Document:

Unassociated Document

    EXHIBIT
4.1                              
      

    

    THIS
PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES ACT (COLLECTIVELY, THE "SECURITIES LAWS").
THIS PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
OFFERED FOR SALE OR OTHERWISE TRANSFERRED UNLESS SUCH TRANSACTION (I) IS
REGISTERED UNDER THE SECURITIES LAWS OR (II) IS EXEMPT FROM REGISTRATION UNDER
THE SECURITIES LAWS AND MAKER IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO
MAKER THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    PROMISSORY
NOTE

    

    October
14, 2010

    $
1,000,000

    

    FOR VALUE RECEIVED, the undersigned,
NuRx Pharmaceuticals, Inc., a Nevada corporation (the "Maker"), hereby
promises to pay to DYVA Management AG, a company organized under the laws
of Switzerland (“DYVA”) (the "Holder"), when due,
the total principal amount equal to the following: (i) all of the DYVA’s share
of the Initial Funding under the terms of Litigation Support Financing
Agreement, dated as of October 14, 2010 by and between Maker and Holder (the
“Financing
Agreement”), (ii) each Additional Funding made by DYVA under the
Financing Agreement, (iii) the accrued but unpaid Commitment Fee, (iv) the
accrued but unpaid Litigation Management Fee under the Financing Agreement, and
(v) the accrued but unpaid Risk Premium under the Financing Agreement (each an
“Advance” and
collectively, the “Advances”), which
total Advances shall not exceed One Million Dollars ($1,000,000) at any one time
outstanding.  Capitalized terms used but not defined herein shall have
the meaning assigned to such term in or by reference to the Financing
Agreement.

    

    1.           Advances. The date,
form and amount of each Advance shall be entered by Holder on Schedule I hereto;
provided, however, that failure to make such a notation shall not alter the
obligations of Maker to Holder hereunder in any way.

    

    2.           Maturity Date. Maker
shall repay to Holder the outstanding principal amount of this Note, and all
accrued unpaid interest thereon, on the earlier of (i) the closing of an
Institutional Placement, or (ii) the later to occur of (A) three years from the
date set forth above, (B) the settlement of the Delaware Action and any and all
Other Litigation, or (C) the entry of a final judgment of the Delaware
Action and any and all Other Litigation.

    

    3.           Interest. Maker shall
pay interest on the outstanding principal balance of this Note from the date of
each Advance until paid in full at a rate of interest equal to the lesser of
twelve percent (12%) per annum or the maximum rate permissible under applicable
law, due and payable on the Maturity Date.  Payments on this Note
shall be applied first to accrued, unpaid interest and thereafter to reduce the
outstanding principal amount in the order in which Advances are made
hereunder.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    4.           
Conversion
Rights. Holder shall have the right to convert this Note and accrued and
unpaid Interest due under this Note into shares of common stock (the “Common Stock”) of the
Maker, as set forth below.

     

    (a) Conversion
into Maker’s Common Stock. Holder shall have the right from and after the
date of the issuance of this Note and then at any time until this Note is fully
paid, to convert any outstanding and unpaid principal portion of this Note, and
accrued but unpaid Interest on such portion, at the election of the Holder (the
date of such conversion being a “Conversion Date”)
into fully paid and non-assessable shares of Common Stock as such stock exists
on the date of issuance of this Note, or any shares of capital stock of the
Maker into which such Common Stock shall hereafter be changed or reclassified,
at the conversion price of $0.10 (the “Conversion Price”).
Upon delivery to the Maker of a completed Notice of Conversion, a form of which
is attached hereto as Exhibit A, the Maker shall issue and deliver to the Holder
within five (5) business days from the Conversion Date (such day being the
“Delivery
Date”) that number of shares for the portion of the Note and related
accrued Interest converted in accordance with the foregoing.  The number of
shares of Common Stock to be issued upon each conversion of this Note shall be
determined by dividing that portion of the principal of the Note and accrued
Interest to be converted, by the Conversion Price.

     

    (b) Manner
of Conversion. This Note may be converted by Holder by presentment of
this Note, accompanied by written notice stating that Holder elects to convert
all of the principal amount thereof and all accrued but unpaid Interest and
stating the name or names, together with addresses, in which the Conversion
Shares are to be issued.  The conversion shall be deemed to have been
effected immediately prior to the close of business on the date on which this
Note shall have been so surrendered to Maker; and at such time the rights of the
Holder to this Note shall cease, and the person in whose name or names any
certificate or certificates for Conversion Shares (or other securities) shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record thereof.

     

    (c) Adjustment
of Conversion Price. The Conversion Price shall be adjusted from time to
time as follows:

     

    (i) Dividends, Splits,
Combinations, Reclassifications. In the event Maker shall hereafter
(i) pay a stock dividend or make a stock distribution of shares of Common
Stock with respect to the Common Stock, (ii) subdivide its outstanding Common
Stock into a greater amount of Common Stock, (iii) combine its outstanding
Common Stock into a smaller amount of Common Stock, (iv) issue by
reclassification of its Common Stock any other security of Maker, or (v) enter
into a consolidation or merger or other business combination with or into
another corporation in which Maker is not the surviving entity, or
a  consolidation or merger or other business combination in which the
Maker is the surviving entity but the shares of the Maker’s capital stock
outstanding immediately prior to the merger are converted, by virtue of the
merger, consolidation or other business combination, into other property,
whether in the form of securities, cash or otherwise, the Conversion Price
in effect immediately prior to such action shall be adjusted so that Holder
shall be entitled to receive the amount of Common Stock or other capital stock
of Maker it would have owned immediately following such action had this Note or
any remaining portion hereof been converted in full immediately prior thereto.
All adjustments made pursuant to this subsection 4(c)(i) shall become effective
immediately after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the case of a
subdivision, combination, reclassification, merger, consolidation or other
business combination. If, as a result of an adjustment made pursuant to this
subsection 4(c)(i), Holder shall become entitled to receive the Conversion
Shares and other securities of Maker, the board of directors of Maker shall
reasonably determine the allocation of the adjusted Conversion Price between or
among the Conversion Shares and such other securities.

