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                                                                Exhibit 10.21

                                LICENSE AGREEMENT

         THIS LICENSE AGREEMENT ("Agreement") is entered into as of January 15,
2004 ("Effective Date") between Biophan Technologies, Inc. ("Licensee"), a
Nevada Corporation having its principal place of business at 150 Lucius Gordon
Drive, Suite 215, West Henrietta, New York 14586, and Nanoset, LLC ("Licensor"),
a New York limited liability company having a place of business at 349 West
Commercial Street, Suite 2490, East Rochester, New York 14445.

          Licensee desires to acquire rights to certain technology as described
in and pursuant to the terms of this Agreement and Licensor is willing to grant
such rights. Therefore, the parties agree as follows:

1.       DEFINITIONS

                  The following terms in this Agreement shall have the
definitions set forth below.

                  1.01 "Affiliate" means any Entity which directly or indirectly
controls, is controlled by, or is under common control with, a party. For the
purposes of this Section, "control" means the beneficial ownership of at least
fifty percent (50%) of the voting stock of the Entity, the direct or indirect
power to appoint at least one-half of the directors or managers of the Entity,
or the power by contract or otherwise to direct the affairs of such Entity.

                  1.02 "Allocated Net Sales Revenue" means the gross amount
invoiced by Licensee or any Affiliate for a Combination Product, less the
applicable allowable deductions described in Sections 1.14(i)-(iv) ("Unallocated
Net Sales"), multiplied by the fraction A/C, where A is the invoice price of the
Licensed Product incorporated into such Combination Product when sold separately
in finished form, and C is the invoice price of the Combination Product. If the
Licensed Product and the Combination Product are not sold separately in finished
form, Allocated Net Sales shall, for the purposes of determining royalties due
on the Combination Product, be calculated by multiplying the Unallocated Net
Sales by the fraction D/(D+E), where D equals the total direct manufacturing
cost of the Licensed Product and E is the total direct manufacturing cost of the
Combination Product.

                  1.03 "Combination Product" means any product that is comprised
of a Licensed Product and another product(s) that is not a Licensed Product.

                  1.04  "Entity"  means  any  corporation,   limited   liability
company, partnership, or other person or entity.

                  1.05 "Invention" means any idea, discovery, creation, or
invention of Licensor, any of its members, employees, consultants, or
contractors, whether made solely, or jointly with another Entity, whether or not
patentable, that is conceived, created, or reduced to practice on or after
November 17, 2001 and/or before the termination of this Agreement which relates
to or would be useful in the Licensed Field.

                  1.06 "Know-how" means unpatented information, whether or not
patentable, including without limitation, technical information, processes,
formulae, trade secrets, materials, designs, and data.

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                  1.07 "Licensed Field" means any and all development,
manufacture, use, sale, repair, and maintenance of Medical Devices.

                  1.08 "Licensed Patents" means all those Patent Rights
described on the attached Exhibit 1.08 and any additional Patent Rights now or
hereafter owned or controlled by Licensor which relate to or would be useful in
the Licensed Field.

                  1.09 "Licensed Product" means any Medical Device, the
manufacture, use, sale, offering for sale, or importing of which would, absent
the license granted hereunder, infringe any Valid Claim included in a Licensed
Patent.

                  1.10     "Licensed Territory" means the world.

                  1.11 "Medical Device" means any implantable, invasive, or
external equipment, apparatus, component, product, compound, service, or process
of manufacture or use, including without limitation any formulation, solution,
pharmaceutical, composite, or prosthetic, that: (i) uses or requires
Nanomagnetics for medical research and/or the diagnosis, prevention, treatment
or cure of any disease, disorder, and/or condition in humans and other animals;
(ii) affects magnetic imaging resonance imaging (MRI) safety; (iii) affects
medical image compatibility; or (iv) involves power systems in humans or other
animals.

                  1.12 "Nanomagnetics" means magnetic materials which have an
average particle size less than 100 nanometers and includes materials,
compositions, and/or articles of manufacture for nano-sized magnetic material,
processes for the manufacture of such nano-sized magnetic material, articles of
manufacture incorporating or using such nano-sized magnetic material, and
processes for the uses of such materials, compositions, and/or articles of
manufacture.

                  1.13 "Net Sales Revenue" means, in any case where a Licensed
Product is sold or commercially disposed of for value by Licensee, any
Affiliate, or any Sublicensee in an arm's length transaction with a third party
(other than an Affiliate of, respectively, Licensee or Sublicensee), the gross
invoice price for such Licensed Product, less the following: (i) discounts,
chargebacks, Medicare or other government rebates, and rebates to purchasers
actually taken or allowed; (ii) credits or allowances given or made for
rejections or return of any previously sold Licensed Products actually taken or
allowed; (iii) to the extent included in such gross invoice price any tax or
government charge imposed on the production, import, export, sale, delivery or
use of such Products, including, without limitation, any value added or similar
tax or government charge, but not including any tax levied with respect to
income; and (iv) to the extent included in such gross invoice price any
reasonable and documented packaging and distribution charges. Net Sales shall
also include and be deemed to have been made with respect to (a) any Licensed
Product not sold or otherwise transferred to any third party but rather used by
Licensee or any Sublicensee to provide a commercial service and (b) any other
transfer of a Licensed Product for less than arm's length value other than
intercompany transfers where the transferee is not the end user. The amount of
any Net Sale as defined in the preceding sentence shall be imputed using the
price or prices at which the Licensed Product at issue is then being sold in
transactions covered by the first sentence of this Section or, if no such

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transactions have occurred, on a reasonable basis to be determined at the time
by the parties. Notwithstanding any other provision of this Section, Net Sales
shall not include the transfer without consideration of any Licensed Product by
Licensee or any Sublicensee (x) for use in any clinical trial or in any
preclinical or other research, (y) as detailing samples or other use to promote
additional Net Sales in amounts consistent with the normal business practices of
Licensee or any Sublicensee, or (z) for compassionate use.

                  1.14 "Patent Rights" means any and all forms of patents issued
or granted anywhere in the world, including, without limitation, utility, model
and design patents, patents of addition, patents of importation or innovation,
improvement patents, reissued and reexamined patents, all renewals and
extensions thereof, and all applications for such patents (including original,
divisional, continuation and continuation-in-part applications) pending before
any national Patent Office and which have not been abandoned or expired.

                  1.15 "Sublicense" means any sublicense of, or other agreement
permitting the commercial exploitation of, some or all of the rights granted to
Licensee under this Agreement.

                  1.16 "Sublicensee"  means any Entity to whom Licensee grants a
Sublicense.

                  1.17 "Sublicense Revenue" means gross revenue received by
Licensee from Sublicensees for a grant of license rights with respect to the
Licensed Patents and/or Know-how.

                  1.18 "Term of this Agreement" or "Term" means the period
beginning on the Effective Date and continuing only for so long as (a) Licensee
has any right to exercise any of its rights with respect to any Licensed Patent
in the Licensed Territory, or (b) royalty payments are due under this Agreement,
unless earlier terminated by Licensor or Licensee as provided herein.

                  1.19 "Valid Claim" means (i) a claim (an "Issued Patent
Claim") of an issued and unexpired patent which has not been held permanently
revoked, unenforceable or invalid by a decision of a court or other governmental
agency of competent jurisdiction, unappealed or unappealable within the time
allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise, and/or (ii) a pending
claim of any pending patent application which has been filed and continues to be
prosecuted in good faith and is not abandoned or finally disallowed without the
possibility of appeal or refiling; provided, however, that, with respect to any
Licensed Product, no pending claim which has not become an Issued Patent Claim
shall continue to constitute a Valid Claim for more than three (3) years
following the first approved commercial sale of the first Licensed Product which
qualifies as a Licensed Product under Section 1.10 solely as a result of such
pending claim.

         2. LICENSE GRANT

                  2.01 Subject to the terms of this Agreement, Licensor grants
to Licensee and its Affiliates, and Licensee accepts for itself and such
Affiliates, the exclusive right and license including the right to grant
Sublicenses, under the Licensed Patents and the Know-how in the Licensed Field

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to make, have made, use, offer to sell, lease, and import Licensed Products in
the Licensed Territory.

                  2.02 Licensee acknowledges and agrees that no license is
granted or implied under, and agrees not to practice under, the Licensed Patents
and Know-how for products and processes that are outside of the Licensed Field.
Where a patent claim describes technology applicable to more than one field of
use, the Licensee obtains rights to such claimed invention only within the
Licensed Field.

         3. LICENSOR INVENTIONS

                  3.01 Members, employees, consultants, and contractors of
Licensor, including, but not limited to Dr. Xingwu Wang and Howard Greenwald,
may make an Invention(s) useful in the Licensed Field during the Term.

                  3.02 Within thirty (30) days of the conception of an
Invention, Licensor shall disclose the same to Licensee in a writing. The
description of an Invention, etc., may. by way of illustration, be a draft
and/or a filed provisional and/or utility patent application, and will be
accompanied by an estimate of the cost of preparing and filing one or more
patent application(s) on such Invention(s), etc. Within sixty (60) days of
disclosure, Licensee shall inform Licensor in writing if Licensee wishes to
exclude the applicable Invention(s) from the license granted by this Agreement.
If Licensee does not so notify Licensor of its intention to exclude any
Invention, Licensee shall pay to Licensor the amount of the aforementioned
estimate, and thereafter, one or more patent applications on such Invention(s)
shall be prepared, executed, and filed on behalf of Licensor. Such patent
application(s) shall be Licensed Patents hereunder.

