DEVELOPMENT AND SERVICES AGREEMENT

This DEVELOPMENT AND SERVICES AGREEMENT (this “Agreement”) is dated as of this 30 ^th day of July, 2009 (the “Effective Date”), by and between QN Diagnostics, LLC, a Delaware limited liability company (“QND”) and QuantRx Biomedical Corporation, a Nevada corporation (“QuantRx”).

WHEREAS , as set forth in the Limited Liability Company Agreement of QN Diagnostics, LLC, of even date hereof, entered into by and between NuRx Pharmaceuticals, Inc. (“NuRx”) and QuantRx (the “LLC Agreement”), NuRx and QuantRx each contributed certain capital and assets and formed QND;

WHEREAS , the LLC Agreement provides that QuantRx shall enter into a development and services agreement with QND pursuant to which QuantRx shall provide certain development, regulatory and manufacturing services to QND with respect to the Lateral Flow Products (as defined in the LLC Agreement); and

WHEREAS , the parties desire hereby to set forth the terms and conditions upon which QuantRx shall provide such services to QND.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1.            Definitions .

“ Affiliate ” shall mean any Person which, directly or indirectly, controls, or is controlled by, or is under common control with the first Person.

“ Budget ” shall have the meaning specified in Section 3.1.

“ Claims and Losses ” shall have the meaning specified in Section 9.1.

“ Confidential Information ” shall mean all Trade Secrets and other confidential and/or proprietary information of a party (the “Disclosing Party”), including information derived from reports, investigations, research, work in progress, codes, marketing and sales programs, financial projections, cost summaries, pricing formula, contract analyses, financial information, projections, confidential filings with any state or federal agency, and all other confidential concepts, methods of doing business, ideas, materials or information prepared or performed for, by or on behalf of such Person by its employees, officers, directors, agents, representatives, or consultants.  Information shall not be deemed Confidential Information hereunder if (a) such information becomes available to or known by the public generally through no fault of the party receiving such information (the “Receiving Party”); (b) disclosure is required by law or the order of any governmental authority under color of law, provided, however, that prior to disclosing any information pursuant to this clause (b), the Receiving Party shall, if possible, give prior written notice thereof to the Disclosing Party and, at the Disclosing Party’s election, either provide the Disclosing Party with the opportunity to contest such disclosure or seek to obtain a protective order narrowing the scope of such disclosure and/or use of the Confidential Information.

“ Copyrights ” shall mean all copyrights, including in and to works of authorship and all other rights corresponding thereto throughout the world, whether published or unpublished, including rights to prepare, reproduce, perform, display and distribute copyrighted works and copies, compilations and derivative works thereof.

“ Fees ” shall have the meaning specified in Section 3.1.

“ Intellectual Property Rights ” shall mean any or all rights in and to intellectual property and intangible industrial property rights, including, without limitation, (a) Patents, Trade Secrets, Copyrights and Trademarks, and (b) any rights similar, corresponding or equivalent to any of the foregoing anywhere in the world.

“ Key Employees ” shall mean those persons identified on Exhibit B .

“ Patents ” shall mean all United States and foreign patents and utility models and applications therefor and all reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries.

“ Person ” means an individual or entity, including a partnership, limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

“ Representatives ” shall mean officers, directors, employees, attorneys, accountants, advisors, agents, distributors, licensees, shareholders, subsidiaries and lenders of a party.  In addition, all Affiliates of QuantRx shall be deemed to be “Representatives” of QuantRx.

“ Service ” (and, with correlative meaning, “Services”) shall have the meaning specified in Section 2.1.

“ Tooling ” shall mean all tools and hardware that are acquired, developed or used in the performance of the Services.

“ Trade Secrets ” shall mean all trade secrets under applicable law and other rights in know-how and confidential or proprietary information, processing, manufacturing or marketing information, including new developments, inventions, processes, ideas or other proprietary information that provide QuantRx with advantages over competitors who do not know or use it and documentation thereof (including related papers, blueprints, drawings, chemical compositions, formulae, diaries, notebooks, specifications, designs, methods of manufacture and data processing software, compilations of information) and all claims and rights related thereto.

“ Trademarks ” shall mean any and all trademarks, service marks, logos, trade names, corporate names, Internet domain names and addresses and general-use e-mail addresses, and all goodwill associated therewith throughout the world.

“ Work Product ” shall mean (a) all Intellectual Property Rights and any related work-in-progress, improvements or modifications to any Intellectual Property Rights that are created, developed or conceived (alone or with others) in connection with the Services, and (b) all regulatory filings, approvals, data and information related to the Lateral Flow Products.  Work Product shall include, without limitation, all materials required to be delivered to QND under this Agreement.

2.            Provision of Services; Standard of Performance .

2.1           Commencing on the date hereof, QuantRx shall provide to QND the services specified on Exhibit A attached hereto (the “Services”) for the period of time specified thereon, unless this Agreement is earlier terminated or extended in accordance with the terms hereof.

2.2           The parties agree to fully cooperate in good faith with each other in connection with the provision of the Services and the matters related to or arising hereunder, including, without limitation, QuantRx’s cooperation with QND to enable QND to establish its own infrastructure to perform the Services independently of QuantRx as may be agreed upon by NuRx and QuantRx after the Effective Date.

2.3           QuantRx agrees during the term of this Agreement not to accept work or enter into any agreement or accept any obligation that would cause QuantRx to breach its obligations under this Agreement.

2.4           In the performance of the Services, QuantRx shall (a) enter into an employment offer letter that is reasonably satisfactory to NuRx with William Fleming prior to Closing, and (b) enter into employment offer letters that are reasonably satisfactory to NuRx with each of Messrs. Buck and Burjess-Cassler within 45 days after the Closing, and shall use commercially reasonable efforts to primarily utilize the services of the Key Employees.  QuantRx represents that it has never been, and that none of its employees or other persons engaged by QuantRx has ever been, (r) debarred (under the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. §335a (a) and (b)), (s) convicted of a crime for which a person can be debarred, (t) threatened to be debarred, or (u) indicted for a crime or otherwise engaged in conduct for which a person can be debarred.  QuantRx immediately shall notify QND in writing of any such debarment, conviction, threat, or indictment.  The terms of the proceeding sentence shall survive the expiration or termination of this Agreement for a period of three (3) years.

3.            Payment .

3.1           QND shall pay to QuantRx on the first business day of each month a monthly payment for the Services performed by QuantRx (the “Fee(s)”) as specified in the Preliminary Project Plan and Budget attached as Exhibit C (the “Budget”).  The Budget and monthly Fees may be adjusted upon mutual written agreement of the parties.

3.2           If QuantRx has costs for the Services in a month that are in excess of the monthly Fee, then QuantRx will submit a request for additional funds at the time QuantRx submits the detailed cost accounting for such month in accordance with Section 3.3.  QND shall have a period of five (5) days after receipt of such request and detailed cost accounting to accept or reject such request, provided that such acceptance shall not be unreasonably withheld.  If QND accepts such request, then QND shall pay such additional amount within five (5) days after notice of acceptance.  Notwithstanding the foregoing, in no event shall the Fees (including any such additional amounts described in this Section 3.2) exceed $3,700,000 in the aggregate.

3.3           QND shall pay the Fees for each month on the first day of such month in advance.  Within ten (10) days of the end of each month, QuantRx shall deliver a detailed accounting of the costs for the preceding month including a report of the monthly and project-to-date budget-to-actual costs, costs to complete each project, and such other reports as reasonably requested by QND.  QuantRx acknowledges and agrees that QND shall not be liable for making any further payment