Document:

EXHIBIT  4.2
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                  2002 AMENDED AND RESTATED OUTSIDE DIRECTORS'
                              STOCK OPTION PLAN OF
                           POMEROY IT SOLUTIONS, INC.

     1.     PURPOSE  OF  THE  PLAN.  This  2002  Amended  and  Restated  Outside
Directors'  Stock  Option  Plan  of  Pomeroy  IT  Solutions, Inc. is intended to
encourage  directors  of  the  Company  who are not officers or employees of the
Company  or  any  of  its Subsidiaries to acquire or increase their ownership of
common stock of the Company on reasonable terms.  The opportunity so provided is
intended  to  foster  in  participants  a  strong incentive to put forth maximum
effort for the continued success and growth of the Company and its Subsidiaries,
to  aid  in  retaining  individuals who put forth such efforts, and to assist in
attracting  the  best available individuals to the Company to serve as directors
in  the  future.

     2.     DEFINITIONS.  When  used  herein, the following terms shall have the
meaning  set  forth  below:

          2.1     "Administrator"  means  the  Board  or  any  of its Committees
appointed  pursuant  to  Section  4  of  the  Plan.

          2.2     "Award"  means  an  Option.

          2.3     "Award  Agreement"  means  a written agreement in such form as
may  be,  from time to time, hereafter approved by the Committee, which shall be
duly executed by the Company and the Director and which sets forth the terms and
conditions  of  an  Option  as  provided  under  the  Plan.

          2.4     "Board"  means  the  Board  of  Directors  of Pomeroy Computer
Resources,  Inc.

          2.5     "Common  Stock"  means  shares  of the Company's common stock,
par  value  .01  per  share.

          2.6     "Code"  means  the Internal Revenue Code of 1986, as in effect
at  the  time of reference, or any successor revenue code which may hereafter be
adopted  in  lieu  thereof, and reference to any specific provisions of the Code
shall  refer  to the corresponding provisions of the Code as it may hereafter be
amended  or  replaced.

          2.7     "Committee"  means  the  Committee  appointed  by the Board of
Directors in accordance with paragraph (a) of Section 4 of the Plan.

          2.8     "Company"  means  Pomeroy  Computer  Resources,  Inc.

          2.9     "Directors" means directors who serve on the Board and who are
not officers or employees of the Company or any of its Subsidiaries.

          2.10     "Exchange  Act" means the Securities Exchange Act of 1934, as
amended.

          2.11     "Fair  Market  Value" means, as of any date, the value of the
Common  Stock  determined  as  follows:

               (i)     If  the  Common  Stock is listed on any established stock
exchange  or  a  national market system, including without limitation the Nasdaq
National Market, its Fair Market Value shall be the closing sales price for such
stock  (or  the  closing  bid,  if  no  sales  were  reported)  as  quoted  on

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such  system  or  exchange  for the last market trading day prior to the time of
determination as reported in the Wall Street Journal or such other source as the
Administrator  deems  reliable;  or

               (ii)     If  the Common Stock is quoted on NASDAQ (but not on the
National  Market  System thereof) or regularly quoted by a recognized securities
dealer  but  selling prices are not reported, its Fair Market Value shall be the
mean between the high and low asked prices for the Common Stock; or

               (iii)     In  the absence of an established market for the Common
Stock,  the  Fair  Market Value thereof shall be determined in good faith by the
Administrator.

          2.12     "Option" means the right to purchase the number of the Common
Stock  specified  by  the Plan, at a price and for a term fixed by the Plan, and
subject to such other limitations and restrictions as the Plan and the Committee
impose.  The  term  Option  includes Initial Options and Anniversary Options, as
defined  in  Section  5.

          2.13     "Optioned Stock" means the Common Stock subject to an Option.

          2.14     "Optionee"  means  a  Director  who  receives  an  Option.

          2.15     "Parent"  means  a  "parent  corporation",  whether  now  or
hereafter existing, as defined in Section 424(e) of the Code.

          2.16     "Plan"  means the Company's 2002 Amended and Restated Outside
Directors'  Stock  Option  Plan.

          2.17     "Share"  means  a  share  of  Common  Stock,  as  adjusted in
accordance  with  Section  12  of  this  Plan.

          2.18     "Subsidiary"  means  any  corporation  or  other legal entity
other  than  the  employer  corporation  in an unbroken chain of corporations or
other  legal  entities  beginning  with  the employer corporation if each of the
corporations  or  other  legal entities other than the last corporation or other
legal  entity  in  the  unbroken chain owns stock, a membership interest, or any
other  voting  interest  possessing  fifty  percent  (50%)  or more of the total
combined  voting  power  of  all classes of stock, membership interests or other
voting  interests  in  one  of the other corporations or other legal entities in
such  chain.

          2.19     "Term"  means the period during which a particular Option may
be  exercised.

     3.     STOCK  SUBJECT TO THE PLAN.  Subject to the provisions of Section 12
of the Plan, the maximum aggregate number of shares of which may be optioned and
sold  under  the  Plan  is  281,356 (which includes options for 35,000 shares of
Common  Stock  which  were  outstanding  under the 1992 Outside Directors' Stock
Option  Plan  (the  "1992  Directors'  Plan")  as  of  March 30, 2004 (the "1992
Outstanding  Options")).  As  of  the effective date of the Amended and Restated
Outside  Directors'  Plan,  246,356 shares of Common Stock shall be reserved for
issuance  under  the  Plan  (which  includes  27,500 shares that were subject to
options  under  the 1992 Directors Plan that have been canceled or expired as of
March  30,  2004), however, the number of shares reserved for issuance under the
Plan  shall  automatically increase as the 1992 Outstanding Options are canceled
or  expire  (by an amount equal to the number of shares of Common Stock issuable
upon exercise of such canceled or expired 1992 Outstanding Options).  The number
of  shares  of  Common  Stock  reserved  for  issuance under this Plan shall not
increase  as  a  result  of the exercise of any of the 1992 Outstanding Options.
The  Common  Stock  may be authorized, but unissued, or reacquired Common Stock.

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          If  an  Option  would  expire  or  become unexercisable for any reason
without having been exercised in full, the unpurchased shares which were subject
thereto  shall, unless the Plan shall have been terminated, become available for
future  grant  under  the  Plan.

