<PAGE>

                                                               Exhibit 10.4

                              CONSULTING AGREEMENT

                  This Consulting Agreement ("Agreement") is entered into
effective as of August 9, 1999 (the "Effective Date"), by and between
Photogen Technologies, Inc. (the "Company") and Farcap Group LLC
("Consultant").

                                    RECITALS
                                    --------

                  WHEREAS, Consultant is involved and has experience in the
investment field including financial investments, mergers and acquisitions,
corporate development and corporate communications with the investment
community;

                  WHEREAS, the Company needs advice and consulting services
in areas of Consultant's expertise; and

                  WHEREAS, Consultant is willing to provide such consulting
services pursuant to the terms of this Agreement.

                  NOW, THEREFORE, in consideration of the mutual promises
herein set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:

                                    AGREEMENT
                                    ---------

          1.   CONSULTING SERVICES.

               (A) During the Consulting Term (defined below), Consultant
shall make himself available at the Company's request to provide the Company
with advisory and consulting services including:

                   (1)      advising the Company regarding its
                            corporate development strategy;

                   (2)      advising the Company regarding the
                            coordination of its corporate
                            communications with the investment
                            community (not including financial public
                            relations services); and

                   (3)      to the extent desired by the Company,
                            assist the Company in analyzing
                            investment, acquisition or merger
                            proposals presented through Consultant
                            and advise the Company during the
                            Company's negotiation thereof.

<PAGE>

               (B) Consultant agrees to use his best efforts and to be
available to provide sufficient time to effectively and competently deliver
such services. To that end, Consultant will make himself available to the
Company for not less than 20 hours per month and/or 200 hours per year for
such services.

          2.   CONSULTING TERM. The term of this Agreement (the "Consulting
Term") shall be two (2) years commencing on the date hereof (the "Effective
Date"); provided, however, that either party may terminate this Agreement
effective on or after August 9, 2000 by giving the other party thirty days'
prior written notice of such termination.

          3.   COMPENSATION. As full compensation for all services rendered
and to be rendered by the Consultant, Consultant shall be entitled to
purchase, at $0.001 per warrant, warrants to purchase 1,000,000 shares of
common stock of the Company. The warrants shall be governed by the form of
warrants attached hereto as Exhibit A and shall include the following terms
and conditions:

               (A) The exercise price per share shall be equal to the fair
market value of a share of common stock on the Effective Date, which shall be
determined by averaging the closing bid price of a share of common stock (as
reported on the OTC Bulletin Board or The Nasdaq Stock Market, as the case
may be) during the (20) trading days immediately preceding the Effective Date;

               (B) Warrants to purchase 500,000 shares shall vest and become
exercisable immediately upon the Effective Date;

               (C) Warrants to purchase 500,000 shares shall vest and become
exercisable upon the earlier of (1) the consummation of a Value-added
Transaction (as defined below) resulting from Consultant's services, or (2)
August 9, 2000 unless either Consultant or the Company has terminated this
Agreement effective on August 9, 2000 in accordance with provisions of
Section 2 of this Agreement. For purpose of this section, a "Value-added
Transaction" means any transaction involving the Company initiated by
Consultant and accepted in writing by the Company as a Value-added
Transaction. The Company shall be free of any liability to Consultant for the
Company's failure to accept a transaction initiated by Consultant as a
Value-added Transaction.

               (D) The shares underlying the Warrants shall have the
registration rights set forth in the Registration Rights Agreement in the
form attached to this Agreement as Exhibit B.

          4.   EXPENSES. Consultant shall be entitled to reimbursement by the
Company of any reasonable expenses incurred in the performance of his
consulting services under this Agreement; provided that the Consultant shall
obtain the prior approval from the Company's President for expenditures in
excess of $250 per month and shall submit an itemized account of

<PAGE>

all reimbursable expenses incurred .

          5.   INDEPENDENT CONTRACTOR. The Consultant shall be an independent
contractor under this Agreement and shall not be an agent or employee of the
Company. Consultant (and its Affiliates (as hereafter defined) or agents)
shall not hold itself (or themselves) out as an agent, employee, partner or
joint venture of or with the Company. The Consultant and its Affiliates shall
have no power or authority to bind or obligate the Company in any manner for
any purpose. Nothing herein shall be construed as establishing a partnership,
joint venture or agency relationship between the Company and the Consultant
(and its Affiliates or agents). The term Affiliate means any entity
controlled by, controlling or under common control with the Consultant.

