Unassociated Document


    SECURITIES
      PURCHASE AGREEMENT

    


    This
      Agreement dated as of October 2, 2007 is entered into by and between Myotech,
      LLC, a New York limited liability company (the “Company”) and Biophan
      Technologies, Inc., a Nevada corporation (the “Purchaser”).

    


    

      WHEREAS,
        the
        Purchaser currently owns 5,408,194 Class A Units of the Company (the “Class A
        Units”) in accordance with that certain Amended and Restated Operating Agreement
        of the Company, effective as of December, 2005 (the “Operating Agreement”) and
        pursuant to a Securities Purchase Agreement effective as of December, 2005
        (the
“Original Purchase Agreement”); and 

    

    

      WHEREAS,
        the
        Purchaser desires to increase its ownership interest in the Company by receiving
        and purchasing additional Class A Units, and the Company desires to issue
        and
        sell additional Class A Units to the Purchaser pursuant to, and in accordance
        with, this Agreement; and

    

    

      WHEREAS,
        in
        connection with the execution and delivery of this agreement the Purchaser
        and
        the Company wish to further amend and restate the Operating Agreement (as
        so
        amended and restated, the “Amended Operating Agreement”).

    

    

      NOW,
        THEREFORE,
        in
        consideration of the mutual promises and covenants contained in this Agreement,
        the parties hereto agree as follows:

    

     

    1.
       Sale
      of Units.

     

    1.1
       Initial
      Sale of Units. The
      Company hereby agrees to sell and issue to the Purchaser on the Initial Closing
      Date and the Purchaser hereby unconditionally agrees to purchase from the
      Company on the Initial Closing Date an aggregate of 5,000,000 Class A Units
      (the
“Initial Closing”) in exchange for prior consideration provided by the Purchaser
      to the Company. 

    


    1.2
       Second
      Sale of Units. 

    


    (a) Subject
      to the terms and conditions of this Agreement, the Company hereby agrees to
      sell
      and issue to the Purchaser and the Purchaser hereby unconditionally agrees
      to
      purchase for cash, an aggregate of 4,316,547 Class A Units for an aggregate
      purchase price equal to $1,200,000 (the “Second Purchase Price”). The Purchaser
      shall pay the Company (a) $100,000 of the Second Purchase Price upon execution
      of this Agreement, (b) $100,000 of the Second Purchase Price on or before
      October 12, 2007, and (c) the remaining $1,000,000 of the Second Purchase Price,
      subject to adjustment in accordance with Section 1.2(b), on or before the
      earlier of: (i) November 1, 2007, or (ii) the date that is five days after
      the
      closing of the transactions contemplated by that certain
      Intellectual Property Assignment Agreement, dated August 6, 2007, by and between
      the Purchaser and Medtronic, Inc. Payments of the Second
      Purchase Price shall be made by wire transfer of immediately available funds
      to
      an account designated by the Company. Promptly following receipt by the Company
      of the total Second Purchase Price payments, but in no event later than three
      (3) business days after such receipt, the Company shall deliver to Purchaser
      a
      certificate representing the applicable number of Class A Units based upon
      a
      purchase price per unit equal to $0.2780 (the “Second
      Closing”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) The
      Purchaser will assume and will indemnify the Company from and against the
      accounts payables of the Company, listed on Schedule 1.2(b) to this Agreement
      The dollar amount of the obligations assumed by the Purchase in accordance
      with
      this Section 1.2(b) shall be deducted from the final payment with respect to
      the
      Second Purchase Price pursuant to Section 1.2(a). All accounts payable
      designated as critical shall be paid or otherwise satisfied within ten business
      days of the date that the final payment with respect to the Second Purchase
      Price is due and the remaining accounts payable shall be paid or otherwise
      satisfied within 30 business days of the date that the final payment with
      respect to the Second Purchase Price is due.

    


    (c) Except
      for the payment of existing accounts payables of the Company, pursuant to
      Section 1.2(b), the proceeds to the Company of the Second Purchase Price will
      be
      used for product development and other general corporate purposes. 

    


    1.3
       Third
      Sale of Units. 

    


    (a) Subject
      to the terms and conditions of this Agreement, the Company hereby agrees that,
      upon completion of the Third Closing Obligations (as defined below) the Company
      agrees to sell and issue to the Purchaser and the Purchaser hereby
      unconditionally agrees to purchase for cash, an aggregate of 6,180,000 Class
      A
      Units for an aggregate purchase price equal to $2,000,000 (the “Third Purchase
      Price”). Within ten (10) days following receipt of notice from the Company of
      completion by the Company of the Third Closing Obligations, the Company shall
      sell and issue to the Purchaser 6,180,000 Class A Units and the Purchaser shall
      pay the Company $200,000 of the Third Purchase Price and make an additional
      nine
      payments of $200,000 on each monthly anniversary thereafter. Promptly following
      receipt by the Company of the aggregate Third Purchase Price payments, but
      in no
      event later than three (3) business days after such receipt, the Company shall
      deliver to Purchaser a certificate representing the applicable number of Class
      A
      Units based upon a purchase price per unit equal to $0.3236 (the “Third
      Closing”).

     

    (b)
       The
      “Third Closing Obligations” mean that the Company shall have developed (i) a
      detailed product development plan, and (ii) a detailed monthly budget, which
      plan and budget shall set forth appropriate quarterly milestones.
      Notwithstanding any provision herein to the contrary, the Purchaser shall have
      the right to waive the Third Closing Obligations and call the Third
      Closing.

    


    1.4
       Future
      Offerings.
      

    


    (a) The
      Company hereby agrees that it will not conduct any equity financing (“Future
      Offerings”) unless it shall have first delivered to the Purchaser, at least
      twenty (20) business days prior to the closing of such Future Offering, written
      notice describing the proposed Future Offering, including the terms and
      conditions thereof and providing the Purchaser an option during the fifteen
      (15)
      day period following delivery of such notice to purchase that number of the
      securities being offered in the Future Offering that the primary purchaser
      of
      such securities has agreed to permit the Purchaser to purchase, on the same
      terms as contemplated by such Future Offering. In the event the terms and
      conditions of a proposed Future Offering are amended in any material respect
      after delivery of the notice to the Purchaser concerning the proposed Future
      Offering, the Company shall deliver a new notice to the Purchaser describing
      the
      amended terms and conditions of the proposed Future Offering and the Purchaser
      thereafter shall have an option during the fifteen (15) day period following
      delivery of such new notice to purchase the number of the securities being
      offered that the primary purchaser of such securities has agreed to permit
      the
      Purchaser to purchase, on the same terms as contemplated by such proposed Future
      Offering, as amended. The foregoing sentence shall apply to successive material
      amendments to the terms and conditions of any proposed Future
      Offering. 

     

    
      
        
        

      

      
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    (b) If
      the
      Company, at any time within a 12-month period following the Third Closing Date
      agrees to (and thereafter closes upon) any financing based upon a Class A Unit
      per unit purchase price lower than $0.3236, but higher than $0.2780, then the
      number of Class A Units issued in connection with the Third Closing shall be
      increased to such number that the effective purchase price for such Units is
      the
      same as the purchase price for the Class A Units issued in such subsequent
      financing.. Such adjustment shall be made whenever during such 12 month period
      Class A Units are issued for such lower price in accordance with such
      agreements. The Company shall notify the Purchaser in writing, no later than
      one
      (1) business day following the issuance of any Class A Units subject to this
      Section, indicating therein the applicable issuance price and other pricing
      terms. No adjustment under this Section shall be made as a result of issuances
      of securities in connection with any option plan that has been approved by
      the
      Board of Directors of the Company prior to the date of the Securities Purchase
      Agreement, pursuant to which the Company’s securities may be issued to any
      employee, consultant, officer or director for services provided to the
      Company.

    


    (c) If
      the
      Company, at any time within a 12-month period following the Third Closing Date
      agrees to (and thereafter closes upon) any financing based upon a Class A Unit
      per unit purchase price lower than $0.2780, then the number of Class A Units
      issued in connection with the Second Closing and the Third Closing shall be
      increased to such number that the effective purchase price for the Units issued
      to Purchaser is the same as the purchase price for the Class A Units issued
      in
      such subsequent financing.. Such adjustment shall be made whenever during such
      12 month period Class A Units are issued for such lower price in accordance
      with
      such agreements. The Company shall notify the Purchaser in writing, no later
      than one (1) business day following the issuance of any Class A Units subject
      to
      this Section, indicating therein the applicable issuance price, and other
      pricing terms. No adjustment under this Section shall be made as a result of
      issuances of securities in connection with (i) any option plan that has been
      approved by the Board of Directors of the Company, pursuant to which the
      Company’s securities may be issued to any employee, consultant, officer or
      director for services provided to the Company, or (ii) the exercise of any
      options or warrants issued by the Company prior to the Third Closing
      Date.

     

    
      
        
        

      

      
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    2.
       Closings.

     

    2.1
       The
      Initial Closing.
      Subject
      to the terms and conditions of this Agreement, the Initial Closing of the sale
      and purchase of the Class A Units under this Agreement shall take place at
      the
      offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, New York, New
      York
      10006, simultaneously with the execution and delivery hereof or such other
      time
      and place as mutually agreed between the Company and the Purchaser (the “Initial
      Closing Date”). The conditions to the execution of this Agreement and/or the
      Initial Closing are as follows:

     

    (a)
       On
      or
      before the Initial Closing Date, the Company, along with the holders of its
      outstanding Class A Units, as members of the Company, shall execute and deliver
      the Second Amended and Restated Operating Agreement to the Purchaser, in the
      form attached hereto as Exhibit A (the “Amended & Restated Operating
      Agreement”);

     

    (b)
       On
      or
      before the Initial Closing Date, the Company shall deliver to the Purchaser
      certificates or other reasonably satisfactory confirmation, as of the most
      recent practicable dates as to the corporate good standing of the Company issued
      by the Secretary of State of the State of New York;

     

    (c)
       On
      or
      before the Initial Closing Date, the Company shall deliver to the Purchaser
      the
      Articles of Organization of the Company, as amended and in effect as of the
      Initial Closing Date, which, if it is reasonably practicable to do so, shall
      be
      certified by the Secretary of State of the State of New York;

     

    (d)
       Upon
      the
      execution of this Agreement, the Company shall deliver to the Purchaser a
      Certificate of the Secretary of the Company attesting as to (A) the signatures
      and titles of the officers of the Company executing this Agreement or any of
      the
      other agreements to be executed and delivered by the Company at the Initial
      Closing, and (B) resolutions of the Board of Directors and those members of
      the
      Company whose authorization and approval is required under the Operating
      Agreement, authorizing and approving all matters in connection with this
      Agreement and the transactions contemplated hereby;

     

    (e)
       Upon
      the
      execution of this Agreement, the Company shall deliver to the Purchaser a
      Certificate, executed by an officer and/or managing member of the Company and
      dated as of the Initial Closing representing that (i) each representation and
      warranty of the Company contained in Section 3 shall be true and complete on
      and
      as of the date of the Initial Closing with the same effect as though such
      representation and warranty had been made on and as of that date (for purposes
      of clarity, the Purchaser shall not be required to consummate the purchase
      of
      the Class A Units at the Initial Closing if there is a material adverse change
      to any representation or warranty on the date of the Initial Closing), (ii)
      all
      consents and approvals required to be obtained by the Company have been
      obtained, and (iii) all closing conditions required to be performed by the
      Company have been performed as of the Initial Closing;

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (f) 
      Within
      one business day following the Initial Closing Date, the Company shall deliver
      to the Purchaser a certificate representing 5,000,000 Class A
      Units.

