of
authorized but unissued shares of Common Stock.

 

3.           

Adjustment of Exercise Price and
Number of Shares. The Exercise Price and the number of
shares purchasable upon the exercise of this Warrant shall be
subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of
the Exercise Price, the Holder of this Warrant shall thereafter be
entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of shares obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by
the number of shares purchasable pursuant hereto immediately prior
to such adjustment, and dividing the product thereof by the
Exercise Price resulting from such adjustment.

 

3.1           

Subdivision or Combination of
Stock. In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares,
the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the
outstanding shares of the Common Stock of the Company shall be
combined into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination shall be
proportionately increased.

 

3.2           

Reclassification. If any
reclassification of the capital stock of the Company shall be
effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities, or other assets or property,
then, as a condition of such reclassification, lawful and adequate
provisions shall be made whereby the Holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of
the Common Stock immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of
stock, securities or other assets or property as may be issued or
payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby. In any
reclassification described above, appropriate provision shall be
made with respect to the rights and interests of the Holder of this
Warrant to the end that the provisions hereof (including, without
limitation, provisions for adjustments of the Exercise Price and of
the number of shares purchasable and receivable upon the exercise
of this Warrant) shall thereafter be applicable, as nearly as may
be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise hereof.

 

3.4           

Notice of Adjustment. Upon any
adjustment of the Exercise Price or any increase or decrease in the
number of shares purchasable upon the exercise of this Warrant, the
Company shall give written notice thereof, by first class mail
postage prepaid, addressed to the registered Holder of this Warrant
at the address of such Holder as shown on the books of the Company.
The notice shall be signed by the Company’s chief financial
officer and shall state the Exercise Price resulting from such
adjustment and the increase or decrease, if any, in the number of
shares purchasable at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.

 

3.5           

Other Notices. If at any
time:

 

(1)           

the Company shall
declare any cash dividend upon its Common Stock;

 

(2)           

there shall be a
Change of Control; or

 

(3)           

there shall be a
voluntary or involuntary dissolution, liquidation or winding-up of
the Company;

 

then,
in any one or more of said cases, the Company shall give, by first
class mail, postage prepaid, addressed to the Holder of this
Warrant at the address of such Holder as shown on the books of the
Company, (a) at least twenty (20) days prior written notice of the
date on which the books of the Company shall close or a record
shall be taken for such dividend or for determining rights to vote
in respect of any such Change of Control or dissolution,
liquidation or winding-up, and (b) in the case of any such Change
of Control or dissolution, liquidation, or winding-up, at least
twenty (20) days prior written notice of the date when the same
shall take place. Any notice given in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend,
the date on which the holders of Common Stock shall be entitled
thereto. Any notice given in accordance with the foregoing clause
(b) shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such Change of
Control, dissolution, liquidation, winding-up, or conversion, as
the case may be.

 

 

 

 

-3-

 

 

 

4.           

No Voting or Dividend Rights.
Nothing contained in this Warrant shall be construed as conferring
upon the Holder hereof the right to vote or to consent to receive
notice as a shareholder of the Company or any other matters or any
rights whatsoever as a shareholder of the Company. No dividends or
interest shall be payable or accrued in respect of this Warrant or
the interest represented hereby or the shares purchasable hereunder
until, and only to the extent that, this Warrant shall have been
exercised.

 

5.           

Warrants Transferable. Subject
to compliance with applicable federal and state securities laws,
this Warrant and all rights hereunder may be transferred, in whole
or in part, without charge to the holder hereof (except for
transfer taxes), upon the prior written consent of the Company and,
thereafter, upon surrender of this Warrant properly endorsed and
compliance with the provisions of this Warrant. Each taker and
holder of this Warrant, by taking or holding the same, consents and
agrees that this Warrant, when endorsed in blank, shall be deemed
negotiable, and that the holder hereof, when this Warrant shall
have been so endorsed, may be treated by the Company, at the
Company’s option, and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the
person entitled to exercise the rights represented by this Warrant,
or to the transfer hereof on the books of the Company and notice to
the contrary notwithstanding; but until such transfer on such
books, the Company may treat the registered owner hereof as the
owner for all purposes.

