Registration Rights Agreement


    EXHIBIT
      10.26

     

     

    REGISTRATION
      RIGHTS AGREEMENT

     

    REGISTRATION
      RIGHTS AGREEMENT (this “Agreement”),
      dated
      as of June 30, 2005, by and among FemOne, Inc., a Nevada corporation, with
      headquarters located at 5600 Avenida Encinas, Suite 130, Carlsbad, California
      92008 (the “Company”),
      and
      each of the undersigned (together with their respective affiliates and any
      assignee or transferee of all of their respective rights hereunder, the
“Initial
      Investors”).
      

     

    WHEREAS:

     

    A. In
      connection with the Securities Purchase Agreement by and among the parties
      hereto of even date herewith (the “Securities Purchase Agreement”), the Company
      has agreed, upon the terms and subject to the conditions contained therein,
      to
      issue and sell to the Initial Investors (i) secured
      convertible notes in the aggregate principal amount of up to One Million Five
      Hundred Thousand Dollars ($1,500,000) (the “Notes”) that are convertible into
      shares of the Company’s common stock (the “Common Stock”), upon the terms and
      subject to the limitations and conditions set forth in such Notes and
(ii) warrants
      (the “Warrants”) to acquire an aggregate of 44,000,000 shares of Common Stock,
      upon the terms and conditions and subject to the limitations and conditions
      set
      forth in the Warrants; and

     

    B. To
      induce
      the Initial Investors to execute and deliver the Securities Purchase Agreement,
      the Company has agreed to provide certain registration rights under the
      Securities Act of 1933, as amended, and the rules and regulations thereunder,
      or
      any similar successor statute (collectively, the “1933
      Act”),
      and
      applicable state securities laws;

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and the mutual covenants contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the Company and each of the Initial Investors hereby agree
      as follows:

     

    1. DEFINITIONS.

     

    a. As
      used
      in this Agreement, the following terms shall have the following
      meanings:

     

    (i) “Investors”
means
      the Initial Investors and any transferee or assignee who agrees to become bound
      by the provisions of this Agreement in accordance with Section 9
      hereof.

     

    (ii) “register,”
      “registered,”
and
      “registration”
refer
      to a registration effected by preparing and filing a Registration Statement
      or
      Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
      1933 Act or any successor rule providing for offering securities on a continuous
      basis (“Rule
      415”),
      and
      the declaration or ordering of effectiveness of such Registration Statement
      by
      the United States Securities and Exchange Commission (the “SEC”).

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (iii) “Registrable
      Securities”
means
      the Conversion Shares issued or issuable upon conversion or otherwise pursuant
      to the Notes including, without limitation, Damages Shares (as defined in the
      Notes) issued or issuable pursuant to the Notes, shares of Common Stock issued
      or issuable in payment of the Standard Liquidated Damages Amount (as defined
      in
      the Securities Purchase Agreement), shares issued or issuable in respect of
      interest or in redemption of the Notes in accordance with the terms thereof)
      and
      Warrant Shares issuable, upon exercise or otherwise pursuant to the Warrants,
      and any shares of capital stock issued or issuable as a dividend on or in
      exchange for or otherwise with respect to any of the foregoing.

     

    (iv) “Registration
      Statement”
means
      a
      registration statement of the Company under the 1933 Act.

     

    b. Capitalized
      terms used herein and not otherwise defined herein shall have the respective
      meanings set forth in the Securities Purchase Agreement or the Convertible
      Note.

     

    2. REGISTRATION.

     

    a. Mandatory
      Registration.
      The
      Company shall prepare, and, on or prior to thirty (30) days from the date of
      receipt of written demand (the “Investor
      Demand”)
      of the
      Investors (the “Filing
      Date”),
      file
      with the SEC a Registration Statement on Form S-3 (or, if Form S-3 is not then
      available, on such form of Registration Statement as is then available to effect
      a registration of the Registrable Securities, subject to the consent of the
      Initial Investors, which consent will not be unreasonably withheld) covering
      the
      resale of the Registrable Securities underlying the Notes and Warrants issued
      or
      issuable pursuant to the Securities Purchase Agreement, which Registration
      Statement, to the extent allowable under the 1933 Act and the rules and
      regulations promulgated thereunder (including Rule 416), shall state that such
      Registration Statement also covers such indeterminate number of additional
      shares of Common Stock as may become issuable upon conversion of or otherwise
      pursuant to the Notes and exercise of the Warrants to prevent dilution resulting
      from stock splits, stock dividends or similar transactions, provided
      however,
      that
      the no Investor Demand shall be made within ninety (90) days following the
      Closing Date (as defined in the Securities Purchase Agreement). The number
      of
      shares of Common Stock initially included in such Registration Statement shall
      be no less than an amount equal to two (2) times the sum of the number of
      Conversion Shares that are then issuable upon conversion of the Notes (based
      on
      the Variable Conversion Price as would then be in effect and assuming the
      Variable Conversion Price is the Conversion Price at such time), and the number
      of Warrant Shares that are then issuable upon exercise of the Warrants, without
      regard to any limitation on the Investor’s ability to convert the Notes or
      exercise the Warrants. The Company acknowledges that the number of shares
      initially included in the Registration Statement represents a good faith
      estimate of not less than the maximum number of shares issuable upon conversion
      of the Notes and upon exercise of the Warrants. In the event that this good
      faith estimate proves not to be correct due to a change in the initial
      Conversion Price for the securities between the date that the Company filed
      its
      last pre-effective amendment to the Registration Statement (and any subsequent
      Registration Statement filed as required hereunder to maintain a sufficient
      number of registered Authorized and Reserved Shares) and the date on which
      any
      such Registration Statement is declared effective by the SEC, then the Company
      shall, within five (5) business days following notice of such effectiveness,
      file a post-effective amendment with the SEC increasing the number of shares
      covered by such Registration Statement to the applicable amount. Provided that
      the Company meets its obligations under this Section 2(a) with respect to the
      filing of any such post-effective amendment, the Company shall not be deemed
      to
      be in default under any provision herein or in the Securities Purchase Agreement
      or the Note by reason of such temporary shortfall in the number of registered
      Authorized and Reserved Shares. 

     

    
      
        
        

      

      
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    b. Underwritten
      Offering.
      If any
      offering covered by a Registration Statement pursuant to Section 2(a) hereof
      involves an underwritten offering, the Investors who hold a majority in interest
      of the Registrable Securities subject to such underwritten offering, with the
      consent of a majority-in-interest of the Initial Investors, shall have the
      right
      to select one legal counsel and an investment banker or bankers and manager
      or
      managers to administer the offering, which investment banker or bankers or
      manager or managers shall be reasonably satisfactory to the
      Company.

