EXHIBIT 4.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE
SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT
AND UNDER APPLICABLE STATE SECURITIES LAWS OR QUANTRX BIOMEDICAL
CORPORATION
SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF
SUCH
SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF
APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.
QUANTRX BIOMEDICAL CORPORATION
(FORMERLY A-FEM MEDICAL CORPORATION)
8% CONVERTIBLE PROMISSORY NOTE
U.S. $______________________
Issuance Date: __________ __, 2005
No.: PN-05-_________________
Maturity Date: December 31, 2006
FOR VALUE RECEIVED, the undersigned, QuantRx Biomedical
Corporation
(Formerly A-Fem Medical Corporation), a Nevada corporation (the
"Company"),
hereby promises to pay to the order of __________________________,
or any future
permitted holder of this promissory note (the "Payee"), at the
principal address
of the Payee set forth herein, or at such other place as the Payee
may designate
in writing to the Company, the principal sum of
_____________________________
Dollars ($________________) or such other amount as may be
outstanding
hereunder, together with all accrued but unpaid interest, in such
coin or
currency of the United States of America as at the time shall be
legal tender
for the payment of public and private debts and in immediately
available funds,
as provided in this promissory note (this "Note").
1.
Exchange of Principal and Interest into Qualified Financing.
Following the Issuance Date, the outstanding principal amount of
this Note
together with all accrued but unpaid interest hereunder (the
"Outstanding
Balance"), shall automatically be exchanged into shares of the
Company issued in
an equity or equity based financing or combination of equity
financings with
gross proceeds totaling at least $2,000,000 (a "Qualified
Financing"); provided,
however, that for purposes of determining the number of equity
securities
(including warrants) to be received by the Payee upon such
exchange, the Payee
shall be deemed to have tendered 110% of the Outstanding Balance of
the Note as
payment of the purchase price in the Qualified Financing. Upon such
conversion
pursuant to a Qualified Financing, the Payee shall automatically be
deemed to be
a purchaser in such Qualified Financing and shall be granted all
rights afforded
a purchaser in the Qualified Financing, and upon consummation of a
Qualified
Financing, this Note shall cease to exist and all rights and
obligations of the
Company and the Payee shall terminate.
2.
In consideration for the loan evidenced by this Note, the
Payee shall be issued Bridge Warrants in the form attached to the
Loan Letter
Agreement dated as of the date hereof (the "Loan
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Letter") as Exhibit B for the issuance of 15,000 shares of common
stock of the
Company per $100,000 of Note principal amount, at an exercise price
of $1.50.
3.
Voluntary Conversion of Principal and Interest. At the option
of the Payee, six (6) months following the Issuance Date, the
Outstanding
Balance of this Note may be converted into common shares of the
Company at a
price per share of $1.00 at any time the Note remains
outstanding.
4.
Principal and Interest Payments.
(a) In the
event the Company does not complete a Qualified
Financing, the Company shall repay the entire principal balance
then outstanding
on December 31, 2006 (the "Maturity Date").
(b)
Interest on the outstanding principal balance of this
Note shall accrue at a rate of eight percent (8%) per annum.
Interest on the
outstanding principal balance of the Note shall be computed on the
basis of the
actual number of days elapsed and a year of three hundred and sixty
(360) days
and shall be payable on the Maturity Date by the Company in cash
or, at the
option of the Company, in shares of the Company's equity
securities.
Furthermore, upon the occurrence of an Event of Default, then to
the extent
permitted by law, the Company will pay interest to the Payee,
payable on demand,
on the outstanding principal balance of the Note from the date of
the Event of
Default until payment in full at the rate of twelve percent (12%)
per annum.
5.
Non-Business Days. Whenever any payment to be made shall be
due on a Saturday, Sunday or a public holiday under the laws of the
State of New
York, such payment may be due on the next succeeding business day
and such next
succeeding day shall be included in the calculation of the amount
of accrued
interest payable on such date.
6.
Representations and Warranties of the Company. The Company
represents and warrants to the Payee as follows:
(a) The
Company has been duly incorporated and is validly
existing and in good standing under the laws of the state of
Nevada, with full
corporate power and authority to own, lease and operate its
properties and to
conduct its business as currently conducted.
(b) This
Note has been duly authorized, validly executed
and delivered on behalf of the Company and is a valid and binding
obligation of
the Company enforceable against the Company in accordance with its
terms,
subject to limitations on enforcement by general principles of
equity and by
bankruptcy or other laws affecting the enforcement of creditors'
rights
generally, and the Company has full power and authority to execute
and deliver
this Note and to perform its obligations hereunder.
(c) The
execution, delivery and performance of this Note
will not (i) conflict with or result in a breach of or a default
under any of
the terms or provisions of, (A) the Company's articles of
incorporation or
by-laws, or (B) any material provision of any indenture, mortgage,
deed of trust
or other material agreement or instrument to which the Company is a
party or by
which it or any of its material properties or assets is bound, (ii)
result in a
violation of any material provision of any law, statute, rule,
regulation, or
any existing applicable decree, judgment or order by any court,
Federal or state
regulatory body, administrative agency, or other governmental body
having
jurisdiction over the Company, or any of its material properties or
assets or
(iii) result in the creation or imposition of any
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material lien, charge or encumbrance upon any material property or
assets of the
Company or any of its subsidiaries pursuant to the terms of any
agreement or
instrument to which any of them is a party or by which any of them
may be bound
or to which any of their property or any of them is subject, except
in the cases
of (i), (ii) and (iii), as would not have a Material Adverse Effect
as such term
is defined in the Loan Letter.
(d) No
consent, approval or authorization of or
designation, declaration or filing with any governmental authority
on the part
of the Company is required in connection with the valid execution
and delivery
of this Note.
7.
Events of Default. The occurrence of any of the following
events shall be an "Event of Default" under this Note:
(a) the
Company shall fail to make the payment of any
amount of any principal outstanding for a period of ten (10)
business days after
the date such payment shall become due and payable hereunder;
or
(b) the
Company shall fail to make any payment of interest
for a period of ten (10) business days after the date such interest
shall become
due and payable hereunder; or
(c) any
representation, warranty or certification made by
the Company herein or in any certificate or financial statement
shall prove to
have been false or incorrect or breached in a material respect on
the date as of
which made; or
(d) the
holder of any indebtedness of the Company or any
of its subsidiaries shall accelerate any payment of any amount or
amounts of
principal or interest on any indebtedness (the "Indebtedness")
(other than the
Indebtedness hereunder) prior to its stated maturity or payment
date the
aggregate principal amount of which Indebtedness of all such
persons is in
excess of $1,000,000, whether such Indebtedness now exists or shall
hereinafter
be created, and such accelerated payment entitles the holder
thereof to
immediate payment of such Indebtedness which
