STOCK PLEDGE AGREEMENT
Stock
Pledge Agreement (this “Agreement”), dated as of June __, 2008, by and between
QUANTRX
BIOMEDICAL CORPORATION,
a Nevada
corporation, with
its
principal place of business at 000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000 (the
“Pledgor”) and
________________________ (the
“Secured Party”).
W
I T N E S S E T H
WHEREAS,
the
Pledgor has delivered to the Secured Party a senior secured bridge note,
dated
as
of June __, 2008,
in the
principal amount of $___________(together with any Other Notes or PIK Notes,
the
“Notes”);
WHEREAS,
the
Secured Party requires, as a condition to the extension of credit to the Pledgor
pursuant to the Notes, that the Pledgor pledge all of its right, title and
interest in and to the shares of stock in Fluoropharma, Inc. and Genomics USA,
Inc. (the “Portfolio Entities”) held by it to secure the obligations of the
Pledgor under the Notes;
WHEREAS,
the
Pledgor has deposited with the Collateral Agent, as collateral security for
the
payment of the obligations of the Pledgor under the Notes, the stock (the
“Pledged Shares”) described in Schedule 1 attached hereto, being all of the
outstanding shares of capital stock or ownership interests in the Portfolio
Entities
held by
the
Pledgor (together with duly executed stock powers in blank covering such Pledged
Shares); and
WHEREAS,
the
Secured Party would not be willing to extend credit to the Pledgor unless the
Pledgor shall have pledged the Pledged Shares to the Secured Party pursuant
to
this Agreement.
NOW,
THEREFORE,
in
consideration of the premises and mutual covenants herein contained, and in
further consideration of the Secured Party’s extension of credit to the Pledgor,
the parties hereby agree as follows:
Section
1
- Pledge.
The
Pledgor hereby pledges to the Secured Party, and grants to the Secured Party
a
continuing security interest in, the following (the “Pledged
Collateral”):
(i) The
Pledged Shares and the certificates representing the Pledged Shares, and all
dividends (whether stock dividends or cash dividends), and cash, instruments
and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the Pledged Shares;
(ii) Any
and
all rights held or owned by the Pledgor to acquire additional shares of stock
or
other securities of the issuers of the Pledged Shares;
(iii) All
additional shares of stock of the issuers of the Pledged Shares from time to
time acquired by the Pledgor by stock split or by the exercise of any conversion
or option rights, and the certificates representing such additional shares,
and
all dividends, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or
all
of such shares; and
1
(iv) Any
and
all proceeds of any of the foregoing upon the sale or other disposal of the
foregoing for any reason.
Section
2
- Security
for Obligations; Covenants; Representations.
This
Agreement secures the payment of all payment obligations of the Pledgor now
or
hereafter existing under the Notes (all such obligations being referred to
as
the “Obligations”). The Pledgor makes the representations and warranties set
forth on Annex
A
hereto.
Section
3
- Further
Assurances.
The
Pledgor agrees that at any time and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be reasonably necessary,
or
that the Secured Party may reasonably request, in order to perfect any security
interest granted or purported to be granted hereby or to enable the Secured
Party to exercise and enforce its rights and remedies hereunder with respect
to
any Pledged Collateral.
Section
4
- Voting
Rights; Dividends; Etc.
So long
as no Event of Default (as defined in the Notes) exists and is
continuing:
(i) The
Pledgor shall be entitled to exercise any and all voting and other consequential
rights pertaining to the Pledged Collateral or any part thereof for any purpose
not inconsistent with the terms of this Agreement.
(ii) The
Pledgor shall be entitled to receive and retain any and all cash dividends
paid
in respect of the Pledged Collateral.
Section
5
- Transfers
and Other Liens; Additional Shares.
The
Pledgor agrees that it will not sell or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, or create or permit
to
exist any lien, security interest, or other charge or encumbrance upon or with
respect to any of the Pledged Collateral, except for the security interest
under
this Agreement.
Section
6
- Secured
Party Appointed Attorney-in-Fact.
The
Pledgor hereby appoints the Collateral Agent attorney-in-fact, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise, to take any action and to execute any instrument that the Secured
Party may deem necessary to accomplish the purposes of this Agreement,
including, without limitation, upon and during the continuation of any Event
of
Default, to receive, endorse and collect all instruments made payable to the
Pledgor representing any dividend, interest payment or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.