                  3.03 If Licensee informs Licensor in writing of its desire to
have any Invention excluded from this Agreement within such sixty (60)-day
period, and/or if Licensee does not pay such expenses or provide an advance
against the estimated costs to patent any Invention or Improvement within such
sixty (60) day period, then Licensee shall waive any rights to have the
particular Invention included within the scope of this Agreement.

                  3.04 Licensor shall not compete with Licensee or any
Sublicensee or assignee within the Licensed Field, even if Licensee waives any
rights to have any particular Invention included within the scope of this
Agreement.

         4. LICENSEE'S OBLIGATIONS

                  4.01 Licensor shall diligently prosecute and maintain the
Licensed Patents, but only to the extent, if any, that the Licensee pays for the
costs of such prosecution and maintenance. Licensor will advise Licensee within
thirty (30) days of the date Licensor becomes aware of the advisability of
taking of filing, prosecution, or maintenance actions with regard to any
Licensed Patent. Licensor will provide an estimate of the cost of taking such
action in accordance with reasonable billing rates and expenses. Within thirty
(30) days of such disclosure, Licensee shall inform Licensor in writing if
Licensee wishes to exclude the patent or patent application from Licensed
Patents. If a patent is to be included as a Licensed Patent within this
Agreement, Licensee shall pay the estimated sum to Licensor, and Licensor shall
promptly take the action in question. Licensor shall keep track of the actual
costs incurred and promptly refund any excess of the estimate paid by Licensee
to Licensor for such work.

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                  4.02 The undertaking by Licensee to pay certain patent fees
and minimum royalties as set forth herein shall be in lieu of any express or
implied best efforts obligation of Licensee, which are hereby waived by
Licensor. Licensee will pay the following amounts as minimum royalties in the
years indicated:

         Year 1:                          five thousand dollars ($5,000);
         Year 2:                          five thousand dollars ($5,000);
         and Years 3 and beyond:          thirty thousand dollars ($30,000).

All amounts paid as minimum royalties shall be paid quarterly pursuant to
Section 6 and shall be credited annually against royalties, but only for that
year, as set forth in Section 5 below. In the event of termination of this
Agreement by Licensee, the minimum royalties due shall be pro-rated through the
effective date of termination. If Licensee is acquired by a third party,
Licensor will consent to the assignment of Licensee's rights under this
Agreement in exchange for a payment of fifty thousand dollars ($50,000) if the
acquiring party is a Sublicensee, or thirty thousand dollars ($30,000)
otherwise.

                  4.03 With regard to any particular patent application, or an
issued patent, Licensee will be advised by Licensor of certain actions that
might be taken with regard to such patent application or patent. By way of
illustration and not limitation, such actions might include:

         (a)      the filing of an information disclosure statement, and/or

         (b)      the filing of a response, amendment, appeal, and/or a petition
                  in response to a  communication  from a United States and/or a
                  foreign Patent Office, and/or

         (c)      the payment of Patent Office fees,  such as fees for petitions
                  for extension, final fees, and the like,

         (d)      the filing of divisional, continuation,  continuation-in-part,
                  and/or reissue patent applications, and/or

         (e)      the filing of one or more International  Patent and/or foreign
                  patent   applications   based  upon  a  United  States  patent
                  application, and/or

         (f)      other  actions  routinely  undertaken  by Patent  Attorneys on
                  behalf  of   clients   during   the   prosecution   of  patent
                  applications.

                  4.04 Licensor shall provide Licensee with monthly bills for
approved services and expenses, and shall be paid any amounts due, within thirty
(30) days of Licensee's receipt of the appropriate bill to the extent such
amount has not been prepaid in any estimate.

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                  4.05 As further consideration under this Agreement, Licensee
will fund, through Licensor, research at Alfred University. Such research shall
be carried out by Dr. Xingwu Wang in accordance with an annual plan developed by
Licensor and Dr. Wang, and acceptable to Licensee. The principal investigator
shall be Dr. Xingwu Wang. The amount of funding for research acceptable to
Licensee shall be at least sixty-thousand dollars ($60,000) for the first year
pursuant to the R&D Agreement. Funding during subsequent years shall be optional
for Licensee and shall be determined based upon an annual plan submitted for
Licensee's review. The funds shall be advanced periodically on a schedule agreed
to by Licensee, Licensor and Dr. Xingwu Wang.

         5. ROYALTIES

                  5.01 Subject to Section 5.02, Licensee shall pay to Licensor a
royalty of five percent (5%) of the Net Sales Revenue and Unallocated Net Sales
Revenue collected.

                  5.02 If Licensee sells a Licensed Product that incorporates
one more other patented technologies licensed to or owned by Licensee for which
a royalty is payable to a third person, the royalty payable under Section 5.01
shall be adjusted by dividing five percent (5%) by the total of the royalty
rates payable on the applicable Licensed Product. In no event shall the royalty
rate payable under Section 5.01 be less than 1.666 percent.

                  5.03     SUBLICENSING

         (a) All sublicensing shall be the sole responsibility of Licensee.
Licensee shall supply Licensor with a copy of each sublicense agreement within
thirty (30) days after its execution.

         (b) Licensee shall pay to Licensor a sublicense  royalty of twenty-five
percent (25%) of the Sublicense Revenue.

         (c) If a Sublicensee is also a sublicensee of other patents, controlled
or licensed by Licensee that contribute to Sublicense Revenue, the percentage
payable under this Section 5.03 shall be adjusted by multiplying twenty five
percent (25%) by a fraction, the numerator of which is five percent (5%) and the
denominator of which is the total of the royalty rates payable on the Licensed
Products. However, in no event shall Licensor be paid less than
eight-and-one-third percent (8.333 %).

         6. PAYMENTS

                  6.01 Not later than the last day of each January, April, July
and October, Licensee shall furnish to Licensor a written statement, in such
detail as Licensor may reasonably require, of all amounts due pursuant to
Sections 4.02, 5.01 and 5.03 for the immediately preceding calendar quarter, and
shall pay to Licensor all amounts due to Licensor in U.S. Dollars. If no amount
is accrued during any quarterly period, a written statement to that effect shall
be furnished.

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                  6.02 Licensee's obligation to pay royalties under this
Agreement shall be imposed only once with respect to any Net Sale of any
Licensed Product regardless of whether the Licensed Product is covered by more
than one claim of a Licensed Patent.

                  6.03 Licensee and Licensor shall use all commercially
reasonable and legal efforts to reduce tax withholding on any payments to be
made to Licensor hereunder. If Licensee concludes that, notwithstanding such
efforts, tax withholding under the laws of any country is required with respect
to any royalty payment to be made to Licensor under this Agreement, Licensee
shall pay or cause its Sublicensee to pay any applicable withholding taxes
imposed by any such political jurisdiction on such royalty payments, and the
amount of any such payments shall be credited against Licensee's royalty
obligation under this Agreement. Licensee shall promptly provide Licensor with,
or promptly cause Licensor to be provided with, original receipts or other
evidence sufficient to allow Licensor to obtain the benefits of any such tax
withholding.

         7. REPRESENTATIONS AND WARRANTIES

                  7.01 Licensor represents and warrants that: except as
described in Exhibit 7.01, and section 2.02, (i) it owns or controls (or will
own or control within ten days after the execution of this agreement) the entire
right, title and interest in and to Inventions, and Licensed Patents and such
interest is not encumbered in any manner; (ii) Licensor has the right and power
to enter into this Agreement, and to grant the rights and licenses set forth
herein free and clear of any obligations to any third persons; and (iii) it has
not granted any license, assignment or other interest to any third person with
respect to any of the Inventions, Improvements, Licensed Patents or Know-how
other than outside the Licensed Field. Licensor also represents and warrants
that: (iv) Licensor has provided Licensee with copies of all, written or oral,
opinions of counsel, clearances, studies, licenses, and agreements relating to
the Licensed Patents and the Licensed Products; (v) the persons listed on
Exhibit 7.01A are all the officers, employees, and consultants of Licensor on or
prior to the Effective Date, and (vi) Licensor has not received any written or
oral communication from a third party that a Licensed Product may or actually
does infringe or otherwise violate any intellectual property right of such third
party.

                  7.02 NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE A
REPRESENTATION OR WARRANTY BY LICENSOR OF THE VALIDITY OF ANY OF THE LICENSED
PATENTS. UNLESS CAUSED BY A BREACH OF ITS EXPRESS WARRANTIES, LICENSOR SHALL
HAVE NO LIABILITY WHATSOEVER TO LICENSEE OR ANY OTHER PERSON FOR OR ON ACCOUNT
OF ANY INJURY, LOSS, OR DAMAGE, OF ANY KIND OR NATURE SUSTAINED BY, OR ANY
DAMAGE ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR
IMPOSED UPON LICENSEE OR ANY OTHER PERSON, ARISING OUT OF OR IN CONNECTION WITH
OR RESULTING FROM (A) THE PRODUCTION, USE, OR SALE OF ANY LICENSED PRODUCT; OR
(B) ANY ADVERTISING OR OTHER PROMOTIONAL ACTIVITIES WITH RESPECT TO ANY OF THE
FOREGOING, AND LICENSEE SHALL HOLD LICENSOR AND ITS OFFICERS; AGENTS, OR
EMPLOYEES, HARMLESS IF LICENSOR, OR ANY OF ITS OFFICERS, AGENTS, OR EMPLOYEES,
IS HELD LIABLE WITH RESPECT TO ANY OF THE FOREGOING.

