<PAGE>
                                       
                    OFFSHORE STOCK SUBSCRIPTION AGREEMENT

     This Stock Subscription Agreement (the "AGREEMENT"), dated _________ __, 
1998, is entered into by and between Biomagnetic Technologies, Inc., a 
California corporation (the "COMPANY"), and the undersigned purchaser (the 
"PURCHASER").

     The Company has offered for sale outside the United States (as such sale 
is defined in Regulation S ("REGULATION S") under the Securities Act of 1933, 
as amended (the "SECURITIES ACT")) to the Purchaser and others, shares of its 
common stock, no par value, pursuant to Regulation S.

     Capitalized terms used herein and not defined herein shall have the 
meanings given to them in Regulation S.

     The parties hereto agree as follows:

     1.   PURCHASE AND SALE OF SHARES.

          (a)  Upon the basis of the representations and warranties, and 
subject to the terms and conditions, set forth in this Agreement, the Company 
covenants and agrees to sell to the Purchaser on the Closing Date (as 
hereinafter defined), the number of shares of its common stock, no par value, 
set forth on the signature page hereof (the "SHARES"), at a price equal to 
$0.50 per share (the "PURCHASE PRICE"), and upon the basis of the 
representations and warranties, and subject to the terms and conditions, set 
forth in this Agreement, the Purchaser covenants and agrees to purchase from 
the Company on the Closing Date the Shares at the Purchase Price.

          (b)  The Shares that the Purchaser has agreed to purchase from the 
Company on the Closing Date at the Purchase Price of $0.50 per share are 
currently authorized shares of the Company's Common Stock.  Subsequent to the 
Closing Date, the Company may, subject to the approval of its shareholders, 
effectuate a 1-for-10 reverse stock split or such other adjustment as deemed 
appropriate by the Company's board of directors and shareholders by amending 
the Company's articles of incorporation.

     2.   Closing.  The closing of the purchase and sale of the Shares 
pursuant to Section 1 hereof (the "CLOSING") shall take place on or before 
_____________, at the offices of the Company, located at 9727 Pacific Heights 
Boulevard, San Diego, CA 92121 (such time and date for the closing, the 
"CLOSING DATE").  The certificates representing the Shares to be purchased by 
the Purchaser shall be delivered by, or on behalf of, the Company at the 
above-mentioned offices, against payment of the Purchase Price therefor in 
immediately available funds by, or on behalf of, the Purchaser to the 
Company's account (No. 422709) at Bank Julius Baer & Co., Ltd., New York 
Branch, 330 Madison Avenue, New York, NY 10017 or as otherwise instructed by 
the Company.  Delivery of such shares shall be in accordance with the 
instructions of the Purchaser, and in such names as the Purchaser shall 
instruct, subject to customary settlement procedures.

                                       
<PAGE>


     3.   REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE COMPANY.  The 
Company represents and warrants to, and agrees with, the Purchaser that:

          (a)  ORGANIZATION AND QUALIFICATION.  Each of the Company and 
Biomagnetic Technologies GmbH, a corporation organized under the laws of 
Germany (the "SUBSIDIARY"), is a corporation duly organized, validly existing 
and in good standing under the laws of its jurisdiction of incorporation and 
has full corporate power and authority to conduct its business as and to the 
extent now conducted and to own, use and lease its assets and properties.  
Each of the Company and its Subsidiary is duly qualified, licensed or 
admitted to do business and is in good standing in each jurisdiction in which 
the ownership, use or leasing of its assets and properties, or the conduct or 
nature of its business, makes such qualification, licensing or admission 
necessary, except for such failures to be so qualified, licensed or admitted 
and in good standing which, individually or in the aggregate, (i) are not 
having and could not be reasonably expected to have a material adverse effect 
on the Company and its Subsidiary taken as a whole, and (ii) could not be 
reasonably expected to have a material adverse effect on the validity or 
enforceability of this Agreement or on the ability of the Company to perform 
its obligations hereunder.  Except for the Subsidiary and Magnesensors Inc., 
the Company does not directly or indirectly own any equity or similar 
interest in, or any interest convertible into or exchangeable or exercisable 
for, any equity or similar interest in, any corporation, partnership, joint 
venture or other business association or entity.