     

    (g)
       Upon
      the
      execution of this Agreement, the Purchaser shall deliver to the Company a
      Certificate of the Secretary of the Purchaser attesting as to (A) the signatures
      and titles of the officers of the Purchaser executing this Agreement or any
      of
      the other agreements to be executed and delivered by the Purchaser at the
      Initial Closing, and (B) resolutions of the Board of Directors of the Purchaser
      whose authorization and approval is required under its certificate of
      incorporation, bylaws and other documents and agreements to which it is a party
      or by which it is bound authorizing and approving all matters in connection
      with
      this Agreement and the transactions contemplated hereby;

    


    2.2
       The
      Second Closing.
      Subject
      to the terms and conditions of this Agreement, the Second Closing of the sale
      and purchase of the Class A Units under this Agreement shall take place at
      the
      offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, New York, New
      York
      10006, upon payment of the aggregate Second Purchase Price or such other time
      and place as mutually agreed between the Company and the Purchaser (the “Second
      Closing Date”). The Company shall revise and update the deliverables set forth
      in Sections 2.1(b), 2.1(c), 2.1(d) and 2.1(e) for the Second Closing and the
      Purchaser shall revise and update the deliverables set forth in Section 2.1(g)
      for the Second Closing.

     

    2.3
       The
      Third Closing.
      Subject
      to the terms and conditions of this Agreement, the Third Closing of the sale
      and
      purchase of the Class A Units under this Agreement shall take place at the
      offices of Sichenzia Ross Friedman Ference LLP, 61 Broadway, New York, New
      York
      10006, upon payment of the aggregate Third Purchase Price or such other time
      and
      place as mutually agreed between the Company and the Purchaser (the “Third
      Closing Date”). The Company shall revise and update the deliverables set forth
      in Sections 2.1(b), 2.1(c), 2.1(d) and 2.1(e) for the Second Closing and the
      Purchaser shall revise and update the deliverables set forth in Section 2.1(g)
      for the Third Closing.

     

    2.4
       Purchaser's
      Failure to Fund.

     

    (a)
       In
      the
      event the Purchaser fails to remit funds in accordance with the requirements
      herein with respect to the Second Closing, then the Purchaser shall return
      to
      the Company all of the Units that have been issued to it pursuant to Sections
      1.1 and 1.2 of this Agreement, which Units shall be deemed to have been
      cancelled. 

     

    
      
        
        

      

      
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    (b)
       In
      the
      event the Purchaser fails to remit funds in accordance with the requirements
      herein with respect to the Second Closing or the Third Closing after a three
      day
      grace period (a "Funding Default"), then the Company shall have the right,
      at
      its option (which may be exercised by the members of the Company’s Board of
      Directors who are appointed by the Non-Biophan Founders (as defined in the
      Amended Operating Agreement)), to buy back up to that number of Class A Units
      determined by multiplying (i) 3,768,488 by (ii) the Repurchase Factor (as
      defined below), for the consideration set forth in Section 2.4(e) below (the
      "Repurchase Units"). The Repurchase Factor shall be based upon the following
      formula:

    

      
        	
                X
                  =  

              	
                A

              
	
                 

              	
                B

              


      

    

     

    Where:                   X
      = the
      Repurchase Factor;

    


    A
      =
      $12,000,000 minus the aggregate dollar amount that the Purchaser actually paid
      to the Company in connection with any past, current or future purchase of Class
      A Units; and

    


    B
      =
      $12,000,000.

    


        (c)
       The
      purchase price for the Repurchase Units shall be based upon the following
      formula:

     

    For
      each
      Class A Unit to be repurchased by the Company, the Company shall transfer to
      the
      Purchaser 1.306 ($2.7434 divided by $2.10) shares of common stock of the
      Purchaser held by the Company.

     

    (d) In
      addition to the Company’s right to buy back Class A Units from the Purchaser in
      accordance with Section 2.4(a), in the event of a Funding Default,
      notwithstanding anything contained in Section 3.21 or the Amended Operating
      Agreement to the contrary, the members of the Board of Directors of the Company
      shall be replaced by those individuals that were members of the Board of
      Directors prior to the execution and delivery of the Amended Restated Operating
      Agreement and shall thereafter be appointed as provided in the Operating
      Agreement, and the Amended Operating Agreement shall be further amended to
      so
      provide.

     

    3.
       Representations
      of the Company.
      Except
      as disclosed by the Company in the Schedules hereto which will be provided
      by
      the Company to the Purchaser on or prior to the Initial Closing and at each
      subsequent Closing, the Company hereby represents and warrants to the Purchaser
      as set forth in this Section 3. The Schedules shall be arranged in sections
      corresponding to the numbered and lettered sections and subsections contained
      in
      this Section 3, and the disclosures in any section or subsection shall qualify
      only the corresponding section or subsection of this Section 3, unless otherwise
      specified.

     

    
      
        
        

      

      
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    3.1
       Organization
      and Standing.
      The
      Company is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the State of New York and has full limited
      liability power and authority to conduct its business as presently conducted
      and
      as proposed to be conducted by it and to enter into and perform this Agreement.
      The Company has furnished to the Purchaser complete and accurate copies of
      its
      Articles of Organization and Operating Agreement, each as amended to date and
      presently in effect. The Company has at all times complied in all material
      respects with all provisions of its Articles of Organization and Operating
      Agreement and is not in default under, or in violation of, any such
      provision.

     

    3.2
       Subsidiaries,
      Etc.
      The
      Company has no subsidiaries and does not own or control, directly or indirectly,
      any shares of capital stock of any other corporation or any interest in any
      partnership, limited liability company, joint venture or other non-corporate
      business enterprise.

     

    3.3
       Capitalization.

     

    (a)
       The
      issued and outstanding units of the Company (immediately prior to the Initial
      Closing) consists of (i) 11,285,015 Class A Units, and (ii) 1,043,898 Class
      B
      Units.

     

    (b)
       Schedule
      3.3(b) includes a complete and accurate list, as of the date of the Initial
      Closing, of the holders of units of the Company, showing the number of units,
      and the class or series of such units, held by each member and (for units other
      than Class A Units) the number of Class A Units (if any) into which such units
      are convertible, both immediately prior to and immediately following the Initial
      Closing. Schedule 3.3(b) also indicates that all outstanding Class A Units
      that
      constitute restricted units or that are otherwise subject to a repurchase or
      redemption right, indicating the name of the applicable member, the vesting
      schedule (including any acceleration provisions with respect thereto), and
      the
      repurchase price payable by the Company. All of the issued and outstanding
      units
      of the Company have been duly authorized and validly issued and are fully paid
      and nonassessable. All of the issued and outstanding units of the Company have
      been offered, issued and sold by the Company in compliance with all applicable
      federal and state securities laws.

     

    (c)
       As
      of the
      date hereof, except as set forth on Schedule 3.3(c), the Company has no, and,
      as
      of the date of the Initial Closing the Company will not have any: (i) unit
      option plans or other unit or equity-related plans of the Company (the "Company
      Unit Plans"), (ii) outstanding options, warrants, subscription rights,
      convertible securities or other rights to purchase Units ("Company Unit
      Options") (other than those Class A Units that Purchaser may become entitled
      to
      purchase pursuant to the Original Purchase Agreement.(iii) obligation
      (contingent or otherwise) to purchase, redeem or otherwise acquire any of its
      units or any interest therein or to pay any dividend or to make any other
      distribution in respect thereof (other than distributions for the payment of
      taxes, if any), and (iv) outstanding or authorized unit appreciation, phantom
      unit or similar rights with respect to the Company.

     

    (d)
       Except
      for the Operating Agreement, there is no agreement, written or oral, between
      the
      Company and any holders of its securities, or, to the Knowledge of the Company,
      among any holder of its securities, relating to the sale or transfer (including
      without limitation agreements relating to rights of first refusal, co-sale
      rights or "drag-along" rights), registration under the Securities Act of 1933,
      as amended (the "Securities Act"), or voting, of the units of the
      Company.

     

    
      
        
        

      

      
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    3.4
       Issuance
      of Units.
      The
      issuance, sale and delivery of the Class A Units in accordance with this
      Agreement have been, or will be on or prior to the Initial Closing, duly
      authorized by all necessary limited liability company action on the part of
      the
      Company, and all such units have been duly reserved for issuance. The Class
      A
      Units when so issued, sold and delivered against payment therefor in accordance
      with the provisions of this Agreement will be duly and validly issued, and
      free
      of restrictions on transfer other than restrictions imposed or created under
      this Agreement, the Amended Operating Agreement, by applicable law, or by the
      Purchaser.