    
      
         

      

      
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    (d) Sale of
Shares of Common Stock Below Conversion Price.

     

    (i) If at
any time or from time to time after the date this Note is issued, Maker issues
or sells, or is deemed by the express provisions of this Section 4(d) to
have issued or sold, Additional Shares of Common Stock (as hereinafter defined),
other than as a dividend or other distribution on any class of stock as provided
in Section 4(c)(i) above, and other than a subdivision or combination of shares
of Common Stock as provided in Section 4(c)(i) above, for an Effective Price (as
hereinafter defined) less than the Conversion Price (subject to adjustment for
any events described in Section 4(c)(i), then the then existing Conversion Price
shall be reduced, as of the opening of business on the date of such issue or
sale, to a price equal to the Effective Price.

     

    (ii)
Determination of
Consideration. For the purpose of making any adjustment required under
this Section 4(d), the consideration received by Maker for any issue or sale of
securities shall (A) to the extent it consists of cash, be the amount of cash
received by Maker therefor before deducting any discounts, commissions or other
expenses allowed, paid or incurred by Maker for any underwriting or otherwise in
connection thereof, (B) to the extent it consists of property other than cash,
be computed at the fair value of that property as determined in good faith by
the Board of Directors, and (C) if Additional Shares of Common Stock,
Convertible Securities (as hereinafter defined) or rights or options to purchase
either Additional Shares of Common Stock or Convertible Securities are issued or
sold together with other stock or securities or other assets of Maker for a
consideration which covers both, be computed as the portion of the consideration
so received that may be reasonably determined in good faith by the board of
directors of the Maker to be allocable to such Additional Shares of Common
Stock, Convertible Securities or rights or options.

     

    (iii)
Treatment of
Convertible Securities. For the purpose of the adjustment required under
this Section 4(d), if Maker issues or sells any rights or options for the
purchase of, or stock or other securities convertible into, Additional Shares of
Common Stock (such convertible stock or securities being herein referred to as
“Convertible
Securities”) and if the Effective Price of such Additional Shares of
Common Stock is less than the Conversion Price (subject to adjustment as
aforesaid), in each case Maker shall be deemed to have issued at the time of the
issuance of such rights or options or Convertible Securities the maximum number
of Additional Shares of Common Stock issuable upon exercise or conversion
thereof and to have received as consideration for the issuance of such shares an
amount equal to the total amount of the consideration, if any, received by Maker
for the issuance of such rights or options or Convertible Securities, plus, in
the case of such rights or options, the amounts of consideration, if any,
payable to Maker upon the exercise of such rights or options, plus, in the case
of Convertible Securities, the amounts of consideration, if any, payable to
Maker (other than by cancellation of liabilities or obligations evidenced by
such Convertible Securities) upon the conversion thereof; provided that if, in
the case of Convertible Securities, the amounts of such consideration cannot be
ascertained but are a function of anti-dilution or similar protective clauses,
Maker shall be deemed to have received the amounts of consideration without
reference to such clauses; and provided further that if the amount of
consideration payable to Maker upon the exercise or conversion of rights,
options or Convertible Securities is reduced over time or on the occurrence or
non-occurrence of specified events other than by reason of anti-dilution
adjustments, the Effective Price shall be recalculated using the figure to which
such amount of consideration is reduced; and provided further that if the amount
of consideration payable to Maker upon the exercise or conversion of such
rights, options or Convertible Securities is subsequently increased, the
Effective Price shall be again recalculated using the increased amount of
consideration payable to Maker upon the exercise or conversion of such rights,
options or Convertible Securities. No further adjustment of the Conversion
Price, as adjusted upon the issuance of such rights, options or Convertible
Securities, shall be made as a result of the actual issuance of Additional
Shares of Common Stock on the exercise of any such rights or options or the
conversion of any such Convertible Securities. If any such rights or options or
the conversion privilege represented by any such Convertible Securities shall
expire without having been exercised, the Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities shall be readjusted
to the Conversion Price which would have been in effect had an adjustment been
made on the basis that the only Additional Shares of Common Stock so issued were
the Additional Shares of Common Stock, if any, actually issued or sold on the
exercise of such rights or options or rights of conversion of such Convertible
Securities, and such Additional Shares of Common Stock, if any, were issued or
sold for the consideration actually received by Maker upon such exercise, plus
the consideration, if any, actually received by Maker for the granting of all
such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by Maker (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities, provided that such
readjustment shall not apply to prior conversions of this Note.

    
      
         

      

      
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    (iv)
Excluded
Issuances. For purposes of this Note, the term “Additional Shares of Common
Stock” shall mean all shares of Common Stock issued by Maker or deemed to
be issued pursuant to this Section 4(d), whether or not subsequently reacquired
or retired by Maker other than (i) shares of Common Stock issued upon
conversion of this Note; (ii) the issuance of the Warrant Shares; (iii)
shares of Common Stock issued pursuant to the exercise of options, warrants or
convertible securities outstanding as of the date this Note is issued; and (iv)
options to purchase up to 1,199,440 shares of Common Stock, and the shares of
Common Stock issuable upon exercise of such options, issued after the date of
this Note under the Maker’s 2007 Stock Compensation Plan.