          (b)  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as disclosed 
herein or in the Company SEC Reports (as defined in Section 3(f)) filed prior 
to the date of this Agreement and except that in March 1997, the Company's 
common stock was delisted from the NASDAQ National Market and now is quoted 
on the National Association of Securities Dealers, Inc.'s OTC Bulletin Board, 
(a) since December 31, 1997, there has not been any change, event or 
development having, or that could be reasonably expected to -have, 
individually or in the aggregate, a material adverse effect on the Company 
and its Subsidiary taken as a whole and (b) between such date and the date 
hereof, the Company and its Subsidiary have conducted their respective 
businesses only in the ordinary course consistent with past practice.

          (c)  VALIDITY OF THE AGREEMENT.  This Agreement has been duly 
authorized, executed and delivered by the Company and is a valid and binding 
agreement enforceable in accordance with its terms, subject to bankruptcy, 
insolvency, fraudulent transfer, reorganization, moratorium and similar laws 
of general applicability relating to or affecting creditors' rights generally 
and to general principles of equity; and the Company has full corporate power 
and authority necessary to enter into this Agreement and to perform its 
obligations hereunder.

          (d)  THE SHARES.  The Shares have been duly and validly authorized 
and on the Closing Date will be duly and validly issued, fully paid and 
nonassessable.

          (e)  REPORTING COMPANY.  The Company is a reporting company and has 
filed all reports required to be filed by Section 13(a) or 15(d) of the 
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") during the 
preceding 12 months and has been subject to such 

                                     -2-
<PAGE>

filing requirements for the past 90 days.  Its common stock is quoted on the 
National Association of Securities Dealers, Inc.'s OTC Bulletin Board.

          (f)  SEC REPORTS AND FINANCIAL STATEMENTS.  The Company delivered 
to the Purchaser prior to the execution of this Agreement a true and complete 
copy of each form, report, schedule, registration statement, definitive proxy 
statement and other document (together with all amendments thereof and 
supplements thereto) filed by the Company or its Subsidiary with the 
Securities and Exchange Commission (the "SEC") since September 30, 1995 (as 
such documents have since the time of their filing been amended or 
supplemented, the "COMPANY SEC REPORTS"), which are all the documents (other 
than preliminary material) that the Company and its Subsidiary were required 
to file with the SEC since such date.

          (g)  REGULATION S (all capitalized terms not defined herein shall 
have the meanings given to them in Regulation S).

               (i)   The sale of the Shares pursuant to this Agreement will 
be made in accordance with the provisions and requirements of Regulation S 
and any applicable state law.

               (ii)  The Company has not offered the Shares to any Person in 
the United States or to any identifiable groups of U.S. citizens abroad or to 
any U.S. Person.

               (iii) No offer to buy the Shares was made to the Company by 
any Person in the United States or by any U.S. Person.

               (iv)  None of the Company, its Subsidiary, or any 
Representative has engaged, or will engage, in any Directed Selling Efforts 
with respect to the Shares.

               (v)   The transactions contemplated by this Agreement (A) have 
not been pre-arranged by the Company with a purchaser which is in the United 
States or is a U.S. Person; and (B) are not part of a plan or scheme of the 
Company to evade the registration provisions of the Securities Act.

               (vi)  The Company has not issued, and after the Closing Date 
will not issue, any stop transfer order or other order impeding the sale and 
delivery of the Shares except for a stop order restricting the sale of the 
Shares into the United States or to, or for the account or benefit of, U.S. 
Persons during the Restricted Period (as hereinafter defined); provided, 
however, that in the event that the SEC promulgates any revision to, or 
issues any release reinterpreting, Regulation S which affects this Agreement, 
the Company may issue such stop transfer order as is necessary to comply with 
such revision or release.

               (vii) The Company has not offered to sell or sold any warrants 
exercisable or convertible into its common stock in a transaction involving 
Regulation S in the past year; and there are no outstanding warrants 
exercisable or convertible into its common stock which have been sold in a 
transaction involving Regulation S.

                                     -3-
<PAGE>

     4.   REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASER.  The 
Purchaser understands, and represents and warrants to, and agrees with, the 
Company, that:

          (a)  The Purchaser understands that no federal or state agency has 
passed on or made any recommendation or endorsement of the Shares.

          (b)  The Purchaser acknowledges that, in making the decision to 
purchase the Shares, it has relied solely upon independent investigations 
made by it and not upon any representations made by the Company with respect 
to the Company or the Shares.  The Purchaser acknowledges that it is a 
sophisticated investor and that an investment in the Shares involves a high 
degree of risk. The Purchaser further acknowledges that the Purchase Price 
may or may not exceed the latest publicly quoted per share "asked" price of 
the Company's common stock.