2
Section
7
- Remedies
upon Default.
If (but
only if) any Event of Default, as defined in the Notes, shall have occurred
and
be continuing:
(a) Upon
written notice from the Secured Party, the right of Pledgor to receive dividends
and to vote the Pledged Shares shall cease, and all such rights shall become
vested in the Secured Party. In addition to other rights and remedies provided
for herein or otherwise available to it, the Secured Party may exercise all
the
rights and remedies of a secured party on default under the Uniform Commercial
Code in effect in the State of New York at that time, and the Secured Party
may
also, without notice except as specified below, sell the Pledged Collateral
or
any part thereof, in accordance with and subject to applicable law, for cash,
on
credit or for future delivery, and upon such other terms as are commercially
reasonable. The Secured Party shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given.
(b) Any
cash
held by the Collateral Agent as Pledged Collateral and all cash proceeds
received by the Collateral Agent from any sale of or collection from all or
any
part of the Pledged Collateral, may be held by the Collateral Agent as
collateral for, and/or be applied in whole or in part by the Secured Parties
against, all or any part of the Obligations. Any surplus of such cash or cash
proceeds held by the Collateral Agent and remaining after payment in full of
all
of the Obligations shall be paid to the Pledgor.
(c) Notwithstanding
anything to the contrary contained herein, the Collateral Agent shall not take
any action with respect to the Pledged Shares pursuant to an exercise of its
rights as a secured party hereunder unless the Secured Parties shall have given
the Pledgor at least 120 days prior written notice of such action (which notice
shall not be given prior to the occurrence of an Event of Default); provided,
that,
no such
prior written notice shall be required in connection with any action taken
by
the Collateral Agent reasonably necessary to perfect the security interest
granted hereby and protect its rights in and to the Pledged Shares.
Section
8
- Enforcement
Rights.
If the
Collateral Agent shall determine to exercise its right hereunder to sell all
or
any of the Pledged Collateral, the Pledgor agree(s) that, upon request of the
Collateral Agent , the Pledgor will do or cause to be done all such other acts
and things as may be reasonably necessary to make such sale of the Pledged
Collateral or any part thereof valid and binding and in compliance with
applicable law. The Pledgor recognizes that the Collateral Agent may be limited
in its ability to effect a sale to the public of all or part of the Pledged
Collateral by reason of certain prohibitions in the Securities Act of 1933,
as
amended, or other federal or state securities laws (collectively, the
“Securities Laws”), and may be compelled to resort to one or more sales to a
restricted group of purchasers who may be required to agree to acquire the
Pledged Collateral for their own account, for investment and not with a view
to
the distribution or resale thereof. The Pledgor agrees that sales so made may
be
at prices and on terms less favorable than if the Pledged Collateral were sold
to the public, and that the Collateral Agent has no obligation to delay the
sale
of any Pledged Collateral for the period of time necessary to register (or
otherwise qualify for an exemption with respect to) the Pledged Collateral
for
sale to the public under the Securities Laws. The Pledgor shall reasonably
cooperate with the Secured Party in its attempt to satisfy any requirements
under the Securities Laws.
3
Section
9
- Security
Interest Absolute.
All
rights of the Collateral Agent and security interest hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(i) any
lack
of validity or enforceability of the Notes or any other document or agreement
delivered by the Pledgor or its affiliates in connection with the Notes (the
“Loan Documents”) or agreement or instrument relating thereto;
(ii) any
change in the time, manner or place of payment of, or in any other term of,
all
or any of the Obligations, or any amendment or waiver or any consent to any
departure from the Notes or any other Loan Document;
(iii) any
exchange, release or non-perfection of any other collateral, or any release
or
amendment or waiver of, or consent to departure from, any guaranty, for all
or
any of the obligations of the Pledgor under the Loan Documents; or
(iv) any
other
circumstance which might otherwise constitute a defense available to, or a
discharge of the Pledgor, any other party to any Loan Document, or a third
party
obligor except for such waivers as are required by applicable law and cannot
be
waived under applicable law.
Section
10 - Amendment.