     

    (v) Effective Price. For
purposes of this Note, the term “Effective Price” of
Additional Shares of Common Stock shall mean the quotient determined by dividing
the total number of Additional Shares of Common Stock issued or sold, or deemed
to have been issued or sold by Maker under this Section 4(d), into the
aggregate consideration received, or deemed to have been received by Maker for
such issue under this Section 4(d), for such Additional Shares of Common
Stock.

    

    5.           Payment. Principal of
and interest on this Note shall be payable in lawful money of the United States
of America. If a payment hereunder becomes due and payable on a Saturday, Sunday
or legal holiday, the due date thereof shall be extended to the next succeeding
business day, and interest shall be payable thereon during such
extension.  Maker shall have the right to prepay this Note in whole at
any time without the consent of Holder, upon sixty (60) days written notice to
Holder accompanied by proof of availability of funds for such prepayment ) (the
“Prepayment
Notice”), provided,
that all accrued, unpaid interest on the amount of the prepayment is also
paid with such prepayment; and provided further following
delivery of such Prepayment Notice, Holder shall have the right to exercise its
rights conversion rights under Section 4 of this Agreement in lieu of such
prepayment.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    6.           Events of Default;
Remedies.

    

    6.1  Events of Default.
The occurrence of any of the following events shall constitute an "Event of Default"
hereunder:

    

    (a) 
Maker shall default in the payment of any part of the principal or Interest
under this Note when due;

    

    (b)  Maker shall be dissolved or
liquidated, or shall sell all or substantially all of its assets;

    

    (c)  a
court having jurisdiction shall enter a decree or order for relief in respect of
Maker in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Maker or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of sixty (60) consecutive days;
or

    

    (d)  Maker
shall commence a voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Maker or for any
substantial part of its property, or shall make any general assignment for the
benefit of its creditors or shall take any action in furtherance of any of the
foregoing

    

    (e)  Maker
is in breach of its obligations under the Financing Agreement, the Warrant or
this Note which is not cured within five (5) days of its receipt of written
notice of such breach.

    

    6.2
Remedies; Notices of Default. Upon the occurrence of any Event of Default,
Holder may at any time (unless all defaults theretofore shall have been
remedied), declare this Note to be due and payable without presentment, demand,
protest or notice, all of which are hereby waived. Holder may then proceed to
protect and enforce the rights of Holder by suit in equity, action at law or
other appropriate proceeding. No course of dealing and no delay on the part of
Holder in exercising any right shall operate as a waiver thereof or otherwise
prejudice Holder's rights. No remedy conferred hereby on Holder shall be
exclusive of any other remedy referred to herein or now or hereafter available
at law, in equity, by statute or otherwise.

    
      
         

      

      
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    7.           Miscellaneous.

    

    7.1  Replacement. On
receipt of evidence reasonably satisfactory to Maker of the loss, theft,
destruction or mutilation of this Note and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement or bond reasonably
satisfactory to Maker, or in the case of mutilation, on surrender and
cancellation of this Note, Maker shall execute and deliver, in lieu of this
Note, a new Note of like denomination, tenor and date as this Note.

    

    7.2  Successors and
Assigns.  This Note may not be assigned, transferred or
hypothecated by either party without the prior written consent of the other
party, which consent may be withheld in its sole and absolute discretion.
Subject to the foregoing, the rights and obligations of Maker and Holder
pursuant to this Note shall be binding upon and inure to the benefit of the
parties’ respective successors, permitted assigns, heirs, administrators and
permitted transferees.

    

    7.3  Amendment; Waiver.
This Note and any of its terms may be modified, amended, waived or terminated
only by a written instrument signed by the party against whom enforcement of
such modification, amendment, waiver or termination is sought.

    

    7.4  Governing Law. This
Note shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to conflict of laws
principles.

    

    7.5 Severability. If any
provision of this Note or the application thereof to any person, place or
circumstance shall be held by a court of competent jurisdiction to be invalid,
unenforceable or void, the remainder of this Note and such provisions as applied
to other persons, places and circumstances shall remain in full force and
effect.

    

    7.6  Interpretation. The
section and other headings used in this Note are for reference purposes only and
shall not constitute a part hereof or affect the meaning or interpretation of
this Note. Except where otherwise indicated, all references to sections refer to
sections of this Note.

    

    7.7  Legal Fees and Costs;
Reimbursement. In the event that any party to this Note shall commence
any suit or action to interpret or enforce this Note, the prevailing party in
such action shall recover such party's costs and expenses incurred in connection
therewith, including attorneys' fees and cost of appeal, if any.

    

    7.8  Entire Agreement. The
parties intend that the terms of this Note shall be the final expression of
their agreement with respect to its subject matter and may not be contradicted
by evidence of any prior or contemporaneous agreement. The parties further
intend that this Note shall constitute the complete and exclusive statement of
its terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative or other legal proceedings involving this
Note.

    

    [Signature
Page Follows]

    
      
         

      

      
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    IN WITNESS WHEREOF, the
Company has caused this Note to be signed in its name by its duly authorized
officers effective as of October 14, 2010.

    

    
      
        
          
            
              
                	 
      	 	 	
                        MAKER:

                      
	 
      	 	 	 
      
	 
      	 	 	
                        NURX
      PHARMACEUTICALS,

                      
	 
      	 	 	
                        INC.