          (c)  The Purchaser acknowledges that the Company is relying upon 
the truth and accuracy of the representations, warranties and covenants of 
the Purchaser made herein in selling the Shares hereunder without 
registration and in reliance upon Regulation S promulgated under the 
Securities Act.  The Purchaser is familiar with Regulation S and has 
consulted with legal counsel familiar with Regulation S in connection with 
this transaction.

          (d)  The Purchaser is not a U.S. Person (as defined in Regulation 
S) or an affiliate of the Company, and is not acquiring the securities for 
the account or benefit of any U.S. person.

          (e)  No offer of the Shares was made to the Purchaser in the United 
States.

          (f)  At the time the offer and buy orders for the Shares were 
originated, including, without limitation, at the time the Purchaser executed 
and delivered this Agreement and otherwise subscribed for or agreed to 
purchase the Shares, the Purchaser was located outside the United States.

          (g)  None of the Purchaser, any affiliate of the Purchaser, or any 
Person acting on behalf of the Purchaser or any such affiliate has engaged, 
or will engage, in any Directed Selling Efforts with respect to the Shares; 
and the Purchaser and its affiliates have complied, and will comply, with the 
Offering Restrictions (as defined in Regulation S), and any other 
requirements, of Regulation S.

          (h)  The Purchaser is aware that the Shares have not been and will 
not be registered under the Securities Act and may only be offered or sold 
pursuant to registration under the Securities Act or an available exemption 
therefrom.

          (i)  The Purchaser:

               (A)   will not, during the period commencing on the Closing Date
     and ending one year after the Closing Date (the "Restricted Period"), offer
     or sell the Shares in the United States, to a U.S. Person or for the 
     account or benefit of a U.S. Person or 

                                     -4-
<PAGE>

     other than in accordance with the provisions of Regulation S (Section 
     230.901 through Section 230.905, and Preliminary Notes);

               (B)   will, after the expiration of the Restricted Period,
     offer, sell, pledge or otherwise transfer the Shares only pursuant to
     registration under the Securities Act or an available exemption therefrom
     and, in any case, in accordance with applicable state securities laws; and

               (C)   at all times agrees not to engage in hedging transactions
     with regard to such securities unless in compliance with the Securities
     Act.

          (j)  If the Purchaser offers and sells the Shares during the 
Restricted Period, then it will do so only in accordance with the provisions 
of Regulation S, pursuant to registration of the Shares under the Securities 
Act, or pursuant to an available exemption from the registration requirements 
of the Securities Act.

          (k)  The transactions contemplated by this Agreement:

               (A)   have not been pre-arranged with a purchaser who is located
     in the United States or is a U.S. Person; and

               (B)   are not part of a plan or scheme to evade the registration
     provisions of the Securities Act.

          (l)  The Purchaser is purchasing the Shares for its own account for 
the purpose of investment and not (A) with a view to, or for sale in 
connection with, any distribution thereof or (B) for the account or on behalf 
of any U.S. Person.  The Purchaser understands, acknowledges and agrees that 
it must bear the economic risk of its investment in the Shares for an 
indefinite period of time and that prior to any offer or sale of such 
securities, the Company may require, as a condition to effecting a transfer 
of the Shares, an opinion of counsel to Purchaser, acceptable to the Company, 
as to the registration or exemption therefrom under the Securities Act.

          (m)  The Purchaser was not formed specifically for the purpose of 
acquiring the Shares purchased pursuant to this Agreement, and if a 
corporation, all corporate action on its part, necessary for the 
authorization, execution, delivery and performance of the Purchaser's 
obligations under this Agreement has been or shall be taken prior to the 
closing of this transaction, and this Agreement, when executed and delivered, 
shall constitute a valid and legally binding obligation of the Purchaser 
enforceable against the Purchaser in accordance with its terms.

          (n)  If the Purchaser is a corporation or trust or other entity, the
officer or trustee or other person executing this Agreement represents and
warrants that he or she is duly authorized to so sign this Agreement and to
consummate the transactions contemplated hereby and that the Purchaser is
authorized by its governing documents to make this investment.  The Purchaser
has such knowledge and experience in financial and business matters that it is
capable 

                                      -5-
<PAGE>

of evaluating the merits and risks of an investment in the Shares, and it is 
able to bear the economic risk of losing up to the entire amount of its 
investment therein.