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         8. TERMINATION

                  8.01 This Agreement shall terminate upon the expiration of the
last-to-expire of the Licensed Patents unless sooner terminated by Licensee.

                  8.02  Licensee may terminate  this  Agreement at any time upon
sixty (60) days' written notice to Licensor.

                  8.03 If either party shall be in default of any material
obligation hereunder, the other party may terminate this Agreement by giving
sixty (60) days' notice by Next Business Day Express Delivery Service to the
other party, specifying the basis for termination. If, within sixty (60) days
after the receipt of such notice, the party receiving notice shall remedy the
condition forming the basis for termination, this Agreement shall continue in
full force.

         9. LITIGATION

                  9.01 Each party shall notify the other party in writing of any
suspected infringement of a Licensed Patent and provide any evidence of such
infringement.

                  9.02 Licensee shall have the first right to institute suit for
infringement(s) of the Licensed Patents by a third person who is making, using,
and/or selling one or more Licensed Products within the Licensed Field. Licensor
will join as a party plaintiff in any such lawsuit initiated by Licensee, if
requested by Licensee. All costs, attorneys' fees, and expenses shall be paid by
Licensee; and, to the extent that Licensor incurs any liability as a result of
joining as such party Plaintiff, the Licensee shall fully indemnify the Licensor
for such liability. However, if Licensee does not institute suit for
infringement(s) within a reasonable period after receipt of written notice from
Licensor of Licensor's desire to bring suit for infringement in its own name and
on its own behalf, then Licensor may, at its own expense, bring suit or take any
other appropriate action.

                  9.03 If Licensee initiates legal action for enforcement of the
Licensed Patents, Licensee shall be entitled to any recovery of damages
resulting from a lawsuit brought by it pursuant to Section 9. Licensor shall be
entitled to recovery of damages resulting from any lawsuit brought by Licensor
to enforce any Licensed Patents pursuant to Section 9. If either party collects
damages resulting from a lawsuit pursuant to Section 9, such party shall pay to
the other twenty-five percent (25%) of the collected funds, after deducting
reasonable costs and attorneys fees from the total amount of such damages and
costs recovered.

                  9.04 Without the prior written consent of Licensor, Licensee
may not settle with an infringer of any Licensed Patents if such settlement
would materially affect the rights of Licensor with respect to the Licensed
Patents outside the Licensed Field. Without the prior written consent of
Licensee, Licensor may not settle with an infringer of any Licensed Patents if
such settlement would materially affect the rights of Licensee with respect to
the Licensed Patents in the Licensed Field.

                  9.05 If there is ever any litigation or other dispute or
difference with a third party, the parties hereto shall, and shall cause all
applicable inventors under their direction or control to, cooperate with each
other and make themselves available to assist in any such dispute.

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         10. RECORDS

                  Licensee shall keep accurate records of all operations
affecting payments hereunder, and shall permit an independent public accountant
mutually acceptable to the parties to inspect all such records annually, upon
ten (10) days' written notice, and to make confidential copies of or extracts
from such records during regular business hours for five (5) years after each
applicable royalty reporting period. Such records shall be deemed Proprietary
Information of Licensee and may not be disclosed, except to the Licensor,
although such accountant may use such records to determine the amounts due from
Licensee or Licensor hereunder and shall report the same to the parties.

         11. MISCELLANEOUS

                  11.01 Subject to the provisions of section 4.02, this
Agreement may be assigned by Licensee to its successors, assigns and designees,
and any of its present or future subsidiaries, or organizations controlled by,
controlling, or under common control with Licensee. Licensee's rights under this
Agreement and the licenses herein granted may be assigned to any person or
corporation succeeding to its business in Licensed Products as a result of any
sale, consolidation, reorganization, or otherwise, provided such assignee,
receiver, person, or corporation shall accept in writing the provisions of this
Agreement and agree to become bound thereby in the place and stead of Licensee.

                  11.02 The parties agree that if any part, term, or provision
of this Agreement shall be found illegal or in conflict with any valid
controlling law, the validity of the remaining provisions shall not be affected
thereby.

                  11.03 The waiver of a breach hereunder may be effected only by
a writing signed by the waiving party and shall not constitute a waiver of any
other breach.

                  11.04 This Agreement represents the entire understanding
between the parties and supersedes all other agreements, express or implied,
between the parties concerning its subject matter.

                  11.05 Any provision of this Agreement may be altered only by a
writing signed by both parties, except as provided in Section 11.01.

                  11.06 This Agreement shall be construed in accordance with the
substantive laws of the State of New York, without regard to its conflict of
laws principles, and each party consents to the exclusive personal jurisdiction
of the state and federal courts located in Monroe County, New York, if there is
a dispute between them hereunder.

                  11.07 Any notice required or permitted by this Agreement shall
be sent by pre-paid Next Day Express Delivery service, and shall be effective as
of its date of delivery. For the purpose of all written communications and
notices between the parties, their addresses shall be:

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         Licensor:         Nanoset, LLC, c/o Howard J. Greenwald,  349 West
                           Commercial Street, Suite 2490, Rochester, New
                           York 14445, and

         Licensee:         Attn: Michael Weiner, CEO, Biophan Technologies, Inc.
                           150 Lucius Gordon Drive -- Suite 215, West
                           Henrietta, New York 14586.

                  11.08    Arbitration.

         (a) Any controversy or dispute arising out of or in connection with
this Agreement, its interpretation, performance, or termination, and validity or
infringement of Licensed Patents, that the parties are unable to resolve within
ninety (90) days after written notice by one party to the other, shall be
submitted to binding arbitration in accordance with the Commercial Arbitration
Rules and (if applicable) the Patent Arbitration Rules of the American
Arbitration Association, as modified in this Article. Such arbitration shall
take place in a venue in Western New York, before a single arbitrator appointed
by the American Arbitration Association. The arbitrator shall render a reasoned
opinion on the matter within three (3) months from the date the hearing is
closed.

         (b) The institution of any arbitration hereunder shall not relieve
Licensee of its obligations to make undisputed payments to Licensor required by
the terms of this Agreement during the continuance of the arbitration
proceeding.

         (c) The decision of the arbitrator shall be binding and conclusive on
the parties, and they shall comply with such decision in good faith. Each party
hereby submits itself to the jurisdiction of the courts of the State of New
York, but only for the entry or enforcement of judgment with respect to the
decision of the arbitrator hereunder, including injunctive relief if appropriate
to render effective the arbitrator's decision. Notwithstanding the foregoing,
judgment on the award by the arbitrator may be entered in any court of the State
of New York or any court having jurisdiction. If judicial enforcement or review
of the arbitrator's decision is sought, the prevailing party shall be entitled
to its costs and reasonable attorneys' fees, in addition to any amount of
recovery ordered by the court.

                  11.09 Consistent with its reasonable practices, Licensee shall
include an appropriate patent marking on the Licensed Products, sufficient to
notify purchasers of the existence of the Licensed Patents. The notice shall
read "Licensed under Licensor's U.S. (or other authority) Numbers n,hhh,hhh;
n,hhh,hhh;". As soon as reasonably possible after receipt of a request from
Licensor to modify the notice to add additional newly issued Licensed Patents,
Licensee shall modify the notice.

                  11.10 For a period of five (5) years from the date of this
Agreement, each party ("receiver") receiving any proprietary and nonpublic
information ("Proprietary Information") of the other party ("discloser") shall
keep secret and confidential the Proprietary Information of the discloser, shall
not use such Proprietary Information for purposes other than those permitted by
this Agreement, and shall not disclose such Proprietary Information to any third
party without discloser's consent, except when, after, and to the extent that
the Proprietary Information: (a) was known to receiver at the time of its
disclosure by discloser, as evidenced by receiver's written records prepared
prior to such disclosure, (b) is now or may hereafter become generally available
to the public, by means other than receiver's failure to fulfill its obligations
hereunder, (c) is disclosed to receiver by a third party having no direct or
indirect secrecy obligation to discloser with respect to such information, or
(d) is required to be disclosed by governmental law or regulation or by court
order.

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                  11.11 All rights and licenses granted under or pursuant to
this Agreement by Licensor to Licensee are, for all purposes of Section 365(n)
of Title 11 of the United States Code ("Title 11"), licenses of rights to
"intellectual property" as defined in Title 11. During the term of this
Agreement Licensor shall create and maintain current copies to the extent
practicable of all such intellectual property. If a bankruptcy proceeding is
commenced by or against Licensor under Title 11, Licensee shall be entitled to a
copy of any and all such intellectual property and all embodiments of such
intellectual property, and the same, if not in the possession of Licensee, shall
be promptly delivered to it (a) upon Licensee's written request after the
commencement of such bankruptcy proceeding, unless Licensor, or its trustee or
receiver, elects within thirty (30) days to continue to perform all of its
obligations under this Agreement, or (b) if not delivered as provided under
clause (a) above, upon Licensee's request following the rejection of this
Agreement by or on behalf of Licensor. If Licensee has taken possession of all
applicable embodiments of the intellectual property of Licensor pursuant to this
Section 11.03 and the trustee in bankruptcy of Licensor does not reject this
Agreement, Licensee shall return such embodiments upon request. If Licensor
seeks or involuntarily is placed under Title 11 and the trustee rejects this
Agreement as contemplated under 11 U.S.C. 365(n)(1), Licensee hereby elects,
pursuant to Section 365(n) to retain all rights granted to Licensee under this
Agreement to the extent permitted by law. If Licensor seeks or is involuntarily
placed under the protection of the bankruptcy laws, Title XI, U.S. Code, and the
trustee in bankruptcy rejects this Agreement, Licensee hereby elects, pursuant
to Section 365(n), to retain all rights granted to it under this Agreement to
the extent permitted by the law.