          6.   CONFIDENTIAL INFORMATION. During the Consulting Term and at
all times thereafter, Consultant will hold in trust, keep confidential, and
not disclose, directly or indirectly, to any third parties, or make any use
of, the Company's Confidential Information (defined below) for any purpose
except for the benefit of Company in the performance of Consultant's duties
under this Agreement. "Confidential Information" means all information,
communications, data, reports, records or materials obtained from the
Company, which is not in the public domain. Confidential Information is not
meant to include information which: a) at the time of the disclosure is in
the public domain; b) after disclosure becomes part of the public domain
through no act or omission by the Consultant; c) as shown by written records
(i) was prior to disclosure in the possession of the undersigned, or (ii) is
subsequent to disclosure developed by the Consultant independently of any
disclosure by the Company; d) is rightfully received by Consultant from third
parties who were entitled to receive such information; or e) is obligated to
be disclosed pursuant to applicable law, regulation or legal process.

          7.   NON-COMPETITION. During the Consulting Term and for a period
of twelve months thereafter, Consultant shall not, directly or indirectly,
(A) engage in any Competitive Business (defined below), (B) disparage
Company, its Affiliates, employees, technology or products, or (C) solicit,
induce or attempt to influence any other Company employee or other person or
entity to engage in any Competitive Business or to curtail or cease any
business or business relationship with Company, its Affiliates, or employees.
"Competitive Business" means owning, managing, controlling, participating in,
consulting with, being employed by, or rendering services for any person or
entity, or in any manner or in any capacity (except as a 5% or less
stockholder of a publicly traded company), that engages in the design,
development, manufacture, sale, lease, marketing, financing or distribution
of products or services in the field of photo-dynamic therapy anywhere in the
world. Because the Company's business and proposed business is national and
international in scope, the Consultant agrees that the geographic scope and
time period covered by this covenant is reasonable.

          8.   REPRESENTATION, WARRANTIES AND COVENANTS. Consultant hereby
represents and warrants to and covenants with the Company as follows:

<PAGE>

               (A) Consultant has full right, power and authority to enter
into this Agreement and perform the services and provide the advice
contemplated hereunder during the Consulting Term and the execution of this
Agreement and the performance of its obligations hereunder will not conflict
with or violate any agreement, duty, rule, regulation or law to which
Consultant is subject or by which he is bound.

               (B) Consultant will not distribute to third parties any
written materials relating to the Company, its products, its future prospects
or otherwise, other than (1) materials prepared by the Company for
distribution by the Consultant to third parties, (2) materials filed with the
Securities and Exchange Commission by the Company, (3) materials on the
Company's web site placed thereon by the Company, or (4) materials which have
received the prior written approval of the Company for distribution by the
Consultant.

               (C) Consultant is not a party to any action or the subject of
any disciplinary proceedings, inquiries, investigation proceedings, or orders
by the Securities and Exchange Commission, any state, regulatory authority,
the NASD, or any court or arbitration panel.

               (D) Consultant will perform services hereunder in full
compliance with all applicable laws. Consultant will not provide any advice
or services hereunder which require the Consultant to be licensed under any
law, rule or regulation unless he is so licensed and in good standing.

          9.   INDEMNIFICATION. The Company will indemnify Consultant and
hold Consultant harmless from and against any actual or potential liability
resulting from Consultant's engagement by the Company under this Agreement in
accordance with the terms of the indemnification agreement, the form of which
is attached hereto as Exhibit C, which agreement is incorporated into this
Agreement by this reference and is part of this Agreement as if set forth in
full herein.

         10.   MISCELLANEOUS.

               (A) This Agreement, including Exhibits A, B and C, constitutes
the entire agreement between the parties with respect to the subject matter
hereof and it supersedes all prior negotiations, representations,
understandings, verbal or written agreements, none of which prior matters
shall be binding upon the parties.

               (B) This Agreement, including Exhibits A, B and C, may only be
modified in writing signed by the parties.

               (C) This Agreement, including Exhibits A, B and C, shall be
governed by the internal laws of the State of Tennessee without regard to
conflict of law provisions thereof.

               (D) Any controversy or claim arising out of or relating to
this Agreement, or

<PAGE>

the alleged breach thereof, or relating to Consultant's activities or
remuneration under this Agreement, shall be settled by binding arbitration in
Chicago, Illinois, in accordance with the applicable rules of the American
Arbitration Association, and judgment on the award rendered by the
arbitrator(s) shall be binding on the parties and may be entered in any court
having jurisdiction thereof.

               (E) This Agreement shall be binding upon the successors and
assigns of the parties.

               (F) All notices, requests, and other communications hereunder
shall be deemed to be duly given if sent by U.S. mail, postage prepaid,
addressed to the other party at the address as set forth herein below:

               To Company:

               Photogen Technologies, Inc.
               7327 Oak Ridge Highway, Suite B
               Knoxville, TN 37931
               Attention: John T. Smolik, President
               Phone: (423) 769-4011 Fax 423 769-4012


               With copy to

               Theodore W. Grippo, Esq.
               Grippo & Elden
               227 West Monroe Street, Suite 3600
               Chicago, IL 60606
               Phone: (312) 704-7720 Fax (312) 558-1195

               To Consultant:

               Farcap Group LLC
               c/o Mark A. Klein, Esq.
               Freshman, Marantz, Orlanski, Cooper & Klein
               9100 Wilshire Boulevard
               Eighth Floor, East Tower
               Beverly Hills, CA 90212
               Phone: (310) 285-1635 Fax: (310) 274-8357

               (G) No waiver of any term or provision of this Agreement shall
be deemed to be a waiver of any subsequent breach or any other term or
provision hereof.