          (o)  Neither the Purchaser nor any of its affiliates directly or 
indirectly have within the past ninety (90) days nor will such persons for a 
period of one year from the Closing directly or indirectly enter into any 
short selling of any equity security of the Company (including, without 
limitation, the common stock of the Company) or any hedging transaction with 
respect to any equity security of the Company, including without limitation, 
puts, calls, or other option transactions, option writing and equity swaps, 
unless in compliance with the Securities Act.

          (p)  Purchaser understands and agrees that each certificate or 
other document evidencing any of the Shares shall be endorsed with the 
legends set forth below, and the Purchaser covenants that the Purchaser shall 
not transfer the shares represented by any such certificate without complying 
with the restrictions on transfer described in the legends endorsed on such 
certificate and understands that the Company shall refuse to register any 
transfer of Shares not complying with the following legend:

               (i)   "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
               HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
               1933, AS AMENDED (THE "SECURITIES ACT"), AND HAVE BEEN
               SOLD IN RELIANCE ON THE EXEMPTION FROM REGISTRATION
               PROVIDED BY REGULATION S UNDER THE SECURITIES ACT
               ("REGULATION S").  THE SECURITIES REPRESENTED BY THIS
               CERTIFICATE MAY NOT BE OFFERED OR SOLD, DIRECTLY OR
               INDIRECTLY, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
               REGULATIONS S (Section 230.901 THROUGH Section
               230.905, AND PRELIMINARY NOTES), PURSUANT TO
               REGISTRATION UNDER THE SECURITIES ACT OR COMPLIANCE
               WITH RULE 144 PROMULGATED UNDER THE SECURITIES ACT OR
               ANOTHER AVAILABLE EXEMPTION THEREFROM, OR UNLESS THE
               COMPANY HAS RECEIVED AN OPINION OF COUNSEL, REASONABLY
               SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
               REGISTRATION IS NOT REQUIRED.  HEDGING TRANSACTIONS
               INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
               IN COMPLIANCE WITH THE SECURITIES ACT."

               (ii)  "THE SHARES REPRESENTED HEREBY ARE 

                                      -6-
<PAGE>

               SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN A CERTAIN
               OFFSHORE STOCK SUBSCRIPTION AGREEMENT, AS AMENDED FROM
               TIME TO TIME.  THE COMPANY WILL UPON WRITTEN REQUEST
               FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF
               WITHOUT CHARGE."

               (iii) Any other legend required by law.

          (q)  Purchaser represents that, on the basis of any actions and 
agreements by it, except as expressly agreed to in writing by the Company, 
there are no brokers or finders entitled to compensation in connection with 
the sale of the Shares to the Purchasers.

          (r)  Purchaser understands that as a result of the purchase of the 
Shares hereunder, Purchaser may be subject to certain reporting requirements, 
including without limitation, the filing of reports pursuant to Rule 13d-1 of 
the Securities Exchange Act of 1934, immediately following the Closing. 
Purchaser agrees to comply with and consult with independent counsel 
regarding any such obligations.

          Purchaser understands and agrees that pursuant to Regulation S, 
each distributor selling securities to a distributor, a dealer (as defined in 
section 2(a)(12) of the Securities Act), or a person receiving a selling 
concession, fee or other remuneration in respect of the securities sold, 
prior to the expiration of a one-year distribution compliance period, must 
send a confirmation or other notice to the purchaser stating that the 
purchaser is subject to the same restrictions on offers and sales that apply 
to a distributor.

          Purchaser has received and reviewed the capitalization and option 
vesting table attached hereto as Schedule A, updated as of May 15, 1998, and 
incorporated herein by this reference.

     5.   ADDITIONAL COVENANTS OF THE COMPANY.  The Company covenants and 
agrees with the Purchaser as follows:

          (a)  REGULATION S.  The Company shall:

               (i)   continue to comply with all applicable reporting 
requirements of the Exchange Act;

               (ii)  refrain from offering to sell or selling any shares of 
common stock, or warrants or other securities convertible into its common 
stock, in a transaction involving Regulation S for a period of 180 days 
following the Closing Date;

                                      -7-
<PAGE>

               (iii) ensure that all Offering Restrictions applicable to the 
sale of Shares pursuant to this Agreement are thoroughly implemented, 
complied with and satisfied; and

               (iv)  refrain from engaging in any Directed Selling Efforts 
with respect to the Shares.