     

    3.5
       Authority
      for Agreement; No Conflict.
      The
      execution, delivery and performance by the Company of this Agreement and the
      Amended Operating Agreement, and the consummation by the Company of the
      transactions contemplated hereby and thereby, have been duly authorized by
      all
      necessary limited liability company action. This Agreement has been, and the
      Amended Operating Agreement when executed at the Initial Closing will be, duly
      executed and delivered by the Company and constitute valid and binding
      obligations of the Company enforceable in accordance with their respective
      terms, except as may be limited by bankruptcy or other equitable principles.
      The
      execution and delivery of this Agreement and the Amended Operating Agreement,
      the consummation of the transactions contemplated hereby and thereby and the
      compliance with their respective provisions by the Company will not (a) conflict
      with or violate any provision of the Articles of Organization or Operating
      Agreement of the Company, (b) require on the part of the Company any filing
      with, or any permit, order, authorization, consent or approval of, any court,
      arbitrational tribunal, administrative agency or commission or other
      governmental or regulatory authority or agency (other than such filings as
      may
      be necessary to comply with applicable federal and state securities laws) (each
      of the foregoing is hereafter referred to as a "Governmental Entity"), (c)
      conflict with, result in a breach of, constitute (with or without due notice
      or
      lapse of time or both) a default under, result in the acceleration of
      obligations under, create in any party the right to accelerate, terminate,
      modify or cancel, or require any notice, consent or waiver under, any contract,
      lease, sublease, license, sublicense, franchise, permit, indenture, agreement
      or
      mortgage for borrowed money, instrument of indebtedness, Security Interest
      (as
      defined below) or other arrangement to which the Company is a party or by which
      the Company is bound or to which its assets are subject, (d) result in the
      imposition of any Security Interest upon any assets of the Company or (e)
      violate any order, writ, injunction, decree, statute, rule or regulation
      applicable to the Company or any of its properties or assets. For purposes
      of
      this Agreement, "Security Interest" means any mortgage, pledge, security
      interest, encumbrance, charge or other lien (whether arising by contract or
      by
      operation of law).

     

    3.6
       Governmental
      Consents.
      No
      consent, approval, order or authorization of, or registration, qualification,
      designation, declaration or filing with, any Governmental Entity is required
      on
      the part of the Company in connection with the offer, issuance, sale and
      delivery of the Units or the other transactions to be consummated at the Initial
      Closing, as contemplated by this Agreement and the Amended Operating Agreement,
      except such filings as shall have been made prior to and shall be effective
      on
      and as of the Initial Closing and such filings required to be made after the
      Initial Closing under applicable federal and state securities laws. Based on
      the
      representations made by the Purchaser in Section 4 of this Agreement, the offer
      and sale of the Class A Units to the Purchaser will be in compliance with
      applicable federal and state securities laws.

     

    
      
        
        

      

      
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    3.7
       Litigation.
      There
      is no action, suit or proceeding, or governmental inquiry or investigation,
      pending, or, to the best of the Company's knowledge, threatened, against the
      Company or any of the members, which questions the validity of this Agreement,
      the Amended Operating Agreement or the right of the Company or any of the
      members to enter into any such agreements, or which might result, either
      individually or in the aggregate, in a material adverse effect on the business,
      assets or financial condition of the Company taken as a whole (a "Company
      Material Adverse Effect"). There is no litigation pending, or, to the best
      of
      the Company's knowledge, threatened, against the Company, or, to the Company's
      knowledge, any of the members, or any of its employees by reason of the past
      employment relationships of any of the members or employees, the proposed
      activities of the Company, or negotiations by the Company with possible
      investors in the Company. The Company is not subject to any outstanding
      judgment, order or decree. For purposes of this Agreement, the terms
      "knowledge", "to the best of the Company's knowledge" and similar terms shall
      mean, with respect to the Company, the actual present awareness of George L.
      Anstadt, George W. Anstadt, Mark P. Anstadt, Jeffrey L. Helfer, Stuart G.
      MacDonald, Michael Weiner and Robert Wood, without independent investigation
      or
      inquiry and, with respect to any person, the actual present awareness of that
      person without independent investigation or inquiry.

     

    3.8
       Financial
      Statements.
      The
      Company has furnished to the Purchaser a complete and accurate copy of (a)
      the
      federal Form 1065 - U.S. Return of Partnership Income of the Company for the
      year 2006, (b) the reviewed financial statements of the Company as of and for
      the year ended December 31, 2006 as prepared by Eldredge, Fox, & Porretti,
      LLP, on the income tax basis of accounting, and (c) interim financial statements
      as of and for the eight months ended August 31, 2007 (the "Interim Statements")
      prepared on the income tax basis of accounting by the Company (collectively,
      the
      "Financial Statements").

     

    3.9
       Absence
      of Undisclosed Liabilities.
      The
      Company does not know of any liability (whether absolute or contingent), except
      for 

     

    (a)
       liabilities
      shown on the balance sheet of the Company (the "Balance Sheet") included in
      the
      Interim Statements (the "Balance Sheet Date"),

     

    (b)
       liabilities
      which have arisen since the Balance Sheet Date in the ordinary course of
      business and which are similar in nature and amount to the liabilities which
      arose during the comparable period of time in the immediately preceding fiscal
      period and (c) contractual and other liabilities incurred in the ordinary course
      of business which are not required by GAAP to be reflected on a balance
      sheet.

     

    3.10
       Absence
      of Changes.
      Since
      the Balance Sheet Date, there has been no material adverse change in the
      business, financial condition, or results of operations of the Company, other
      than changes occurring in the ordinary course of business consistent with prior
      periods.

     

    3.11
       Taxes.

     

    (a)
       All
      Tax
      Returns required to have been filed by or with respect to the Company have
      been
      duly filed. 

     

    (b)
       Since
      its
      organization, the Company has all times been treated as a partnership for U.S.
      federal income tax purposes. The Company is not and has never been a publicly
      traded partnership within the meaning of Section
      7704 of the Code. No election has been made for the Company to be taxed as
      a
      corporation for U.S. federal income tax purposes.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (c)
       The
      Company is not a party to any current agreement extending the time within which
      to file any Tax Return. No claim has ever been made by any taxing authority
      in a
      jurisdiction in which the Company does not file Tax Returns that the Company
      is
      or may be subject to taxation by that jurisdiction.

     

    (d)
       The
      Company has withheld and paid all Taxes required to have been withheld and
      paid
      in connection with amounts paid or owing to any employee, creditor, independent
      contractor or other third party. The Company is not a party to any agreement,
      plan, contract or arrangement that would result, individually or in the
      aggregate, in the payment of any "excess parachute payments" within the meaning
      of Section 280G of the Code. The Company has not agreed to and is not required
      to make by reason of a change in accounting method or otherwise, or could be
      required to make by reason of a proposed or threatened change in accounting
      method or otherwise, any adjustment under Section 481(a) of the
      Code.

     

    (e)
       No
      issues
      have been raised in any examination by any taxing authority with respect to
      the
      Company which, by application of similar principles, reasonably could be
      expected to result in a proposed deficiency for any other period not so
      examined. No Tax Returns of the Company currently are the subject of audit
      or,
      pursuant to notification of a pending audit or otherwise, are expected to be
      audited.

     

    (f)
       The
      Company has not waived any statute of limitations in respect of Taxes or agreed
      to any extension of time with respect to any Tax assessment or deficiency.
      The
      Company has not received any written ruling of a Taxing Authority related to
      Taxes or entered into any written and legally binding agreement with a Taxing
      Authority relating to Taxes. The Company is not a party to any Tax allocation
      or
      sharing agreement.

     

    (g)
       None
      of
      the assets of the Company constitute tax-exempt bond financed property or
      tax-exempt use property, within the meaning of Section 168 of the Code. The
      Company is not a party to any "safe harbor lease" that is subject to the
      provisions of Section 168(f)(8) of the Internal Revenue Code as in effect prior
      to the Tax Reform Act of 1986, or to any "long-term contract" within the meaning
      of Section 460 of the Code. The Company has not participated in a "reportable
      transaction" within the meaning of Treasury Regulations Section 1.6011-4(b)
      or a
      "potentially abusive tax shelter" within the meaning of Section 6112(b) of
      the
      Code.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (h)
       For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    (i)
       "Code"
      means the Internal Revenue Code of 1986, as amended.

     

    (ii)
       "Taxes"
      means (A) all federal, state, local or foreign taxes, charges, fees, imposts,
      levies or other assessments, including all net income, gross receipts, capital,
      sales, use, ad valorem, value added, transfer, franchise, profits, inventory,
      escheat, abandoned property, property, capital stock, license, withholding,
      payroll, employment, social security, unemployment, excise, severance, stamp,
      occupation, property and estimated taxes, customs duties, fees, assessments
      and
      charges of any kind whatsoever and (B) all interest, penalties, fines, additions
      to tax or additional amounts imposed by any taxing authority in connection
      with
      any item described in clause (A).

     

    (iii)
       "Tax
      Returns" means any return, declaration, report, claim for refund, or information
      return or statement relating to Taxes, including any schedule or attachment
      thereto, and including any amendment thereof.

     

    3.12
       Property
      and Assets.
      The
      Company has good title to, or a valid leasehold interest in, all of its material
      properties and assets, including all properties and assets reflected in the
      Balance Sheet, except those disposed of since the date thereof in the ordinary
      course of business, and none of such properties or assets is subject to any
      Security Interest other than those identified in the Balance Sheet or in
      Schedule 3.12.

     

    3.13
       Intellectual
      Property.

     

    (a)
       Schedule
      3.13(a) lists (i) each patent, patent application, copyright registration or
      application therefor, mask work registration or application therefor, and
      trademark, service mark and domain name registration or application therefor
      owned by or licensed to the Company and (ii) each Customer Deliverable (as
      defined below) of the Company.

     

    (b)
       The
      Company owns or has the right to use all Intellectual Property (as defined
      below) necessary (i) to develop, use, manufacture, market and distribute the
      Customer Deliverables and (ii) to operate the Internal Systems (as defined
      below). The Company has taken all reasonable measures to protect the proprietary
      nature of each item of Company Intellectual Property (as defined below), and
      to
      maintain in confidence all trade secrets and confidential information, that
      it
      owns or uses. No other person or entity has any rights to any of the Company
      Intellectual Property owned by the Company (except pursuant to agreements or
      licenses specified in Schedule 3.13(b)), and no other person or entity is
      infringing, violating or misappropriating any of the Company Intellectual
      Property.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    (c)
       To
      the
      Company’s knowledge, none of the Customer Deliverables, or the research and
      development, marketing, distribution, provision or use thereof, infringes or
      violates, or constitutes a misappropriation of, any Intellectual Property rights
      of any person or entity, and, to the Company’s knowledge, neither the marketing,
      distribution, provision or use of any Customer Deliverables currently under
      development by the Company will, when such Customer Deliverables are
      commercially released by the Company, infringe or violate, or constitute a
      misappropriation of, any Intellectual Property rights that exist today of any
      person or entity. To the Company’s knowledge, none of the Internal Systems, or
      the use thereof, infringes or violates, or constitutes a misappropriation of,
      any Intellectual Property rights of any person or entity. Schedule 3.13(c)
      lists
      any complaint, claim or notice, or written threat thereof, received by the
      Company alleging any such infringement, violation or misappropriation; and
      the
      Company has provided to the Purchaser complete and accurate copies of all
      written documentation in the possession of the Company relating to any such
      complaint, claim, notice or threat. The Company has provided to the Purchaser
      complete and accurate copies of all written documentation in the Company's
      possession relating to claims or disputes known to the Company concerning any
      Company Intellectual Property.