         12.  RELEASE OF ALL PRIOR CLAIMS

         Each of the parties to this agreement (including Nanoset, LLC and
Biophan Technologies, Inc.), and each of the Members of Nanoset, LLC (Xingwu
Wang, Howard J. Greenwald, and Biomed Solutions, LLC) hereby release each of the
other parties to this agreement (Nanoset, LLC and Biophan Technologies, Inc.)
and each of the other Members of Nanoset, LLC (Xingwu Wang, Howard J. Greenwald,
and Biomed Solutions, LLC) from any and all claims that arose or have arisen
from January 1, 2002 until the execution of this agreement that such party has
against any of such other parties. The provisions of this agreement supersede
the provisions of the February 7, 2002 Contract between Nanoset LLC and Biophan
Technologies, Inc. The provisions of this agreement also supersede the
provisions of any agreement(s) made between Xingwu Wang and Biophan
Technologies, Inc. between January 1, 2002 and the execution of this agreement.

                                       11
<PAGE>

          IN WITNESS WHEREOF the parties have caused this Agreement to be
executed by their duly authorized officers on the respective dates hereinafter
set forth.

<TABLE>
<CAPTION>
Licensee - BIOPHAN TECHNOLOGIES, INC.

<S>     <C>                                                             <C>
         /s/ Guenter Jaensch                                           Date:  January 15, 2004
         --------------------------------------------                         ----------------
         Dr. Guenter Jaensch, Chairman

         /s/ Michael L. Weiner                                         Date:  January 15, 2004
         --------------------------------------------                         ----------------
         Michael L. Weiner, CEO

Licensor - NANOSET, LLC

         /s/ Howard J. Greenwald                                       Date:  January 15, 2004
         --------------------------------------------                         ----------------
         Howard J. Greenwald,
          Member

         /s/ Xingwu Wang                                               Date:  January 15, 2004
         --------------------------------------------                         ----------------
         Dr. Xingwu Wang, Member

         /s/ Michael L. Weiner                                         Date:  January 15, 2004
         --------------------------------------------                         ----------------
         Michael Weiner, on behalf of
         Biomed Solutions, Member
</TABLE>

                                       12

<PAGE>

 EXHIBIT 1.08

                                LICENSED PATENTS

                             NANOMAGNETIC TECHNOLOGY

(1)      JLH-649,  "Coated Stent  Assembly"  Filed  12/30/2003  (No  application
         number yet)

This application was filed in the names of Helfer,  Wang, Gray and Greenwald and
will be assigned after the closing of the deal on January 15, 2004.

(2)      JLH-636,  "MRI Contrast Agent Assembly" Filed  12/01/2003  (Application
         number 60/525,916)

This application was filed in the names of Heifer, Wang, Gray and Greenwald and
will be assigned after the closing of the deal on January 15, 2004.

(3)     XW-263, "Magnetic Resonance Imaging Coated Assembly" Filed 03/07/2003
        (Application number 10/384,288)

This application was filed in the names of Wang, Greenwald, Heifer, Gray and
Weiner and will be assigned after the closing of the deal on January 15, 2004.

(4)      XW-222, "Protective Assembly" Filed 02/24/2003 (Application number
         10/373,377)

This application was filed in the names of Wang, Greenwald,  Heifer and Gray and
will be assigned after the closing of the deal on January 15, 2004.

(5)      XW-397, "Magnetically Shielded Assembly" Filed 02/12/2003 (Application
         number 10/366,082)

This application was filed in the names of Wang and Greenwald and will be
assigned after the closing of the deal on January 15, 2004.

(6)      XW-390,   "Nanomagnetically   Shielded  Substrate"  Filed  0  1/21/2003
         (Application number - PCT/USO3/0 1671)

Partially assigned, partially not assigned based on status of corresponding US
cases.

(7)    XW-490, "Nanomagnetically Shielded Substrate" Filed 12/18/2002
       (Application number 10/324,773)

This application was filed in the names of Wang and Greenwald and will be
assigned after the closing of the deal on January 15, 2004.

(8)      XW-253, "Implantable Medical Shielding Device" Filed 12/07/2002
         (Application number 10/313,847)

This application was filed in the names of Wang, Heifer and Greenwald and will
be assigned after the closing of the deal on January 15, 2004.

                                       13
<PAGE>

(9)      XW-226, "Magnetically Shielded Assembly" Filed 11/25/2002 (Application
         number 10/303,264)

This application was filed in the names of Wang, Helfer and MacDonald and has
issued and been assigned to Nanoset.

(10)     XW-39l, "Nanomagnetic Shielding Assembly" Filed 10/18/2002 (Application
         number 10/273,73 8)

This application was filed in the name of Wang and has been assigned to Nanoset.

(11)     XW-387, "Magnetically Shielded Assembly" Filed 09/30/2002 (Application
         number 10/260,247)

This application was filed in the names of Wang, Heifer and MacDonald and has
issued (patent number 6,673,999) and been assigned to Nanoset.

(12)     XW-348, "Magnetically Shielded Conductor" Filed 09/13/2002 (Application
         number 10/242,969)

This application was filed in the names of Wang and Helfer and has been assigned
to Nanoset.

(13)     XW-395 "Magnetically Shielded Conductor" Filed 08/26/2002 (Application
         number 10/229,183)

This application was filed in the name of Wang and has been assigned to Nanoset.

(14)    JLH-3 89 "Magnetically Shielded Conductor" Filed 03/04/2002 (Application
        number 10/090,553)

This application was filed in the names of Heifer and Wang and has been assigned
to Nanoset.

(15)     15 XW-550 "Magnetically Shielded Conductor" Filed 01/22/2002
         (Application number 10/054,407)

This application was filed in the name of Wang and has issued (patent number
6,506,972) and been assigned to Nanoset.

                                       14
<PAGE>

EXHIBIT 7.01

                             EXCEPTIONS TO OWNERSHIP

         Substantially contemporaneously with the execution of this LICENSE
AGREEMENT, a "Research and Development Agreement" has been executed between
Nanoset, LLC, Dr. Xingwu Wang, and Howard J. Greenwald. Notwithstanding any
other provision of this LICENSE AGREEMENT, (1) the Inventions made by Xingwu
Wang, and/or Howard J. Greenwald, and/or other employees, members, and/or
consultants of Nanoset are subject to the terms of the Research and Development
Agreement, (2) no warranty is made by Nanoset, LLC with regard to rights in such
Inventions to the extent, if any, that such rights exceed the rights granted (or
expected to be granted, e.g., under Section 2.02(a)) to Nanoset, LLC under the
terms of such Research and Development Agreement, and (3)no grant, conveyance,
and/or license is made by Nanoset, LLC with regard to rights in such inventions
to the extent, if any, that such rights exceed the rights granted (or expected
to be granted, e.g., under Section 2.02(a)) to Nanoset, LLC under the terms of
such Research and Development Agreement.

         Thus, by way of illustration and to avoid any doubt, Licensee
acknowledges that Section 2.03 of the Research and Development Agreement excepts
certain Inventions from this LICENSE AGREEMENT. Furthermore, Licensee
acknowledges that, with regard to Inventions made by Xingwu Wang and/or Howard
J. Greenwald and/or other employees, members, and/or consultants of Nanoset
(except as the parties subsequently agree in writing), if the Research and
Development Agreement expires, Licensee will continue to have the rights under
this LICENSE AGREEMENT to Inventions for which Licensee paid the amounts due
under the Research and Development Agreement, but will have no right to new
inventions made after such expiration. Furthermore, License acknowledges that if
it terminates this LICENSE AGREEMENT, it will have no further rights under the
Research and Development Agreement.

                                       15
<PAGE>

EXHIBIT 7.01A

                           OFFICERS, ETC. OF LICENSOR

     The following are the Members of Nanoset,  LLC: (1) Xingwu Wang, (2) Howard
J. Greenwald, and Biomed Solutions, LLC. Nanoset, as of January 15, 2004, has no
employees. Nanoset, as of January 15, 2004, has retained no consultants.