          (b)  ORDINARY COURSE.  Until the Closing, the Company and its 
Subsidiary shall conduct their respective businesses only in, and neither the 
Company nor its Subsidiary shall take any action except in, the ordinary 
course consistent with past practice.

     6.   ADDITIONAL COVENANTS OF THE PURCHASER.  The Purchaser covenants and 
agrees that at all times prior to the Closing and thereafter, the Purchaser 
will hold, and will use its best efforts to cause its Representatives to 
hold, in strict confidence, unless (i) compelled to disclose by judicial or 
administrative process or by other requirements of applicable Laws of 
Governmental or Regulatory Authorities (including, without limitation, in 
connection with obtaining the necessary approvals of this Agreement or the 
transactions contemplated hereby of Governmental or Regulatory Authorities), 
or (ii) disclosed in an action or proceeding brought by a party hereto in 
pursuit of its rights or in the exercise of its remedies hereunder, all 
documents and information concerning trade secrets of the Company and its 
Subsidiary furnished to it by the Company or its Representatives in 
connection with this Agreement or the transactions contemplated hereby, 
except to the extent that such documents or information can be shown to have 
been (A) previously known by the Purchaser or its Representatives, (B) in the 
public domain (either prior to or after the furnishing of such documents or 
information hereunder) through no fault of the Purchaser and its 
Representatives or (C) later acquired by the Purchaser or its Representatives 
from another source, provided that such source is under no obligation to keep 
such documents and information confidential.  In the event that this 
Agreement is terminated without the transactions contemplated hereby having 
been consummated, upon the request of the Company, the Purchaser will, and 
will cause its Representatives to, promptly (and in no event later than five 
(5) days after such request) redeliver or cause to be redelivered all copies 
of such documents and information furnished by the Company or its 
Representatives to the Purchaser and its Representatives in connection with 
this Agreement or the transactions contemplated hereby and destroy or cause 
to be destroyed all notes, memoranda, summaries, analyses, compilations and 
other writings rlated thereto or based thereon prepared by the Purchaser or 
its Representatives.

     7.   FEES AND EXPENSES.  Except as set forth in Section 12(b), each of 
the Purchaser and the Company agrees to pay its own expenses incident to the 
performance of its obligations hereunder, including, but not limited to, the 
fees, expenses and disbursements of such party's counsel.

     8.   DEFINITIONS.  As used in this Agreement, the following defined 
terms shall have the meanings indicated below:

          (a)  "GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, 
tribunal, arbitrator, authority, agency, commission, official or other 
instrumentality of the United States, any foreign country or any state, 
county, city or other political subdivision.

                                      -8-
<PAGE>

          (b)  "LAW" means all laws, statutes, rules, regulations, ordinances 
and other pronouncements having the effect of law of the United States, any 
foreign country or any domestic or foreign state, county, city or other 
political subdivision or of any Governmental or Regulatory Authority.

          (c)  "LIEN" means any lien, claim, mortgage, encumbrance, pledge, 
security interest, equity or charge of any kind.

          (d)  "PERSON" means any natural person, corporation, general 
partnership, limited partnership, proprietorship, other business 
organization, trust, union, association or Governmental or Regulatory 
Authority.

          (e)  "REPRESENTATIVE" means any officer, director, employee, 
investment banker, financial advisor, attorney, accountant, agent or other 
Person retained by or acting for or on behalf of the Company or its 
Subsidiary or the Purchaser.

     9.   INDEMNIFICATION.

          (a)  In the event the Purchaser becomes involved in any capacity in 
any action, proceeding or investigation in connection with any matter 
referred to or relating to this Agreement (except as expressly provided for 
in paragraph (c) of this Section 9), the Company will reimburse the Purchaser 
for its reasonable legal and other expenses (including the cost of any 
investigation and preparation) incurred in connection therewith, as such 
expenses are incurred, and will indemnify and hold the Purchaser harmless 
from and against any losses, claims, damages or liabilities to which it may 
become subject in connection with any such action, proceeding, investigation 
or matter, unless such expenses, loss, claim, damage or liability results 
primarily from the Purchaser's gross negligence, recklessness or bad faith in 
connection with the subject of this Agreement.