     

    (d)
       Schedule
      3.13(d) identifies each license or other agreement pursuant to which the Company
      has licensed, distributed or otherwise granted any rights to any third party
      with respect to, any Company Intellectual Property. Except as to be described
      in
      Schedule 3.13(d), the Company has not agreed to indemnify any person or entity
      against any infringement, violation or misappropriation of any Intellectual
      Property rights with respect to any Company Intellectual Property.

     

    (e)
       Schedule
      3.13(e) identifies each item of Company Intellectual Property that is owned
      by a
      party other than the Company, and the license or agreement pursuant to which
      the
      Company uses it (excluding off-the-shelf software programs licensed by the
      Company pursuant to "shrink wrap" licenses).

     

    (f)
       The
      Company has not disclosed the source code for any software developed by it,
      or
      other confidential information constituting, embodied in or pertaining to such
      software, to any person or entity, except pursuant to the agreements to be
      listed in Schedule 3.13(f), and the Company has taken reasonable measures to
      prevent disclosure of such source code.

     

    (g)
       All
      of
      the copyrightable materials incorporated in or bundled with the Customer
      Deliverables have been created by employees of the Company within the scope
      of
      their employment by the Company or by independent contractors of the Company
      who
      have executed agreements expressly assigning all right, title and interest
      in
      such copyrightable materials to the Company. No portion of such copyrightable
      materials was jointly developed with any third party.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    (h)
       For
      purposes of this Agreement, the following terms shall have the following
      meanings:

     

    (i)
       "Customer
      Deliverables" shall mean (A) the products that the Company currently
      manufactures, markets, sells or licenses and (B) the services that the Company
      currently provides or.

     

    (ii)
       "Internal
      Systems" shall mean the internal systems of the Company that are used in its
      business or operations, including, computer hardware systems, software
      applications and embedded systems.

     

    (iii)
       "Intellectual
      Property" shall mean all: (A) patents, patent applications, patent disclosures
      and all related continuation, continuation-in-part, divisional, reissue,
      reexamination, utility model, certificate of invention and design patents,
      patent applications, registrations and applications for registrations; (B)
      trademarks, service marks, trade dress, Internet domain names, logos, trade
      names and corporate names and registrations and applications for registration
      thereof; (C) copyrights and registrations and applications for registration
      thereof; (D) mask works and registrations and applications for registration
      thereof; (E) computer software, data and documentation; (F) inventions, trade
      secrets and confidential business information, whether patentable or
      nonpatentable and whether or not reduced to practice, know-how, manufacturing
      and product processes and techniques, research and development information,
      copyrightable works, financial, marketing and business data, pricing and cost
      information, business and marketing plans and customer and supplier lists and
      information; (G) other proprietary rights relating to any of the foregoing
      (including remedies against infringements thereof and rights of protection
      of
      interest therein under the laws of all jurisdictions); and (H) copies and
      tangible embodiments thereof.

     

    (iv)
       "Company
      Intellectual Property" shall mean the Intellectual Property owned by or licensed
      to the Company and incorporated in, underlying or used in connection with the
      Customer Deliverables or the Internal Systems.

     

    3.14
       Insurance.
      [Intentionally Omitted]

     

    3.15
       Material
      Contracts and Obligations.
      The
      Company has made available to the Purchaser copies (or, in the case of oral
      agreements, accurate summaries) of all material agreements or commitments of
      any
      nature (whether written or oral) to which the Company is a party or by which
      it
      is bound, including without limitation (a) any agreement which requires future
      expenditures by the Company in excess of $10,000 per annum or which might result
      in payments to the Company in excess of $10,000 per annum, (b) any employment
      and consulting agreements, employee benefit, bonus, pension, profit-sharing,
      unit option, unit purchase and similar plans and arrangements, (c) any
      distributor, sales representative or similar agreement, (d) any agreement with
      any current or former member, officer, director or managing member of the
      Company, or any "affiliate" or "associate" of such persons (as such terms are
      defined in the rules and regulations promulgated under the Securities Act),
      including without limitation any agreement or other arrangement providing for
      the furnishing of services by, rental of real or personal property from, or
      otherwise requiring payments to, any such person or entity, (e) any agreement
      under which the Company is restricted from carrying on any business anywhere
      in
      the world, (f) any agreement relating to indebtedness for borrowed money, (g)
      any agreement for the disposition of a material portion of the Company's assets
      (other than for the sale of inventory in the ordinary course of business),
      (h)
      any agreement for the acquisition of the business or securities or other
      ownership interests of another party or (i) any other agreement that is material
      to the operations, business or finances of the Company other than this
      Agreement. . All of such agreements and contracts are valid and binding
      obligations of the Company and are in full force and effect in accordance with
      their terms. Neither the Company, nor, to the best of the Company's knowledge,
      any other party thereto, is in default of any of its obligations under any
      of
      such agreements or contracts.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    3.16
       Compliance.
      The
      Company has, in all material respects, complied with all laws, regulations
      and
      orders applicable to its present business and has all material permits and
      licenses required thereby. There is no term or provision of any mortgage,
      indenture, contract, agreement or instrument to which the Company is a party
      or
      by which it is bound, or, to the best of the Company's knowledge, of any
      provision of any state or federal judgment, decree, order, statute, rule or
      regulation applicable to or binding upon the Company, which materially adversely
      affects or, so far as the Company may now foresee, in the future is reasonably
      likely to result in or have a Company Material Adverse Effect. To the best
      of
      the Company's knowledge, none of the members nor any other employee of the
      Company is in violation of any term of any contract or covenant with the Company
      relating to employment, patents, assignment of inventions, proprietary
      information disclosure, non-competition or non-solicitation.

     

    3.17
       Employees.

     

    (a) 
      The
      Company has no employees.

     

    3.18
       ERISA.
      The
      Company does not have or otherwise contribute to or participate in any employee
      benefit plan subject to the Employee Retirement Income Security Act of 1974,
      as
      amended.

     

    3.19
       Books
      and Records.
      {Intentionally Omitted]

     

    3.20
       Permits.
      The
      Company possesses all material permits, licenses, registrations, certificates,
      orders or approvals from any Governmental Entity ("Permits") that are required
      for the Company to conduct its business as presently conducted, except for
      those
      the absence of which would not have a Company Material Adverse Effect. Each
      such
      Permit is in full force and effect and, to the best of the Company's knowledge,
      no suspension or cancellation of such Permit is threatened and to the Company's
      knowledge there is no basis for believing that such Permit will not be renewable
      upon expiration.

     

    3.21
       Board
      of Directors.
      Prior
      to the execution and delivery of the Amended Operating Agreement, the members
      of
      its Board of Directors are the following persons: Peer M. Portner, Mark P.
      Anstadt, Michael L. Weiner and Inge Anstadt.

     

    3.23
       Disclosures.
      Neither
      this Agreement nor any Exhibit hereto, nor the Amended Operating Agreement
      nor
      any report, certificate or instrument furnished by the Company to the Purchaser
      or their counsel in connection with the transactions contemplated by this
      Agreement, when read together, contains or will contain any untrue statement
      of
      a material fact or omits or will omit to state a material fact necessary in
      order to make the statements contained herein or therein, in light of the
      circumstances under which they were made, not misleading.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    3.24
       Publicity.
      The
      Company agrees that no disclosure of this Agreement, the Amended Operating
      Agreement and the transactions contemplated hereunder and thereunder shall
      be
      made to any third party without the consent of the Purchaser, except as may
      be
      required by law, in which event the Purchaser shall be given an opportunity
      to
      review, in advance, the proposed disclosure. The Company agrees that the
      Purchaser shall be permitted to announce that the parties have entered into
      this
      Agreement as and to the extent required by law so long as the Company shall
      be
      given an opportunity to review and approve the announcement.

     

    4.
       Representations
      of the Purchaser.
      The
      Purchaser represents and warrants to the Company as follows:

     

    4.1
       Organization
      and Standing.
      The
      Purchaser is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada and has full corporate power and authority
      to conduct its business as presently conducted and as proposed to be conducted
      by it and to enter into and perform this Agreement. The Purchaser has at all
      times complied in all material respects with all provisions of its Certificate
      of Incorporation and its Bylaws and is not in default under, or in violation
      of,
      any such provision.

     

    4.3
       Authority
      for Agreement; No Conflict.
      The
      execution, delivery and performance by the Purchaser of this Agreement, and
      the
      consummation by the Purchaser of the transactions contemplated hereby, have
      been
      duly authorized by all necessary corporate action. This Agreement has been
      duly
      executed and delivered by the Purchaser and constitute valid and binding
      obligations of the Purchaser enforceable in accordance with their respective
      terms, except as may be limited by bankruptcy or equitable principles. The
      execution and delivery of this Agreement, the consummation of the transactions
      contemplated hereby and the compliance with their respective provisions by
      the
      Purchaser will not (a) conflict with or violate any provision of the Certificate
      of Incorporation or Bylaws of the Purchaser, (b) require on the part of the
      Purchaser any filing with, or any permit, order, authorization, consent or
      approval of, any court, arbitrational tribunal, administrative agency or
      commission or other governmental or regulatory authority or agency (each of
      the
      foregoing is hereafter referred to as a "Governmental Entity"), (c) conflict
      with, result in a breach of, constitute (with or without due notice or lapse
      of
      time or both) a default under, result in the acceleration of obligations under,
      create in any party the right to accelerate, terminate, modify or cancel, or
      require any notice, consent or waiver under, any contract, lease, sublease,
      license, sublicense, franchise, permit, indenture, agreement or mortgage for
      borrowed money, instrument of indebtedness, Security Interest (as defined below)
      or other arrangement to which the Purchaser is a party or by which the Purchaser
      is bound or to which its assets are subject, (d) result in the imposition of
      any
      Security Interest upon any assets of the Purchaser or (e) violate any order,
      writ, injunction, decree, statute, rule or regulation applicable to the
      Purchaser or any of its properties or assets. For purposes of this Agreement,
      "Security Interest" means any mortgage, pledge, security interest, encumbrance,
      charge or other lien (whether arising by contract or by operation of
      law).