                      
	 
      	 	 	 
      
	 
      	 	 	
                        By:

                      	
                        /s/
      Harin
      Padma-Nathan

                      
	 
      	 	 	
                        Name:

                      	
                        Harin
      Padma-Nathan

                      
	 
      	 	 	
                        Title:

                      	
                        CEO

                      
	 
      	 	 	 
      
	
                        Attest:

                      	 	 
      
	
                         

                      	
                        /s/
      Steven Gershick

                      	 	 
      
	
                        Name:

                      	Steven
      Gershick	 	 
      
	
                        Title:

                      	CFO	 	 
      

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
I

    

    To

    

    Promissory
Note dated October 14, 2010

     

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      	
                                                              Date of Advance

                                                            	 
      	
                                                              Form of Advance

                                                            	 
      	
                                                              Amount

                                                            	 
      	
                                                              Holder’s Initials

                                                            	 
	
                                                              6/30/10

                                                            	
                                                                

                                                            	
                                                              Initial
      Litigation Management Fee

                                                            	
                                                                

                                                            	
                                                              $25,000.00  
      

                                                            	
                                                                

                                                            	
                                                              /s/
      EK

                                                            	 
	
                                                              6/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              7/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/11/10

                                                            	 	
                                                              Initial
      Funding

                                                            	 	$37,500.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/11/10

                                                            	 	
                                                              Risk
      Premium - Initial Funding

                                                            	 	$9,375.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/11/10

                                                            	 	
                                                              Commitment
      Fee

                                                            	 	$25,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              8/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              9/23/10

                                                            	 	
                                                              Additional
      Funding

                                                            	 	$50,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              9/23/10

                                                            	 	
                                                              Risk
      Premium - Additional Funding

                                                            	 	$25,000.00  
      	 	
                                                              /s/
      EK

                                                            	 
	
                                                              9/30/10

                                                            	 	
                                                              Monthly
      Litigation Management Fee

                                                            	 	$4,000.00  
      	 	
                                                              /s/
      EKUnassociated Document

    EXHIBIT
10.1                       

     

    LITIGATION SUPPORT
FINANCING
AGREEMENT

     

    This
Agreement is made as of the 14th day
of October, 2010 by and between DYVA Management AG, a company organized under
the laws of Switzerland (“DYVA”) and NuRx
Pharmaceuticals, Inc., a corporation organized under the laws of Nevada (“NuRx”) hereinafter
collectively referred to as the “Parties” and
individually referred to as a “Party”.

     

    RECITALS

     

    
      	
            	
              WHEREAS,

            	
              NuRx
      is a plaintiff in a lawsuit filed in the Court of Chancery of the State of
      Delaware styled NuRx
      Pharmaceuticals, Inc, v. William H. Fleming and QN Diagnostics,
      LLC, C.A. No. 5755-VCP (the “Delaware
      Action”); and

            

    

     

    
      	
            	
              WHEREAS,

            	
              DYVA
      has agreed to fund the cost of all or part of the Delaware Action and the
      Other Litigation (defined below) in exchange for the issuance by NuRx of a
      convertible promissory note and warrants for the issuance of common stock
      by NuRx; and

            

    

     

    
      	
            	
              WHEREAS,

            	
              the
      Parties seek to define their rights, powers and obligations with respect
      to the litigation costs and other matters associated with the Delaware
      Action and the Other Litigation (as defined
  below).

            

    

     

    AGREEMENTS

     

    NOW,
THEREFORE, for and in consideration of the mutual covenants and agreements
contained herein, the Parties agree as follows:

     

    
      	
               
      

            	
              1.

            	
              Litigation
      Funding. The Parties agree as follows with respect to the funding
      of the Delaware Action and any other litigation (“Other
      Litigation”) undertaken to enforce or protect NuRx’s rights with
      respect to QN Diagnostics LLC (the “Joint
      Venture”), a joint venture undertaken by NuRx with QuantRx
      Biomedical Corporation.  For avoidance of doubt, funding of the
      Delaware Action and any Other Litigation shall include all legal fees,
      expenses and advances incurred by any counsel of record with respect to
      the Delaware Action or Other Litigation, the cost of any experts retained
      by or on behalf of NuRx with respect to the Delaware Action or any Other
      Litigation up to an amount that shall not cause the Advances (as defined
      in Section 4(a)(i)) to exceed One Million Dollars ($1,000,000) but shall
      not include the cost of any judgment against, or sanctions imposed upon,
      NuRx.

            

    

     

    
      	
               
      

            	
              a.

            	
              Initial
      Funding.  The initial financing of the Delaware Action
      shall consist of a payment of $75,000 the (“Initial
      Funding”) to counsel of record in the Delaware Action (the “Law
      Firm”), which is currently Smith, Katzenstein & Furlow,
      LLP.  DYVA and NuRx shall each advance $37,500 with respect to
      the Initial Funding.

            

    

    
      
         

      

      
        - 1
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              b.

            	
              Additional
      Funding.

            

    

     

    
      	
               
      

            	
              i.

            	
              DYVA
      shall, at the request of NuRx, advance additional funds to the Law Firm
      (each such advance an “Additional
      Funding”) in the amount requested by NuRx within five business days
      of receipt of the request.

            

    

     

    
      	
               
      

            	
              ii.

            	
              DYVA
      shall provide Additional Funding to counsel of record with respect to any
      Other Litigation, provided, however, that
      DYVA has given its written consent that such Other Litigation shall be
      subject to the terms of this Agreement.

            

    

     

    
      	
               
      

            	
              iii.

            	
              DYVA shall
      have the right to cease advancing Additional Funding in connection with
      the Delaware Action or any Other Litigation in the event it in good faith
      disagrees with the litigation strategy or actions approved by NuRx in
      connection with such law
suits.