          (b)  In the event that the Company becomes involved in any capacity 
in any action, proceeding or investigation in connection with any matter 
referred to or relating to this Agreement (except as expressly provided for 
in paragraph (c) of this Section 9), the Purchaser will reimburse the Company 
for its reasonable legal and other expenses (including the cost of any 
investigation and preparation) incurred in connection therewith, as such 
expenses are incurred, and will indemnify and hold the Company harmless from 
and against any losses, claims, damages or liabilities to which it may become 
subject in connection with any such action, proceeding, investigation or 
matter, to the extent, but only to the extent, that such loss, claim, damage 
or liability results primarily from the Purchaser's gross negligence, 
recklessness or bad faith in connection with the subject of this Agreement.

          (c)  Promptly after receipt by an indemnified party under this 
Section 9 of notice of the commencement of any action, such indemnified party 
shall notify the indemnifying party in writing of the commencement thereof; 
but the omission to so notify the indemnifying party shall not relieve the 
indemnifying party from any liability which it may have pursuant to this 
Section 9 unless, due to the failure to be so notified, the indemnifying 
party is unable to contest the losses or claims indemnified against, and such 
omission shall in no event relieve the 

                                      -9-
<PAGE>

indemnifying party from any liability which it may have to any indemnified 
party otherwise than under this Section 9.  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 therein and, to the extent that it may elect by written notice 
delivered to such indemnified party promptly after receiving the aforesaid 
notice from such indemnified party, to assume the defense thereof with 
counsel reasonably satisfactory to such indemnified party (who shall not, 
except with the consent of the indemnified party, which consent shall not be 
unreasonably withheld, be counsel to the indemnifying party); 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 that there may be legal defenses available to it 
and/or other indemnified parties which are different from or additional to 
those available to the indemnifying party, the indemnified party or parties 
shall have the right to select separate counsel to assert such legal defenses 
and otherwise to participate in the defense of such action on behalf of such 
indemnified party or parties.  Upon receipt of notice from the indemnifying 
party to such indemnified party of its election so to assume the defense of 
such action and approval by the indemnified party of counsel, the indenifying 
party will not be liable to such indemnified party under this Section 9 for 
any legal or other expenses subsequently incurred by such indemnified party 
in connection with the defense thereof unless (i) the indemnified party shall 
have employed separate counsel in connection with the assertion of legal 
defenses in accordance with the proviso to the next preceding sentence (it 
being understood, however, that the indemnifying party shall not be liable 
for the expenses of more than one separate counsel for each indemnified 
party), (ii) the indemnifying party shall not have employed counsel 
reasonably satisfactory to the indemnified party to represent the indemnified 
party within a reasonable time after notice of commencement of the action or 
(iii) the indemnifying party has authorized the employment of counsel for the 
indemnified party at the expense of the indemnifying party; provided further, 
however, that, if clause (i) or (iii) is applicable, such liability shall be 
only in respect of the counsel referred to in such clauses (i) or (iii).

     10.  SURVIVAL OF THE REPRESENTATIONS, WARRANTIES, ETC.  The respective 
agreements, representations, warranties, indemnities and other statements 
made by or on behalf of the Company and the Purchaser, respectively, pursuant 
to this Agreement, shall remain in full force and effect, regardless of any 
investigation made by or on behalf of the other party to this Agreement or 
any officer, director or employee of, or Person controlling or under common 
control with, such party and will survive delivery of and payment for the 
Shares.

     11.  NOTICES.  All communications hereunder shall be in writing, and, if 
sent to the Purchaser shall be sufficient in all respects if delivered, sent 
by registered United States mail, or by telecopy and confirmed to the 
Purchaser at:

          The address or telecopier number
          shown on the counterpart
          signature page of this Agreement;

or, if sent to the Company, shall be delivered, sent by registered United 
States mail or by telecopy and confirmed to the Company at:

                                      -10-
<PAGE>


          Mr. D. Scott Buchanan
          President and CEO
          Biomagnetic Technologies, Inc.
          9727 Pacific Heights Boulevard
          San Diego, CA 92121
          Telecopy:  (619) 458-5698.