                                       16

<PAGE>

EXHIBIT 12

                           FEBRUARY 7, 2002 AGREEMENT

               CONTRACT BETWEEN BIOPHAN TECHNOLOGIES, INC. (BTI),
                          XINGWU WANG, AND NANOSET LLC
              CONCERNING NANOMAGNETIC MATERIALS PATENT APPLICATIONS

         The patent application(s) will be assigned to Nanoset, LLC, with the
following understandings.

         a) Biophan Technologies, Inc. will pay Howard Greenwald for his time
involving this patent application(s) and will pay Dr. Wang, directly, a one-time
licensing fee of $10 000 now and $5,000 more when the patent application(s)
issues in exchange for a paid-up royalty fee, exclusive license for medical
application(s) for the life of any patent or patents (US and/or foreign) issuing
on such patent application(s). Medical uses shall include uses in shielding
pacemakers and other medical devices formulations, pharmaceuticals, composites,
prosthetics , etc. used for treating humans or animals in any fashion,
implantable or invasive or external. BTI rights shall include rights of
enforcement and sub-licensing in the medical field. BTI shall consult with
Howard Greenwald on enforcement strategies and potential downstream prosecution.

         b) BTI will negotiate an R&D contract for consulting services to
demonstrate the effectiveness of the technology in an MRI field. Dr. Wang will
determine who shall assist him in the project including use of facilities and
students at Alfred etc. Dr. Wang will bill BTI for his time on this project.

         c) In the event that the shielding shall prove effective for shielding
a metal pacemaker lead from MRI energies adequately to enable pacemaker
shielding that can be commercially applied, BTI will grant Mr. Wang an option to
acquire 25,000 shares of BTI stock at $1 per share.

                                       17
<PAGE>

         d) Rights for use in other non-medical devices (or applications) shall
remain with Nanoset (see b).

------------------------------            ------------------------------------
Mike Weiner                               Date
CEO
Biophan Technologies, Inc.

------------------------------            ------------------------------------
Xingwu Wang                               Date
Individual

------------------------------            ------------------------------------
Howard J. Greenwald, Esq.                 Date
Managing Partner
Nanoset, LLC

                                       18<PAGE>

Exhibit 10.52

                            STOCK PURCHASE AGREEMENT

                  THIS STOCK PURCHASE AGREEMENT is made as of the 5th day of
February, 2004, by and between Biophan Technologies, Inc. (the "Company"), a
corporation organized under the laws of the State of Nevada, with its principal
offices at 150 Lucius Gordon Drive, Suite 215, West Henrietta, New York 14586,
and SBI Brightline Consulting, LLC, a California limited liability company with
its principal offices at 2361 Campus Drive, Suite 210, Newport Beach, California
92612 (the "Purchaser").

                  IN CONSIDERATION of the mutual covenants contained in this
Agreement, the Company and the Purchaser hereby agree as follows:

                  SECTION 1. Authorization of Sale of the Shares. Subject to the
terms and conditions of this Agreement, the Company may issue and sell to the
Purchaser and the Purchaser shall purchase from the Company up to 17,750,000
shares of the Company's Common Stock (the "Shares"), par value $.005 per share
(the "Common Stock"). To the extent that the Company has available authorized
shares, the Company covenants to reserve and continue to reserve, free of
preemptive rights and other similar contractual rights of stockholders, a
sufficient number of its authorized but unissued shares of its Common Stock to
cover the Shares which may be issued pursuant to the terms of this Agreement.

                  SECTION 2.          Agreement to Purchase the Shares.

                  2.1 Schedule 2.1 attached hereto defines fourteen (14)
tranches of Shares that the Purchaser has agreed to purchase from the Company
(each, a "Tranche") and, with respect to each Tranche, sets forth the number of
Shares constituting such Tranche (the "Tranche Shares") and the purchase price
per share for the Tranche Shares in such Tranche (the "Tranche Purchase Price").

                  2.2 The Company may, in its sole discretion, elect to sell the
Tranche Shares of any Tranche to the Purchaser at any time after the date on
which a Registration Statement (as defined in Section 7.1) of the Company
covering the Shares elected to be sold is declared effective (an "Effective
Date"); provided, however, (i) the Company must elect to sell all of the Tranche
Shares included in a Tranche if it elects to sell any of the Tranche Shares in
such Tranche; and (ii) the Company must elect to sell the Tranche Shares in the
order that the Tranches are listed on Schedule 2.1. The Company may elect to
sell Tranche Shares included in more than one Tranche at the same time. To
effect its election to sell Shares, the Company must give written notice thereof
(an "Election Notice") to the Purchaser. The Election Notice shall specify the
Tranche or Tranches with respect to which the election is being made and the
date on which the closing of the sale and purchase of the Tranche Shares shall
occur; provided, such date shall be a business day and shall not be earlier than
five days after the date such Election Notice is given to the Purchaser. An
Election Notice shall be irrevocable except as provided in Section 3.5.

                                                                    Page 1 of 18
<Page>

                  SECTION 3.          Closing of the Purchase of the Shares.

                  3.1 Subject to the satisfaction or waiver of the conditions
precedent set forth in Sections 3.2 and 3.3, the closing of a purchase of
Tranche Shares by the Purchaser pursuant to this Agreement (each, a "Closing")
shall occur at 10:00 a.m. on the date specified in the Election Notice delivered
by the Company with respect to such Tranche Shares unless the Company and the
Purchaser have mutually agreed on a different time or date with respect to such
Closing (the time and date of the Closing of a particular Tranche is referred to
herein as the "Tranche Closing Date"). Unless otherwise agreed by the Company
and the Purchaser, each Closing shall occur at the offices of Nixon Peabody,
LLP, Rochester, New York.

                  3.2 The obligation of the Purchaser to purchase Tranche Shares
at a Closing shall be subject to the satisfaction of the following conditions,
or the waiver of such conditions by the Purchaser, at or prior to the applicable
Tranche Closing Date:

                  (a) the representations and warranties of the Company set
forth in Section 4 of this Agreement shall be true and correct with the same
force and effect as though expressly made on and as of such Tranche Closing
Date, except for representations or warranties made as of a particular date
which representations and warranties shall be true and correct as of such date;

                  (b) the Company shall have complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Tranche Closing Date;

                  (c) the Company shall have delivered to the Purchaser a
certificate executed by the Chairman of the Board or President and the chief
financial or accounting officer of the Company, dated the applicable Tranche
Closing Date, to the effect that the conditions in clauses (a) and (b) have been
satisfied; and

                  (d) a Registration Statement covering such Tranche Shares
shall have been declared effective and shall not have been withdrawn, no stop
order suspending the effectiveness of such Registration Statement shall be in
effect, and no proceedings for the suspension of the effectiveness of such
Registration Statement shall have been instituted or threatened by the
Securities and Exchange Commission (the "Commission").

                  3.3 The obligation of the Company to sell Tranche Shares at a
Closing shall be subject to the satisfaction of the following conditions, or the
waiver of such conditions by the Company, at or prior to the applicable Tranche
Closing Date:

                  (a) the representations and warranties of the Purchaser set
forth in Section 5 of this Agreement shall be true and correct with the same
force and effect as though expressly made on and as of such Tranche Closing
Date, except for representations or warranties made as of a particular date
which representations and warranties shall be true and correct as of such date;

                                                                    Page 2 of 18
<Page>

                  (b) the Purchaser shall have complied with all the agreements
hereunder and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to such Tranche Closing Date;

                  (c) the Purchaser shall have delivered to the Company a
certificate executed by a duly authorized officer of the Purchaser, dated the
applicable Tranche Closing Date, to the effect that the conditions in clauses
(a) and (b) have been satisfied; and

                  (d) no stop order suspending the effectiveness of the
Registration Statement covering such Tranche Shares shall be in effect, and no
proceedings for the suspension of the effectiveness of such Registration
Statement shall have been instituted or threatened by the Commission.

                  3.4 At each Closing, (i) each of the Company and the Purchaser
shall deliver to the other, as applicable, any documents required to be
delivered by Sections 3.2 or 3.3 which have not been delivered prior to such
Closing, (ii) the Purchaser shall pay to the Company, by wire transfer of
immediately available funds to an account designated in writing by the Company
at or prior to the Closing, the applicable Tranche Purchase Price for the
Tranche Shares being purchased at the Closing, and (iii) the Company shall
deliver to the Purchaser a stock certificate representing the Tranche Shares
being purchased or shall cause the Tranche Shares being purchased to be
electronically transferred to the Purchaser.

                  3.5 If a Closing does not occur on a proposed Tranche Closing
Date because the conditions specified in Sections 3.3 and 3.4 were not satisfied
at the time of the applicable proposed Tranche Closing Date, the Election Notice
with respect to the Tranche or Tranches proposed to be sold on such proposed
Tranche Closing Date shall automatically be revoked; provided, however, such
revocation shall not impair the right of the Company to give another Election
Notice with respect to the Tranche or Tranches covered by the revoked Election
Notice or to compel the Purchaser to purchase any Tranche Shares included in
such Tranche or Tranches on a subsequent Tranche Closing Date on which the
conditions specified in Section 3.2 are satisfied.

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

                  4.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and the Company is qualified to do business
as a foreign corporation in each jurisdiction in which qualification is
required, except where the failure to so qualify would not individually or in
the aggregate have a material adverse effect on the financial condition, results
of operations, properties or business of the Company taken as a whole.

                  4.2 Subsidiaries. As of the date hereof, the Company does not
have any subsidiaries other than LTR Antisense Technology, Inc., a New York
corporation, and MRIC Drug Delivery Systems, LLC, a New York limited liability
company. As used in this Section 4, the term "the Company" shall include such
subsidiaries.