            

    

     

    
      	
               
      

            	
              2.

            	
              Control of
      Litigation; Appointment of
      Litigation Manager.

            

    

     

    
      	
               
      

            	
              a.

            	
              Control of
      Litigation.  NuRx shall control the litigation in its
      sole and absolute discretion and shall be solely responsible for all
      information submitted to any court with respect to the Delaware Action or
      any Other Litigation.

            

    

     

    
      	
               
      

            	
              b.

            	
              Appointment of
      Litigation Manager.  Notwithstanding Section 2(a), DYVA
      is irrevocably appointed as the litigation manager with respect to the
      Delaware Action and any Other Litigation subject to financing under this
      Agreement (the “Litigation Manager”), provided, however,
      that DYVA shall cease to be Litigation Manager in the event it elects to
      cease providing Additional Funding pursuant to Section
      1(b)(iii).  NuRx agrees that it shall consult with DYVA on each
      material decision with respect to the Delaware Action and the Other
      Litigation.

            

    

     

    
      	
               
      

            	
              3.

            	
              Commitment
      Fee/Litigation Management Fee/Risk Premium.  In
      connection with the transactions contemplated herein, NuRx shall pay DYVA
      the following fees, which in each case shall be added to the principal
      balance of the Convertible Note (as defined in Section 4(a)
      below):

            

    

     

    
      	
               
      

            	
              a.

            	
              Commitment
      Fee.  In exchange for DYVA’s agreement to pay its share
      of the Initial Funding and all of the Additional Fundings, NuRx agrees to
      pay DYVA a one-time commitment fee in the amount of $25,000 (the “Commitment
      Fee”).

            

    

     

    
      	
               
      

            	
              b.

            	
              Litigation Management
      Fee.  NuRx agrees to pay DYVA a litigation management fee
      (the “Litigation
      Management Fee”) in the
      amount of (1) $25,000, which is immediately due and payable, and (2)
      $4,000 per month to be paid each month commencing on June 30, 2010, and on
      the 30th
      day of each month thereafter (or, in the case of February, the 28th
      day) and ending upon the earlier of the settlement or entry of a final
      judgment in the Delaware Action and any Other
  Litigation.

            

    

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              c.

            	
              Risk
      Premium.  NuRx shall pay DYVA a risk premium equal to 25%
      of DYVA’s share of the Initial Funding and 50% of each Additional Funding
      made by DYVA (the “Risk
      Premium”).  The Risk Premium shall be due and payable on
      each date that DYVA pays the Initial Funding and each Additional
      Funding.

            

    

     

    
      	
               
      

            	
              4.

            	
              Issuance of
      Convertible Note and
Warrant.

            

    

     

    
      	
               
      

            	
              a.

            	
              In
      consideration for the financing of the Delaware Action and the Other
      Litigation, NuRx agrees to issue to DYVA a convertible promissory note
      (the “Convertible
      Note”) in the form attached as Exhibit
A.

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      principal amount of the Convertible Note (the “Principal”) shall be
      comprised of Dvya’s share of the Initial Funding, each Additional Funding
      made by DYVA, any accrued but unpaid Commitment Fee, any accrued but
      unpaid Litigation Management Fee and any accrued but unpaid Risk Premium
      (each an “Advance” and
      collectively, the “Advances”),
      which total Advances shall not exceed One Million Dollars
      ($1,000,000).

            

    

     

    
      	
               
      

            	
              ii.

            	
              DYVA’s
      obligation to pay an Additional Funding shall terminate and NuRx shall
      repay to DYVA the outstanding Principal and all accrued unpaid Interest
      under the Convertible Note on the earliest to occur of the following
      events (the “Maturity
      Date”): (i) the date upon which NuRx in its sole and absolute
      discretion closes on the sale of NuRx securities which results in NuRx
      receiving gross proceeds in excess of One Million Dollars ($1,000,000)
      with serial issues or staged payments aggregated (an “Institutional
      Placement”), subject to DYVA’s right to exercise its conversion
      rights under the Convertible Note in connection with such Institutional
      Placement; or (ii) the later to occur of (A) three years from the date
      that the Convertible Note issued, (B) the settlement of the Delaware
      Action and any and all Other Litigation, or (C) the entry of a final
      judgment in the Delaware Action and any and all Other
      Litigation.

            

    

     

    
      	
               
      

            	
              iii.

            	
              NuRx
      shall pay interest on the outstanding Principal of the Convertible Note
      from the date of each Advance until paid in full at a rate equal to the
      lesser of twelve percent (12%) per annum or the maximum rate permissible
      under applicable law, due and payable on the Maturity Date (the “Interest”).

            

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              iv.

            	
              The
      Convertible Note shall be executed and delivered to DYVA contemporaneously
      with NuRx’s execution and delivery of this
  Agreement.

            

    

     

    
      	
               
      

            	
              b.

            	
              In
      additional consideration for the financing of the Delaware Action and the
      Other Litigation, NuRx agrees to issue to DYVA, on the Maturity Date of
      the Convertible Note, warrants in the form attached as Exhibit B (the
      “Warrant”) for
      the purchase of common stock of NuRx at Ten Cents (.10¢) per share with
      warrant coverage equal to 100% of the highest Principal amount of the
      Convertible Note.  The Warrant shall have an exercise period of
      seven years from the date of issuance of the
  Warrant.

            

    

     

    
      	
               
      

            	
              5.

            	
              Representations and
      Warranties of NuRx. NuRx
      represents and warrants to DYVA as
follows:

            

    

     

    
      	
               
      

            	
              a.