 

6.           

Lost Warrants. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such
mutilation upon surrender and cancellation of such Warrant, the
Company, at its expense, will make and deliver a new Warrant, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated
Warrant.

 

7.           

Modification and Waiver. Any
term of this Warrant may be amended and the observance of any term
of this Warrant may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with
the written consent of the Company and the Holder hereof. Any
amendment or waiver affected in accordance with this Section 7
shall be binding upon the Company and the Holder.

 

8.           

Notices. All notices and other
communications from the Company to the Holder, or vice versa, shall
be deemed delivered and effective when given personally or mailed
by first-class registered or certified mail, postage prepaid, at
such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such
holder from time to time.

 

9.           

Titles and Subtitles; Governing Law;
Venue. The titles and subtitles used in this Warrant are
used for convenience only and are not to be considered in
construing or interpreting this Warrant. This Warrant is to be
construed in accordance with and governed by the internal laws of
the State of Delaware without giving effect to any choice of law
rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of Delaware
to the rights and duties of the Company and the Holder. All
disputes and controversies arising out of or in connection with
this Warrant shall be resolved exclusively by the state and federal
courts in the State of Delaware, and each of the Company and the
Holder hereto agrees to submit to the jurisdiction of said courts
and agrees that venue shall lie exclusively with such
courts.

 

10.           

Representations and Warranties.
The Holder represents and warrants to the Company and follows: The
Warrant is being acquired for Holder’s own investment
portfolio and account (and not on behalf of, and without the
participation of, any other Person) with the intent of holding such
Warrant for investment and without the intent of participating,
directly or indirectly, in a distribution of the Warrant and not
with a view to, or for resale in connection with, any distribution
of the Warrant or any portion thereof. Holder acknowledges that the
Warrant has not been offered to Holder by means of publicly
disseminated advertisements of sales literature. Holder is an
“accredited investor” (as defined in Rule 501
promulgated under the Securities Act) and is knowledgeable and
experienced in finance, securities and investments and has had
sufficient experience analyzing and investing in securities similar
to the Warrant so as to be capable of evaluating the merits and
risks of an investment in the Warrant. Holder is able to bear the
economic risk of an investment in the Warrant. Holder has had an
opportunity to discuss the Company’s business, management,
financial affairs and the terms and conditions of the issuance of
the Warrant with the Company’s management. The foregoing,
however, does not limit or modify the representations and
warranties of the Company in the Asset Purchase Agreement entered
into on the date hereof by and between the Company and Preprogen
LLC or the rights and remedies of Holder for any breach of such
representations and warranties. Holder understands that the Warrant
will not have been registered pursuant to the Securities Act or any
applicable state securities laws, that the Warrant will be
characterized as “restricted securities” under federal
securities laws, and that under such laws and applicable
regulations the Warrant cannot be sold or otherwise disposed of
without registration under the Securities Act or an exemption
therefrom. In this connection, Holder represents that it is
familiar with Rule 144 promulgated under the Securities Act, as
currently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Holder understands that no
public market now exists for the Warrant, and that the Company has
made no assurances that a public market will ever exist for the
Warrant.

 

 

 

 

-4-

 

 

 

                       

11.            

Definition of Warrant Shares.
For purposes of this Warrant, the following terms shall have the
following meanings:

 

“Change of Control” shall mean
that (A) the Company shall, directly or indirectly, in one or more
related transactions, (i) consolidate or merge with or into
(whether or not the Company is the surviving corporation) another
Person, or (ii) sell, assign, transfer, convey or otherwise dispose
of all or substantially all of the properties or assets of the
Company to another Person, or (iii) another Person completes a
purchase, tender or exchange offer that is accepted by the holders
of more than the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the Person or Persons
making or party to, or associated or affiliated with the Persons
making or party to, such purchase, tender or exchange offer), or
(iv) consummate a stock purchase agreement or other business
combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another
Person whereby such other Person acquires more than the 50% of the
outstanding shares of Common Stock (not including any shares of
Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making
or party to, such stock purchase agreement or other business
combination), or (v) reorganize, recapitalize or reclassify its
Common Stock (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 3.1 or 3.2
above) or (B) any “person” or “group” (as
these terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act) is or shall become the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% of the aggregate ordinary voting
power represented by issued and outstanding shares of Common
Stock.