                                                                    Page 3 of 18
<Page>

                  4.3 Authorized and Outstanding Capital Stock. The Company has
authorized the issuance of 80,000,000 shares of Common Stock, of which
approximately 57,476,396 shares are issued and outstanding as of January 31,
2004. The Company's stock option plan provides for the granting of options to
the Company's employees, directors, consultants and advisors, to purchase an
aggregate of up to 7,000,000 shares of Common Stock, of which as of January 31,
2004, options to purchase an aggregate of 3,844,993 shares of Common Stock were
outstanding. In addition, the Company has granted warrants to purchase an
aggregate of 4,463,669 shares of Common Stock as of the date of this Agreement.
Except for shares of Common Stock, options and warrants described in this
Section 4.3 and certain rights of Biomed Solutions, LLC to convert a debt owed
to it by the Company, as of January 31, 2004 there were no authorized or
outstanding options, warrants, preemptive rights, rights of first refusal or
other rights to purchase any capital stock of the Company or any equity or debt
securities convertible into or exchangeable or exercisable for capital stock of
the Company. Between January 31, 2004 and the date hereof, the Company has not
granted or issued any options, warrants, preemptive rights, rights of first
refusal or other rights to purchase any capital stock of the Company or any
equity or debt securities convertible into or exchangeable or exercisable for
capital stock of the Company except for shares of Common Stock issued upon the
exercise of outstanding warrants or options or the conversion of debt originally
held by Biomed Solutions, LLC.

                  4.4 Issuance, Sale and Delivery of the Shares. When issued,
delivered and paid for in the manner set forth in this Agreement, the Shares
will be duly authorized, validly issued, fully paid and nonassessable. No
preemptive rights or other rights to subscribe for or purchase exist with
respect to the issuance and sale of the Shares by the Company pursuant to this
Agreement. No further approval or authority of the stockholders or the Board of
Directors of the Company will be required for the issuance and sale of the
Shares to be sold by the Company as contemplated herein except for, with respect
to a portion of the Shares, the approval of the Board of Directors and the
stockholders to an amendment to the articles of incorporation of the Company to
increase the number of authorized shares of Common Stock of the Company.

                  4.5 Due Execution, Delivery and Performance of the Agreement.
The Company has full legal right, corporate power and authority to enter into
this Agreement and to perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company. The
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions herein contemplated will not violate any
provision of the organizational documents of the Company and will not result in
the creation of any lien, charge, security interest or encumbrance upon any
assets or property of the Company pursuant to the terms or provisions of, or
will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under
any agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company is a party or by which the
Company or any of its assets or properties may be bound or affected or any
statute or any authorization, judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other governmental body
applicable to the Company or any of its properties. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the execution, delivery and
performance of this Agreement or the consummation by the Company of the
transactions contemplated hereby, except for compliance with the Blue Sky laws
and federal securities laws applicable to the offering of the Shares. Assuming
the valid execution hereof by the Purchaser, this Agreement will constitute the

                                                                    Page 4 of 18
<Page>

legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Company in Section 7.3 hereof may be legally
unenforceable.

                  4.6 No Actions. There are no legal or governmental actions,
suits or proceedings pending or, to the Company's knowledge, threatened to which
the Company is or may be a party which seeks to prevent or restrain the
transactions contemplated by this Agreement or to recover damages as a result of
the consummation of such transactions.

                  4.7 Investment Company. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company, within the meaning of the Investment Company Act of
1940, as amended.

                  4.8 Conflicting Registration Rights. No stockholder of the
Company has any right (which has not been waived or has not expired by reason of
lapse of time following notification of the Company's intent to file the
Registration Statement) to request or require the Company to register the sale
of any shares owned by such stockholder under the Securities Act of 1933, as
amended (the "Securities Act"), on the Registration Statement.

                  4.9 Brokers. There is no broker, finder or other party that is
entitled to receive from the Company any brokerage or finder's fee or other fee
or commission as a result of any transactions contemplated by this Agreement.

                  4.10 Books and Records. The books, records and accounts of the
Company accurately and fairly reflect, in reasonable detail, the transactions
in, and dispositions of, the assets of, and the results of operations of, the
Company, all to the extent required by generally accepted accounting principles.
The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

                                                                    Page 5 of 18
<Page>

                  4.11 Sole Representations and Warranties. Except for the
representations and warranties contained in this Section 4, the Company makes no
representation or warranty to the Purchaser, express or implied, in connection
with the transactions contemplated by this Agreement.

                  SECTION 5. Representations, Warranties and Covenants of the
Purchaser. The Purchaser represents and warrants to the Company as follows:

                  5.1 Organization and Qualification. The Purchaser is a company
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation.

                  5.2 Due Execution, Delivery and Performance of the Agreements.
The Purchaser has full legal right, power and authority to enter into this
Agreement and to perform the transactions contemplated hereby. This Agreement
has been duly authorized, executed and delivered by the Purchaser. The
execution, delivery and performance of this Agreement by the Purchaser and the
consummation of the transactions herein contemplated will not violate any
provision of the organizational documents of the Purchaser and will not result
in the creation of any lien, charge, security interest or encumbrance upon any
assets or property of the Purchaser pursuant to the terms or provisions of, or
will not conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under
any agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Purchaser is a party or by which the
Purchaser or any of its assets or properties may be bound or affected or any
statute or any authorization, judgment, decree, order, rule or regulation of any
court or any regulatory body, administrative agency or other governmental body
applicable to the Purchaser or any of its properties. No consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body is required for the execution, delivery and
performance of this Agreement or the consummation by the Purchaser of the
transactions contemplated hereby. Assuming the valid execution hereof by the
Company, this Agreement will constitute the legal, valid and binding obligation
of the Purchaser, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Purchaser
in Section 7.3 hereof may be legally unenforceable.

                  5.3 No Actions. There are no legal or governmental actions,
suits or proceedings pending or, to the Purchaser's knowledge, threatened to
which the Purchaser is or may be a party which seeks to prevent or restrain the
transactions contemplated by this Agreement or to recover damages as a result of
the consummation of such transactions. The Purchaser has not been and is not
currently the subject of an investigation or inquiry by the Securities and
Exchange Commission, the NASD, or any state securities commission.

                                                                    Page 6 of 18
<Page>

                  5.4 Nature of Purchaser. The Purchaser is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in shares representing an investment decision like
that involved in the purchase of the Shares, including investments in securities
issued by the Company. The Purchaser is an "accredited investor" within the
meaning of Rule 501(a) of Regulation D promulgated under the Securities Act and
would be considered a large, institutional accredited investor. SBI USA, LLC,
which owns at least 80% of the outstanding equity securities of the Purchaser,
is a "qualified institutional buyer" (as such term is defined in Rule 144A(a)(1)
of the Securities Act). Based on the nature of the Purchaser and the amount of
its investments as of the date hereof for its own account and on a discretionary
basis for qualified institutional buyers; if the purchase of all of the Shares
were consummated on the terms set forth in this Agreement prior to the date
hereof, the Purchaser would qualify on the date of this Agreement as a qualified
institutional buyer. The Purchaser is not a "dealer" within the meaning of the
Securities Act or a "broker" or "dealer" within the meaning of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Purchaser is able to
bear the economic risk of loss of the Purchaser's entire investment in the
Shares.

                  5.5 Access to Information. The Purchaser has requested,
received, reviewed and considered all information it deems relevant in making an
informed decision to purchase the Shares. The Purchaser understands that the
Company is still in the development stage and does not have operating revenues.

                  5.5 Investment Intent. The Purchaser is acquiring the Shares
in the ordinary course of its business and for its own account for investment
only and with no present intention of distributing any of such Shares or
entering into any arrangement or understanding with any other person regarding
the distribution of such Shares (it being understood that the foregoing does not
limit the Purchaser's right to sell Shares pursuant to the Registration
Statement).

                  5.6 Sole Representations and Warranties. Except for the
representations and warranties contained in this Section 5, the Purchaser makes
no representation or warranty to the Company, express or implied, in connection
with the transactions contemplated by this Agreement.

                  SECTION 6. Survival of Representations, Warranties and
Agreements. Notwithstanding any investigation made by any party to this
Agreement, all covenants, agreements, representations and warranties made by the
Company and the Purchaser herein and in the certificates delivered pursuant
hereto shall survive the execution of this Agreement, the delivery to the
Purchaser of the Shares being purchased and the payment therefor.

                                                                    Page 7 of 18
<Page>

                  SECTION 7.          Covenants.

                  7.1      Registration Procedures and Expenses.

                  (a) The obligations of the Purchaser to purchase the Shares
shall be subject to the Company preparing and filing with the Commission one or
more registration statements on Form SB-2 or other applicable form as determined
by the Company (each, a "Registration Statement") for the purpose of registering
the sale of the Shares by the Purchaser from time to time on the facilities of
any securities exchange or trading system on which the Common Stock is then
traded or in privately-negotiated transactions, which Registration Statements
shall contain all material non-public information disclosed to the Purchaser by
the Company in connection with the issuance and sale of the Shares. For purposes
of this Section 7.1, the term "Shares" shall include any other securities of the
Company issued in exchange for the Shares, as a dividend on the Shares or in
connection with a stock split or other reorganization transaction affecting the
Shares. As soon as practicable, but in any event no later than forty-five (45)
days following the date of this Agreement, the Company shall file a Registration
Statement which covers the Shares included in the Tranches that the Company is
able to sell to the Purchaser without increasing its capitalization, after
taking into account shares that the Company may be obligated to issue pursuant
to outstanding warrants, options and convertible debt. The Company shall use its
commercially reasonable efforts to cause this initial Registration Statement to
become effective as soon as practicable. Filing of subsequent Registration
Statements to cover additional Shares shall be at the sole discretion of the
Company; provided that this sentence shall not affect the closing condition in
Section 3.2(d).