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    4.4
       Governmental
      Consents.
      No
      consent, approval, order or authorization of, or registration, qualification,
      designation, declaration or filing with, any Governmental Entity is required
      on
      the part of the Purchaser in connection with the offer, issuance, sale and
      delivery of the Class A
      Units or
      the
      other transactions to be consummated at the Initial Closing, as contemplated
      by
      this Agreement, except such filings as shall have been made prior to and shall
      be effective on and as of the Initial Closing and such filings required to
      be
      made after the Initial Closing under applicable federal and state securities
      laws. 

     

    4.5
       Investment.
      The
      Purchaser is acquiring the Units for its own account for investment and not
      with
      a view to, or for sale in connection with, any distribution thereof, nor with
      any present intention of distributing or selling the same; and the Purchaser
      has
      no present or contemplated agreement, undertaking, arrangement, obligation,
      indebtedness or commitment providing for the disposition thereof.

     

    4.6
       Accredited
      Investor.
      The
      Purchaser is an "accredited investor" as defined in Rule 501(a) under the
      Securities Act.

     

    4.7
       Authority.
      The
      Purchaser has full power and authority to enter into and to perform this
      Agreement in accordance with its terms. The Purchaser has not been organized,
      reorganized or recapitalized specifically for the purpose of investing in the
      Company or acquiring the Class A Units.

     

    4.8
       Experience.
      The
      Purchaser has carefully reviewed the representations concerning the Company
      contained in this Agreement and has made detailed inquiry concerning the
      Company, its business and its personnel; the officers and managing members
      of
      the Company have made available to the Purchaser any and all written information
      which it has requested and have answered in writing to the Purchaser's
      satisfaction all inquiries made by the Purchaser; and the Purchaser has
      sufficient knowledge and experience in finance and business that it is capable
      of evaluating the risks and merits of its investment in the Company and the
      Purchaser is able financially to bear the risks thereof.

     

    4.9
       Publicity.
      The
      Purchaser agrees that no disclosure of this Agreement, and the transactions
      contemplated hereunder shall be made to any third party without the consent
      of
      the Company, except as may be required by law, in which event the Company shall
      be given an opportunity to review, in advance, the proposed disclosure. The
      Purchaser acknowledges that the Company agrees that the Purchaser shall be
      permitted to announce that the parties have entered into this Agreement as
      and
      to the extent required by law or regulation, so long as the Company shall be
      given an opportunity to review and approve the announcement.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    5.
       Indemnification.

     

    5.1
       By
      the
      Company.
      The
      Company hereby indemnifies and holds harmless the Purchaser from and against
      all
      claims, damages, losses, liabilities, costs and expenses (including without
      limitation, settlement costs and any legal, accounting or other expenses for
      investigating or defending any actions or threatened actions) (collectively,
      the
      "Losses") in connection with each and all of the following (a "Breach of
      Warranty"):

     

    (a)
       any
      misrepresentations or breach of any representation or warranty made by the
      Company in this Agreement;

     

    (b)
       any
      breach of any covenant, agreement or obligation of the Company contained in
      this
      Agreement or any other agreement, instrument or document contemplated by this
      Agreement; and

     

    (c)
       any
      misrepresentation contained in any statement, certificate or schedule furnished
      by the Company pursuant to this Agreement or in connection with the transactions
      contemplated by this Agreement.

     

    5.2
       By
      the
      Purchaser.
      The
      Purchaser hereby indemnifies and holds harmless the Company from and against
      all
      claims, damages, losses, liabilities, costs and expenses (including without
      limitation, settlement costs and any legal, accounting or other expenses for
      investigating or defending any actions or threatened actions) (collectively,
      the
      "Losses") in connection with each and all of the following (a "Breach of
      Warranty"):

     

    (a)
       any
      misrepresentations or beach of any representation or warranty made by the
      Purchaser contained in this Agreement;

     

    (b)
       any
      breach of any covenant, agreement or obligation of the Purchaser contained
      in
      this Agreement or any other agreement, instrument or document contemplated
      by
      this Agreement; and

     

    (c)
       any
      misrepresentation contained in any statement, certificate or schedule furnished
      by the Purchaser pursuant to this Agreement or in connection with the
      transactions contemplated by this Agreement.

     

    5.3
       Claims
      for Indemnification.
      Whenever any claim shall arise for indemnification under this Section 5, the
      party seeking indemnification (the "Indemnified Party"), shall promptly notify
      the other party (the “Indemnifying Party”) of the claim and, when known, the
      facts constituting the basis for such claim. In the event of any such claim
      for
      indemnification hereunder resulting from or in connection with any claim or
      legal proceedings by a third party, the notice shall specify, if known, the
      amount or an estimate of the amount of the liability arising therefrom. The
      Indemnified Party shall not settle or compromise any claim by a third party
      for
      which it is entitled to indemnification hereunder without the prior written
      consent, which shall not be unreasonably withheld or delayed, of the
      Indemnifying Party, provided, however, that if suit shall have been instituted
      against the Indemnified Party and the Indemnifying Party shall not have taken
      control of such suit after notification thereof as provided in Subsection 5.3
      of
      this Agreement, the Indemnified Party shall have the right to settle or
      compromise such claim upon giving notice to the Indemnifying Party as provided
      in Subsection 5.3.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    5.4
       Defense
      by the Indemnifying Party.
      In
      connection with any claim which may give rise to indemnity hereunder resulting
      from or arising out of any claim or legal proceeding by a person other than
      the
      Indemnified Party, the Indemnifying Party, at its sole cost and expense, may,
      upon written notice to the Indemnified Party, assume the defense of any such
      claim or legal proceeding if the Indemnifying Party acknowledges to the
      Indemnified Party in writing the obligation of the Indemnifying Party to
      indemnify the Indemnified Party with respect to all elements of such claim.
      If
      the Indemnifying Party assumes the defense of any such claim or legal
      proceeding, the Indemnifying Party shall select counsel reasonably acceptable
      to
      the Indemnified Party to conduct the defense of such claims or legal proceedings
      and at the sole cost and expense of the Indemnifying Party shall take all steps
      necessary in the defense or settlement thereof. The Indemnifying Party shall
      not
      consent to a settlement of, or the entry of any judgment arising from, any
      such
      claim or legal proceeding, without the prior written consent of the Indemnified
      Party (which consent shall not be unreasonably withheld or delayed). The
      Indemnified Party shall be entitled to participate in (but not control) the
      defense of any such action, with its own counsel and at its own expense. If
      the
      Indemnifying Party does not assume the defense of any such claim or litigation
      resulting therefrom within 30 days after the date such claim is made: (a) the
      Indemnified Party may defend against such claim in such manner as it may deem
      appropriate, including, but not limited to, settling such claim or litigation,
      after giving notice of the same to the Indemnifying Party, on such terms as
      the
      Indemnified Party may deem appropriate, and (b) the Indemnifying Party shall
      be
      entitled to participate in (but not control) the defense of such action, with
      its counsel and at its own expense. If the Indemnifying Party thereafter seeks
      to question the manner in which the Indemnified Party defended such third party
      claim or the amount or nature of any such settlement, the Indemnifying Party
      shall have the burden to prove by a preponderance of the evidence that the
      Indemnified Party did not defend or settle such third party claim in a
      reasonably prudent manner.

     

    5.5
       Payment
      of Indemnification Obligation.
      All
      indemnification by a party hereunder (to the extent not satisfied in the manner
      specified in the preceding sentence), shall be effected, by payment of cash
      or
      delivery of a cashier's or certified check in the amount of the indemnification
      liability; provided, however, the Purchaser shall permit the Company to sell
      number of shares of Purchaser Common Stock determined by a fraction, the
      numerator of which is the amount of the indemnification liability and the
      denominator of which is the fair market value of a share of Purchaser Common
      Stock as of the date of determination, in order to remit such cash payment
      to
      the Purchaser.

     

    5.6
       Survival
      of Representations; Claims for Indemnification.
      All
      representations and warranties in this Agreement, or in any instrument or
      document furnished in connection with this Agreement or the transactions
      contemplated hereby, shall survive the Initial Closing and any investigation
      at
      any time made by or on behalf of the Indemnified Party for a period of 18
      months. All such representations and warranties shall expire on the 18-month
      anniversary of the date of the Initial Closing, except for claims, if any, (a)
      asserted in writing prior to such 18-month anniversary identified as a claim
      for
      indemnification purposes pursuant to this Section 5, or (b) which are based
      upon
      fraud by the a party, which shall survive until the earlier of (i) expiration
      of
      the applicable statute of limitations and (ii) the date on which the matter
      is
      finally resolved.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    5.7
       Limitation.
      The
      Company shall not be liable under this Section 5 until any Losses arising
      therefrom exceed $50,000 (at which point the Company shall become liable for
      all
      Losses under this Section 5 in excess of $50,000). In no event shall the Company
      be obligated to make payment under this Section 5 in respect of any Losses
      incurred by Purchaser in excess of the amount of the cash portion of the
      Purchase Price actually received by the Company hereunder. The indemnification
      provisions set forth in this Section 5 represent the sole and exclusive remedy
      of the parties with respect to claims for Losses arising hereunder.

     

    6. Further
      Covenants.

     

    6.1 Each
      of
      the Company and the Purchaser agrees and, in the case of the Purchaser, agrees
      to cause its designees to the Board of Directors of the Company, to use
      commercially reasonable efforts to identify and hire a person with applicable
      Cardiovascular-device experience as the Chief Executive Officer of the
      Company.

     

    6.2 Each
      of
      the Company and the Purchaser agrees and, in the case of the Purchaser, agrees
      to cause its designees to the Board of Directors of the Company, to prepare
      and
      approve, as soon as is practicable, a detailed product development plan for
      the
      Company that satisfies the requirements of Section 1.3(a).

     

    6.3 Each
      of
      the Company and the Purchaser agrees and, in the case of the Purchaser, agrees
      to cause its designees to the Board of Directors of the Company, to prepare
      and
      approve, as soon as is practicable, a detailed monthly budget, including
      appropriate quarterly milestones, for the Company that satisfies the
      requirements of Section 1.3(a).

     

    6.4 The
      Purchaser hereby agrees that it will file a registration statement with the
      Securities and Exchange Commission, allowing for the distribution of the shares
      of common stock of the Purchaser held by the Company to its members and the
      resale without further registration by the members of such common stock no
      later
      then November 30, 2007. In the event such registration statement is not filed
      on
      or before such date then Biophan shall pay to the members of the Company one
      percent of the value of such shares (based upon the closing price on each such
      date) for each month or part thereof that such registration statement is not
      timely filed. 