<PAGE>

               (H) The Consultant shall be permitted to pursue and
participate in other consulting, financial or investment activities for
parties and concerns other than the Company so long as such activities do not
violate the provisions of Section 7 of this Agreement.

               (I) If any provision of this Agreement is deemed to be
unenforceable or invalid, the enforceability and validity of all other
provisions hereof shall not be affected thereby.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.

PHOTOGEN TECHNOLOGIES, INC.

By:       /s/ John T. Smolik
    ------------------------------
      John T. Smolik, President


FARCAP GROUP LLC

By:        /s/ Yale Farar
    ------------------------------
         Yale Farar, Manager

<PAGE>

                                                                     Exhibit A


                                Warrant Agreement


<PAGE>

                                                                     EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT

                                 August 9, 1999



FARCAP GROUP, LLC

Dear Sirs:

             This will confirm that in consideration of your agreement to
consult with us under that certain Consulting Agreement entered into as of
the date hereof and your purchase of warrants (the "Warrants") to purchase an
aggregate of 1,000,000 shares (the "Warrant Shares") of Common Stock, $0.001
par value ("Common Stock"), of Photogen Technologies, Inc. a Nevada
corporation (the "Company"), the Company covenants and agrees with you as
follows:

                  1.  CERTAIN  DEFINITIONS.  As used  in  this  Agreement,
the  following  terms  shall  have  the following respective meanings:

                  "COMMISSION" shall mean the Securities and Exchange
         Commission, or any other federal agency at the time administering the
         Securities Act.

                  "COMMON STOCK" shall mean the Common Stock, $0.001 par value,
         of the Company, as constituted as of the date of this Agreement.

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
         as amended, or any similar federal statute, and the rules and
         regulations of the Commission thereunder, all as the same shall be in
         effect at the time.

                  "REGISTRATION EXPENSES" shall mean the expenses so
         described in Section 8.

                  "RESTRICTED STOCK" shall mean the Warrant Shares, excluding
         Warrant Shares which have been (a) registered under the Securities Act
         pursuant to an effective registration statement filed thereunder and
         disposed of in accordance with the registration statement covering them
         or (b) publicly sold pursuant to Rule 144 under the Securities Act.

                  "SECURITIES ACT" shall mean the Securities Act of 1933, as
         amended, or any similar federal statute, and the rules and regulations
         of the Commission thereunder, all as the same shall be in effect at the
         time.

<PAGE>

                  "SELLING EXPENSES" shall mean the expenses so described in
         Section 8.

                  2.  RESTRICTIVE LEGEND. Each certificate representing
Warrant Shares shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in
the following form:

                  "THE SECURITIES EVIDENCED OR CONSTITUTED HEREBY HAVE BEEN
                  ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE
                  SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS THE
                  REGISTRATION PROVISIONS OF SAID ACT HAVE BEEN COMPLIED WITH OR
                  UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
                  REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
                  IS NOT REQUIRED."

A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Securities Act.

                  3.  NOTICE OF PROPOSED TRANSFER. Prior to any proposed
transfer of any Warrant Shares (other than under the circumstances described
in Sections 4, 5 or 6), the holder thereof shall give written notice to the
Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the
Company, shall be accompanied by an opinion of counsel reasonably
satisfactory to the Company to the effect that the proposed transfer may be
effected without registration under the Securities Act, whereupon the holder
of such stock shall be entitled to transfer such stock in accordance with the
terms of its notice; PROVIDED, HOWEVER, that no such opinion of counsel shall
be required for a transfer to one or more partners of the transferror (in the
case of a transferror that is a partnership) or to an affiliate of the
holder. Each certificate for Warrant Shares transferred as above provided
shall bear the legend set forth in Section 2, except that such certificate
shall not be such legend if (i) such transfer is in accordance with the
provisions of Rule 144 (or any other rule permitting public sale without
registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration
under the Securities Act. The restrictions provided for in this Section 3
shall not apply to securities which are not required to bear the legend
prescribed by Section 2 in accordance with the provisions of that Section.