            	
              Due Incorporation,
      Qualification, etc. NuRx is a corporation duly organized, validly
      existing and in good standing under the laws of the State of Nevada. NuRx
      (i) has the power and authority to own or lease its properties
      and to carry on its business as now conducted, and (ii) is duly
      qualified, licensed to do business and in good standing under the laws of
      Nevada and as a foreign corporation in each jurisdiction in which the
      failure to be so qualified or licensed could reasonably be expected to
      have a material adverse effect on the business, financial condition or
      results of operations of NuRx.

            

    

     

    
      	
               
      

            	
              b.

            	
              Authority. The
      execution, delivery and performance by NuRx of this Agreement, the
      Convertible Note, the Warrant and the NuRx Guarantee, and the
      consummation of the transactions contemplated thereby (i) are within
      the power of NuRx and (ii) have been duly authorized by all necessary
      corporate or company action on the part of
NuRx.

            

    

     

    
      	
               
      

            	
              c.

            	
              Enforceability.
      Each of this Agreement, the Convertible Note, the Warrant and the NuRx
      Guarantee, has been, or will be, duly executed and delivered by NuRx and
      constitutes, or will constitute, a legal, valid and binding obligation of
      NuRx, enforceable against NuRx in accordance with its terms, except as
      limited by bankruptcy, insolvency or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally
      and general principles of equity.

            

    

     

    
      	
               
      

            	
              d.

            	
              Non-Contravention.
      The execution and delivery by NuRx of this Agreement, the Convertible
      Note, the Warrant and the NuRx Guarantee and the performance and
      consummation of the transactions contemplated hereby and thereby, do not
      and will not: (i) violate NuRx’s certificate of incorporation or bylaws
      (collectively, the “Organizational
      Documents”) or any material judgment, order, writ, decree, statute,
      rule or regulation applicable to NuRx; (ii) violate any provision of,
      or result in the breach or the acceleration of, or entitle any other
      person or entity to accelerate (whether after the giving of notice or
      lapse of time or both), any material mortgage, indenture, agreement,
      instrument or contract to which NuRx is a party or by which it is bound;
      or (iii) result in the creation or imposition of any lien upon any
      property, asset or revenue of NuRx or the suspension, revocation,
      impairment, forfeiture, or nonrenewal of any material permit, license,
      authorization or approval applicable to NuRx, its business or operations,
      or any of its assets or
properties.

            

    

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              e.

            	
              Approvals. No
      consent, approval, order or authorization of, or registration, declaration
      or filing with, any governmental authority or other person or entity
      (including, without limitation, the stockholders of any person or entity)
      is required in connection with the execution and delivery of this
      Agreement, the Convertible Note, the Warrant or the NuRx Guarantee by NuRx
      and the performance and consummation of the transactions contemplated by
      any of such documents.

            

    

     

    
      	
               
      

            	
              f.

            	
              No Violation or
      Default. NuRx is in not violation of or in default with respect to:
      (i) its Organizational Documents (in each case as currently in
      effect) or any material judgment, order, writ, decree, statute, rule or
      regulation applicable to NuRx; (ii) any material mortgage, indenture,
      agreement, instrument or contract to which NuRx is a party or by which it
      is bound; or (iii) any federal, state, local or foreign law,
      ordinance or regulation or other requirement of any governmental or
      regulatory body, court or arbitrator applicable to the business of NuRx
      (nor is there any waiver in effect which, if not in effect, would result
      in such a violation or default).

            

    

     

    
      	
               
      

            	
              g.

            	
              Capitalization.
      The authorized capital stock of NuRx consists solely of 1,800,000 shares
      of preferred stock, par value $0.001 per share, none of which are issued
      and outstanding, of which 1,000,000 shares have been designated as Series
      A Preferred Stock, 500,000 of which have been designated as Series B
      Preferred Stock and 300,000 of which have been designated as Series C
      Preferred Stock, and 150,000,000 shares of common stock, par value $0.001
      per share, of which, after giving effect to the transactions contemplated
      by this Agreement (i.e., the issuance of the Convertible Note and the
      Warrant) (i) 23,444,234 shares will be issued and outstanding; (ii) no
      shares are held in treasury; (iii) 5,625,560 shares are reserved for
      issuance upon the exercise of options and warrants outstanding (other than
      shares reserved for issuance in connection with conversion of the
      Convertible Note or upon exercise of the Warrant) (the “Option and Warrant
      Shares”); (iv) 10,000,000 shares are reserved for issuance upon the
      conversion of the principal amount and interest accrued on the Convertible
      Note, (the “Conversion
      Shares”); and (v) 10,000,000 shares are reserved for issuance upon
      the exercise of the Warrant (the “Warrant
      Shares”). All of the issued and outstanding shares of common stock
      have been duly authorized and are validly issued, fully paid and
      nonassessable.  Except as set forth in this Agreement (including
      the Convertible Note and the Warrant), and except for options and warrants
      relating to the Option and Warrant Shares and for the Convertible Note
      relating to the Conversion Shares, and the Warrant relating to the Warrant
      Shares, there are no options, warrants, conversion privileges, preemptive
      rights or other rights presently outstanding to purchase or otherwise
      acquire any authorized but unissued shares of capital stock or other
      securities of NuRx, or any other written agreements of NuRx to issue any
      such securities or rights.

            

    

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              h.

            	
              Absence of Undisclosed
      Liabilities and Obligations. NuRx has no liability or obligation,
      either accrued, absolute, direct, or to NuRx’s knowledge, contingent or
      indirect, or otherwise, whether as principal, agent, partner, co-venturer,
      guarantor or in any capacity whatsoever other than (i) obligations
      and liabilities that are not individually or in the aggregate material,
      (ii) obligations under contracts made in the ordinary course of
      business, and (iii) obligations and liabilities described in the periodic
      reports NuRx has filed with the Securities and Exchange Commission under
      the Securities Exchange Act of 1934, as
amended.