     

    c. Payments
      by the Company.
      The
      Company shall use its best efforts to obtain effectiveness of the Registration
      Statement as soon as practicable. If (i) the
      Registration Statement(s) covering the Registrable Securities required to be
      filed by the Company pursuant to Section 2(a) hereof is not filed by the Filing
      Date or declared effective by the SEC on or prior to one hundred twenty (120)
      days from the Filing Date (as defined above), or (ii) after
      the Registration Statement has been declared effective by the SEC, sales of
      all
      of the Registrable Securities cannot be made pursuant to the Registration
      Statement, or (iii) the
      Common Stock is not listed or included for quotation on the Nasdaq National
      Market (“Nasdaq”),
      the
      Nasdaq SmallCap Market (“Nasdaq
      SmallCap”),
      the
      New York Stock Exchange (the “NYSE”),
      or
      the American Stock Exchange (the “AMEX”)
      after
      being so listed or included for quotation, or (iv) the
      Common Stock ceases to be traded on the Over-the-Counter Bulletin Board (the
      “OTCBB”)
      or any
      equivalent replacement exchange prior to being listed or included for quotation
      on one of the aforementioned markets, then the Company will make payments to
      the
      Investors in such amounts and at such times as shall be determined pursuant
      to
      this Section 2(c) as partial relief for the damages to the Investors by reason
      of any such delay in or reduction of their ability to sell the Registrable
      Securities (which remedy shall not be exclusive of any other remedies available
      at law or in equity). The Company shall pay to each holder of the Notes or
      Registrable Securities an amount equal to the then outstanding principal amount
      of the Notes (and, in the case of holders of Registrable Securities, the
      principal amount of Notes from which such Registrable Securities were converted)
      (“Outstanding
      Principal Amount”),
      multiplied by the Applicable Percentage (as defined below) times the sum of
      (if
      and to the extent applicable): (i) the number of months (prorated for partial
      months) after the Filing Date or the end of the aforementioned one hundred
      twenty (120) day period and prior to the date the Registration Statement is
      declared effective by the SEC, provided, however, that there shall be excluded
      from such period any delays which are solely attributable to changes required
      by
      the Investors in the Registration Statement with respect to information relating
      to the Investors, including, without limitation, changes to the plan of
      distribution, or to the failure of the Investors to conduct their review of
      the
      Registration Statement pursuant to Section 3(h) below in a reasonably prompt
      manner; (ii) the number of months (prorated for partial months) that sales
      of
      all of the Registrable Securities cannot be made pursuant to the Registration
      Statement after the Registration Statement has been declared effective
      (including, without limitation, when sales cannot be made by reason of the
      Company’s failure to properly supplement or amend the prospectus included
      therein in accordance with the terms of this Agreement, but excluding any days
      during an Allowed Delay (as defined in Section 3(f)); or (iii) the number of
      months (prorated for partial months) that the Common Stock is not listed or
      included for quotation on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX
      or
      that trading thereon is halted after the Registration Statement has been
      declared effective. The term “Applicable
      Percentage”
means
      two hundredths (.02). (For example, if the Registration Statement becomes
      effective one (1) month after the end of such one hundred twenty (120) day
      period, the Company would pay $5,000 for each $250,000 of Outstanding Principal
      Amount. If thereafter, sales could not be made pursuant to the Registration
      Statement for an additional period of one (1) month, the Company would pay
      an
      additional $5,000 for each $250,000 of Outstanding Principal Amount.) Such
      amounts shall be paid in cash or, at the Company’s option, in shares of Common
      Stock priced at the Conversion Price (as defined in the Notes) on such payment
      date. 

     

    
      
        
        

      

      
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    d. Piggy-Back
      Registrations.
      Subject
      to the last sentence of this Section 2(d), if at any time prior to the
      expiration of the Registration Period (as hereinafter defined) the Company
      shall
      determine to file with the SEC a Registration Statement relating to an offering
      for its own account or the account of others under the 1933 Act of any of its
      equity securities (other than on Form S-4 or Form S-8 or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of or combination with any entity or business or equity securities
      issuable in connection with stock option or other bona fide,
      employee benefit plans), the Company shall send to each Investor who is entitled
      to registration rights under this Section 2(d) written notice of such
      determination and, if within fifteen (15) days after the effective date of
      such
      notice, such Investor shall so request in writing, the Company shall include
      in
      such Registration Statement all or any part of the Registrable Securities such
      Investor requests to be registered, except that if, in connection with any
      underwritten public offering for the account of the Company the managing
      underwriter(s) thereof shall impose a limitation on the number of shares of
      Common Stock which may be included in the Registration Statement because, in
      such underwriter(s)’ judgment, marketing or other factors dictate such
      limitation is necessary to facilitate public distribution, then the Company
      shall be obligated to include in such Registration Statement only such limited
      portion of the Registrable Securities with respect to which such Investor has
      requested inclusion hereunder as the underwriter shall permit. Any exclusion
      of
      Registrable Securities shall be made pro rata among the Investors seeking to
      include Registrable Securities in proportion to the number of Registrable
      Securities sought to be included by such Investors; provided,
      however,
      that
      the Company shall not exclude any Registrable Securities unless the Company
      has
      first excluded all outstanding securities, the holders of which are not entitled
      to inclusion of such securities in such Registration Statement or are not
      entitled to pro rata inclusion with the Registrable Securities; and provided,
      further,
      however,
      that,
      after giving effect to the immediately preceding proviso, any exclusion of
      Registrable Securities shall be made pro rata with holders of other securities
      having the right to include such securities in the Registration Statement other
      than holders of securities entitled to inclusion of their securities in such
      Registration Statement by reason of demand registration rights, or of any
      contract commitment made in connection with the issuance of the securities
      being
      registered and which commitment is the reason such registration statement is
      being filed. No right to registration of Registrable Securities under this
      Section 2(d) shall be construed to limit any registration required under Section
      2(a) hereof. If an offering in connection with which an Investor is entitled
      to
      registration under this Section 2(d) is an underwritten offering, then each
      Investor whose Registrable Securities are included in such Registration
      Statement shall, unless otherwise agreed by the Company, offer and sell such
      Registrable Securities in an underwritten offering using the same underwriter
      or
      underwriters and, subject to the provisions of this Agreement, on the same
      terms
      and conditions as other shares of Common Stock included in such underwritten
      offering. Notwithstanding anything to the contrary set forth herein, the
      registration rights of the Investors pursuant to this Section 2(d) shall only
      be
      available in the event the Company fails to timely file, obtain effectiveness
      or
      maintain effectiveness of any Registration Statement to be filed pursuant to
      Section 2(a) in accordance with the terms of this Agreement.