                  4.  REQUIRED REGISTRATION. (a) At any time after August 9,
1999 the holders of Restricted Stock constituting at least 50% of the total
shares of Restricted Stock then outstanding may request the Company to
register under the Securities Act all or any portion of the shares of
Restricted Stock held by such requesting holder or holders for

<PAGE>

sale in the manner specified in such notice, PROVIDED that the shares of
Restricted Stock for which registration has been requested shall constitute
at least 100,000 shares of Restricted Stock if such holder or holders shall
request the registration of less than all shares of Restricted Stock then
held by such holder or holders (or any lesser number if the reasonably
anticipated aggregate price to the public of such public offering would
exceed $500,000). For purposes of the Section 4 and Sections 5, 6, 13(a) and
13(d), the term "Restricted Stock" shall be deemed to include the number of
shares of Restricted Stock which would be issuable to a holder of Warrant
Shares upon exercise of Warrants held by such holder at such time; PROVIDED,
HOWEVER, that the only securities which the Company shall be required to
register pursuant hereto shall be shares of Common Stock; and PROVIDED,
FURTHER, HOWEVER, that, in any underwritten public offering contemplated by
this Section 4 or Sections 5 and 6, the holders of Warrant Shares shall be
entitled to sell their Warrants to the underwriters for exercise and sale of
the shares of Common Stock issued upon exercise thereof. Notwithstanding
anything to the contrary contained herein, no request may be made under this
Section 4 (i) within 120 days after the effective date of a registration
statement filed by the Company covering a firm commitment underwritten public
offering in which the holders of Restricted Stock shall have been entitled to
join pursuant to Sections 5 or 6 and in which there shall have been
effectively registered all shares of Restricted Stock as to which
registration shall have been requested, or (ii) at a time when the board of
directors of the Company determines in good faith and without regard to the
expenses involved or liabilities inherent in the process that it would not be
in the Company's best interests to effect a registration at that time.

             (b) Following receipt of any notice under this Section 4, the
Company shall immediately notify all holders of Restricted Stock from whom
notice has not been received and shall use its reasonable efforts to register
under the Securities Act, for public sale in accordance with the method of
disposition specified in such notice from requesting holders, the number of
shares of Restricted Stock specified in such notice (and in all notices
received by the Company from other holders within 30 days after the giving of
such notice by the Company). If such method of disposition shall be an
underwritten public offering, the holders of a majority of the shares of
Restricted Stock to be sold in such offering may designate the managing
underwriter of such offering, subject to the approval of the Company, which
approval shall not be unreasonably withheld or delayed. The Company shall be
obligated to register Restricted Stock pursuant to this Section 4 on one
occasion only; PROVIDED, HOWEVER, that such obligation shall be deemed
satisfied only when a registration statement covering all shares of
Restricted Stock specified in notices received as aforesaid, for sale in
accordance with the method of disposition specified by the requesting
holders, shall have become effective and, if such method of disposition is a
firm commitment underwritten public offering, all such shares shall have been
sold pursuant thereto.

             (c) The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the
method of disposition

<PAGE>

specified by the requesting holders, shares of Common Stock to be sold by the
Company for its own account, except as and to the extent that, in the opinion
of the managing underwriter (if such method of disposition shall be an
underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold. Except for registration
statements on Form S-4, S-8 or any successor thereto, the Company will not
file with the Commission any other registration statement with respect to its
Common Stock, whether for its own account or that of other stockholders, from
the date of receipt of a notice from requesting holders pursuant to this
Section 4 until the completion of the period of distribution of the
registration contemplated thereby.

                  5.  INCIDENTAL REGISTRATION. If the Company at any time
(other than pursuant to Section 4 or Section 6) proposes to register any of
its securities under the Securities Act for sale to the public, whether for
its own account or for the account of other security holders or both (except
with respect to registration statements on Forms S-4, S-8 or another form not
available for registering the Restricted Stock for sale to the public), each
such time it will give written notice to all holders of outstanding
Restricted Stock of its intention so to do. Upon the written request of any
such holder, received by the Company within 30 days after the giving of any
such notice by the Company, to register any of its Restricted Stock (which
request shall state the intended method of disposition thereof), the Company
will use its reasonable efforts to cause the Restricted Stock as to which
registration shall have been so requested to be included in the securities to
be covered by the registration statement proposed to be filed by the Company,
all to the extent requisite to permit the sale or other disposition by the
holder (in accordance with its written request) of such Restricted Stock so
registered. In the event that any registration pursuant to this Section 5
shall be, in whole or in part, an underwritten public offering of Common
Stock, the number of shares of Restricted Stock to be included in such an
underwriting may be reduced (pro rata among the requesting holders based upon
the number of shares of Restricted Stock owned by such holders) if and to the
extent that the managing underwriter shall be of the opinion that such
inclusion would adversely affect the marketing of the securities to be sold
by the Company therein, PROVIDED, HOWEVER, that such number of shares of
Restricted Stock shall not be reduced if any shares are to be included in
such underwriting for the account of any person other than the Company or
requesting holders of Restricted Stock, and PROVIDED, FURTHER, HOWEVER, that
in no event may less than one-third of the total number of shares of Common
Stock to be included in such underwriting be made available for shares of
Restricted Stock. Notwithstanding the foregoing provisions, the Company may
withdraw any registration statement referred to in this Section 5 or exclude
any Restricted Stock for which the board of directors of the Company
determines in good faith and without regard to the expenses involved or
liabilities inherent in the process that it would not be in the Company's
best interests to effect a registration without thereby incurring any
liability to the holders of Restricted Stock.