     4.     ADMINISTRATION OF THE PLAN.

          (a)     The  Board shall appoint the Committee, which shall consist of
not  less  than  two  (2)  disinterested persons as defined in Rule 16b-3 of the
Exchange  Act.  Subject  to the provisions of the Plan, the Committee shall have
full authority to interpret the Plan, and to prescribe, amend, and rescind rules
and  regulations  relating  to  it.  The  Board  may, from time to time, appoint
members  to  the  Committee  in  substitution  for  or  in  addition  to members
previously  appointed  and may fill vacancies, however caused, in the Committee.
The Committee shall select one of its members as its Chairman and shall hold its
meetings at such times and places as it shall deem advisable.  A majority of its
members  shall constitute a quorum.  Any action of the Committee may be taken by
a written instrument signed by all of the members, and any action so taken shall
be  fully  as  effective  as if it had been taken by a vote of a majority of the
members  at a meeting duly called and held.  The Committee shall make such rules
and  regulations  for the conduct of its business as it shall deem advisable and
shall  keep  minutes  of its meetings and records of all action taken in writing
without  a  meeting.  No member of the Committee shall be liable, in the absence
of  bad  faith,  for  any act or omission with respect to his/her service on the
Committee.

          (b)      Powers  of  the  Administrator.  Subject to the provisions of
                   ------------------------------
the  Plan  and  in the case of a Committee, the specific duties delegated by the
Board  to  such  Committee,  the  Administrator shall have the authority, in its
discretion:

               (i)     to  determine  the Fair Market Value of the Common Stock,
in accordance with Section 2.11 of the Plan;

               (ii)    to  approve forms of agreement for use under the Plan;

               (iii)   to  determine  whether  and  under  what  circumstance an
Option may be settled in cash under Section 8(d) instead of Common Stock;

          (c)     Effective  Committee's  Decision.   All  decisions,
                  --------------------------------
determinations  and  interpretations  of  the  Administrator  shall be final and
binding on all Optionees and any other holders of any Options.

     5.     GRANT  OF  OPTIONS.  An  Option  to purchase 10,000 shares of Common
Stock (the "Initial Option") shall, without action by the Board or Committee, be
granted  to each Director on the first day of his/her initial term as a director
or  on  the  effective  date  of the Plan, whichever shall occur later, provided
he/she  meets  the  definition  of a disinterested director in Rule 16b-3 of the
Exchange  Act.  Upon  the first day of an eligible Director's second consecutive
year  of  service on the Board, and on the first day of each consecutive year of
service  thereafter,  an  additional  Option  to purchase 5,000 shares of Common
Stock (an "Anniversary Option") shall, without action by the Board or Committee,
be  granted  to  such Director.  In the event of a Director who is commencing an
initial  term,  but such Director had been a Director of the Company previously,
the  Administrator may, in its sole discretion, determine to decrease the number
of  shares  subject  to  the  Initial Option, taking into account the particular
circumstances  of  such  situation.  Notwithstanding the foregoing provisions of
this paragraph, if the number of shares of Common Stock available to grant under
the  Plan  on  a  scheduled  date of grant is insufficient to make all automatic
grants required to be made pursuant to the Plan on such date, then each eligible
Director  shall receive an Option to purchase a pro rata number of the remaining
shares of Common Stock available under the Plan; provided, however, that if such
proration  results  in fractional shares of Common Stock, then such Option shall
be rounded down to the nearest number of whole shares of Common Stock.

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     6.     STOCK OPTIONS.

          6.1     Option Price.
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               (a)     The  exercise price per share of any Option granted under
the Plan shall be the Fair Market Value of the shares of Common Stock covered by
the  Option  on  the  date  set  forth  in  Section  2.11.

               (b)     The  consideration to be paid for the Shares to be issued
upon exercise of an Option, including the method of payment, shall be determined
by  the  Administrator  and  may  consist  entirely  of (1) cash, (2) check, (3)
promissory  note, (4) other Shares which (x) in the case of Shares acquired upon
exercise  of  an Option either have been owned by the Optionee for more than six
months  on  the  date of surrender or were not acquired, directly or indirectly,
from  the  Company,  and  (y)  have a Fair Market Value on the date of surrender
equal  to  the  aggregate  exercise  price of the Shares as to which said Option
shall  be exercised, (5) authorization from the Company to retain from the total
number  of  Shares  as  to  which  the Option is exercised that number of Shares
having  a  Fair Market Value on the date of exercise equal to the exercise price
for the total number of Shares as to which the Option is exercised, (6) delivery
of a properly executed notice together with irrevocable instructions to a broker
to  promptly deliver to the Company the amount of sale or loan proceeds required
to  pay  the  exercise  price,  (7)  by  delivering  an irrevocable subscription
agreement  for  the Shares which irrevocably obligates the option holder to take
and pay for the Shares not more than twelve months after the date of delivery of
the  subscription  agreement,  (8)  any  combination of the foregoing methods of
payment  or  (9) such other consideration and method of payment for the issuance
of  Shares  to  the  extent  permitted under all applicable laws.  In making its
determination as to the type of consideration to accept, the Administrator shall
consider  if  acceptance  of  such  consideration  may be reasonably expected to
benefit  the  Company.

               (c)     The  Company,  in  its  sole  discretion, may establish a
procedure  whereby  a Director, subject to the requirements of Section 16 of the
Exchange  Act,  Rule  16b-3,  Regulation  T,  federal income tax laws, and other
federal,  state  and  local  tax  and securities laws, can exercise an Option or
portion  thereof  without  making  a  direct  payment of the option price to the
Company.  If  the  Company so elects to establish the cashless exercise program,
the Company shall determine, in its sole discretion, and from time to time, such
administrative  procedures  and  policies  as  it  deems  appropriate,  and such
procedures  and policies shall be binding on any Director wishing to utilize the
cashless  exercise  program.

          6.2     Terms of Options.
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               (a)     Prior  to  June  10,  2004,  any Option granted hereunder
shall be exercisable for a Term of five (5) years from the date of grant thereof
(Date  of  Grant),  but  shall  be subject to earlier termination as hereinafter
provided, and prior to its expiration or termination the Option may be exercised
within  the  following  time  limitations.

                    (i)     After one (1) year from the Date of Grant, it may be
exercised  as  to  not  more  than one-third (1/3) of the shares of Common Stock
originally  subject  to  the  Option.

                    (ii)     After  two (2) years from the Date of Grant, it may
be  exercised as to not more than two-thirds (2/3) of the shares of Common Stock
originally  subject  to  the  Option.

                    (iii)     After  three  (3) years from the Date of Grant, it
may  be exercised as to any part or all of the shares of Common Stock originally
subject  to  Option.

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               (b)     From  and  after  June  10,  2004,  all  Options shall be
exercisable  for  a  Term  of two (2) years from the Date of Grant, but shall be
subject  to  earlier  termination  as hereinafter provided, and all such Options
shall  be  fully  vested  as  of  the  Date  of  Grant.

          6.3     Termination  of  Directorship.  In  the  event that a Director
                  -----------------------------
ceases  to  be  a member of the Board (other than by reason of death), an Option
may  be  exercised by the Director (to the extent that the Director was entitled
to  do  so  at  the  time he/she ceased to be a member of the Board) at any time
within three (3) months after he/she ceases to be a member of the Board, but not
beyond  the  Term  of  the  Option.