     

    
      
        
        

      

      
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    e. Eligibility
      for Form S-3, SB-2 or S-1; Conversion to Form S-3.
      The
      Company represents and warrants that it meets the requirements for the use
      of
      Form S-3, SB-2 or S-1 for registration of the sale by the Initial Investors
      and
      any other Investors of the Registrable Securities. The Company agrees to file
      all reports required to be filed by the Company with the SEC in a timely manner
      so as to remain eligible or become eligible, as the case may be, and thereafter
      to maintain its eligibility, for the use of Form S-3. If the Company is not
      currently eligible to use Form S-3, not later than five (5) business days after
      the Company first meets the registration eligibility and transaction
      requirements for the use of Form S-3 (or any successor form) for registration
      of
      the offer and sale by the Initial Investors and any other Investors of
      Registrable Securities, the Company shall file a Registration Statement on
      Form
      S-3 (or such successor form) with respect to the Registrable Securities covered
      by the Registration Statement on Form SB-2 or Form S-1, whichever is applicable,
      filed pursuant to Section 2(a) (and include in such Registration Statement
      on
      Form S-3 the information required by Rule 429 under the 1933 Act) or convert
      the
      Registration Statement on Form SB-2 or Form S-1, whichever is applicable, filed
      pursuant to Section 2(a) to a Form S-3 pursuant to Rule 429 under the 1933
      Act
      and cause such Registration Statement (or such amendment) to be declared
      effective no later than ninety (90) days after filing. In the event of a breach
      by the Company of the provisions of this Section 2(e), the Company will be
      required to make payments pursuant to Section 2(c) hereof.

     

    3. OBLIGATIONS
      OF THE COMPANY. 

     

    In
      connection with the registration of the Registrable Securities, the Company
      shall have the following obligations:

     

    a. The
      Company shall prepare promptly, and file with the SEC not later than the Filing
      Date, a Registration Statement with respect to the number of Registrable
      Securities provided in Section 2(a), and thereafter use its best efforts to
      cause such Registration Statement relating to Registrable Securities to become
      effective as soon as possible after such filing but in no event later than
      one
      hundred twenty (120) days from the Filing Date), and keep the Registration
      Statement effective pursuant to Rule 415 at all times until such date as is
      the
      earlier of (i) the date on which all of the Registrable Securities have been
      sold and (ii) the date on which the Registrable Securities (in the opinion
      of
      counsel to the Initial Investors) may be immediately sold to the public without
      registration or restriction (including, without limitation, as to volume by
      each
      holder thereof) under the 1933 Act (the “Registration
      Period”),
      which
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein not misleading.

     

    
      
        
        

      

      
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    b. The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to the Registration Statements and
      the prospectus used in connection with the Registration Statements as may be
      necessary to keep the Registration Statements effective at all times during
      the
      Registration Period, and, during such period, comply with the provisions of
      the
      1933 Act with respect to the disposition of all Registrable Securities of the
      Company covered by the Registration Statements until such time as all of such
      Registrable Securities have been disposed of in accordance with the intended
      methods of disposition by the seller or sellers thereof as set forth in the
      Registration Statements. In the event the number of shares available under
      a
      Registration Statement filed pursuant to this Agreement is insufficient to
      cover
      all of the Registrable Securities issued or issuable upon conversion of the
      Notes and exercise of the Warrants, the Company shall amend the Registration
      Statement, or file a new Registration Statement (on the short form available
      therefor, if applicable), or both, so as to cover all of the Registrable
      Securities, in each case, as soon as practicable, but in any event within thirty
      (30) days after the necessity therefor arises (based on the market price of
      the
      Common Stock and other relevant factors on which the Company reasonably elects
      to rely). The Company shall use its best efforts to cause such amendment and/or
      new Registration Statement to become effective as soon as practicable following
      the filing thereof, but in any event within thirty (30) days after the date
      on
      which the Company reasonably first determines (or reasonably should have
      determined) the need therefor. The provisions of Section 2(c) above shall be
      applicable with respect to such obligation, with the one hundred twenty (120)
      days running from the day the Company reasonably first determines (or reasonably
      should have determined) the need therefor.

     

    c. The
      Company shall furnish to each Investor whose Registrable Securities are included
      in a Registration Statement and its legal counsel (i) promptly
      (but in no event more than two (2) business days) after the same is prepared
      and
      publicly distributed, filed with the SEC, or received by the Company, one copy
      of each Registration Statement and any amendment thereto, each preliminary
      prospectus and prospectus and each amendment or supplement thereto, and, in
      the
      case of the Registration Statement referred to in Section 2(a), each letter
      written by or on behalf of the Company to the SEC or the staff of the SEC,
      and
      each item of correspondence from the SEC or the staff of the SEC, in each case
      relating to such Registration Statement (other than any portion of any thereof
      which contains information for which the Company has sought confidential
      treatment), and (ii) promptly
      (but in no event more than two (2) business days) after the Registration
      Statement is declared effective by the SEC, such number of copies of a
      prospectus, including a preliminary prospectus, and all amendments and
      supplements thereto and such other documents as such Investor may reasonably
      request in order to facilitate the disposition of the Registrable Securities
      owned by such Investor. The Company will immediately notify each Investor by
      facsimile of the effectiveness of each Registration Statement or any
      post-effective amendment. The Company will promptly (but in no event more than
      ten (10) business days) respond to any and all comments received from the SEC
      (which comments shall promptly be made available to the Investors upon request),
      with a view towards causing each Registration Statement or any amendment thereto
      to be declared effective by the SEC as soon as practicable, shall promptly
      file
      an acceleration request as soon as practicable (but in no event more than three
      (3) business days) following the resolution or clearance of all SEC comments
      or,
      if applicable, following notification by the SEC that any such Registration
      Statement or any amendment thereto will not be subject to review and shall
      promptly file with the SEC a final prospectus as soon as practicable (but in
      no
      event more than three (3) business days) following receipt by the Company from
      the SEC of an order declaring the Registration Statement effective. In the
      event
      of a breach by the Company of the provisions of this Section 3(c), the Company
      will be required to make payments pursuant to Section 2(c) hereof. For purposes
      of this Section 3(c), delivery by electronic means shall constitute effective
      delivery hereunder.