     

    7.
       Miscellaneous.

     

    7.1
       Successors
      and Assigns.
      This
      Agreement and the rights and obligations of the Purchaser hereunder and
      thereunder, may be assigned by the Purchaser to (a) any person or entity to
      which the Units are transferred by the Purchaser pursuant to the consummation
      of
      a merger, consolidation, reorganization, recapitalization or statutory share
      exchange involving the Purchaser or a sale or other disposition of all or
      substantially all of the assets of the Purchaser in one or a series of
      transactions or (b) to any Affiliate (as defined in the Securities Act) of
      the
      Purchaser, and in each such case, the transferee shall be deemed a "Purchaser"
      for purposes of this Agreement. Notwithstanding the foregoing, the Company
      may
      not assign its rights under this Agreement (whether by merger, consolidation,
      sale of assets, sale or equity securities or otherwise) without the prior
      written consent of the Purchaser.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    7.2
       Expenses.
      Except
      as otherwise agreed, each of the Company and the Purchaser shall be responsible
      for its own respective costs and expenses, including legal fees, incurred in
      connection with this Agreement and the transactions contemplated
      thereunder.

     

    7.3
       Brokers.
      Each of
      the Company and the Purchaser (a) represents and warrants to the other party
      hereto that it has not retained a finder, broker, investment banker or
      intermediary in connection with the transactions contemplated by this Agreement,
      and (b) will indemnify and save the other party harmless from and against any
      and all claims, liabilities or obligations with respect to brokerage or finders'
      fees or commissions, or consulting fees in connection with the transactions
      contemplated by this Agreement asserted by any person on the basis of any
      statement or representation alleged to have been made by such indemnifying
      party.

     

    7.4
       Severability.
      The
      invalidity or unenforceability of any provision of this Agreement shall not
      affect the validity or enforceability of any other provision of this
      Agreement.

     

    7.5
       Specific
      Performance.
      In
      addition to any and all other remedies that may be available at law in the
      event
      of any breach of this Agreement, each party shall be entitled to specific
      performance of the agreements and obligations of the other party hereunder
      and
      to such other injunctive or other equitable relief as may be granted by a court
      of competent jurisdiction.

     

    7.6
       Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      laws of the State of New York (without reference to the conflicts of law
      provisions thereof), as to all other matters.

     

    7.7
       Notices.
      All
      notices, requests, consents and other communications under this Agreement shall
      be in writing and shall be deemed delivered (a) three business days after being
      sent by registered or certified mail, return receipt requested, postage prepaid
      or (b) one business day after being sent via a reputable nationwide overnight
      courier service guaranteeing next business day delivery, in each case to the
      intended recipient as set forth below:

     

    If
      to the
      Company, at 15 Shoen Place, Pittsford, NY 14534, Attention: General Manager,
      or
      at such other address as may have been furnished in writing by the Company
      to
      the other party hereto, with a copy to Boylan, Brown, Code, Vigdor & Wilson,
      LLP, 2400 Chase Square, Rochester, New York 14604, Attention: Robert F. Mechur,
      Esq.; or

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    If
      to the
      Purchaser, at 15 Schoen Place, Pittsford, New York 14534, Attention: Chief
      Executive Officer, or at such other address as may have been furnished in
      writing by the Purchaser to the other party hereto, with a copy to Sichenzia
      Ross Friedman Ference LLP, 61 Broadway, New York, New York 10006, Attention:
      Gregory Sichenzia, Esq.

     

    Any
      party
      may give any notice, request, consent or other communication under this
      Agreement using any other means (including, without limitation, personal
      delivery, messenger service, telecopy, first class mail or electronic mail),
      but
      no such notice, request, consent or other communication shall be deemed to
      have
      been duly given unless and until it is actually received by the party for whom
      it is intended. Any party may change the address to which notices, requests,
      consents or other communications hereunder are to be delivered by giving the
      other parties notice in the manner set forth in this Section.

     

    7.8
       Complete
      Agreement.
      This
      Agreement (including its Exhibits) and the Amended Operating Agreement
      constitute the entire agreement and understanding of the parties hereto with
      respect to the subject matter hereof and supersede all prior agreements and
      understandings relating to such subject matter. The Original Purchase Agreement
      and all of the rights and obligations of the parties thereunder are terminated
      effective as of the date hereof.

     

    7.9
       Amendments
      and Waivers.
      This
      Agreement may be amended or terminated and the observance of any term of this
      Agreement may be waived with respect to all parties to this Agreement (either
      generally or in a particular instance and either retroactively or
      prospectively), with the written consent of the Company and the Purchaser,
      which
      waiver on behalf of the Company may be made only by a majority of the Company’s
      Board of Directors including one Director who was appointed by the Non-Biophan
      Founders (as defined in the Amended Operating Agreement). Any amendment,
      termination or waiver effected in accordance with this Section 7.10 shall be
      binding on all parties hereto. No waivers of or exceptions to any term,
      condition or provision of this Agreement, in any one or more instances, shall
      be
      deemed to be, or construed as, a further or continuing waiver of any such term,
      condition or provision.

     

    7.10
       Pronouns.
      Whenever the context may require, any pronouns used in this Agreement shall
      include the corresponding masculine, feminine or neuter forms, and the singular
      form of nouns and pronouns shall include the plural, and vice
      versa.

     

    7.11
       Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, and all of which shall constitute one and the same
      document. This Agreement may be executed by facsimile signatures.

     

    7.12
       Section
      Headings and References.
      The
      section headings are for the convenience of the parties and in no way alter,
      modify, amend, limit or restrict the contractual obligations of the parties.
      Any
      reference in this agreement to a particular section or subsection shall refer
      to
      a section or subsection of this Agreement, unless specified
      otherwise.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF
      the
      parties have executed this Agreement effective as of the day and year first
      above written.

    

      
        	 	
                COMPANY:

              	 
	 	 	 	 
	 	
                MYOTECH,
                  LLC

              	 
	 	 	 	 
	 	 	 	 
	 	
                By: 

              	
                /s/
                  Peer Portner

              	 
	 	
                Name:
                  Peer Portner

              	 
	 	
                Title:
                  Director

              	 
	 	 	 	 
	 	
                PURCHASER:

              	 
	 	 	 	 
	 	
                BIOPHAN
                  TECHNOLOGIES, INC.

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:
                  

              	
                /s/
                  John F. Lanzafame

              	 
	 	
                Name:
                  John F. Lanzafame

              	 
	 	
                Title:
                  Chief Executive Officer

              	 


      

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      Schedule
        1.2(b)

      


      Accounts
        Payable, as of September 30, 2007

       

      
        
          	
                  Vendor

                	
                  Amount
                    Due

                
	
                  Advanta
                    Bank

                	
                  $21.95
                    

                
	
                  Dr.
                    George L. Anstadt

                	
                  $36,835.00
                    

                
	
                  Mark
                    Anstadt

                	
                  $17,500.00
                    

                
	
                  Biomed
                    Solutions, LLC

                	
                  $9,248.42
                    

                
	
                  Boylan,
                    Brown, Code, Vigdor, Wilson, LL

                	
                  $2,801.50
                    

                
	
                  Buchanan
                    Ingersoll & Rooney LLP

                	
                  $68,271.97
                    

                
	
                  CIT
                    Technology Fin Serv., Inc.

                	
                  $803.43
                    

                
	
                  Rebecca
                    Darner

                	
                  $2,000.00
                    

                
	
                  Duke
                    University

                	
                  $15,000.00
                    

                
	
                  Eldredge,
                    Fox & Porretti, LLP

                	
                  $4,939.04
                    

                
	
                  David
                    Feldman, M.D.

                	
                  $1,500.00
                    

                
	
                  Flatiron
                    Capital Corp.

                	
                  $2,044.66
                    

                
	
                  Frontier
                    Communications of Rochester

                	
                  $1,256.93
                    

                
	
                  The
                    Hartford

                	
                  $993.54
                    

                
	
                  Hektoen
                    Fund 03673

                	
                  $3,000.00
                    

                
	
                  Jeffrey
                    L. Helfer

                	
                  $4,898.99
                    

                
	
                  William
                    L. Holman, MD

                	
                  $750.00
                    

                
	
                  K&L
                    Gates

                	
                  $48,068.00
                    

                
	
                  Jeanne
                    Lesniak

                	
                  $17,005.40
                    

                
	
                  James
                    Lowe

                	
                  $1,500.00
                    

                
	
                  Mason
                    Selkowitz McDermott

                	
                  $2,925.00
                    

                
	
                  Medical
                    Elastomer Development

                	
                  $26,857.17
                    

                
	
                  Merlin
                    Associates, LLC

                	
                  $13,585.00
                    

                
	
                  Carmelo
                    Milano, MD

                	
                  $1,500.00
                    

                
	
                  Michael
                    Milbocker

                	
                  $39,128.54
                    

                
	
                  NaturalNano.
                    Inc.

                	
                  $1,068.76
                    

                
	
                  NetTogether

                	
                  $114.60
                    

                
	
                  Nixon
                    Peabody LLP

                	
                  $155.00
                    

                
	
                  R.
                    Anthony Perez-Tamayo, MD

                	
                  $11,293.00
                    

                
	
                  Plastech
                    Consulting, Inc.

                	
                  $1,972.50
                    

                
	
                  Dr.
                    Peer M. Portner

                	
                  $51,522.33
                    

                
	
                  Preston,
                    Gates, Ellis & Rouvelas Meeds

                	
                  $12,014.00
                    

                
	
                  Schoen
                    Place, LLC

                	
                  $833.33
                    

                
	
                  Siemens
                    Financial Services, Inc.

                	
                  $5,639.07
                    

                
	
                  Michael
                    H. Sketch, Jr., M.D.

                	
                  $1,500.00
                    

                
	
                  Soundwave
                    Research Laboratories, Inc.

                	
                  $8,044.25
                    

                
	
                  Specialty
                    Manufacturing Inc.

                	
                  $483.67
                    

                
	
                  Dr.
                    Benjamin Sun

                	
                  $1,500.00
                    

                
	
                  Technology
                    Innovations, LLC

                	
                  $2,244.65
                    

                
	
                  Samuel
                    A. Tisherman, M.D.

                	
                  $1,500.00
                    

                
	
                  Visron
                    Design, Inc.

                	
                  $4,784.00
                    

                
	
                  Wright
                    State University

                	
                  $37,500.00
                    

                
	
                  Xerox
                    Corporation

                	
                  $227.53
                    

                
	
                  Z
                    & B Enterprises, Inc.