          6.4     Death of a Director.  In the event of the death of a Director,
                  -------------------
the  Option may be exercised at any time within twelve (12) months following the
date  of  death,  but  in no event later than the expiration date of the Term of
such Option as set forth in the Option Agreement (by the Director's estate or by
a  person  who  acquired  the  right  to  exercise  the  Option  by  bequest  or
inheritance),  but only to the extent that the Director was entitled to exercise
the  Option  at  the  date  of  death.  To  the extent that the Director was not
entitled  to  exercise  the Option at the date of termination or if the Director
does  not  exercise  such  Option  to  the  extent  so  entitled within the time
specified  herein,  the  Option  shall  terminate.

     7.     TERM  OF  THE  PLAN.  The  Amended  and  Restated  Plan shall become
effective on June 10, 2004, provided the Plan has been previously adopted by the
Board of Directors and approved by the stockholders of the Company as determined
in Section 18 of the Plan.  It shall continue in effect for the remainder of the
initial  term  of  ten  (10)  years,  which  expire June 13, 2012, unless sooner
terminated  under  Section  14  of  the  Plan.

     8.     EXERCISE OF OPTION.

          (a)     Any  Option  granted  hereunder  shall  be exercisable at such
times  under  such  conditions  as determined by the Administrator, and shall be
permissible  under  the  terms  of  the  Plan.

          (b)     The  Option  may  not  be exercised for a fraction of a Share.

          An  Option shall be deemed to be exercised when written notice of such
Option  has been given to the Company in accordance with the terms of the Option
by  the  person  entitled to exercise the Option and full payment for the Shares
with  respect to which the Option is exercised has been received by the Company.
Full  payment  may,  as  authorized  by  the  Administrator,  consist  of  any
consideration  and method of payment allowable under Section 6.1(b) of the Plan.

          Exercise  of  an Option in any manner will result in a decrease in the
number of Shares which may thereafter be available, both for purpose of the Plan
and  for sale under the Option by the number of Shares as to which the Option is
exercised.

          (c)     Options  granted  to  persons  subject to Section 16(b) of the
Exchange  Act,  must  comply  with  Rule 16b-3 and shall contain such additional
conditions  or  restrictions  as  may  be required thereunder to qualify for the
maximum  exemption  from  Section  16  of  the Exchange Act with respect to Plan
transactions.

          (d)     Buy-Out  Provisions.  The  Administrator may at any time offer
                  -------------------
to  buy-out for a payment in cash or Shares, an Option previously granted, based
on  such  terms  and  conditions  as  the  Administrator  shall  establish  and
communicate to the Optionee at the time that such offer is made.

      9.     RIGHTS  OF  OPTIONEE.  Until  the  issuance  (as  evidenced  by the
appropriate  entry  on the books of the Company or of a duly authorized transfer
agent  of the Company) of the stock certificate evidencing such Shares, no right
to  vote  or  receive dividends or any other rights as a stockholder shall exist
with  respect to the Optioned Stock, notwithstanding the exercise of the Option.
The  Company  shall

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issue,  or  cause to be issued, such stock certificate promptly upon exercise of
the  Option.  No adjustment will be made for a dividend or other right for which
the record date is prior to the date the stock certificate is issued.

     10.     NON-TRANSFERABILITY  OF  OPTIONS.  The  Option  may  not  be  sold,
pledged,  assigned, hypothecated, transferred or disposed of in any manner other
than:  (a) by will or the laws of descent and distribution, and an Option may be
exercised  during  the lifetime of the holder of the Option, only by him/her, or
in  the event of his/her death, by the legal representative of the estate of the
deceased  Director,  or  the  person  or  persons who shall acquire the right to
exercise  an  Option by the bequest or inheritance by reason of the death of the
Director, or in the event of disability, his/her personal representative, or (b)
pursuant to a Qualified Domestic Relations Order, as defined in the Code, or the
Employee Retirement and Security Act (ERISA), or the rules thereunder.

     11.     STOCK  WITHHOLDING  TO  SATISFY  WITHHOLDING  TAX OBLIGATIONS.  The
Company  shall  be  authorized to withhold from any Award granted or payment due
under  the  Plan  the  amount of withholding taxes due in respect of an Award or
payment  hereunder  and  to  take  such  other action as may be necessary in the
opinion  of  the Company to satisfy all obligations for the payment of taxes. At
the  discretion  of  the  Administrator,  Optionees  may  satisfy  withholding
obligations as provided in this paragraph. When an Optionee incurs tax liability
in  connection with an Option, which tax liability is subject to tax withholding
under  applicable  laws,  the Optionee is obligated to pay the Company an amount
required  to be withheld under applicable tax laws, the Optionee may satisfy the
withholding  tax  obligation  by  electing to have the Company withhold from the
Shares  to  be issued upon exercise of the Option that number of Shares having a
Fair  Market  Value equal to the amount required to be withheld. The Fair Market
Value  of  the  Shares  to  be withheld shall be determined on the date that the
amount of tax to be withheld is to be determined (the "Tax Date").

          All  elections by an Optionee to have Shares withheld for this purpose
shall  be made in writing in a form acceptable to the Administrator and shall be
subject  to  the  following  restrictions:

          (a)     the  election  must  be made on or prior to the applicable Tax
Date;

          (b)     once  made,  the  election  shall  be  irrevocable  as  to the
particular Shares of the Option as to which the election is made;

          (c)     all  elections  shall be subject to the consent or disapproval
of  the  Administrator;

          (d)     if  the  Optionee  is subject to Rule 16b-3, the election must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional  conditions  or restrictions as may be required thereunder to qualify
for  the  maximum  exemption from Section 16 of the Exchange Act with respect to
Plan  transactions.

          In  the  event  the  election  to  have  Shares withheld is made by an
Optionee  and  the  Tax Date is deferred under Section 83 of the Code because no
election  is  filed  under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee  shall  be  unconditionally obligated to tender back to the Company the
proper  number  of  Shares  on  the  Tax  Date.

     12.     ADJUSTMENTS  UPON  CHANGES IN CAPITALIZATION OR MERGER.  Subject to
any  required action by the stockholders of the Company, the number of shares of
Common  Stock  covered  by  each outstanding Option, and the number of shares of
Common  Stock  which  have been authorized for issuance under the Plan but as to
which  no  Options have yet been granted or which have been returned to the Plan
upon  cancellation or expiration of an Option, as well as the price per share of
Common  Stock  covered by each such outstanding Option, shall be proportionately
adjusted  for  any increase or decrease in the number of issued shares of Common
Stock  resulting  from  a  stock  split,  reverse  split,  stock

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dividend,  combination  or  reclassification  of  the Common Stock, or any other
increase  or  decrease  in  the number of issued shares of Common Stock effected
without  receipt  of  consideration  by  the  Company;  provided,  however, that
conversion  of  any convertible securities of the Company shall not be deemed to
have  been  "effected without receipt for consideration."  Such adjustment shall
be  made  by  the  Board,  whose  determination  in that respect shall be final,
binding and conclusive.  Except as expressly provided herein, no issuance by the
Company  of  shares of stock of any class, or securities convertible into shares
of  stock  of any class, shall affect, and no adjustment by reason thereof shall
be  made  with respect to, the number or price of shares of Common Stock subject
to  an  Option.