 

“Person” means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency
thereof.

 

“Principal Trading Market” means
the principal securities exchange or securities market in the
United States on which the securities are then traded.

 

“Securities Act” means the
Securities Act of 1933, as amended.

 

“Trading Day” means any day on which
the applicable securities are traded on the Principal Trading
Market; provided that “Trading Day” shall not include
any day on which the applicable securities are scheduled to trade
on such exchange or market for less than 4.5 hours or any day that
the applicable securities are suspended from trading during the
final hour of trading on such exchange or market (or if such
exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending
at 4:00:00 p.m., New York time).

 

“Warrant Shares” shall mean the
number of shares of the Company’s Common Stock issuable upon
exercise of this Warrant.

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

-5-

 

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

 

 

	

 

	
QuantRx Biomedical
Corporation

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/
Shalom
Hirschman

	

 

	

 

	

 

	
Shalom
Hirschman

	

 

	

 

	

 

	

Chief Executive
Officer

	

 

 

       

 

 

 

 

[Signature
Page To Warrant]

 

 

-6-

 

 

 

	

 

	
Acknowledged and
Agreed by the Holder:

	

 

	

 

	
RASHBI CAPITAL
GROUP, LLC 

	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/
Mayer
Goldberger

	

 

	

 

	

 

	
 

	

 

	

 

	

 

	

 

	

 

 

 

 

 

 

 

[Signature
Page To Warrant]

 

 

 

-7-

 

FORM OF SUBSCRIPTION

 

(To be
signed only upon exercise of Warrant)

 

To:
QUANTRX BIOMEDICAL CORPORATION

 

The
undersigned, the holder of a right to purchase shares of Common
Stock of QuantRx Biomedical Corporation (the “Company”) pursuant to that
certain Warrant to Purchase Common Stock of QuantRx Biomedical
Corporation Number CSW-_____ (the “Warrant”), dated as
of ____________ hereby irrevocably elects to exercise the purchase
right represented by such Warrant for, and to purchase thereunder,
__________________________ (_________) shares of Common Stock of
the Company and (check one):

 

 

 ☐

herewith makes
payment of ________________________ Dollars($__________) therefor
in cash;

 

 

 ☐

elects a
“cashless exercise” in accordance with Section 1.2 of
the Warrant.

 

  

The
undersigned represents that it is acquiring such securities for its
own account for investment and not with a view to or for sale in
connection with any distribution thereof.

 

DATED:
________________

 

____________________________

 

 

By: 
                                                    

Name:                                                                 

Its:                                                       

 

-8-

 

 

ACKNOWLEDGMENT

 

 

To:
HOLDER

 

 

The
undersigned hereby acknowledges that as of the date hereof,
__________________ (___________) shares of Common Stock remain
subject to the right of purchase in favor of _____________ pursuant
to that certain Warrant to Purchase Common Stock of QuantRx
Biomedical Corporation, number CSW-___ dated as of
____________.

 

DATED:
________________

 

QuantRx
Biomedical Corporation

 

By:                                                       

 

Name: 

 

Its:                                                       

 

 

 

-9-

 

Warrant Receipt

 

The
undersigned, ___________________, does hereby acknowledge receipt
of Warrant Number CSW-___ dated, ________________, representing
_____________ (________) shares of the Common Stock Warrants of
QuantRx Biomedical Corporation

 

IN
WITNESS WHEREOF, the undersigned has executed this Receipt as of
the date set forth below.

 

 

 

Type: Common Stock
Warrants

 

Warrant Number:
CSW-___

 

Number
of Shares:

 

 

	
 

	
 Name:
_______________________

	
 

	
 

	
 

	
 Date: 
_______________________

	
 

	
 

 

                   

 

 

-10-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00277-of-00352.parquet"}]]