     

    
      
        
        

      

      
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    d. The
      Company shall use reasonable efforts to (i) register
      and qualify the Registrable Securities covered by the Registration Statements
      under such other securities or “blue sky” laws of such jurisdictions in the
      United States as the Investors who hold a majority in interest of the
      Registrable Securities being offered reasonably request, (ii) prepare
      and file in those jurisdictions such amendments (including post-effective
      amendments) and supplements to such registrations and qualifications as may
      be
      necessary to maintain the effectiveness thereof during the Registration Period,
      (iii) take
      such other actions as may be necessary to maintain such registrations and
      qualifications in effect at all times during the Registration Period, and
(iv) take
      all other actions reasonably necessary or advisable to qualify the Registrable
      Securities for sale in such jurisdictions; provided,
      however,
      that
      the Company shall not be required in connection therewith or as a condition
      thereto to (a) qualify
      to do business in any jurisdiction where it would not otherwise be required
      to
      qualify but for this Section 3(d), (b) subject
      itself to general taxation in any such jurisdiction, (c) file
      a general consent to service of process in any such jurisdiction, (d) provide
      any undertakings that cause the Company undue expense or burden, or (e) make
      any change in its charter or bylaws, which in each case the Board of Directors
      of the Company determines to be contrary to the best interests of the Company
      and its shareholders.

     

    e. In
      the
      event Investors who hold a majority-in-interest of the Registrable Securities
      being offered in the offering (with the approval of a majority-in-interest
      of
      the Initial Investors) select underwriters for the offering, the Company shall
      enter into and perform its obligations under a reasonably acceptable
      underwriting agreement, in usual and customary form, including, without
      limitation, customary indemnification and contribution obligations, with the
      underwriters of such offering.

     

    f. As
      promptly as practicable after becoming aware of such event, the Company shall
      notify each Investor of the happening of any event, of which the Company has
      knowledge, as a result of which the prospectus included in any Registration
      Statement, as then in effect, includes an untrue statement of a material fact
      or
      omission to state a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading, and use its best efforts promptly
      to
      prepare a supplement or amendment to any Registration Statement to correct
      such
      untrue statement or omission, and deliver such number of copies of such
      supplement or amendment to each Investor as such Investor may reasonably
      request; provided that, for not more than ten (10) consecutive trading days
      (or
      a total of not more than twenty (20) trading days in any twelve (12) month
      period), the Company may delay the disclosure of material non-public information
      concerning the Company (as well as prospectus or Registration Statement
      updating) the disclosure of which at the time is not, in the good faith opinion
      of the Company, in the best interests of the Company (an “Allowed
      Delay”);
      provided, further, that the Company shall promptly (i) notify
      the Investors in writing of the existence of (but in no event, without the
      prior
      written consent of an Investor, shall the Company disclose to such investor
      any
      of the facts or circumstances regarding) material non-public information giving
      rise to an Allowed Delay and (ii) advise
      the Investors in writing to cease all sales under such Registration Statement
      until the end of the Allowed Delay. Upon expiration of the Allowed Delay, the
      Company shall again be bound by the first sentence of this Section 3(f) with
      respect to the information giving rise thereto.

     

    
      
        
        

      

      
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    g. The
      Company shall use its best efforts to prevent the issuance of any stop order
      or
      other suspension of effectiveness of any Registration Statement, and, if such
      an
      order is issued, to obtain the withdrawal of such order at the earliest possible
      moment and to notify each Investor who holds Registrable Securities being sold
      (or, in the event of an underwritten offering, the managing underwriters) of
      the
      issuance of such order and the resolution thereof.

     

    h. The
      Company shall permit a single firm of counsel designated by the Initial
      Investors to review such Registration Statement and all amendments and
      supplements thereto (as well as all requests for acceleration or effectiveness
      thereof) a reasonable period of time prior to their filing with the SEC, and
      not
      file any document in a form to which such counsel reasonably objects and will
      not request acceleration of such Registration Statement without prior notice
      to
      such counsel. The sections of such Registration Statement covering information
      with respect to the Investors, the Investor’s beneficial ownership of securities
      of the Company or the Investors intended method of disposition of Registrable
      Securities shall conform to the information provided to the Company by each
      of
      the Investors. In no event shall any failure to (or delay in) comment(ing)
      upon
      or consent(ing) to any document provided to the Investors or their counsel
      in a
      timely manner (and in any event within ten (10) days of their receipt of any
      such document) be counted against the Company with respect to any failure or
      delay in performing any of its obligations under this Agreement, the Securities
      Purchase Agreement or the Note.

     

    i. The
      Company shall make generally available to its security holders as soon as
      practicable, but not later than ninety (90) days after the close of the period
      covered thereby, an earnings statement (in form complying with the provisions
      of
      Rule 158 under the 1933 Act) covering a twelve-month period beginning not later
      than the first day of the Company’s fiscal quarter next following the effective
      date of the Registration Statement.

     

    j. At
      the
      request of any Investor, the Company shall furnish, on the date that Registrable
      Securities are delivered to an underwriter, if any, for sale in connection
      with
      any Registration Statement or, if such securities are not being sold by an
      underwriter, on the date of effectiveness thereof (i) an
      opinion, dated as of such date, from counsel representing the Company for
      purposes of such Registration Statement, in form, scope and substance as is
      customarily given in an underwritten public offering, addressed to the
      underwriters, if any, and the Investors and (ii) a
      letter, dated such date, from the Company’s independent certified public
      accountants in form and substance as is customarily given by independent
      certified public accountants to underwriters in an underwritten public offering,
      addressed to the underwriters, if any, and the Investors.