          In  the  event  of  the  proposed  dissolution  or  liquidation of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such  proposed  action.  To the extent it has not been previously exercised, the
Option  will  terminate  immediately  prior to the consummation of such proposed
action.  In  the  event of a merger or consolidation of the Company with or into
another  corporation  or  the  sale of substantially all of the Company's assets
(hereinafter,  a  "merger"), the Option shall be assumed or an equivalent option
shall  be substituted by such successor corporation or a parent or subsidiary of
such  successor  corporation.  In the event that such successor corporation does
not  agree to assume the Option or to substitute an equivalent option, the Board
shall,  in  lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option as to all of the Optioned Stock, including
Shares as to which the Option would not otherwise the exercisable.  If the Board
makes  an  Option fully exercisable in lieu of assumption or substitution in the
event  of a merger, the Board shall notify the Optionee that the Option shall be
fully exercisable for a period of fifteen (15) days from the date of such notice
and  the Option will terminate upon the expiration of such period.  For purposes
of  this  paragraph,  the  Option  shall be considered assumed if, following the
merger,  the  Option  or  right confers the right to purchase, for each Share of
stock  subject  to the Option immediately prior to the merger, the consideration
(whether stock, cash, or other securities or property) received in the merger by
holders  of  Common  Stock  for  each  Share  held  on the effective date of the
transaction  (and if holders were offered a choice of consideration, the type of
consideration  chosen  by  the holders of a majority of the outstanding Shares);
provided,  however,  that  if  such consideration received in the merger was not
solely  common  stock of the successor corporation or its parent, the Board may,
with  the  consent of the successor corporation and the participant, provide for
the consideration to be received upon the exercise of the Option, for each Share
of  stock  subject  to  the  Option,  to be solely common stock of the successor
corporation  or  its  Parent  equal  to  the  Fair Market Value to the per share
consideration  received  by  holders  of  Common  Stock in the merger or sale of
assets.

     13.     FORM  OF OPTIONS.  Nothing contained in the Plan nor any resolution
adopted  or  to be adopted by the Board or the stockholders of the Company shall
constitute  the granting of any Option.  An Option shall be granted hereunder on
the  date  or  dates  specified in the Plan.  Whenever the Plan provides for the
receipt  of  an  Option  by  a  Director,  the Secretary or the President of the
Company,  or  such  other person as the Committee shall appoint, shall forthwith
send  notice  thereof  to  the  Director,  in  such  form as the Committee shall
approve, stating the number of Shares of Common Stock subject to the Option, the
Term  of  the Option, and all other terms and conditions thereof provided by the
Plan.  The  notice shall be accompanied by a written Award Agreement which shall
have  been  duly  executed  by  or  on  behalf of the Company.  Execution by the
Director  to  whom  such Option is granted of said Award Agreement in accordance
with the provisions set forth in this Plan shall be a condition precedent to the
exercise  of  any  Option.

     14.     AMENDMENT AND TERMINATION OF THE PLAN.

          (a)     Amendment  and  Termination.  The Board may at any time amend,
                  ---------------------------
alter,  suspend  or  discontinue  the  Plan,  but  no  amendment,  alternation,
suspension or discontinuation shall be made which would impair the rights of any
Optionee  under  any  grant  theretofore  made,  without  his or her consent. In
addition,  to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act or with Section 422 of the Code (or any other applicable law or
regulation,  including  the

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requirements  of  the  NASD or an established stock exchange), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree  as  required.

          (b)     Effect  of  Amendment  or  Termination.  Any such amendment or
                  --------------------------------------
termination  of  the  Plan  shall  not  affect  Options already granted and such
Options  shall  remain  in  full  force  and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.

          (c)     Amendments  to  Prior  Grants.  Subject  to  the  terms  and
                  -----------------------------
conditions  and  within the limitations of the Plan, the Administrator may amend
the terms of any Option theretofore granted, prospectively or retroactively, but
no such amendment shall (i) materially impair the rights of any Optionee without
his  or  her consent or (ii) except for adjustments made pursuant to Section 12,
reduce  the exercise price of outstanding Options or cancel or amend outstanding
Options  for the purpose of repricing, replacing or regranting such Options with
an  exercise  price that is less than the exercise price of the original Options
without  stockholder  approval.

     15.     CONDITIONS  UPON  ISSUANCE  OF  SHARES.  Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance  and  delivery  of  such  Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933,  as  amended,  the  Exchange  Act,  the  rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then  be listed, and shall be further subject to the approval of counsel for the
Company  with  respect  to  such  compliance.

          As  a  condition to the exercise of an Option, the Company may require
the  person  exercising  such Option to represent and warrant at the time of any
such  exercise  that  the  Shares  are  being  purchased only for investment and
without  any  present  intention  to  sell  or distribute such Shares if, in the
opinion  of  counsel  for the Company, such representation is required by any of
the  aforementioned  relevant  provisions  of  law.

     16.     RESERVATION  OF SHARES.  The Company, during the term of this Plan,
will  at  all times reserve and keep available such number of Shares as shall be
sufficient  to  satisfy  the  requirements  of  the  Plan.  The inability of the
Company  to obtain authority from any regulatory body having jurisdiction, which
authority  is  deemed  by  the  Company's  counsel to be necessary to the lawful
issuance  and  sale  of  any  Shares hereunder, shall relieve the Company of any
liability  in  respect  of  the failure to issue or sell such Shares as to which
such  requisite  authority  shall  not  have  been  obtained.

     17.     AGREEMENTS.  Options  shall  be  evidenced by written agreements in
such form as the Board shall approve from time to time.

     18.     STOCKHOLDER  APPROVAL.  The amendments to this Amended and Restated
Outside  Directors'  Stock  Option  Plan  shall  be  subject  to approval by the
stockholders  of  the Company within twelve (12) months before or after the date
the  Amended  and  Restated Plan is adopted.  Such stockholder approval shall be
obtained  in  the  degree and manner required under applicable state and federal
law.

     19     INFORMATION  TO  OPTIONEES.  The  Company  shall  provide  to  each
Optionee,  during  the  period  for  which such Optionee has one or more Options
outstanding,  copies  of  all  annual  reports  and  other  information which is
provided  to all stockholders of the Company.  The Company shall not be required
to provide such information if the issuance of Options under the Plan is limited
to  Directors whose duties in connection with the Company assure their access to
equivalent  information.