No
amendment or waiver of any provisions of this Agreement shall be effective
unless the same shall be in writing and signed by the Secured Party and the
Pledgor, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
Section
11 - Continuing
Security Interest; Transfer of Note(s).
This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) remain in full force and effect until payment in full of the
Obligations (other than contingent indemnity obligations), (ii) be binding
upon
the Pledgor, its successors and assigns, and (iii) inure to the benefit of
the
Secured Party and its successors, transferees and assigns. Upon the payment
in
full of the Obligations (including as a result of a conversion in full of the
Notes) and the termination of any obligation of the Secured Parties to extend
any credit thereunder, this Agreement shall automatically terminate without
further action on the part of either of the parties hereto and the Collateral
Agent shall promptly deliver such of the Pledged Collateral as shall not have
been sold or otherwise applied pursuant to the terms hereof to the Pledgor
and
take any action reasonably requested by the Pledgor to cause the release of
the
security interests created hereunder.
Section
12 - Governing
Law; Terms.
This
Agreement shall be governed by the laws of the State of New York, without regard
to the choice of law provisions thereof. The Pledgor agrees that any suit for
the enforcement of this Agreement may be brought in the courts of the State
of
New York or any federal court sitting in such state and consents to the
non-exclusive jurisdiction of each such court and to service of process in
any
such suit being made upon the Pledgor by mail at the address specified above.
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings given in the Notes.
4
Section
13 - Expenses.
The
Pledgor will upon demand pay to the Collateral Agent the amount of any and
all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which the Secured Party may incur in connection
with (i) any amendment to, or consents or waivers requested under, this
Agreement, (ii) the custody or preservation of, or the sale, collection from,
or
other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Secured Party hereunder or (iv) the
failure by the Pledgor to perform or observe any of the provisions
hereof.
Section
14 - Collateral
Agent.
This
Agreement shall be subject to all provisions of the Letter Loan Agreement,
dated
as of June __, 2008, between the Pledgor and the Secured Party (the “Purchase
Agreement”).
5
IN
WITNESS WHEREOF,
the
Pledgor and the Secured Party have executed and delivered this Pledge Agreement
as of the date first above written.
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QUANTRX
BIOMEDICAL CORPORATION
|
|
By:
__________________________________________
Name:
Title:
|
|
By:
__________________________________________
Name:
Title:
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6
SCHEDULE
1
|
Name
of Issuer
|
Class
of Stock
|
Stock
Certificate
No.
|
No.
of shares
owned
|
Percentage
of Issuer owned
|
|
Fluoropharma,
Inc.
|
Common
|
C16
C21
C25
C26
C27
C40
C42
C43
|
1,050,000
46,170
100,000
100,000
100,000
118,772
81,228
627,058
|
58%
|
|
Genomics
USA, Inc.
|
Common
|
1
6
|
112,875
31,149
|
12%
|
7
Annex
A
The
Pledgor represents and warrants to the Secured Party that:
|
1.1
|
the
Pledged Shares represent approximately 58% and 12% respectively of
the
shares of common stock issued by Fluoropharma, Inc. and Genomics
USA,
Inc.;
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|
1.2
|
subject
to restrictions on transfer applicable to certain of the Pledged
Shares
under the Securities Act of 1933, as amended, and other applicable
securities law, the Pledged Shares are freely transferable on the
books of
the issuers of the Pledged Shares and no consents or approvals are
required in order to register a transfer of the Pledged
Shares;
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|
1.3
|
this
Agreement constitutes its legal, valid, binding and enforceable obligation
and is a first priority security interest over the Pledged Shares
effective in accordance with its
terms;
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|
1.4
|
subject
to restrictions on transfer applicable to certain of the Pledged
Shares
under the Securities Act of 1933, as amended, and other applicable
securities law, the execution, delivery, observance and performance
by the
Pledgor of this Agreement will not require the Pledgor to obtain
any
licenses, consents or approvals and will not result in any violation
of
any law, statute, ordinance, rule or regulation applicable to it;
and
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1.5
|
it
has obtained all the necessary authorizations and consents to enable
it to
enter into this Agreement and the necessary authorizations and consents
will remain in full force and effect at all times during the substance
of
the security constituted by this
Agreement.
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8