                  (b) The Company shall prepare and file with the Commission
such amendments and supplements to the Registration Statements and the
prospectuses forming a part thereof as may be necessary to keep the Registration
Statements effective until the earliest date, after the date on which all of the
Shares covered thereby have been purchased pursuant to this Agreement or the
obligation of the Purchaser to purchase the Shares covered thereby pursuant to
this Agreement has been terminated, on which (i) all the Shares covered thereby
have been disposed of pursuant to the Registration Statement, (ii) all of the
Shares covered thereby that are then held by the Purchaser may be sold under the
provisions of Rule 144 without limitation as to volume, whether pursuant to Rule
144(k) or otherwise, or (iii) the Company has determined that all Shares covered
thereby that are then held by the Purchaser may be sold without restriction
under the Securities Act and has removed any stop transfer instructions relating
to such Shares and offered to cause to be removed any restrictive legends on the
certificates, if any representing such Shares (the period between the Effective
Date and the earliest of such dates is referred to herein as the "Registration
Period"). At any time after the end of the Registration Period, the Company may
withdraw the applicable Registration Statement and its obligations under this
Section 7 (other than its obligations under Section 7.3) shall automatically
terminate.

         (c) The Purchaser agrees to comply with all federal and state
securities laws and the rules and regulations promulgated thereunder in
connection with any sale by it of the Shares, whether or not such sale is
pursuant to a Registration Statement. In connection with the sale of any Shares
pursuant to a Registration Statement, but without limiting the generality of the
foregoing sentence, the Purchaser shall (i) comply with the provisions of
Regulation M promulgated under the Exchange Act, and (ii) deliver to the

                                                                    Page 8 of 18
<Page>

purchaser of Shares the prospectus forming a part of such Registration Statement
and all relevant supplements thereto which have been provided by the Company to
the Purchaser on or prior to the applicable delivery date.

                  (d) The Company shall not be obligated to prepare and file a
post-effective amendment or supplement to a Registration Statement or the
prospectus constituting a part thereof during the continuance of a Blackout
Event. A "Blackout Event" means any of the following: (a) the possession by the
Company of material information that is not ripe for disclosure in a
registration statement or prospectus, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company or that disclosure of
such information in a Registration Statement or the prospectus constituting a
part thereof would be detrimental to the business and affairs of the Company; or
(b) any material engagement or activity by the Company which would, in the good
faith determination of the Chief Executive Officer or the Board of Directors of
the Company, be adversely affected by disclosure in a registration statement or
prospectus at such time.

                  (e) At least two (2) days prior to the filing with the
Commission of a Registration Statement (or any amendment thereto) or the
prospectus forming a part thereof (or any supplement thereto), the Company shall
provide draft copies thereof to the Purchaser and shall consider incorporating
into such documents such comments as the Purchaser (and its counsel) may propose
to be incorporated therein. Notwithstanding the foregoing, no prospectus
supplement, the form of which has previously been provided to the Purchaser,
need be delivered in draft form to the Purchaser.

                  (f) The Company shall promptly notify the Purchaser upon the
occurrence of any of the following events in respect of a Registration Statement
or the prospectus forming a part thereof: (i) receipt of any request for
additional information from the Commission or any other federal or state
governmental authority during the Registration Period, the response to which
would require any amendments or supplements to such Registration Statement or
related prospectus; (ii) the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
such Registration Statement or the initiation of any proceedings for that
purpose; or (iii) receipt of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Shares for sale
in any jurisdiction or the initiation or threatening of any proceeding for such
purpose.

                  (g) The Company shall furnish to the Purchaser with respect to
the Shares registered under a Registration Statement (and to each underwriter,
if any, of such Shares) such number of copies of prospectuses and such other
documents as the Purchaser may reasonably request, in order to facilitate the
public sale or other disposition of all or any of the Shares by the Purchaser
pursuant to such Registration Statement.

                                                                    Page 9 of 18
<Page>

                  (h) The Company shall file or cause to be filed such documents
as are required to be filed by the Company for normal blue sky clearance in
states specified in writing by the Purchaser; provided, however, that the
Company shall not be required to qualify to do business or consent to service of
process in any jurisdiction in which it is not now so qualified or has not so
consented.

                  (i) With a view to making available to the Purchaser the
benefits of Rule 144, the Company agrees, throughout the Registration Period and
so long as the Purchaser owns Shares purchased pursuant to this Agreement, to:

                           (i) comply with the provisions of paragraph (c)(1) of
Rule 144; and

                           (ii) file with the Commission in a timely manner all
reports and other  documents  required  to be filed by the  Company  pursuant to
Section  13 or 15(d)  under  the  Exchange  Act;  and,  if at any time it is not
required to file such  reports but in the past had been  required to or did file
such reports,  it will, upon the request of the Purchaser,  make available other
information  as required  by, and so long as  necessary  to permit  sales of its
Shares pursuant to, Rule 144.

                  (j) The Company shall bear all expenses incurred by it in
connection with the procedures in paragraphs (a) through (i) of this Section 7.1
and the registration of the Shares pursuant to each Registration Statement. The
Company shall not be responsible for any expenses incurred by the Purchaser in
connection with its sale of the Shares or its participation in the procedures in
paragraphs (a) through (i) of this Section 7.1 including, without limitation,
any fees and expenses of counsel or other advisers to the Purchaser and any
underwriting discounts, brokerage fees and commissions incurred by the
Purchaser.

                  7.2      Covenants of the Purchaser.

                  (a) The Purchaser acknowledges and understands that the Shares
are "restricted securities" as defined in Rule 144. The Purchaser hereby agrees
not to offer or sell (as such terms are defined in the Securities Act and the
rules and regulations promulgated thereunder) any Shares unless such offer or
sale is made (a) pursuant to an effective registration of the Shares under the
Securities Act, or (b) pursuant to an available exemption from the registration
requirements of the Securities Act. The Purchaser agrees that it will not engage
in hedging transactions with regard to the Shares other than in compliance with
the Securities Act. A proposed transfer shall be deemed to comply with this
Section 7.2(a) if the Purchaser delivers to the Company a legal opinion in form
and substance satisfactory to the Purchaser from counsel satisfactory to the
Purchaser to the effect that such transfer complies with this Section 7.2(a).

                  (b) If at any time or from time to time after an Effective
Date, the Company notifies the Purchaser in writing that a Registration
Statement or the prospectus forming a part thereof (taking into account any
prior amendments or supplements thereto) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not

                                                                   Page 10 of 18
<Page>

misleading, the Purchaser shall not offer or sell any Shares or engage in any
other transaction involving or relating to the Shares (other than purchases of
Shares pursuant to this Agreement), from the time of the giving of notice with
respect to such untrue statement or omission until the Purchaser receives
written notice from the Company that such untrue statement or omission no longer
exists or has been corrected or disclosed in an effective post-effective
amendment to such Registration Statement or a valid prospectus supplement to the
prospectus forming a part thereof.

                  (c) In connection with the sale of any Shares pursuant to a
Registration Statement, the Purchaser shall deliver to the purchaser thereof the
prospectus forming a part of such Registration Statement and all relevant
supplements thereto which have been provided by the Company to the Purchaser on
or prior to the applicable delivery date, all in accordance with the
requirements of the Securities Act and the rules and regulations promulgated
thereunder and any applicable blue sky laws.

                  (d) The Company may refuse to register (or permit its transfer
agent to register) any transfer of any Shares not made in accordance with this
Section 7.2 and for such purpose may place stop order instructions with its
transfer agent with respect to the Shares.

                  (e) The Purchaser will cooperate with the Company in all
respects in connection with the performance by the Company of its obligations
under Section 7.1, including timely supplying all information reasonably
requested by the Company (which shall include all information regarding the
Purchaser, and any person who beneficially owns Shares held by the Purchaser
within the meaning of Rule 13d-3 promulgated under the Exchange Act, and the
proposed manner of sale of the Shares required to be disclosed in each
Registration Statement) and executing and returning all documents reasonably
requested in connection with the registration and sale of the Shares. The
Purchaser hereby consents to be named as an underwriter in each Registration
Statement, if applicable, in accordance with current Commission policy and, if
necessary, to join in the request of the Company for the acceleration of the
effectiveness of each Registration Statement.

                  (f) Neither the Purchaser nor any entity controlling it, under
its control or under common control with it has, prior to the execution of this
Agreement, and will not, for a period of eighteen (18) months following the
execution of this Agreement, carry a net short position in the Common Stock of
the Company, participate in any short selling activities, recommendations, or
collusion, directly or indirectly, as such activities relate to the Common Stock
of the Company. A net short position will include any derivative instruments
such as a put option, collar, swap or any other instrument which would result in
a net short position.

                  7.3      Indemnification. For the purpose of this Section 7.3:

                  (i)      the term "Purchaser Affiliate" shall mean any person
                           who controls the Purchaser within the meaning of
                           Section 15 of the Securities Act or Section 20 of the
                           Exchange Act; and

                                                                   Page 11 of 18
<Page>

                  (ii)     the term "Registration Statement" shall include any
                           final prospectus, exhibit, supplement or amendment
                           included in or relating to a Registration Statement
                           referred to in Section 7.1.