                                       27
<PAGE>
     20.     FEES  AND COSTS.  The Company shall pay all original issue taxes on
the  exercise  of  any  Option  granted  under  the  Plan and all other fees and
expenses necessarily incurred by the Company in connection therewith.

21.  OTHER  PROVISIONS.  As  used in the Plan, and in Award Agreements and other
     documents  prepared  in  implementation  of  the  Plan,  references  to the
     masculine  pronoun  shall be deemed to refer to the feminine or neuter, and
     references  in  the singular or the plural shall refer to the plural or the
     singular,  as  the  identity of the person or persons or entity or entities
     being  referred  to  may require. The captions used in the Plan and in such
     Award Agreements and other documents prepared in implementation of the Plan
     are  for convenience only and shall not affect the meaning of any provision
     hereof  or  thereof.

                                       28Exhibit 4.5

                             --------------------

                             INVESTMENT AGREEMENT

                             --------------------

                                   Between

                          BIOPHAN TECHNOLOGIES, INC.

                                     and

                        BOSTON SCIENTIFIC SCIMED, INC.

                          Dated as of June 30, 2005

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             Page

                                    ARTICLE I
                                   DEFINITIONS

<S>                                                                          <C>
SECTION 1.01. Certain Defined Terms                                            1
SECTION 1.02. Additional Definitions                                           4

                                   ARTICLE II
                           EQUITY INVESTMENT; LICENSE

SECTION 2.01. Subscription for the Shares                                      4
SECTION 2.02. The Closing                                                      5
SECTION 2.03. Biophan Licensor Consents                                        6
SECTION 2.04. Termination by Biophan                                           6

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES
                                 OF THE COMPANY

SECTION 3.01. Organization, Authority and Qualification of the Company         7
SECTION 3.02. Subsidiaries                                                     7
SECTION 3.03. Capital Stock of the Company                                     7
SECTION 3.04. Authority Relative to this Agreement and the License Agreement   8
SECTION 3.05. No Conflict                                                      9
SECTION 3.06. Governmental Consents and Approvals                              9
SECTION 3.07. Absence of Certain Changes or Events; Conduct in Ordinary Course 9
SECTION 3.08. SEC Filings; Financial Statements                                9
SECTION 3.09. Litigation                                                       10
SECTION 3.10. Compliance with Laws                                             10
SECTION 3.11. Material Contracts                                               10
SECTION 3.12. Brokers                                                          10
SECTION 3.13. Regulatory Compliance                                            11
SECTION 3.14. Intellectual Property                                            11
</TABLE>

<PAGE>

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                                 OF THE INVESTOR

<TABLE>
<CAPTION>
<S>                                                                           <C>
SECTION 4.01. Organization and Authority of the Investor                       12
SECTION 4.02. No Conflict                                                      12
SECTION 4.03. Governmental Consents and Approvals                              12
SECTION 4.04. Brokers                                                          13
SECTION 4.05. Investment Intent                                                13

                                    ARTICLE V
                               REGISTRATION RIGHTS

SECTION 5.01. Restriction on Sale of the Shares                                13
SECTION 5.02. Restrictive Legend                                               13
SECTION 5.03. Registration Procedures                                          13
SECTION 5.04. Expenses                                                         16
SECTION 5.05. Indemnification and Contribution                                 17
SECTION 5.06. Prospectus Delivery                                              19

                                   ARTICLE VI
                               GENERAL PROVISIONS

SECTION 6.01. Public Announcements and Publications                            19
SECTION 6.02. Further Action                                                   20
SECTION 6.03. Expenses                                                         20
SECTION 6.04. Notices                                                          20
SECTION 6.05. Severability                                                     21
SECTION 6.06. Entire Agreement                                                 21
SECTION 6.07. Assignment                                                       21
SECTION 6.08. No Third Party Beneficiaries                                     21
SECTION 6.09. Amendment                                                        21
SECTION 6.10. No Waiver                                                        21
SECTION 6.11. Dispute Resolution                                               22
SECTION 6.12. Governing Law                                                    22
SECTION 6.13. Counterparts                                                     22
SECTION 6.14. Waiver of Jury Trial                                             22
SECTION 6.15. Construction; Interpretation                                     23
SECTION 6.16. Remedies                                                         23
SECTION 6.17. Survival                                                         23
SECTION 6.18. Termination                                                      23
</TABLE>
<PAGE>

                            EXHIBITS AND SCHEDULES

Exhibit A    Form of License Agreement
Exhibit B    Form of Consent of AMRIs Patent GmbH
Exhibit C    Form of Opinion of Counsel to the Company
Disclosure Schedule

<PAGE>

            INVESTMENT AGREEMENT, dated as of [?], 2005, between BIOPHAN
TECHNOLOGIES, INC., a Nevada corporation (the "Company"), and BOSTON
SCIENTIFIC SCIMED, INC., a Minnesota corporation (the "Investor", each a
"Party" and together with the Company, the "Parties").

            WHEREAS, the Investor is engaged in the business of developing,
manufacturing and marketing, among other things, biomedical technology used
to treat cardiac and vascular disease;

            WHEREAS, the Company is in the business of developing technology
to enable implantable medical devices and interventional devices to be used
safely and effectively in conjunction with Magnetic Resonance Imaging;

            WHEREAS, the Investor has entered into a license agreement with
the Company on the date hereof, the final form of which is attached hereto as
Exhibit A  (the "License Agreement"), that provides the Investor with an
exclusive license for the use of certain of the Company's Intellectual
Property and know-how in certain fields and a non-exclusive license for the
use of certain other Intellectual Property of the Company; and

            WHEREAS, the Investor is willing to subscribe for capital stock
of the Company;

            NOW, THEREFORE, in consideration of the premises and the mutual
representations and warranties, agreements and covenants hereinafter set
forth, the Parties hereby agree as follows:

                                  ARTICLE I

                                 DEFINITIONS

            SECTION 1.01.  Certain Defined Terms.  For purposes of this
Agreement:

            "Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.

            "AMP Biophan Licensor Consent" means the Biophan Licensor Consent
of AMRIs Patent GmbH ("AMP"), the form of which is attached hereto as Exhibit
B.

            "AMP License" means the AMP-Biophan License Agreement dated as of
February 24, 2005, the Addendum to and Ratification of the AMP-Biophan
License Agreement dated as of February 24, 2005 and any other agreements
relating to either of the foregoing.

            "Agreement" or "this Agreement" means this Agreement and includes
the Exhibits and the Disclosure Schedule, and all amendments hereto made in
accordance with the provisions of Section 6.09.