                	
                  $2,531.25
                    

                
	 	
                  $467,362.48
                    

                


        

      

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.3(b)

      


      


      Myotech,
        LLC Unit Holders

      


      
        	
                Class
                  A Units

              	 	 	 	 
	
                George
                  L. Anstadt 

              	 	 	
                718,750
                  

              	 
	
                George
                  W. Anstadt 

              	 	 	
                718,750
                  

              	 
	
                Mark
                  P. Anstadt 

              	 	 	
                1,437,500
                  

              	 
	
                Jeffrey
                  L. Helfer 

              	 	 	
                862,500
                  

              	 
	
                Stuart
                  G. McDonald 

              	 	 	
                575,000
                  

              	 
	
                Biomed
                  Solutions, LLC 

              	 	 	
                1,437,500
                  

              	 
	
                Speech
                  Compression Technologies, LP 

              	 	 	
                12,500
                  

              	 
	
                Technology
                  Innovations, LLC 

              	 	 	
                12,500
                  

              	 
	
                Astro
                  Instrumentation, LLC 

              	 	 	
                3,071
                  

              	 
	
                Robert
                  J. Wood 

              	 	 	
                12,500
                  

              	 
	
                W.
                  Timothy Bibens 

              	 	 	
                86,250
                  

              	 
	
                Biophan
                  Technologies 

              	 	 	
                5,408,194
                  

              	 
	
                Total
                  Class A Units 

              	 	 	
                11,285,015
                  

              	 


      

       

      
        	
                Class
                  B Units

              	 	 	
                
                

              	 
	
                Allen,
                  Michael P.

              	 	 	
                12,500
                  

              	 
	
                Amende,
                  Bernard G.

              	 	 	
                12,500
                  

              	 
	
                Arcarese,
                  Elizabeth B. & Jos. S.

              	 	 	
                12,500
                  

              	 
	
                Arcarese,
                  Joseph 

              	 	 	
                6,250
                  

              	 
	
                Bibens,
                  Francis W. 

              	 	 	
                12,500
                  

              	 
	
                Biomed
                  Solutions, LLC

              	 	 	
                12,500
                  

              	 
	
                Bourcy,
                  Robert Scott 

              	 	 	
                2,500
                  

              	 
	
                Bryant,
                  Rober D.

              	 	 	
                20,000
                  

              	 
	
                Calabrese,
                  Douglas J.

              	 	 	
                10,000
                  

              	 
	
                Cameron,
                  Joseph J. & Mary K.

              	 	 	
                12,500
                  

              	 
	
                Cantin,
                  James F. & Debra F.

              	 	 	
                25,000
                  

              	 
	
                Caputo,
                  Ron 

              	 	 	
                12,500
                  

              	 
	
                Castelli,
                  James V.

              	 	 	
                6,250
                  

              	 
	
                Cole,
                  Matthew 

              	 	 	
                2,500
                  

              	 
	
                Coles,
                  Matthew E.

              	 	 	
                2,500
                  

              	 
	
                DeCarolis,
                  Paul 

              	 	 	
                12,500
                  

              	 
	
                Dubnik
                  Family Limited Partnership 

              	 	 	
                12,500
                  

              	 
	
                Eberhardt,
                  Robert W / Eberhardt Jr., Robert W 

              	 	 	
                37,500
                  

              	 
	
                Eggert,
                  Timothy

              	 	 	
                12,500
                  

              	 
	
                Eggert,
                  Timothy - IRA

              	 	 	
                25,000
                  

              	 
	
                Eggert,
                  Timothy & Shelly 

              	 	 	
                12,500
                  

              	 
	
                Elliott,
                  Robert F.

              	 	 	
                12,500
                  

              	 
	
                Fay,
                  Thomas P. & Lorraine A.

              	 	 	
                12,500
                  

              	 
	
                FM
                  Office Express 

              	 	 	
                7,299
                  

              	 
	
                Freedom
                  Path LLC (Steve Healey)

              	 	 	
                12,500
                  

              	 
	
                Gantert,
                  John A.

              	 	 	
                12,500
                  

              	 
	
                Gantert,
                  Shelly M.

              	 	 	
                12,500
                  

              	 
	
                Gouldthorpe,
                  Brad 

              	 	 	
                12,500
                  

              	 
	
                Gregory
                  W. Teren IRA Charles Schwab & Co., Inc. Custodian 

              	 	 	
                7,500
                  

              	 


      

       

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

       

      
        	
                Harkna,
                  Eric 

              	 	 	
                25,000
                  

              	 
	
                Harzallah,
                  Wejdi 

              	 	 	
                25,000
                  

              	 
	
                Hedgeco
                  Holding Corp 

              	 	 	
                12,500
                  

              	 
	
                Hedgeco
                  Holdings Corp.

              	 	 	
                25,000
                  

              	 
	
                Henderson,
                  Preston

              	 	 	
                12,500
                  

              	 
	
                Hoogesteger,
                  Bruce W. 

              	 	 	
                6,250
                  

              	 
	
                Hotaling,
                  James P. 

              	 	 	
                5,000
                  

              	 
	
                Ireland,
                  John J. 

              	 	 	
                12,500
                  

              	 
	
                Jacobson,
                  Walter & Susie 

              	 	 	
                12,500
                  

              	 
	
                John
                  Gantert 

              	 	 	
                5,000
                  

              	 
	
                John
                  K & Kathleen S Best 

              	 	 	
                12,500
                  

              	 
	
                John
                  P. Wenner 

              	 	 	
                53,050
                  

              	 
	
                Morabito,
                  William J. 

              	 	 	
                6,250
                  

              	 
	
                Morabito,Thomas
                  

              	 	 	
                6,250
                  

              	 
	
                Parkes,
                  Walter

              	 	 	
                12,500
                  

              	 
	
                Peters,
                  Gary H.

              	 	 	
                6,250
                  

              	 
	
                Pillman,
                  Stanley 

              	 	 	
                75,000
                  

              	 
	
                Pittsford
                  Flour Mill LLC 

              	 	 	
                7,299
                  

              	 
	
                Popolow,
                  Joseph 

              	 	 	
                12,500
                  

              	 
	
                Portland,
                  Richard C 

              	 	 	
                5,000
                  

              	 
	
                Richmond,
                  Richard D. 

              	 	 	
                12,500
                  

              	 
	
                Sack,
                  John J. & Sandra M.

              	 	 	
                25,000
                  

              	 
	
                Sreve
                  M. Dubnik 

              	 	 	
                12,500
                  

              	 
	
                Streibel,
                  Max 

              	 	 	
                2,500
                  

              	 
	
                Tausch,
                  Erich K.

              	 	 	
                6,250
                  

              	 
	
                Technology
                  Innovations, LLC

              	 	 	
                12,500
                  

              	 
	
                Teren,
                  Gregory W.

              	 	 	
                12,500
                  

              	 
	
                Thomas
                  S. Ely Revocable Living Trust 

              	 	 	
                12,500
                  

              	 
	
                Titus,
                  Christine M. & Jeffrey A.

              	 	 	
                12,500
                  

              	 
	
                Tuite,
                  Robert J. 

              	 	 	
                12,500
                  

              	 
	
                UBS
                  Financial Services, as IRA Custodian for Stanley M. Pillman
                  

              	 	 	
                125,000
                  

              	 
	
                Van
                  Newkirk, Wayne & Trina

              	 	 	
                12,500
                  

              	 
	
                Viola,
                  Joseph

              	 	 	
                5,000
                  

              	 
	
                Wihlen,
                  John C. 

              	 	 	
                2,500
                  

              	 
	
                Wilbert,
                  Richard 

              	 	 	
                50,000
                  

              	 
	
                Wood,
                  Robert J. & Janet P.

              	 	 	
                12,500
                  

              	 
	
                Zahos,
                  E. & Rockow, S.

              	 	 	
                12,500
                  

              	 
	
                Total
                  Class B Units 

              	 	 	
                1,043,898
                  

              	 
	 	 	 	
                12,328,913
                  

              	 


      

      


      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.3(c)

      


      


      MYOTECH,
        LLC

      Schedule
        of Options and Warrants

      


      
        	
                Grantee

              	
                Agreement

              	
                Excerpt

              
	
                James
                  E. Lowe

              	
                Consulting
                  Agreement dated 6/9/05 

              	
                MYOTECH
                  shall provide to Consultant warrants to purchase units of company
                  equity
                  on the following terms: 

                 

                A.
                  Five thousand (5,000) Class B Units at a strike price of ten cents
                  ($0.10)
                  per unit fully vested upon signing the Consulting Agreement. 

                 

                B.
                  Twenty-five thousand (25,000) Class B Units at a strike price of
                  ten cents
                  ($0.10) per unit with full vesting at the start of human clinical
                  studies
                  at Duke. 

                 

                C.
                  Twenty-five thousand (25,000) Class B Units for each one million
                  dollars
                  ($1,000,000) in grant monies awarded to the company that directly
                  support
                  the development and commercialization of the company's products
                  for a
                  period of three (3) years from the date this agreement is signed,
                  fully
                  vested on the date the monies are received by MYOTECH. Strike price
                  to be
                  ten cents ($0.10) per unit. MYOTECH reserves the right to not accept
                  any
                  grant monies that in its decision are not aligned with the business
                  and
                  scientific objectives of the Company.

              
	
                Biophan
                  Technologies, Inc.

              	
                Securities
                  Purchase Agreement dated as of November 30, 2005

              	
                Section
                  2.3 Warrant Coverage

                (a)
                  The Purchaser shall receive .25 warrants for each Class A unit
                  purchased
                  by Purchaser hereunder (the “Warrants”). Such warrants shall be issued to
                  the Purchaser simultaneously with the issuance of Class A units
                  in
                  accordance with Sections 2.1(a) and 2.2 above and shall be exercisable
                  upon issuance with a warrant price equal to $2.7434 per unit and
                  a warrant
                  term of seven years from the date of issuance. 

              
	
                Certain
                  Scientific Advisory Board Members:

                Mark
                  Anstadt

                Brooks
                  Edwards 

                David
                  Feldman

                William
                  L. Holman

                James
                  E. Lowe

                Douglas
                  Mann

                Robert
                  E. Michler

                Carmelo
                  Milano

                Anthony
                  Perez-Tamayo

                Peer
                  Portner

                Michael
                  H. Sketch, Jr.

                Benjamin
                  Sun

                Samuel
                  Tisherman 

              	
                SAB
                  Member Agreements

              	
                Each
                  member has options to purchase five thousand (5,000) Class B Membership
                  units at a purchase price of $.10 per
                  unit.