                  6.  REGISTRATION ON FORM S-3. If at any time (i) a holder
or holders of Warrant Shares or Restricted Stock request that the Company
file a registration statement on Form S-3 or any successor thereto for a
public offering of all or any portion o f the

<PAGE>

shares of Restricted Stock held by such requesting holder or holders, the
reasonably anticipated aggregate price to the public of which would exceed
$100,000, and (ii) the Company is a registrant entitled to use Form S-3 or
any successor thereto to register such shares, then the Company shall use its
reasonable efforts to register under the Securities Act on Form S-3 or any
successor thereto, for public sale in accordance with the method of
disposition specified in such notice, the number of shares of Restricted
Stock specified in such notice. Whenever the Company is required by this
Section 6 to use its reasonable efforts to effect the registration of
Restricted Stock, each of the procedures and requirements of Section 4
including but not limited to the requirement that the Company notify all
holders of Restricted Stock from whom notice has not been received and
provide them with the opportunity to participate in the offering) shall apply
to such registration, PROVIDED, HOWEVER, that there shall be no limitation on
the number of registrations on Form S-3 which may be requested and obtained
under this Section 6, and PROVIDED, FURTHER, HOWEVER, that the requirements
contained in the first sentence of Section 4(a) shall not apply to any
registration on Form S-3 which may be requested and obtained under this
Section 6. Notwithstanding anything to the contrary contained herein, no
request may be made under this Section 6 at a time when the board of
directors of the Company determines in good faith and without regard to the
expenses involved or liabilities inherent in the process that it would not be
in the Company's best interests to effect a registration at that time.

                  7.  REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions to Sections 4, 5 or 6 to use its reasonable
efforts to effect the registration of any shares of Restricted Stock under
the Securities Act, the Company will, as expeditiously as possible:

                  (a) prepare and file with the Commission a registration
statement (which, in the case of an underwritten public offering pursuant to
Section 4, shall be on Form S-1 or other form of general applicability
satisfactory to the managing underwriter selected as therein provided) with
respect to such securities and use its reasonable efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby (determined as hereinafter provided);

                  (b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for the period specified in paragraph (a) above and comply with the
provisions of the Securities Act with respect to the disposition of all
Restricted Stock covered by such registration statement in accordance with
the sellers' intended method of disposition set forth in such registration
statement for such period;

                  (c) furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in

<PAGE>

order to facilitate the public sale or other disposition of the Restricted
Stock covered by such registration statement;

                  (d) use its reasonable efforts to register or qualify the
Restricted Stock covered by such registration statement under the securities
or "blue sky" laws of such jurisdictions as the sellers of Restricted Stock
or, in the case of an underwritten public offering, the managing underwriter
reasonably shall request; PROVIDED, HOWEVER, that the Company shall not for
any such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;

                  (e) use its reasonable efforts to list the Restricted Stock
covered by such registration statement with any securities exchange on which
the Common Stock of the Company is then listed;

                  (f) immediately notify each seller of Restricted Stock and
each underwriter under such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

                  (g) if the offering is underwritten and at the request of
any seller of Restricted Stock, the Company shall use its reasonable efforts
to furnish on the date that Restricted Stock is delivered to the underwriters
for sale pursuant to such registration: (i) an opinion dated such date of
counsel representing the Company for the purposes of such registration,
addressed to the underwriters and to such seller, stating that such
registration statement has become effective under the Securities Act and that
(A) to the best knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Securities Act,
(B) the registration statement, the related prospectus and each amendment or
supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such
other effects as reasonably may be requested by counsel for the underwriters
or by such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion
of such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to
the period

<PAGE>

ending no more than five business days prior to the date of such letter) with
respect to such registration as such underwriters reasonably may request; and

                  (h) make available for inspection by each seller of
Restricted Stock, any underwriter participating in any distribution pursuant
to such registration statement, and any attorney, accountant or other agent
retained by such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement.

                  For purposes of Section 7(a) and 7(b) and of Section 4(c),
the period of distribution of Restricted Stock in a firm commitment
underwritten public offering shall be deemed to extend until each underwriter
has completed the distribution of all securities purchased by it, and the
period of distribution of Restricted Stock in any other registration shall be
deemed to extend until the earlier of the sale of all Restricted Stock
covered thereby and 120 days after the effective date thereof.

                  In connection with each registration hereunder, the sellers
of Restricted Stock will furnish to the Company in writing such information
with respect to themselves and the proposed distribution by them as
reasonably shall be necessary in order to assure compliance with federal and
applicable state securities laws.