                  (a) The Company  agrees to  indemnify  and hold  harmless  the
Purchaser and each Purchaser Affiliate, against any losses, claims, damages,
liabilities or expenses, joint or several, to which such Purchaser or such
Purchaser Affiliate may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common law
or otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in a Registration
Statement, as amended as of the applicable Effective Date, including any
information deemed to be a part thereof as of the time of effectiveness pursuant
to paragraph (b) of Rule 430A, or pursuant to Rule 434 promulgated under the
Securities Act, or the prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of such
Registration Statement at the time of effectiveness if no Rule 424(b) filing is
required (the "Prospectus"), or any amendment or supplement thereto, (ii) the
omission or alleged omission to state in such Registration Statement as of the
applicable Effective Date a material fact required to be stated therein or
necessary to make the statements in such Registration Statement or any
post-effective amendment or supplement thereto, or in the Prospectus or any
amendment or supplement thereto, not misleading, in each case in the light of
the circumstances under which the statements contained therein were made, or
(iii) any inaccuracy in the representations and warranties of the Company
contained in this Agreement, or any failure of the Company to perform its
obligations hereunder, and will reimburse the Purchaser and each such Purchaser
Affiliate for any legal and other expenses as such expenses which are reasonably
incurred by the Purchaser or such Purchaser Affiliate in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in a Registration
Statement, the Prospectus or any amendment or supplement thereto in reliance
upon and in conformity with written information furnished to the Company by the
Purchaser expressly for use therein, or (ii) the failure of the Purchaser to
comply with the covenants and agreements contained in Section 7.2 hereof
respecting the sale of the Shares, or (iii) the inaccuracy of any
representations made by the Purchaser herein or (iv) any statement or omission
in any Prospectus that is corrected or disclosed in any subsequent Prospectus
that was delivered to the Purchaser prior to the pertinent sale or sales by the
Purchaser.

                  (b) The Purchaser will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed a Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act and the Exchange Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed such Registration Statement or controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or

                                                                   Page 12 of 18
<Page>

state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser) insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (i) any failure to comply with the covenants and agreements
contained in Section 7.2 hereof respecting the sale of the Shares, (ii) the
inaccuracy of any representation made by the Purchaser herein, or (iii) any (x)
untrue or alleged untrue statement of any material fact contained in such
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or (y) omission or alleged omission to state in such Registration Statement, the
Prospectus or any amendment or supplement thereto a material fact required to be
stated therein or necessary to make the statements in such Registration
Statement or any amendment or supplement thereto, or in the Prospectus or any
amendment or supplement thereto, not misleading, in each case in the light of
the circumstances under which they were made; provided, that the Purchaser's
indemnification obligation under this clause (iii) shall apply to the extent,
and only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in such Registration Statement, the
Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by the Purchaser
expressly for use therein, and will reimburse the Company, each of its
directors, each of its officers who signed such Registration Statement or
controlling person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who signed such
Registration Statement or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action.

                  (c) Promptly after receipt by an indemnified party under this
Section 7.3 of notice of the threat or commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 7.3, promptly notify the indemnifying
party in writing thereof; provided, the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution (except as provided in paragraph (d)) or
otherwise than under the indemnity agreement contained in this Section 7.3 or to
the extent it is not prejudiced as a result of such failure. In case any such
action is brought against any indemnified party and such indemnified party seeks
or intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it may wish, jointly
with all other indemnifying parties similarly notified, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 7.3 for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof unless
the indemnified party shall not have employed counsel reasonably satisfactory to

                                                                   Page 13 of 18
<Page>

the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of action, in which case the reasonable fees
and expenses of counsel shall be at the expense of the indemnifying party.

                  (d) If the indemnification provided for in this Section 7.3 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a) or (b) of this Section 7.3 in respect to any losses, claims, damages,
liabilities or expenses referred to herein (subject to the limitation of
paragraph (c) of this Section 7.3), then each applicable indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of any losses, claims, damages, liabilities or expenses referred to
herein (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and the Purchaser from the placement of the Common Stock
contemplated by this Agreement or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
the relative fault of the Company and the Purchaser in connection with the
statements or omissions or inaccuracies in the representations and warranties in
this Agreement that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchaser on the other
shall be deemed to be in the same proportion as the amount paid by the Purchaser
to the Company pursuant to this Agreement for the Shares purchased by the
Purchaser that were sold pursuant to the Registration Statement bears to the
difference (the "Difference") between the amount such Purchaser paid for the
Shares that were sold pursuant to the Registration Statement and the amount
received by such Purchaser from such sale. The relative fault of the Company on
the one hand and the Purchaser on the other shall be determined by reference to,
among other things, whether the untrue or alleged statement of a material fact
or the omission or alleged omission to state a material fact or the inaccurate
or the alleged inaccurate representation and/or warranty relates to information
supplied by the Company or by the Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement, omission or inaccuracy. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
paragraph (c) of this Section 7.3, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in paragraph (c) of this Section
7.3 with respect to the notice of the threat or commencement of any threat or
action shall apply if a claim for contribution is to be made under this

                                                                   Page 14 of 18
<Page>

paragraph (d); provided, however, that no additional notice shall be required
with respect to any threat or action for which notice has been given under
paragraph (c) for purposes of indemnification. The Company and each Purchaser
agree that it would not be just and equitable if contribution pursuant to this
Section 7.3 were determined solely by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, the Purchaser shall not be required to contribute any amount in excess of
the amount by which the Difference exceeds the amount of any damages that the
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

                  7.4 Information Available. So long as a Registration Statement
is effective covering the resale of Shares then still owned by the Purchaser,
the Company will furnish to the Purchaser:

                  (a) as soon as practicable after available, one copy of (i)
its Annual Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting principles
by a firm of certified public accountants), (ii) upon written request, its
Annual Report on Form 10-KSB, (iii) upon written request, its Quarterly Reports
on Form 10-QSB, (iv) upon written request, its Current Reports on Form 8-K, and
(v) a full copy of each Registration Statement (the foregoing, in each case,
excluding exhibits); and

                  (b) upon the written request of the Purchaser, all exhibits
excluded by the parenthetical to subparagraph (a)(v) of this Section 7.4.

                  SECTION 8. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, confirmed facsimile or nationally recognized
overnight express courier postage prepaid, and shall be deemed given when so
mailed and shall be delivered as addressed as follows:

                  (a) if to the Company, to:

                                    Biophan Technologies, Inc.
                                    150 Lucius Gordon Drive
                                    Suite 215
                                    West Henrietta, New York 14586
                                    Phone:  585.214.2441
                                    Facsimile:       585.427.9049
                                    Attn:  Michael L. Weiner

                                    with a copy to:

                                    Nixon Peabody LLP
                                    Clinton Square
                                    P.O. Box 31051
                                    Rochester, New York 14603-1051
                                    Phone:           585.263.1000
                                    Facsimile:       585.263.1600
                                    Attn.:  Melissa A. Mahler, Esq.

                                                                   Page 15 of 18
<Page>

                           or to such other person at such other place as the
                           Company shall designate to the Purchaser in writing;
                           and

                  (b) if to the Purchaser, at its address as set forth above or
at such other address or addresses as may have been furnished to the Company in
writing.

                  SECTION 9. Assignment. Neither party hereto may assign or
delegate any of such party's rights or obligations under or in connection with
this Agreement, and any attempted assignment or delegation of such rights or
obligations shall be void. Except as expressly provided in Section 7.3 with
respect to Purchaser Affiliates, directors and controlling persons of the
Company and officers of the Company who signed a Registration Statement, no
person, including without limitation any person who purchases or otherwise
acquires or receives any Shares from the Purchaser, is an intended third party
beneficiary of this Agreement, and no party to this Agreement shall have any
obligation arising under this Agreement to any person other than the other party
hereto and, to the extent expressly provided in Section 7.3, Purchaser
Affiliates, directors and controlling persons of the Company and officers of the
Company who signed a Registration Statement.

                  SECTION 10. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Purchaser.

                  SECTION 11. Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.

                  SECTION 12. Severability. In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

                  SECTION 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to its conflicts of law principles and the federal law of the United
States of America.

                  SECTION 14. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other parties.

                                                                   Page 16 of 18
<Page>

                  IN WITNESS WHEREOF, the parties hereto have caused this
  Agreement to be executed by their duly authorized representatives as of the
  day and year first above written.

                          Biophan Technologies, Inc.

                          By:  /s/ Robert J. Wood
                               ------------------------------------------------
                          Name:    Robert J. Wood
                          Title:   Vice-President, Treasurer and Chief
                                   Financial Officer

                          SBI Brightline Consulting, LLC

                          By:  /s/ Shelly Singhal
                               ------------------------------------------------
                          Name:  Shelly Singhal
                          Title:   Managing Member

                                                                   Page 17 of 18
<Page>

                                                                SCHEDULE 2.1

                                    TRANCHES

                      Number of Tranche Shares     Tranche Purchase Price per
 Tranche No.             Included in Tranche      Tranche Share (U.S. Dollars)
 -----------             -------------------      ----------------------------
      1                       2,000,000                       $0.60
      2                       2,000,000                       $0.65
      3                       2,000,000                       $0.70
      4                       2,000,000                       $0.80
      5                       1,000,000                       $2.00
      6                       1,000,000                       $2.00
      7                       1,000,000                       $2.00
      8                       1,000,000                       $2.00
      9                       1,000,000                       $2.00
     10                       1,000,000                       $2.00
     11                       1,000,000                       $2.00
     12                       1,000,000                       $2.00
     13                       1,000,000                       $2.00
     14                        750,000                        $2.00

                                                                   Page 18 of 18

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