     

    
      
        
        

      

      
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    k. The
      Company shall make available for inspection by (i) any
      Investor, (ii) any
      underwriter participating in any disposition pursuant to a Registration
      Statement, (iii) one
      firm of attorneys and one firm of accountants or other agents retained by the
      Initial Investors at their expense, (iv) one
      firm of attorneys and one firm of accountants or other agents retained by all
      other Investors at their expense, and (v) one
      firm of attorneys retained by all such underwriters (collectively, the
“Inspectors”)
      all
      pertinent financial and other records, and pertinent corporate documents and
      properties of the Company, including without limitation, records of conversions
      by other holders of convertible securities issued by the Company and the
      issuance of stock to such holders pursuant to the conversions (collectively,
      the
“Records”),
      as
      shall be reasonably deemed necessary by each Inspector to enable each Inspector
      to exercise its due diligence responsibility, and cause the Company’s officers,
      directors and employees to supply all information which any Inspector may
      reasonably request for purposes of such due diligence; provided,
      however,
      that
      each Inspector shall hold in confidence and shall not make any disclosure
      (except to an Investor) of any Record or other information which the Company
      determines in good faith to be confidential, and of which determination the
      Inspectors are so notified, unless (a) the
      disclosure of such Records is necessary to avoid or correct a misstatement
      or
      omission in any Registration Statement, (b) the
      release of such Records is ordered pursuant to a subpoena or other order from
      a
      court or government body of competent jurisdiction, or (c) the
      information in such Records has been made generally available to the public
      other than by disclosure in violation of this or any other agreement. The
      Company shall not be required to disclose any confidential information in such
      Records to any Inspector until and unless such Inspector shall have entered
      into
      confidentiality agreements (in form and substance satisfactory to the Company)
      with the Company with respect thereto, substantially in the form of this Section
      3(k). Each Investor agrees that it shall, upon learning that disclosure of
      such
      Records is sought in or by a court or governmental body of competent
      jurisdiction or through other means, give prompt notice to the Company and
      allow
      the Company, at its expense, to undertake appropriate action to prevent
      disclosure of, or to obtain a protective order for, the Records deemed
      confidential. Nothing herein (or in any other confidentiality agreement between
      the Company and any Investor) shall be deemed to limit the Investor’s ability to
      sell Registrable Securities in a manner which is otherwise consistent with
      applicable laws and regulations. 

     

    l. The
      Company shall hold in confidence and not make any disclosure of information
      concerning an Investor provided to the Company unless (i) disclosure
      of such information is necessary to comply with federal or state securities
      laws, (ii) the
      disclosure of such information is necessary to avoid or correct a misstatement
      or omission in any Registration Statement, (iii) the
      release of such information is ordered pursuant to a subpoena or other order
      from a court or governmental body of competent jurisdiction, or (iv) such
      information has been made generally available to the public other than by
      disclosure in violation of this or any other agreement. The Company agrees
      that
      it shall, upon learning that disclosure of such information concerning an
      Investor is sought in or by a court or governmental body of competent
      jurisdiction or through other means, give prompt notice to such Investor prior
      to making such disclosure, and allow the Investor, at its expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      for, such information.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    m. The
      Company shall (i) cause
      all the Registrable Securities covered by the Registration Statement to be
      listed on each national securities exchange on which securities of the same
      class or series issued by the Company are then listed, if any, if the listing
      of
      such Registrable Securities is then permitted under the rules of such exchange,
      or (ii) to
      the extent the securities of the same class or series are not then listed on
      a
      national securities exchange, secure the designation and quotation, of all
      the
      Registrable Securities covered by the Registration Statement on Nasdaq or,
      if
      not eligible for Nasdaq, on Nasdaq SmallCap or, if not eligible for Nasdaq
      or
      Nasdaq SmallCap, on the OTCBB and, without limiting the generality of the
      foregoing, to arrange for at least two market makers to register with the
      National Association of Securities Dealers, Inc. (“NASD”)
      as
      such with respect to such Registrable Securities.

     

    n. The
      Company shall provide a transfer agent and registrar, which may be a single
      entity, for the Registrable Securities not later than the effective date of
      the
      Registration Statement.

     

    o. The
      Company shall cooperate with the Investors who hold Registrable Securities
      being
      offered and the managing underwriter or underwriters, if any, to facilitate
      the
      timely preparation and delivery of certificates (not bearing any restrictive
      legends) representing Registrable Securities to be offered pursuant to a
      Registration Statement and enable such certificates to be in such denominations
      or amounts, as the case may be, as the managing underwriter or underwriters,
      if
      any, or the Investors may reasonably request and registered in such names as
      the
      managing underwriter or underwriters, if any, or the Investors may request,
      and,
      within three (3) business days after a Registration Statement which includes
      Registrable Securities is ordered effective by the SEC, the Company shall
      deliver, and shall cause legal counsel selected by the Company to deliver,
      to
      the transfer agent for the Registrable Securities (with copies to the Investors
      whose Registrable Securities are included in such Registration Statement) an
      instruction in the form attached hereto as Exhibit
      1
      and an
      opinion of such counsel in the form attached hereto as Exhibit 2.

     

    p. At
      the
      request of the holders of a majority-in-interest of the Registrable Securities,
      the Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to a Registration Statement and
      any
      prospectus used in connection with the Registration Statement as may be
      necessary in order to change the plan of distribution set forth in such
      Registration Statement.

     

    q. From
      and
      after the date of this Agreement, the Company shall not, and shall not agree
      to,
      allow the holders of any securities of the Company to include any of their
      securities in any Registration Statement under Section 2(a) hereof or any
      amendment or supplement thereto under Section 3(b) hereof without the consent
      of
      the holders of a majority-in-interest of the Registrable Securities other than
      in connection with any securities issued under any transaction which is an
      exception to the Capital Raising Limitation set forth in Section 4(e) of the
      Securities Purchase Agreement.

     

    r. The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Investors of Registrable Securities pursuant
      to a
      Registration Statement.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    4. OBLIGATIONS
      OF THE INVESTORS.

     

    In
      connection with the registration of the Registrable Securities, the Investors
      shall have the following obligations:

     

    a. It
      shall
      be a condition precedent to the obligations of the Company to complete the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of a particular Investor that such Investor shall furnish to the
      Company such information regarding itself, the Registrable Securities held
      by it
      and the intended method of disposition of the Registrable Securities held by
      it
      as shall be reasonably required to effect the registration of such Registrable
      Securities and shall execute such documents in connection with such registration
      as the Company may reasonably request. At least three (3) business days prior
      to
      the first anticipated filing date of the Registration Statement, the Company
      shall notify each Investor of the information the Company requires from each
      such Investor. 

     

    b. Each
      Investor, by such Investor’s acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of the Registration Statements hereunder, unless
      such Investor has notified the Company in writing of such Investor’s election to
      exclude all of such Investor’s Registrable Securities from the Registration
      Statements and
      to waive
      all defaults which are or could be triggered with respect to the Company as
      a
      result of the failure to include such securities therein pursuant to this
      Agreement, the Securities Purchase Agreement and/or the Note.

     

    c. In
      the
      event Investors holding a majority-in-interest of the Registrable Securities
      being registered (with the approval of the Initial Investors) determine to
      engage the services of an underwriter, each Investor agrees to enter into and
      perform such Investor’s obligations under an underwriting agreement, in usual
      and customary form, including, without limitation, customary indemnification
      and
      contribution obligations, with the managing underwriter of such offering and
      take such other actions as are reasonably required in order to expedite or
      facilitate the disposition of the Registrable Securities, unless such Investor
      has notified the Company in writing of such Investor’s election to exclude all
      of such Investor’s Registrable Securities from such Registration
      Statement.