     12.  TERMINATION.

          (a)  This Agreement may be terminated, and the transactions 
contemplated hereby may be abandoned:

               (i)   at any time before the Closing, by mutual written 
agreement of Company and the Purchaser;

               (ii)  at any time before the Closing, by the Company or the 
Purchaser, in the event (A) of a material breach hereof by the 
non-terminating party if such non-terminating party fails to cure such breach 
within ten (10) business days following notification thereof by the 
terminating party or (B) 10 business days after notification of the 
non-terminating party by the terminating party that the satisfaction of any 
condition to the terminating party's obligations under this Agreement becomes 
impossible or impracticable with the use of commercially reasonable efforts 
if the failure of such condition to be satisfied is not caused by a breach 
hereof by the terminating party; provided, that the other party may within 
such ten (10) business days cure by satisfying or demonstrating the 
satisfiability of such condition; or

               (iii) at any time after the Closing by the Company.

          (b)  If this Agreement is validly terminated pursuant to Section 
12(a), this Agreement will forthwith become null and void, and there will be 
no liability or obligation on the part of Company or the Purchaser (or any of 
their respective officers, directors, employees, agents or other 
representatives or affiliates), except as provided in the next succeeding 
sentence and except that the provisions with respect to confidentiality in 
Section 6 and expenses in Section 7 will continue to apply following any such 
termination. Notwithstanding any other provision in this Agreement to the 
contrary, upon termination of this Agreement pursuant to Section 12(a), the 
Company will remain liable to the Purchaser for any breach of this Agreement 
by the Company existing at the time of such termination, and the Purchaser 
will remain liable to the Company for any breach of this Agreement by the 
Purchaser existing at the time of such termination, and the Company or the 
Purchaser may seek such remedies, including damages and fees of attorneys, 
against the other with respect to any such breach as are provided in this 
Agreement or as are otherwise available at Law or in equity.

     13.  MISCELLANEOUS.

          (a)  This Agreement may be executed in one or more counterparts and 
it is not necessary that signatures of all parties appear on the same 
counterpart, but such counterparts together shall constitute but one and the 
same agreement.

                                      -11-
<PAGE>

          (b)  This Agreement shall inure to the benefit of and be binding 
upon the parties hereto, their respective successors and, with respect to 
Section 9 hereof, the officers, directors and controlling Persons thereof and 
each Person under common control therewith, and no other Person shall have 
any right or obligation hereunder.

          (c)  This Agreement shall be governed by, and construed in 
accordance with, the laws of the State of California and the United States, 
without regard to conflicts of laws principles.

          (d)  The headings of the sections of this document have been 
inserted for convenience of reference only and shall not be deemed to be a 
part of this Agreement.

          (e)  The Company may reject this subscription, or any subscription 
for any reason or no reason, in its absolute discretion and without incurring 
any liability to Purchaser.

          (f)  This Agreement states and comprises the entire agreement 
between the parties and shall supersede and replace any and all prior 
agreements between the parties and may be amended only by written instrument 
signed by both parties.

          (g)  If any provision of this Agreement shall be judicially 
determined to be invalid, illegal or unenforceable, the validity, legality 
and enforceability of the remaining provisions shall not in any way be 
affected or impaired thereby.

          (h)  Each party to this Agreement shall use its best efforts to 
cause the Closing to occur and 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 hereto 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.

          (i)  All references to "dollars" or "$" in this Agreement shall be 
deemed to refer to United States dollars.

          (j)  If any action at law or in equity is necessary to enforce or 
interpret the terms of this Agreement, the prevailing party shall be entitled 
to reasonable attorneys' fees, costs and necessary disbursements in addition 
to any other relief to which such party may be entitled.

                                      -12-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered 
this Agreement, all as of the day and year first above written.

                                   BIOMAGNETIC TECHNOLOGIES, INC.

                                   By:
                                      -------------------------------------
                                        D. Scott Buchanan
                                        President and CEO

PURCHASER:

-------------------------------------------------------------------------------
 Print name of Purchaser.  If a corporation, the appropriate officer or
 officers must sign.

-------------------------------------------------------------------------------
 Number of Shares (of the Company's common stock, no par value) subscribed for

-------------------------------------------------------------------------------
 Address of Purchaser

-------------------------------------------------------------------------------
 Address of Purchaser (continued)

-------------------------------------------------------------------------------
 Telephone Number of Purchaser

-------------------------------------------------------------------------------
 Telecopy Number of Purchaser

-------------------------------------------------------------------------------
 Signature(s)

-------------------------------------------------------------------------------
 Print name(s) and title(s)


                                       
                             [SIGNATURE PAGE FOR 
                    OFFSHORE STOCK SUBSCRIPTION AGREEMENT]