            

    

     

    
      	
               
      

            	
              i.

            	
              Disclosure. All
      information furnished to DYVA by or on behalf of NuRx in connection with
      the transactions contemplated by this agreement or any related document,
      when taken as a whole, does not contain any untrue statement of a material
      fact or omit to state a material fact necessary in order to make the
      statements not misleading. There is no fact of which NuRx is aware that
      has not been disclosed to DYVA and that is or could reasonably be expected
      to be material and adverse to the properties, business, or condition
      (financial or otherwise) of NuRx.

            

    

     

    
      	
               
      

            	
              6.

            	
              Representations and
      Warranties of DYVA. DYVA
      represents and warrants to NuRx as
follows:

            

    

     

    
      	
               
      

            	
              a.

            	
              Binding
      Obligation. DYVA has full legal capacity, power and authority to
      execute and deliver this Agreement and to perform DYVA’s obligations
      hereunder. This Agreement is a valid and binding obligation of DYVA,
      enforceable in accordance with its terms, except as limited by bankruptcy,
      insolvency or other laws of general application relating to or affecting
      the enforcement of creditors’ rights generally and general principles of
      equity.

            

    

     

    
      	
               
      

            	
              b.

            	
              Securities Law
      Compliance. DYVA has been advised that the Conversion Shares and
      Warrant Shares have not been registered under the Securities Act, or any
      state securities laws, and therefore cannot be resold unless they are
      registered under the Securities Act and applicable state securities laws
      or unless an exemption from such registration requirements is available.
      DYVA is aware that NuRx is under no obligation to effect any such
      registration with respect to the securities or to file for or comply with
      any exemption from registration. DYVA is purchasing the securities for
      DYVA’s own account for investment, not as a nominee or agent, and not with
      a view to, or for resale in connection with, the distribution thereof.
      DYVA has such knowledge and experience in financial and business matters
      that DYVA is capable of evaluating the merits and risks of such
      investment, is able to incur a complete loss of such investment and is
      able to bear the economic risk of such investment for an indefinite period
      of time. DYVA is an “accredited investor” as such term is defined in
      Rule 501 of Regulation D under the Securities
    Act.

            

    

    
      
         

      

      
        - 6
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              7.

            	
              Guarantees.

            

    

     

    
      	
               
      

            	
              a.

            	
              NuRx
      Guarantee.  Upon the execution and delivery of this
      Agreement, NuRx shall issue to DYVA a guarantee in the form attached as
      Exhibit C with respect to its obligations under this Agreement, the
      Convertible Note and the Warrant (the “NuRx
  Guarantee”).

            

    

     

    
      	
               
      

            	
              b.

            	
              Joint Venture
      Guarantee.  Upon gaining control of the board of the
      Joint Venture, NuRx shall cause the Joint Venture to issue a guarantee in
      the form attached as Exhibit D with respect to the obligations of NuRx
      under this Agreement, the Convertible Note and the Warrant (the “Joint Venture
      Guarantee”).

            

    

     

    
      	
               
      

            	
              8.

            	
              Covenants.

            

    

     

    
      	
               
      

            	
              a.

            	
              Sale of Joint Venture
      Interest.  Prior to the issuance of the Joint Venture
      Guarantee, NuRx shall not sell, or enter into any agreement for the sale
      of its ownership interest in, the Joint
Venture.

            

    

     

    
      	
               
      

            	
              b.

            	
              Institutional
      Placement.  In the event of an Institutional Placement,
      NuRx shall pay in full all of the Principal and accrued but unpaid
      Interest under the Convertible
Note.

            

    

     

    
      	
               
      

            	
              c.

            	
              Reservation of Common
      Shares.  NuRx shall at all times reserve and keep
      available, solely for issuance and delivery upon the conversion of the
      Convertible Note and exercise or conversion of the Warrant, all such
      shares of common stock as from time to time would be issuable upon the
      conversion of the Convertible Note and exercise or conversion of the
      Warrant.  NuRx will not avoid or seek to avoid the observance or
      performance of any of the terms of the Convertible Note or the 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 action as may be necessary or
      appropriate in order to protect the rights of DYVA.  In
      addition, NuRx shall promptly take all commercially reasonable action as
      may from time to time be required  to permit the Purchaser to
      convert the Convertible Note and exercise or convert the Warrant and to
      duly and effectively issue shares of common stock pursuant
      thereto.

            

    

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              d.

            	
              Notice of Issuance of
      Securities. NuRx shall not issue any securities from the date of
      this Agreement until the conversion of the Convertible Note, in its
      entirety, and the exercise or conversion of the Warrant, in its entirety,
      without providing ten business days’ prior written notice to DYVA; provided that, NuRx
      shall not be required to provide any such notice in connection with (i)
      any issuance of securities pursuant to the exercise or conversion of any
      securities outstanding as of the date of this Agreement or (ii) the
      issuance of any shares of common stock, or options or other rights to
      purchase or acquire shares of common stock, or the issuance of any other
      securities, to directors, employees, consultants or advisors to NuRx,
      pursuant to a formal plan duly adopted by the board of directors of
      NuRx.

            

    

     

    
      	
               
      

            	
              9.

            	
              Miscellaneous.

            

    

     

    
      	
               
      

            	
              a.

            	
              Waivers and
      Amendments.  Any provision of this Agreement may be amended,
      waived or modified only upon the written consent of NuRx and
      DYVA.