     

    d. Each
      Investor agrees that, upon receipt of any notice from the Company of the
      happening of any event of the kind described in Section 3(f) or 3(g), such
      Investor will immediately discontinue disposition of Registrable Securities
      pursuant to the Registration Statement covering such Registrable Securities
      until such Investor’s receipt of the copies of the supplemented or amended
      prospectus contemplated by Section 3(f) or 3(g) and, if so directed by the
      Company, such Investor shall deliver to the Company (at the expense of the
      Company) or destroy (and deliver to the Company a certificate of destruction)
      all copies in such Investor’s possession, of the prospectus covering such
      Registrable Securities current at the time of receipt of such
      notice.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    e. No
      Investor may participate in any underwritten registration hereunder unless
      such
      Investor (i) agrees
      to sell such Investor’s Registrable Securities on the basis provided in any
      underwriting arrangements in usual and customary form entered into by the
      Company, (ii) completes
      and executes all questionnaires, powers of attorney, indemnities, underwriting
      agreements and other documents reasonably required under the terms of such
      underwriting arrangements, and (iii) agrees
      to pay its pro rata share of all underwriting discounts and commissions and
      any
      expenses in excess of those payable by the Company pursuant to Section 5
      below.

     

    f. Each
      Investor desiring to have Registrable Securities included in any registration
      statement shall provide such undertakings, representations and warranties about
      themselves and the manner of distribution of the securities as the Company
      or
      its counsel may reasonably request. No statement or information provided to
      the
      Company or its counsel pursuant to this Section 4(f) shall contain any untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein, or necessary to make the statements therein not
      misleading.

     

    5. EXPENSES
      OF REGISTRATION.

     

    All
      reasonable expenses, other than underwriting discounts and commissions, incurred
      in connection with registrations, filings or qualifications pursuant to Sections
      2 and 3, including, without limitation, all registration, listing and
      qualification fees, printers and accounting fees, the fees and disbursements
      of
      counsel for the Company, and the reasonable fees and disbursements of one
      counsel selected by the Initial Investors pursuant to Sections 2(b) and 3(h)
      hereof shall be borne by the Company.

     

    6. INDEMNIFICATION.
      

     

    In
      the
      event any Registrable Securities are included in a Registration Statement under
      this Agreement:

     

    a. To
      the
      extent permitted by law, the Company will indemnify, hold harmless and defend
      (i) each
      Investor who holds such Registrable Securities, (ii) the
      directors, officers, partners, employees, agents and each person who controls
      any Investor within the meaning of the 1933 Act or the Securities Exchange
      Act
      of 1934, as amended (the “1934
      Act”),
      if
      any, (iii) any
      underwriter (as defined in the 1933 Act) for the Investors, and (iv) the
      directors, officers, partners, employees and each person who controls any such
      underwriter within the meaning of the 1933 Act or the 1934 Act, if any (each,
      an
“Indemnified
      Person”),
      against any joint or several losses, claims, damages, liabilities or expenses
      (collectively, together with actions, proceedings or inquiries by any regulatory
      or self-regulatory organization, whether commenced or threatened, in respect
      thereof, “Claims”)
      to
      which any of them become subject insofar as such Claims arise out of or are
      based upon: (i) any untrue statement or alleged untrue statement of a material
      fact in a Registration Statement or the omission or alleged omission to state
      therein a material fact required to be stated or necessary to make the
      statements therein not misleading; (ii) any untrue statement or alleged untrue
      statement of a material fact contained in any preliminary prospectus if used
      prior to the effective date of such Registration Statement, or contained in
      the
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading; or (iii) any violation or alleged violation by the Company
      of the 1933 Act, the 1934 Act, any other law, including, without limitation,
      any
      state securities law, or any rule or regulation thereunder relating to the
      offer
      or sale of the Registrable Securities (the matters in the foregoing clauses
      (i)
      through (iii) being, collectively, “Violations”).
      

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    Subject
      to the restrictions set forth in Section 6(c) with respect to the number of
      legal counsel, the Company shall reimburse the Indemnified Person, promptly
      as
      such expenses are incurred and are due and payable, for any reasonable legal
      fees or other reasonable expenses incurred by them in connection with
      investigating or defending any such Claim. Notwithstanding anything to the
      contrary contained herein, the indemnification agreement contained in this
      Section 6(a): (i) shall not apply to a Claim arising out of or based upon a
      Violation which occurs in reliance upon and in conformity with information
      furnished in writing to the Company by or on behalf of any Indemnified Person
      or
      underwriter for such Indemnified Person expressly for use in connection with
      the
      preparation of such Registration Statement or any such amendment thereof or
      supplement thereto, if such prospectus was timely made available by the Company
      pursuant to Section 3(c) hereof; (ii) shall not apply to amounts paid in
      settlement of any Claim if such settlement is effected without the prior written
      consent of the Company, which consent shall not be unreasonably withheld,
provided,
      however, that the Company’s determination not to admit, accept responsibility
      for, accept a plea of nolo contendere or agree to the issuance of an order
      of
      any federal or state governmental agency or other jurisdiction shall not be
      “unreasonable” for purposes of this Section 6(a) if the Company reasonably
      believes that it can successfully defend any such Claim and that it would be
      in
      the best interests of the Company and its shareholders to do so; and (iii)
      with
      respect to any preliminary prospectus, shall not inure to the benefit of any
      Indemnified Person if the untrue statement or omission of material fact
      contained in the preliminary prospectus was corrected on a timely basis in
      the
      prospectus, as then amended or supplemented, such corrected prospectus was
      timely made available by the Company pursuant to Section 3(c) hereof, and the
      Indemnified Person was promptly advised in writing not to use the incorrect
      prospectus prior to the use giving rise to a Violation and such Indemnified
      Person, notwithstanding such advice, used it. Such indemnity shall remain in
      full force and effect regardless of any investigation made by or on behalf
      of
      the Indemnified Person and shall survive the transfer of the Registrable
      Securities by the Investors pursuant to Section 9 hereof.