                  In connection with each registration pursuant to Sections
4, 5 or 6 covering an underwritten public offering, the Company and each
seller agree to enter into a written agreement with the managing underwriter
selected in the manner herein provided in such form and containing such
provisions as are customary in the securities business for such an
arrangement between such underwriter and companies of the Company's size and
investment stature.

                  8.  EXPENSES. All expenses incurred by the Company in
complying with Sections 4, 5 and 6, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel to the Company and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with
complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer
agents and registrars and costs of issuance but excluding any Selling
Expenses, are called "Registration Expenses". All underwriting discounts and
selling commissions and finders fees applicable to the sale of Restricted
Stock and fees and disbursements of counsel for the holders of "Restricted
Stock" are called "Selling Expenses".

                  The Company will pay all Registration Expenses in
connection with each registration statement under Sections 4, 5 or 6. All
Selling Expenses in connection with each registration statement under
Sections 4, 5 or 6 shall be borne by the participating sellers in proportion
to the number of shares sold by each, or by such participating sellers other
than the Company (except to the extent the Company shall be a seller) as

<PAGE>

they may agree.

                  9.  INDEMNIFICATION AND CONTRIBUTION. (a) In the event of a
registration of any of the Restricted Stock under the Securities Act pursuant
to Sections 4, 5 or 6, the Company will indemnify and hold harmless each
seller of such Restricted Stock thereunder, each underwriter of such
Restricted Stock thereunder and each other person, if any, who controls such
seller or underwriter within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several to which such
seller, underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Restricted Stock was
registered under the Securities Act pursuant to Sections 4, 5 or 6, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each such seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action, PROVIDED, HOWEVER, that the Company will not be
liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in
conformity with information furnished by any such seller, any such
underwriter or any such controlling person in writing specifically for use in
such registration statement or prospectus.

                  (b) In the event of a registration of any of the Restricted
Stock under the Securities Act pursuant to Sections 4, 5 or 6, each seller of
such Restricted Stock thereunder, severally and not jointly, will indemnify
and hold harmless the Company, each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who
signs the registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning
of the Securities Act, against all losses, claims, damages or liabilities,
joint or several, to which the Company or such officer, director, underwriter
or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement under which such Restricted Stock was registered under the
Securities Act pursuant to Sections 4, 5 or 6, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company and
each such officer, director, underwriter and controlling person for any legal
or other expenses

<PAGE>

reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; PROVIDED, HOWEVER, that such
seller will be liable hereunder in any such case if and only to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with information pertaining
to such seller, as such, furnished in writing to the Company by such seller
specifically for use in such registration statement or prospectus; and
PROVIDED, FURTHER, HOWEVER, that the liability of each seller hereunder shall
be limited to the proportion of any such loss, claim, damage, liability or
expense which is equal to the proportion that the public offering price of
the shares sold by such seller, under such registration statement bears to
the total public offering price of all securities sold thereunder, but not in
any event to exceed the proceeds received by such seller from the sale of
Restricted Stock covered by such registration statement.

                  (c) Promptly after receipt by an indemnified party
hereunder of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to such indemnified party other than under this
Section 9 and shall only relieve it from any liability which it may have to
such indemnified party under this Section 9 if and to the extent the
indemnifying party is prejudiced by such omission. In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such indemnified
party, and, after notice from the indemnifying party to such indemnified
party of its election so to assume and undertake the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this
Section 9 for any legal expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation and of liaison with counsel so selected; PROVIDED, HOWEVER,
that, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded based on written advice of counsel that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified
party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred. In no event shall any
indemnifying party be liable in respect of any amounts paid in settlement of
any action unless the indemnifying party shall have approved the terms of
such settlement; provided that such consent shall not be unreasonably
withheld.

<PAGE>

                  (d) In order to provide for just and equitable contribution
to joint liability under the Securities Act in any case in which either (i)
any holder of Restricted Stock exercising rights under this Agreement, or any
controlling person of any such holder, makes a claim for indemnification
pursuant to this Section 9 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case notwithstanding the
fact that this Section 9 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of any such
selling holder or any such controlling person in circumstances for which
indemnification is provided under this Section 9; then, and in each such
case, the Company and such holder will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after
contribution from others) in such proportion so that such holder is
responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; PROVIDED, HOWEVER, that, in any such case, (A) no such holder will
be required to contribute any amount in excess of the public offering price
of all such Restricted Stock offered by it pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled
to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.

                 10.  CHANGES IN COMMON STOCK. If, and as often as, there is
any change in the Common Stock by way of a stock split, stock dividend,
combination or reclassification, or through a merger, consolidation,
reorganization or recapitalization, or by any other means, appropriate
adjustment shall be made in the provisions hereof so that the rights and
privileges granted hereby shall continue with respect to the Common Stock as
so changed.