              


      

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

       

      
        	
                Peer
                  M. Portner

              	
                Compensation
                  Agreement February 5, 2007

              	
                Warrants
                  to purchase 200,000 Class A units at a price of $.10 on signing
                  the
                  agreement. 25,000 Class A units per quarter at a price of $.10
                  per unit.
                  All units expire 5 years from date of issue.

              
	
                Peer
                  M. Portner

              	
                Granted
                  pursuant to Board Resolution dated June 17, 2007 

              	
                Warrants
                  to purchase 400,000 Class A Units at a strike price of $.10. 50%
                  of these,
                  200,000, vested immediately. The other half vest in equal portions
                  over
                  the 24 months following the date of issue, contingent upon continued
                  board
                  membership and active service, beginning as of the date of
                  issue.

              
	
                Lesniak
                  & Associates

              	
                Independent
                  Consultant Agreement

                Dated
                  as of April 9, 2007

              	
                As
                  of this date warrants to purchase 2,793.75 Class B units have been
                  issued
                  with a purchase price of $.10 per unit.

                In
                  addition to the above compensation the Company shall pay Consultant
                  for
                  the achievement of Company goals as mutual determined by Company
                  and
                  Consultants. Company shall pay Consultant 30,000 MYOTECH Equity
                  B Unit
                  Warrants pursuant to the Company’s Incentive Performance Plan upon written
                  notice of FDA approval of the IDE for its first product (Gen-1).
                  Additional Company goals shall be determined at a later
                  date.

              


      

      


      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.12

      


      


      Security
        Interests on Company property or assets not identified in the Company’s August
        31, 2007 Balance Sheet

      


      None

      


      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.13(a)

      


      


      Patents,
        patent applications and trademarks

      


      


      Patent
        Applications

      


      
        	
                Docket
                  #

              	
                Invention

              	
                Inventors

              	
                Applic
                  S/N, Date

              	
                Type

              	
                Pub
                  #,Date

              	
                Foreign

              
	
                1034448-000007

              	
                Sensor-equipped
                  & Algorithm-Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  M, MacDonald, Helfer, Anstadt, GL, Anstadt, GW

              	
                10/607,434,
                  6/26/2003 

              	
                Utility

              	
                2004-0267086-A1
                  12/30/2004

              	
                12/12/05
                  - EPO & China

              
	
                1034448-000009

              	
                Meth&App
                  f/Direct Mechanical Ventricular Actuation w/Favorable Conditioning
&
                  Minimal Heart Stress

              	
                Anstadt,
                  M.P., Anstadt. G.L., MacDonald, S., Helfer, J.L., Anstadt,
                  G.W.

              	
                10/795,098
                  3/5/2004

              	
                CIP

              	
                US-2006-0167334
                  A1, 07/27/06

              	
                PCT-MPA-800

              
	
                1034448-000011

              	
                Therapeutic
                  Agent Delivery Apparatus with Direct Mechanical Ventricular Assistance
                  Capability

              	
                Anstadt,
                  M.P., Amstadt. G.L., MacDonald, S., Helfer, J.L., Anstadt,
                  G.W.

              	
                11/143,542
                  6/2/2005

              	
                Div

              	
                US-2005-0234289
                  A1, 10/20/05

              	
                 

              
	
                1034448-000013

              	
                Sensor-Equipped
                  and Algorithm-Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  Mark P., Anstadt, George L., MacDonald, Stuart G., Helfer, Jeffrey
                  L.,
                  Anstadt, George W.

              	
                11/359,543,
                  2/23/2006

              	
                DIV

              	
                US-2006-0142634
                  A1, 06/29/06

              	
                 

              


      

       

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

       

      
        	
                1034448-000016

              	
                Sensor-Equipped
                  and Algorithm-Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  Mark P.; Anstadt, George L.; MacDonald, Stuart G.; Helfer, Jeffrey,
                  L.;
                  Anstadt, George W. 

              	
                2,530,574,
                  12/22/05

              	
                Canada

              	
                 

              	
                 

              
	
                1034448-000017

              	
                Sensor-Equipped
                  and Algorithm-Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  M.P.; Anstadt, G.L.; MacDonald, S.G.; Helfer, J.L.; Anstadt,
                  G.W.

              	
                04777156.3,
                  01/19/06

              	
                EPO

              	
                 

              	
                 

              
	
                1034448-000018

              	
                Sensor-Equipped
                  and Algorithm Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  M.P.; Anstadt, George L.; MacDonald, S. G.; Helfer, J.L.; Anstadt,
                  George
                  W.

              	
                89/DELNP/2006,
                  01/05/06

              	
                India

              	
                 

              	
                 

              
	
                1034448-000019

              	
                Sensor-Equipped
                  and Algorithm-Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  M.P.; Anstadt, G.L.; MacDonald, S.G.; Helfer, J.L.; Anstadt,
                  G.W.

              	
                200480023755.8,
                  03/14/06

              	
                China

              	
                1838971,
                  09/27/06

              	
                 

              
	
                1034448-000020
                  

              	
                Sensor-Equipped
                  and Algorithm-Controlled Direct Mechanical Ventricular Assist
                  Device

              	
                Anstadt,
                  M.P.; Anstadt, G.L.; MacDonald, S.G.; Helfer, J.L.; Anstadt,
                  G.W.

              	
                2006-517710,
                  12/22/05

              	
                Japan

              	
                 

              	
                 

              


      

       

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

       

      
        	
                1034448-000021

              	
                Method
                  & Apparatus for Direct Mechanical Ventricular Actuation with Favorable
                  Conditioning and Minimal Heart Stress

              	
                Anstadt,
                  MP, Anstadt, GL, MacDonald, Helfer, Anstadt, GW

              	
                11/302,322,
                  12/14/05

              	
                CIP

              	
                US2006-0211909
                  A1, 09/21/06

              	
                 

              
	
                1034448-000025

              	
                Method
                  and Apparatus for Direct Mechanical Ventricular Actuation with
                  Favorable
                  Conditioning and Minimal Heart Stress

              	
                Anstadt,
                  Mark P.; Anstadt, George L.; MacDonald, Stuart, G.; Helfer, Jeffrey,
                  L.;
                  Anstadt, George W.

              	
                05
                  713 894.3, 9/5/2006

              	
                EPO

              	
                1748807,
                  02/07/07

              	
                 

              
	
                1034448-000026

              	
                Method
                  and Apparatus for Minimally Invasive Direct Mechanical Ventricular
                  Actuation

              	
                MacDonald,
                  Stuart G.; Perez-Tamayo, Ruheri A.; Anstadt, George W.

              	
                PCT/US2006/045492,
                  11/28/06

              	
                PCT

              	
                WO
                  2007/062239 A2, 05/31/07

              	
                 

              


      

       

      Marks

      


      
        	
                Mark

              	
                Application
                  #, Registration # & Date

              	
                Filed/
                  Publication Date

              	
                Identification

              	
                Owner

              
	 	 	 	 	 
	
                MYOTECH

              	
                78/381,008

              	
                3/9/2004,
                  7/5/2005

              	
                Biomedical
                  devices, namely cardiac assist devices utilizing direct mechanical
                  ventricular actuation. Intl Class: 010, Basis: 1(b)

              	
                Myotech

              
	
                YOUR
                  HEART.YOUR LIFE

              	
                78/872,259

              	
                4/28/2006

              	
                Cardiac
                  assist device International Class 010: Cardiac assist devices for
                  supporting blodd flow. Intl Class: 010, Basis: 1(b)

              	
                Myotech

              


      

       

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.13(b)

      


      


      Agreements
        and Licenses pertaining to the Company Intellectual
        Property

      


      


      "Company
        Intellectual Property" means the Intellectual Property owned by or licensed
        to
        the Company and incorporated in, underlying or used in connection with the
        Customer Deliverables or the Internal Systems. 

      


      "Intellectual
        Property" means all: (A) patents, patent applications, patent disclosures
        and
        all related continuation, continuation-in-part, divisional, reissue,
        reexamination, utility model, certificate of invention and design patents,
        patent applications, registrations and applications for registrations; (B)
        trademarks, service marks, trade dress, Internet domain names, logos, trade
        names and corporate names and registrations and applications for registration
        thereof; (C) copyrights and registrations and applications for registration
        thereof; (D) mask works and registrations and applications for registration
        thereof; (E) computer software, data and documentation; (F) inventions, trade
        secrets and confidential business information, whether patentable or
        nonpatentable and whether or not reduced to practice, know-how, manufacturing
        and product processes and techniques, research and development information,
        copyrightable works, financial, marketing and business data, pricing and
        cost
        information, business and marketing plans and customer and supplier lists
        and
        information; (G) other proprietary rights relating to any of the foregoing
        (including remedies against infringements thereof and rights of protection
        of
        interest therein under the laws of all jurisdictions); and (H) copies and
        tangible embodiments thereof. 

      


      "Customer
        Deliverables" mean (A) the products that the Company currently manufactures,
        markets, sells or licenses and (B) the services that the Company currently
        provides.

      


      "Internal
        Systems" means the internal systems of the Company that are used in its business
        or operations, including, computer hardware systems, software applications
        and
        embedded systems.

       

      There
        are
        no agreements or licenses pertaining to Company Intellectual Property. The
        original exclusive license agreement between Advanced Resuscitation, LLC
        (ARLLC)
        was eliminated by the Assignment Agreement executed December 20,
        2005.

      


      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.13(c)

      


      


      Allegations
        of infringement violation or misappropriation of Intellectual Property
        rights

      


      


      The
        Company has not received any complaints, claims, notices, or written threats
        thereof, alleging any infringement, violation or misappropriation of any
        Intellectual Property rights of any person or entity.

       

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.13(d)

      


      


      Licenses
        and agreements third parties with respect to Company Intellectual
        Property.

      


      


      The
        Company has neither licensed, nor entered into any agreement to license,
        nor in
        any manner granted any rights to any third party with respect to any Company
        Intellectual Property. 

      


      Further,
        the Company has not indemnified any person or entity against any infringement,
        violation or misappropriation of any Intellectual Property rights with respect
        to any Company Intellectual Property.

       

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.13(e)

      


      


      Company
        licenses of others’ Intellectual Property

      


      


      The
        Company regularly uses commodity software programs such as Microsoft Windows
        and
        LabView. The Company also regularly uses Internet search engines and the
        Delphion patent database under contract. Other than these, the Company uses
        no
        Intellectual Property owned by others.

       

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

       

      Schedule
        3.13(f)

      


      


      Disclosure
        of source code

      


      


      The
        Company has neither disclosed, nor entered into any agreement with any
        individual or entity to disclose, software source code or related confidential
        information.

      


      
        
          
          

        

        
          36