     

    b. In
      connection with any Registration Statement in which an Investor is
      participating, each such Investor agrees severally and not jointly to indemnify,
      hold harmless and defend, to the same extent and in the same manner set forth
      in
      Section 6(a), the Company, each of its directors, officers, partners, employees,
      and agents, and each person, if any, who controls the Company within the meaning
      of the 1933 Act or the 1934 Act, any underwriter and any other shareholder
      selling securities pursuant to the Registration Statement and any of its
      directors, officers, partners, employees, and agents, and any person who
      controls such shareholder or underwriter within the meaning of the 1933 Act
      or
      the 1934 Act (collectively and together with an Indemnified Person, an
“Indemnified
      Party”),
      against any Claim to which any of them may become subject, under the 1933 Act,
      the 1934 Act or otherwise, insofar as such Claim arises out of or is based
      upon
      any Violation by such Investor, in each case to the extent (and only to the
      extent) that such Violation occurs in reliance upon and in conformity with
      written information furnished to the Company by such Investor expressly for
      use
      in connection with such Registration Statement; and subject to Section 6(c)
      hereof such Investor will reimburse any legal or other expenses (promptly as
      such expenses are incurred and are due and payable) reasonably incurred by
      them
      in connection with investigating or defending any such Claim; provided,
      however,
      that
      the indemnity agreement contained in this Section 6(b) shall not apply to
      amounts paid in settlement of any Claim if such settlement is effected without
      the prior written consent of such Investor, which consent shall not be
      unreasonably withheld. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such Indemnified Party
      and shall survive the transfer of the Registrable Securities by the Investors
      pursuant to Section 9. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(b) with
      respect to any preliminary prospectus shall not inure to the benefit of any
      Indemnified Party if the untrue statement or omission of material fact contained
      in the preliminary prospectus was corrected on a timely basis in the prospectus,
      as then amended or supplemented.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    c. Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action (including any governmental action),
      such Indemnified Person or Indemnified Party shall, if a Claim in respect
      thereof is to be made against any indemnifying party under this Section 6,
      deliver to the indemnifying party a written notice of the commencement thereof,
      and the indemnifying party shall have the right to participate in, and, to
      the
      extent the indemnifying party so desires, jointly with any other indemnifying
      party similarly noticed, to assume control of the defense thereof with counsel
      mutually satisfactory to the indemnifying party and the Indemnified Person
      or
      the Indemnified Party, as the case may be; provided,
      however,
      that an
      Indemnified Person or Indemnified Party shall have the right to retain its
      own
      counsel with the fees and expenses to be reimbursed by the indemnifying party
      upon a successful Claim, if, in the reasonable opinion of counsel retained
      by
      the indemnifying party, the representation by such counsel of the Indemnified
      Person or Indemnified Party and the indemnifying party would be inappropriate
      due to actual or potential differing interests between such Indemnified Person
      or Indemnified Party and any other party represented by such counsel in such
      proceeding. The indemnifying party shall pay for only one separate legal counsel
      for the Indemnified Persons or the Indemnified Parties, as applicable, and
      such
      legal counsel shall be selected by Investors holding a majority-in-interest
      of
      the Registrable Securities included in the Registration Statement to which
      the
      Claim relates (with the approval of a majority-in-interest of the Initial
      Investors), if the Investors are entitled to indemnification hereunder, or
      the
      Company, if the Company is entitled to indemnification hereunder, as applicable.
      The failure to deliver written notice to the indemnifying party within a
      reasonable time of the commencement of any such action shall not relieve such
      indemnifying party of any liability to the Indemnified Person or Indemnified
      Party under this Section 6, except to the extent that the indemnifying party
      is
      actually prejudiced in its ability to defend such action. The indemnification
      required by this Section 6 shall be made by periodic payments of the amount
      thereof during the course of the investigation or defense, as such expense,
      loss, damage or liability is incurred and is due and payable.

     

    7. CONTRIBUTION.

     

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided,
      however,
      that
(i) no
      contribution shall be made under circumstances where the maker would not have
      been liable for indemnification under the fault standards set forth in Section
      6, and (ii) no
      seller of Registrable Securities guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
      from any seller of Registrable Securities who was not guilty of such fraudulent
      misrepresentation.

     

    8. REPORTS
      UNDER THE 1934 ACT.

     

    With
      a
      view to making available to the Investors the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the investors to sell securities of the Company to the public
      without registration (“Rule
      144”),
      the
      Company agrees to:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    a. make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

     

    b. file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company’s obligations under Section 4(c) of the Securities Purchase
      Agreement) and the filing of such reports and other documents is required for
      the applicable provisions of Rule 144; and

     

    c. furnish
      to each Investor so long as such Investor owns Registrable Securities, promptly
      upon request, (i) a
      written statement by the Company that it has complied with the reporting
      requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a
      copy of the most recent annual or quarterly report of the Company and such
      other
      reports and documents so filed by the Company, and (iii) such
      other information as may be reasonably requested to permit the Investors to
      sell
      such securities pursuant to Rule 144 without registration.

     

    9. ASSIGNMENT
      OF REGISTRATION RIGHTS.

     

    The
      rights under this Agreement shall be automatically assignable by the Investors
      to any transferee of all or any portion of Registrable Securities if:
      (i) the Investor agrees in writing with the transferee or assignee to
      assign such rights, and a copy of such agreement is furnished to the Company
      within a reasonable time after such assignment, (ii) the Company is, within
      a reasonable time after such transfer or assignment, furnished with written
      notice of (a) the
      name and address of such transferee or assignee, and (b) the
      securities with respect to which such registration rights are being transferred
      or assigned, (iii) following such transfer or assignment, the further
      disposition of such securities by the transferee or assignee is restricted
      under
      the 1933 Act and applicable state securities laws, (iv) at or before the time
      the Company receives the written notice contemplated by clause (ii) of this
      sentence, the transferee or assignee agrees in writing with the Company to
      be
      bound by all of the provisions contained herein and makes the investor
      representations contained in the Securities Purchase Agreement, (v) such
      transfer shall have been made in accordance with the applicable requirements
      of
      the Securities Purchase Agreement, and (vi) such transferee shall be an
“accredited
      investor”
as
      that
      term is defined in Rule 501 of Regulation D promulgated under the 1933
      Act.

     

    10. AMENDMENT
      OF REGISTRATION RIGHTS. 

     

    Provisions
      of this Agreement may be amended and the observance thereof may be waived
      (either generally or in a particular instance and either retroactively or
      prospectively), only with written consent of the Company, each of the Initial
      Investors (to the extent such Initial Investor still owns Registrable
      Securities) and Investors who hold a majority interest of the Registrable
      Securities. Any amendment or waiver effected in accordance with this Section
      10
      shall be binding upon each Investor and the Company.