                 11.  RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Restricted Stock to the public without
registration, at all times after 90 days after any registration statement
covering a public offering of securities of the Company under the Securities
Act shall have become effective, the Company agrees to:

                  (a) make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;

                  (b) use its reasonable efforts to file with the Commission
in a timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and

                  (c) furnish to each holder of Restricted Stock forthwith
upon request a written

<PAGE>

statement by the Company as to its compliance with the reporting requirements
of such Rule 144 and of the Securities Act and the Exchange Act, a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the Commission
allowing such holder to sell any Restricted Stock without registration.

                 12. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to you as follows:

                  (a) The execution, delivery and performance of this
Agreement by the Company have been duly authorized by all requisite corporate
action and will not violate any provision of law, any order of any court or
other agency of government, the Charter or By-laws of the Company or any
provision of any indenture, agreement or other instrument to which it or any
or its properties or assets is bound, conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Company.

                  (b) This Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms.

                 13.  MISCELLANEOUS.

                  (a) All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and inure
to the benefit of the respective successors and assigns of the parties hereto
(including without limitation transferees of any Warrant Shares or Restricted
Stock), whether so expressed or not; PROVIDED, HOWEVER, that registration
rights conferred herein on the holders of Warrant Shares or Restricted Stock
shall only issue to the benefit of a transferee of Warrant Shares or
Restricted Stock if (i) there is transferred to such transferee at least 5%
of the total shares of Restricted Stock issued pursuant to the Warrants to
the direct or indirect transferror of such transferee or (ii) such transferee
is a partner, shareholder or affiliate of a party hereto.

                  (b) All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed by certified
or registered mail, return receipt requested, postage prepaid, or by
facsimile, in the case of non U.S. residents, addressed as follows:

                  if to the Company or any other party hereto, at the address
                  of such party set forth in the Consulting Agreement;

                  if to any subsequent holder of Warrant Shares or Restricted
                  Stock, to it of

<PAGE>

                  such address as may have been furnished to the Company in
                  writing by such holder;

or, in any case, at such other address or addresses as shall have been
furnished in writing to the Company (in the case of a holder of Warrant
Shares or Restricted Stock) or to the holders of Warrant Shares or Restricted
Stock (in the case of the Company) in accordance with the provisions of this
paragraph.

                  (c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee and for all purposes shall
be construed in accordance with the internal laws of said State, PROVIDED,
HOWEVER, that if, as a result of the Company's incorporation in the State of
Nevada the laws of that State should govern a particular issue, the internal
laws of the State of Nevada shall govern that issue.

                  (d) This Agreement may not be amended or modified, and no
provision hereof may be waived, without the written consent of the Company
and the holders of at least two-thirds of the outstanding shares of
Restricted Stock.

                  (e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                  (f) The obligations of the Company to register shares of
Restricted Stock under Sections 4, 5 or 6 shall terminate on the sixth
anniversary of the date of this Agreement.

                  (g) If requested in writing by the underwriters for the
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell
publicly any shares of Restricted Stock or any other shares of Common Stock
(other than shares of Restricted Stock or other shares of Common Stock being
registered n such offering) without the consent of such underwriters, for a
period of not more than 120 days following the effective date of the
registration statement relating to such offering; PROVIDED, HOWEVER, that all
persons entitled to registration rights with respect to shares of Common
Stock who are not parties to this Agreement, all other persons selling shares
of Common Stock in such offering and all executive officers and directors of
the Company shall also have agreed not to sell publicly their Common Stock
under the circumstances and pursuant to the terms set forth in this Section
13(g).

                  (h) Notwithstanding the provisions of Section 7(a), the
Company's obligation to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for
a period not to exceed 90 days in any 24-month period if there exists at the
time material non-public information relating to the Company which, in the
reasonable opinion of the Company, should not be disclosed.

                  (i) If any provision of this Agreement shall be held to be
illegal, invalid or

<PAGE>

unenforceable, such illegality, invalidity or unenforceability shall attach
only to such provision and shall not in any manner affect or render illegal,
invalid or unenforceable any other provision of this Agreement, and this
Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.

                  Please indicate your acceptance of the foregoing by signing
and returning the enclosed counterpart of this letter, whereupon this
Agreement shall be a binding agreement between the Company and you.

                                       Very truly yours,


                                       PHOTOGEN TECHNOLOGIES, INC.

                                       By        John Smolik
                                         ----------------------------
                                                  President

                                       By      /s/ Eric Wachter
                                          ---------------------------
                                                  Secretary


AGREED TO AND ACCEPTED as of the date first above written.