                                       1
<PAGE>

            "Biophan Licensor Consents" means those acknowledgements and
waivers set forth in Exhibit D to the License Agreement which are to be
executed by the Biophan Licensors (as defined in the License Agreement).

            "Board of Directors" means the board of directors of the Company.

            "Business Day" means any day that is not a Saturday, a Sunday or
any other day on which banks are required or authorized by Law to be closed
in The City of New York.

            "Closing Date" means the date five (5) Business Days following
the later to occur of (i) receipt by the Company of the executed AMP Biophan
Licensor Consent or (ii) the receipt by the Company of notice from the
Investor that it is electing to pay to the Company the payment provided for
in Section 6.01(ii) of the License Agreement.

            "Common Stock" means the common stock of the Company, par value
$0.005 per share.

            "Company IP Agreements" means (a) licenses of Intellectual
Property by the Company to any third party, (b) licenses of Intellectual
Property by any third party to the Company and (c) agreements between the
Company and any third party relating to the development or use of
Intellectual Property.

            "control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee, personal
representative or executor, of the power to direct or cause the direction of
the affairs or management of a Person, whether through the ownership of
voting securities, as trustee, personal representative or executor, by
contract, credit arrangement or otherwise.

            "Disclosure Schedule" means the Disclosure Schedule attached
hereto, dated as of the date hereof and forming a part of this Agreement.

            "Encumbrance" means any security interest, pledge, hypothecation,
mortgage, lien (including, without limitation, environmental and Tax liens)
or other encumbrance.

            "FDA" means the United States Food and Drug Administration.

            "Governmental Authority" means any United States or non-United
States federal, national, supranational, state, provincial, local, or similar
government, governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.

            "Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any
Governmental Authority.

            "Intellectual Property" means all intellectual property rights,
including (i) United States and non-United States patents and patent
applications, divisions, continuations, continuations-in-part, reissues or
extensions thereof, (ii) trademarks, whether registered or unregistered and
applications for registration thereof, (iii) copyrights, whether registered
or unregistered and applications for registration thereof, and (iv) trade
secrets, know-how, technology, proprietary information and data, including,
without limitation, formulae, procedures, plans, methods, processes,
specifications, models, protocols, techniques and experimentation, and
design, testing and manufacturing data, and products, compositions and
procedures.

                                       2
<PAGE>

            "knowledge of the Company" means the actual knowledge of each of
Michael L. Weiner, Robert J. Wood and Stuart G. McDonald.

            "Law" means any United States or non-United States federal,
national, supranational, state, provincial, local or similar statute, law,
ordinance, regulation, rule, code, order, requirement or rule of law.

            "Licensed Intellectual Property" means Intellectual Property
licensed to the Company pursuant to the Company IP Agreements.

            "Material Adverse Effect" means any circumstance, change or
effect that, individually or in the aggregate with all other circumstances,
changes or effects: (a) would reasonably be expected to be materially adverse
to the business, assets, operations, results of operations, prospects,
liabilities (including, without limitation, contingent liabilities) or the
financial condition of the Company and its Subsidiaries, taken as a whole, or
(b) would reasonably be expected to materially adversely affect the ability
of the Company to consummate the transactions contemplated by this Agreement
or the License Agreement.

            "Owned Intellectual Property" means Intellectual Property owned
by the Company.

            "Person" means any individual, partnership, firm, corporation,
limited liability company, association, trust, unincorporated organization or
other entity, as well as any syndicate or group that would be deemed to be a
person under Section 13(d)(3) of the Exchange Act.

            "Registrable Securities" means (a) the Shares issued pursuant to
this Agreement and (b) any securities issuable or issued or distributed in
respect of any of the Shares identified in clause (a) by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, reorganization, merger, consolidation or otherwise.  For
purposes of this Agreement, Registrable Securities shall cease to be
Registrable Securities on the Unrestricted Date.

            "Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in
which) more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such limited liability company, partnership, or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.

                                       3
<PAGE>

            "Tax" means all income, gross receipts, gains, sales, use,
employment, franchise, profits, excise, property, value added and other
taxes, fees, stamp taxes and duties, assessments or charges of any kind,
together with any interest and penalties, additions to tax or additional
amounts imposed by any taxing authority with respect thereto.

            "Unrestricted Date" means the date upon which (i) all the Shares
have been disposed of pursuant to a registration statement, (ii) all of the
Shares then held by the Investor 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 then held by
the Investor 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.

            "U.S. GAAP" means United States generally accepted accounting
principles applied on a consistent basis.

            SECTION 1.02.  Additional Definitions.  The following terms have
the meanings set forth in the Sections set forth below:

      Definition                                          Location

      "Blackout Event"................................... 5.03(n)
      "Certificates"..................................... 2.02(b)(vii)
      "Closing".......................................... 2.02(a)
      "Company".......................................... Preamble
      "Company Indemnified Party"........................ 5.05(b)
      "Company SEC Reports".............................. 3.08(a)
      "Exchange Act"..................................... 3.08(a)
      "Investor"......................................... Preamble
      "Investor Indemnified Party"....................... 5.05(a)
      "License Agreement"................................ Recitals
      "Notice of Disagreement"........................... 6.11
      "Parties".......................................... Preamble
      "Party"...........................................  Preamble
      "Purchase Price"................................... 2.01
      "Reference Statement Date"......................... 3.08(c)
      "SEC".............................................. 3.08(a)
      "Securities Act"................................... 3.08(a)
      "Shares"........................................... 2.01

                                  ARTICLE II

                          EQUITY INVESTMENT; LICENSE

            SECTION 2.01.  Subscription for the Shares.  Upon the basis of
the representations and warranties set forth in this Agreement and subject to
the terms and conditions set forth herein, on the Closing Date the Investor
agrees to subscribe for, and the Company agrees to issue and sell to the
Investor, a number of shares of Common Stock of the Company (the "Shares")
equal to the quotient obtained by dividing $5,000,000 (the "Purchase Price")
by the number equal to 110% of the average closing price of the Common Stock
on the OTC Bulletin Board, as reported on [http://finance.yahoo.com], over
the 30 calendar-day period prior to, but excluding, the Closing Date.

                                       4
<PAGE>

            SECTION 2.02.  The Closing.  i)Subject to the terms and
conditions of this Agreement, including the delivery of the items described
in (b) and (d) of this Section 2.02, the closing of the transactions
contemplated by Section 2.01 of this Agreement shall take place at a closing
(the "Closing") to be held at the offices of Shearman & Sterling LLP, 599
Lexington Avenue, New York, New York at 10:00 A.M. (New York City time) on
the Closing Date.