     

    11. MISCELLANEOUS.

     

    a. A
      person
      or entity is deemed to be a holder of Registrable Securities whenever such
      person or entity owns of record such Registrable Securities. If the Company
      receives conflicting instructions, notices or elections from two or more persons
      or entities with respect to the same Registrable Securities, the Company shall
      act upon the basis of instructions, notice or election received from the
      registered owner of such Registrable Securities.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    b. Any
      notices required or permitted to be given under the terms hereof shall be sent
      by certified or registered mail (return receipt requested) or delivered
      personally or by courier (including a recognized overnight delivery service)
      or
      by facsimile and shall be effective five days after being placed in the mail,
      if
      mailed by regular United States mail, or upon receipt, if delivered personally
      or by courier (including a recognized overnight delivery service) or by
      facsimile, in each case addressed to a party. The addresses for such
      communications shall be:

     

    If
      to the
      Company:

     

    FemOne,
      Inc.

    5600
      Avenida Encinas, Suite 130 

    Carlsbad,
      California 92008

    Attention:
      Chief Executive Officer

    Telephone:
      (760) 448-2498

    Facsimile:
      (760) 931-1304

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    With
      a
      copy (which shall not constitute notice) to:

     

    August
      Law Group, P.C.

    The
      Atrium

    19200
      Von
      Karman Avenue, Suite 500

    Irvine,
      California 92612

    Attention:
      Kenneth S. August, Esq.

    Telephone:
      (949) 752-7772

    Facsimile:
      (949) 752-7776

    Email:
      Kaugust@augustlawgroup.com

     

    If
      to an
      Investor: to the address set forth immediately below such Investor’s name on the
      signature pages to the Securities Purchase Agreement. 

     

    With
      a
      copy (which shall not constitute notice) to:

     

    Ballard
      Spahr Andrews & Ingersoll, LLP

    1735
      Market Street

    51st
      Floor

    Philadelphia,
      Pennsylvania 19103

    Attention:
      Gerald J. Guarcini, Esq.

    Telephone:
      215-865-8625

    Facsimile:
      215-864-8999

    Email:
      guarcini@ballardspahr.com

     

    c. Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

     

    d. 
      THIS
      AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
      LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
      UNITED STATES FEDERAL COURTS LOCATED NEW YORK, NEW YORK WITH RESPECT TO ANY
      DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS ENTERED INTO IN CONNECTION
      HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. ALL PARTIES
      IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
      SUCH SUIT OR PROCEEDING. ALL PARTIES FURTHER AGREE THAT SERVICE OF PROCESS
      UPON
      A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
      SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN
      SHALL AFFECT EITHER PARTY’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
      BY LAW. BOTH PARTIES AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH
      SUIT
      OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS
      BY
      SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER. THE PARTY WHICH DOES NOT
      PREVAIL IN ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR
      ALL
      FEES AND EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE PREVAILING PARTY
      IN CONNECTION WITH SUCH DISPUTE.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    


    e. In
      the
      event that any provision of this Agreement is invalid or unenforceable under
      any
      applicable statute or rule of law, then such provision shall be deemed
      inoperative to the extent that it may conflict therewith and shall be deemed
      modified to conform with such statute or rule of law. Any provision hereof
      which
      may prove invalid or unenforceable under any law shall not affect the validity
      or enforceability of any other provision hereof.

     

    f. This
      Agreement, the Notes, the Warrants and the Securities Purchase Agreement
      (including all schedules and exhibits thereto) constitute the entire agreement
      among the parties hereto with respect to the subject matter hereof and thereof.
      There are no restrictions, promises, warranties or undertakings, other than
      those set forth or referred to herein and therein. This Agreement and the
      Securities Purchase Agreement supersede all prior agreements and understandings
      among the parties hereto with respect to the subject matter hereof and
      thereof.

     

    g. Subject
      to the requirements of Section 9 hereof, this Agreement shall be binding upon
      and inure to the benefit of the parties and their successors and
      assigns.

     

    h. The
      headings in this Agreement are for convenience of reference only and shall
      not
      form part of, or affect the interpretation of, this Agreement.

     

    i. This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same agreement
      and shall become effective when counterparts have been signed by each party
      and
      delivered to the other party. This Agreement, once executed by a party, may
      be
      delivered to the other party hereto by facsimile transmission of a copy of
      this
      Agreement bearing the signature of the party so delivering this
      Agreement.

     

    j. Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

     

    k. Except
      as
      otherwise provided herein, all consents and other determinations to be made
      by
      the Investors pursuant to this Agreement shall be made by Investors holding
      a
      majority of the Registrable Securities, determined as if the all of the Notes
      then outstanding have been converted into for Registrable
      Securities.

     

    l. The
      Company acknowledges that a breach by it of its obligations hereunder will
      cause
      irreparable harm to each Investor by vitiating the intent and purpose of the
      transactions contemplated hereby. Accordingly, the Company acknowledges that
      the
      remedy at law for breach of its obligations under this Agreement will be
      inadequate and agrees, in the event of a breach or threatened breach by the
      Company of any of the provisions under this Agreement, that each Investor shall
      be entitled, in addition to all other available remedies in law or in equity,
      and in addition to the penalties assessable herein, to an injunction or
      injunctions restraining, preventing or curing any breach of this Agreement
      and
      to enforce specifically the terms and provisions hereof, without the necessity
      of showing economic loss and without any bond or other security being
      required.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    m. The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

     

     

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]

     


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      the
      Company and the undersigned Initial Investors have caused this Agreement to
      be
      duly executed as of the date first above written.

     

    FEMONE,
      INC.

     

    /s/
      Ray W. Grimm,
      Jr.                               


    Ray
      W.
      Grimm, Jr.

    Chief
      Executive Officer

     

     

    AJW
      PARTNERS, LLC

    By:
      SMS
      Group, LLC

     

          
                                                                    


    Corey
      S.
      Ribotsky

    Manager
      

     

     

    AJW
      OFFSHORE, LTD.

    By:
      First
      Street Manager II, LLC

    


    
            
                                                                      


      Corey
        S.
        Ribotsky

      Manager
        



    


    AJW
      QUALIFIED PARTNERS, LLC

    By:
      AJW
      Manager, LLC

    


    
            
                                                                      


      Corey
        S.
        Ribotsky

      Manager
        

    

    


    


    NEW
      MILLENNIUM CAPITAL 

    PARTNERS,
      II, LLC

    By:
      First
      Street Manager II, LLC

    


    
            
                                                                      


      Corey
        S.
        Ribotsky

      Manager
        



    20