FARCAP GROUP, LLC

By:     /s/ Yale Farar
   ------------------------------
      Yale Farar, Manager

<PAGE>
                                    Exhibit C

                               Indemnity Agreement

         The Company agrees to indemnify and hold harmless Farcap Group, LLC,
its agents and controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange
Act of 1934, as amended) (Farcap and each such other person are collectively
and individually referred to below as an "Indemnified Party") from and
against any and all loss, claim, damage, liability and expense whatsoever, as
incurred, including, without limitation, reasonable costs of any
investigation, legal and other fees and expenses incurred in connection with,
and any amounts paid in settlement of, any action, suit or proceeding or any
claim asserted, to which the Indemnified Party may become subject under any
applicable federal or state law (whether in tort, contract or on any other
basis) or otherwise, and related to the performance by the Indemnified Party
of the services contemplated by the Consulting Agreement to which this
Schedule is attached (the "Consulting Agreement") and will reimburse the
Indemnified Party for all expenses (including legal fees and expenses) as and
when they are incurred in connection with the investigation of, preparation
for or defense of any pending or threatened claim or any action or proceeding
arising therefrom, whether or not the Indemnified Party is a party and
whether or not such claim, action or proceeding is initiated or brought by
the Company. The Company will not be liable under the foregoing
indemnification provision to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court or arbitrator,
not subject to appeal or further appeal, to have resulted from the
Indemnified Party's bad faith or willful misconduct. The Company also agrees
that the Indemnified Party shall have no liability (whether direct or
indirect, in contract, tort or otherwise) to the Company related to, or
arising out of, the engagement of the Indemnified Party pursuant to, or the
performance by the Indemnified Party of the services contemplated by, the
Consulting Agreement except to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court or arbitrator,
not subject to appeal or further appeal, to have resulted from the
Indemnified Party's bad faith or willful misconduct.

         If, and only if, the indemnity provided above shall be unenforceable
or unavailable for any reason whatsoever, the Indemnified Party shall be
entitled to receive from the Company, or its successors and assigns,
contribution for all such indemnifiable losses, claims, damages, liabilities
and expenses (including, without limitation, all indemnifiable costs of any
investigation, legal or other fees and expenses incurred in connection with,
and any amounts paid in settlement of, any action, suit or proceeding or any
claim asserted) so that the Indemnified Party ultimately bears only such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and the Indemnified Party on the other in connection with the
acts or omissions which resulted in such losses, claims, damages, liabilities
or expenses; provided that in no event shall the Company contribute less than
the amount necessary to ensure that all Indemnified Persons, in the
aggregate, are not liable for any liabilities and expenses in excess of the
value of the warrants actually received by Consultant pursuant to the
Consulting Agreement.

         The Indemnified Party will give prompt written notice to the Company
of any claim for

<PAGE>

which it seeks indemnification hereunder, but the omission to so notify the
Company will not relieve the Company from any liability which it may
otherwise have hereunder except to the extent that the Company is damaged or
prejudiced by such omission or from any liability it may have other than
under this Exhibit C. The Company shall have the right to assume the defense
of any claim, lawsuit or action (collectively an "action") for which the
Indemnified Party seeks indemnification hereunder, subject to the provisions
stated herein with counsel reasonably satisfactory to the Indemnified Party.
After notice from the Company to the Indemnified Party of its election so to
assume the defense thereof, and so long as the Company performs its
obligations pursuant to such election, the Company will not be liable to the
Indemnified Party for any legal or other expenses subsequently incurred by
the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation. The Indemnified Party shall have the right
to employ separate counsel in any such action and to participate in the
defense thereof at its own expense; PROVIDED, HOWEVER, that the reasonable
fees and expenses of such counsel shall be at the expense of the Company if
the named parties to any such action (including any impleaded parties)
include both the Indemnified Party and the Company and the Indemnified Party
shall have reasonably concluded, based on written advice of counsel, that
there may be one or more legal defenses available to the Indemnified Party
which are different from, or in conflict with, any legal defenses which may
be available to the Company (in which event the Company shall not have the
right to assume the defense of such action on behalf of the Indemnified
Party, it being understood, however, that the Company shall not be liable for
the reasonable fees and expenses of more than one separate firm of attorneys
for all Indemnified Parties in each jurisdiction in which counsel is needed).
In addition to the Company's other obligations hereunder and without
limitation, the Company agrees to pay monthly, upon receipt of itemized
statements therefor, all reasonable fees and expenses of counsel incurred by
an Indemnified Party in defending any claim of the type set forth in the
preceding paragraphs or in producing documents, assisting in answering any
interrogatories, giving any deposition testimony or otherwise becoming
involved in any action or response to any claim relating to the engagement
referred to herein, or any of the matters enumerated in the preceding
paragraphs, whether or not any claim is made against an Indemnified Party or
an Indemnified Party is named as a party to any such action. In no event
shall any indemnifying party be liable in respect of any amounts paid in
settlement of any action unless the indemnifying party shall have approved
the terms of such settlement; provided that such consent shall not be
unreasonably withheld.