            

    

     

    
      	
               
      

            	
              b.

            	
              Entire
      Agreement.  This Agreement, together with the Convertible
      Note, the Warrant, the NuRx Guarantee and the Joint Venture Guarantee,
      constitutes and contains the entire agreement among NuRx and DYVA and
      supersedes any and all prior agreements, negotiations, correspondence,
      understandings and communications between the parties, whether written or
      oral, respecting the subject matter hereof.  Each of the Parties
      acknowledges that no other Party, nor any agent or attorney of any other
      Party, has made any promise, representation, or warranty whatsoever,
      express or implied, and not contained herein, concerning the subject
      matter hereof to induce the Party to execute or authorize the execution of
      this Agreement, and acknowledges that the Party has not executed or
      authorized the execution of this instrument in reliance upon any such
      promise, representation, or warranty not contained
  herein.

            

    

     

    
      	
               
      

            	
              c.

            	
              Third
      Parties.  Nothing expressed or implied in this Agreement
      is intended, or shall be construed to confer upon or give any person or
      entity other than the Parties hereto any rights or remedies under or by
      reason of this Agreement.

            

    

     

    
      	
               
      

            	
              d.

            	
              Governing Law.
       This Agreement and all actions arising out of or in connection with
      this Agreement shall be governed by and construed in accordance with the
      laws of the State of Delaware.

            

    

     

    
      	
               
      

            	
              e.

            	
              Survival. 
      The representations, warranties, covenants and agreements in this
      Agreement shall survive the execution and delivery of this
      Agreement.

            

    

     

    
      	
               
      

            	
              f.

            	
              Notices. 
      All notices, requests, demands, consents, instructions or other
      communications required or permitted hereunder shall be in writing and
      faxed, mailed or delivered to each party as
  follows:

            

    

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              i.

            	
              If
      to DYVA, to:

            

    

     

    DYVA
Management AG

    Bahnhofstrasse
10

    P.O. Box
324

    CH-6301

    Zug/Switzerland

    Attention:  Emanuel
Kunz

    Telephone:  41
41 727 10 36

    Facsimile:   41
41 727 10 41

    

    
      	
               
      

            	
              ii.

            	
              If
      to NuRx, to:

            

    

     

    NuRx
Pharmaceuticals, Inc. 

    c/o
ProElite, Inc.

    12121
Wilshire Blvd.

    Suite 1001

    Los
Angeles, CA 90025

    Attention:  Steven
D. Gershick, CFO

    Telephone:
(949) 336-7111

    Facsimile:  (818)
474-7207

    

    With a
copy to:

    

    K&L
Gates LLP

    1900 Main
Street, Suite 600

    Irvine,
CA 92614-7319

    Attention:  Michael
A. Hedge, Esq.

    Telephone:  (949)
623-3519

    Facsimile:   (949)
253-0902

    

    All such
notices and communications will be deemed effectively given the earlier of
(i) when received, (ii) when delivered personally, (iii) one
Business Day after being delivered by facsimile (with receipt of appropriate
confirmation), (iv) one Business Day after being deposited with an
overnight courier service of recognized standing or (v) four days after
being deposited in the U.S. mail, first class with postage prepaid.

     

    
      	
               
      

            	
              g.

            	
              Severability of this
      Agreement.  If any provision of this Agreement shall be
      judicially determined to be invalid, illegal or unenforceable, the
      validity, legality and enforceability of the remaining provisions shall
      not in any way be affected or impaired
thereby.

            

    

     

    
      	
               
      

            	
              h.

            	
              Titles and
      Subtitles.  The titles and subtitles used in this Agreement
      are used for convenience only and are not to be considered in construing
      or interpreting this Agreement.

            

    

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              i.

            	
              No Presumption Against
      the Drafter.  Each of the Parties participated in the
      drafting of this Agreement and the interpretation of any ambiguity
      contained in this Agreement will not be affected by the claim that a
      particular party drafted any provision
hereof.

            

    

     

    
      	
               
      

            	
              j.

            	
              Counterparts.
       This Agreement may be executed in any number of counterparts
      (including by way of electronic transmission), each of which shall be an
      original, but all of which together shall be deemed to constitute one
      instrument.

            

    

     

    
      
        	
              	
                k.

              	
                U.S. Currency.
      All
      payments required to be made pursuant to this Agreement  shall
      be payable only in United States Dollars and shall not be discharged or
      satisfied by any tender or recovery pursuant to any judgment expressed in
      or converted into any currency other than United States Dollars, or any
      other realization in such other currency, whether as proceeds of set-off,
      distributions or otherwise, except to the extent that such tender,
      recovery or realization shall result in the effective receipt by the
      Person to whom such payment was owed of the full amount of United States
      Dollars due and payable
hereunder.

              

      

    

     

    [Signature
page follows]

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the date and year
first written above.

    

    
      
        	 
      	
                NuRx PHARMACEUTICALS, INC.,
      a

              
	 
      	
                Nevada
      corporation

              
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                /S/ Harin Padma-Nathan

              	
                (SEAL)

              
	 
      	 
      	
                Name:
      Harin Padma-Nathan

              	 
      
	 
      	 
      	
                Title:
      CEO

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                DYVA MANAGEMENT AG, a
      company

              
	 
      	
                organized
      under the laws of Switzerland

              
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                /S/ Emanuel Kunz

              	
                (SEAL)

              
	 
      	 
      	
                Name:  Emanuel
      Kunz

              	 
      
	 
      	 
      	
                Title:
      General Counsel

              	 
      

      

    

    
      
         

      

      
        - 11
-

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