            (b)   Closing Deliveries of the Company.  At the Closing, the
Company shall deliver or cause to be delivered to the Investor:

            (i)         a true and complete copy, certified by the Secretary
      of the Company, of the resolutions duly and validly adopted by the
      Board of Directors evidencing its authorization of the execution and
      delivery of this Agreement and the License Agreement, and the
      consummation of the transactions contemplated thereby, accompanied by
      the certification of the Secretary of the Company as to the names and
      signatures of the officers of the Company authorized to sign this
      Agreement and the License Agreement and the other documents to be
      delivered thereunder;

            (ii)        a certificate of an appropriate officer of the
      Company, in form and substance reasonably satisfactory to the Investor,
      that the representations and warranties of the Company contained in
      Article III hereof are true and correct on and as of the Closing Date
      and that the Company has complied with all agreements and conditions to
      be performed or satisfied on its part at or prior to the Closing Date;

            (iii)       the opinion of the Company's outside counsel, dated
      as of the Closing Date, substantially in the form set forth in Exhibit
      C;

            (iv)        a copy of (A) the articles of incorporation of the
      Company, as amended, certified by the Secretary of State of the State
      of Nevada, as of a date not earlier than three Business Days prior to
      the Closing Date and accompanied by a certificate of the Secretary of
      the Company, dated as of the Closing Date, stating that no amendments
      have been made to such articles of incorporation since such date, and
      (B) the bylaws of the Company, certified by the Secretary of the
      Company;

            (v)         a good standing certificate for the Company issued by
      the Secretary of State of the State of Nevada, dated as of a date not
      earlier than three Business Days prior to the Closing Date;

            (vi)        an executed copy of the AMP Biophan Licensor Consent
      and any other Biophan Licensor Consents which have been obtained by the
      Company prior to the Closing Date;

                                       5
<PAGE>

            (vii)       irrevocable instructions to the transfer agent for
      the Common Stock directing the transfer agent to issue to the Investor
      certificates (the "Certificates") evidencing the Shares issued and sold
      by the Company to the Investor pursuant to this Agreement, duly and
      properly registered in the name of the Investor (or its designee); and

            (viii)      a receipt for the Purchase Price.

            (c)   Post-Closing Deliveries of the Company.  The Company shall
deliver or cause to be delivered to the Investor:

            (i)         executed copies of all Biophan Licensor Consents,
      excluding the AMP Biophan Licensor Consent and any other Biophan
      Licensor Consents delivered on the Closing Date pursuant to Section
      2.02(b)(vi), within ninety (90) days after the date hereof; and

            (ii)        certificates evidencing the Shares issued and sold by
      the Company to the Investor pursuant to this Agreement, duly and
      properly registered in the name of the Investor (or its designee)
      within thirty (30) days after the Closing.

            (d)   Closing Deliveries of the Investor.  At the Closing, the
Investor shall deliver or cause to be delivered to the Company:

            (i)   the Purchase Price, by wire transfer of immediately
      available funds to a bank account of the Company in the United States
      designated in writing by the Company not less than two Business Days
      prior to the Closing Date; and

            (ii)  a receipt acknowledging delivery of the certificates
      representing the Shares.

            SECTION 2.03.  Biophan Licensor Consents

              If the Investor elects to terminate the License Agreement
pursuant to Section 11.03(c) of the License Agreement, this Agreement shall
terminate immediately and the parties hereto shall have no further
obligations pursuant to this Agreement, except that, if the Closing has
occurred, the Company shall repay the Purchase Price to the Investor within
five (5) Business Days of such termination and, if the Certificates have been
delivered to the Investor, the Investor shall return the Certificates to the
Company within five (5) Business Days of such termination, in addition to
satisfying any other requirements of such termination as provided for in the
License Agreement.

            SECTION 2.04.  Termination by Biophan

            .  If Biophan elects to terminate the License Agreement pursuant
to Section 11.02(c) of the License Agreement and the Closing has not occurred
on or before August 15, 2005, this Agreement shall automatically be
terminated and the parties hereto shall have no further obligations pursuant
to this Agreement.

                                       6
<PAGE>

                                 ARTICLE III

                        REPRESENTATIONS AND WARRANTIES
                                OF THE COMPANY

            As an inducement to the Investor to enter into this Agreement and
the License Agreement, the Company hereby represents and warrants to the
Investor as of the date hereof and as of the Closing Date (except for such
representations and warranties as are expressly made as of another date) as
follows:

            SECTION 3.01.  Organization, Authority and Qualification of the
Company  The Company is a corporation duly organized, validly existing and in
good standing under the Laws of the State of Nevada and has all necessary
corporate power and authority to own, operate or lease the properties and
assets now owned, operated or leased by it and to carry on its business as it
has been and is currently conducted.  The Company is duly licensed or
qualified to do business and is in good standing in each jurisdiction in
which the properties owned or leased by it or the operation of its business
makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified would not (a) materially adversely affect the
ability of the Company to carry out its obligations under, and to consummate
the transactions contemplated by, this Agreement and the License Agreement or
(b) otherwise have a Material Adverse Effect.  True and correct copies of the
Company's articles of incorporation and bylaws, each as amended to the date
hereof, are attached hereto as Section 3.01 of the Disclosure Schedule.

            SECTION 3.02.  Subsidiaries.  ii) Except as set forth in Section
3.02(a) of the Disclosure Schedule, there are no other corporations,
partnerships, joint ventures, associations or other entities in which the
Company or any Subsidiary thereof owns, of record or beneficially, any direct
or indirect equity or other interest or any right (contingent or otherwise)
to acquire the same.  Except as set forth in Section 3.02(a) of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a
member of (nor is any part of their business conducted through) any
partnership nor is the Company or any of its Subsidiaries a participant in
any joint venture or similar arrangement.

            (b)   Each of the Company's Subsidiaries:  (i) is duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
organization, (ii) has all necessary power and authority to own, operate or
lease the properties and assets owned, operated or leased by such Subsidiary
and to carry on its business as it has been and is currently conducted by
such Subsidiary and (iii) is duly licensed or qualified to do business and is
in good standing in each jurisdiction in which the properties owned or leased
by it or the operation of its business makes such licensing or qualification
necessary.

            SECTION 3.03.  Capital Stock of the Company  The authorized
capital stock of the Company consists of 125,000,000 shares of Common Stock.
As of May 31, 2005, (a) 74,471,997 shares of Common Stock were issued and
outstanding, (b) 8,187,355 shares of Common Stock were reserved for issuance
pursuant to outstanding options granted pursuant to the Company's 2001 Stock
Option Plan, (c) 1,983,362 shares of Common Stock were reserved for issuance
upon the exercise of outstanding warrants in the amounts and at the exercise
prices disclosed on Section 3.03 of the Disclosure Schedule, and (d)  no
shares of preferred stock are authorized.  No shares of capital stock of the
Company are held in its treasury.  All of the outstanding shares of the
Company's capital stock are duly and validly issued, fully paid and
nonassessable.  None of the issued and outstanding shares of capital stock of
the Company was issued in violation of any preemptive rights.  Except (i)
that advances under the Company's Convertible Note dated May 27, 2005 to
Biomed Solutions, LLC (the "Biomed Note") in the amount of $1,000,000 on June
3, 2005 are convertible into shares of Common Stock at the rate of $2.12 per
share and advances under the Biomed Note in the amount of $1,000,000 on June
14, 2005 are convertible into shares of Common Stock at the rate of $2.92 per
share or (ii) as set forth in the first sentence of this Section or (iii) in
Section 3.03 of the Disclosure Schedule, there are no options, warrants,
subscriptions, calls, convertible securities or other rights, agreements,
arrangements or commitments relating to the capital stock of the Company or
obligating the Company to issue or sell any shares of capital stock of, or
any other equity interest in, the Company.  There are no outstanding
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or make any investment (in
the form of a loan, capital contribution or otherwise) in, any other Person.
The Shares to be issued and sold pursuant to this Agreement have been duly
and validly authorized by the Company, and, at the Closing, the Shares will
have been duly and validly issued, fully paid and non-assessable, and the
issuance of such Shares shall not be subject to preemptive or other similar
rights.  To the knowledge of the Company, there are no voting trusts,
stockholder agreements, proxies or other agreements or understandings in
effect with respect to the voting or transfer of any of the Company's capital
stock, except as described on Section 3.03 of the Disclosure Schedule.  There
are no accrued and unpaid dividends on any capital stock of the Company.

                                       7
<PAGE>

            SECTION 3.04.  Authority Relative to this Agreement and the
License Agreement.  iii)The Company has all necessary corporate power and
authority to enter into this Agreement and the License Agreement, to carry
out its obligations hereunder or thereunder and to consummate the
transactions contemplated hereby or thereby.  The execution and delivery by
the Company of this Agreement and the License Agreement, the performance by
the Company of its obligations hereunder or thereunder and the consummation
by the Company of the transactions contemplated hereby or thereby have been
duly authorized by all requisite corporate action on the part of the
Company.  This Agreement and the License Agreement have been, or upon their
execution shall be, duly executed and delivered by the Company, and (assuming
due execution and delivery thereof by each other party thereto, if
applicable) this Agreement and the License Agreement constitute, or upon
their execution shall constitute, the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms,
subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium and other similar Laws relating to or affecting
creditors' rights and remedies generally, and (ii) the effect of general
equitable principles, regardless of whether asserted in a proceeding in
equity or at law.

            (b)   All corporate actions taken by the Company have been duly
authorized, and the Company has not taken any action that in any respect
conflicts with, constitutes a default under or results in a violation of any
provision of its restated certificate of incorporation or bylaws, excluding
any such action that would not have a Material Adverse Effect.

                                       8
<PAGE>

            (c)   The minute books of the Company made available to the
Investor are the only minute books of the Company and contain an accurate
summary of all meetings of the Board of Directors (and the committees
thereof) and stockholders or actions by written consent.

            SECTION 3.05.  No Conflict.  The execution, delivery and
performance by the Company of this Agreement and the License Agreement do not
(a) violate, conflict with or result in the breach of any provision of its
articles of incorporation or bylaws, each as amended through the date hereof,
(b) conflict with or violate any Law or Governmental Order applicable to the
Company, any of its Subsidiaries, or any of its assets, properties or
businesses, or (c) conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, require any consent under, or give to others
any rights of termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation of any Encumbrance on the Common
Stock or any of the properties or assets of the Company pursuant to, any
note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which the
Company is a party or by which any of its Common Stock or assets or
properties is bound or affected, except, with respect to clause (c), for any
such conflicts, violations, breaches, defaults or other occurrences that have
not had, and would not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect.

            SECTION 3.06.  Governmental Consents and Approvals.  The
execution, delivery and performance of this Agreement and the License
Agreement by the Company do not require any consent, approval, authorization
or other order of, action by, filing with or notification to, any
Governmental Authority.

            SECTION 3.07.  Absence of Certain Changes or Events; Conduct in
Ordinary Course.  Except as set forth in Section 3.07 of the Disclosure
Schedule, since the Reference Statement Date (as defined below), the business
of the Company has been conducted in the ordinary course, in a manner
consistent with past practices and there has been no Material Adverse Effect.

            SECTION 3.08.  SEC Filings; Financial Statements.  iv)The Company
has filed all forms, reports and documents required to be filed by it with
the Securities and Exchange Commission (the "SEC").  The Company's (i) Annual
Report on Form 10-KSB for the fiscal year ended February 28, 2005, (ii) proxy
statements relating to the Company's meetings of stockholders (whether annual
or special) held since March 1, 2004 and (iii) other forms, reports and other
registration statements filed by the Company with the SEC since March 1, 2005
(the forms, reports and other documents referred to in clauses (i), (ii), and
(iii) above being, collectively, the "Company SEC Reports"), (x) were
prepared in all material respects in accordance with either the requirements
of the Securities Act of 1933, as amended (the "Securities Act"), or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the case
may be, and the rules and regulations promulgated thereunder, and (y) did
not, at the time they were filed, or, if amended, as of the date of such
amendment, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.  No Subsidiary of the Company is required to file
any form, report or other document with the SEC.

                                       9
<PAGE>

            (b)   Each of the consolidated financial statements (including,
in each case, any notes thereto) contained in the Company SEC Reports was
prepared in accordance with U.S. GAAP throughout the periods indicated
(except as may be indicated in the notes thereto or, in the case of unaudited
statements, as permitted by Form 10-QSB of the SEC) and each fairly presents,
in all material respects, the consolidated financial position, results of
operations and cash flows of the Company and its consolidated Subsidiaries as
at the respective dates thereof and for the respective periods indicated
therein (subject, in the case of unaudited statements, to normal and
recurring year-end adjustments which would not have had, and would not
reasonably be expected to have, a Material Adverse Effect).

            (c)   Except as and to the extent set forth on the consolidated
balance sheet of the Company and its consolidated Subsidiaries as of February
28, 2005, including the notes thereto (the "Reference Statement Date"), or in
Section 3.08(c) of the Disclosure Schedule, neither the Company nor any
Subsidiary has any material liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise), except for liabilities and
obligations incurred in the ordinary course of business consistent with past
practice which have not had and would not reasonably be expected to have a
Material Adverse Effect.

            (d)   As of the date of this Agreement, the Company has
heretofore furnished to the Investor complete and correct copies of (i) all
agreements, documents and other instruments not yet filed by the Company with
the SEC but that are currently in effect and that the Company expects to file
with the SEC after the date of this Agreement and (ii) all amendments and
modifications that have not been filed by the Company with the SEC to all
agreements, documents and other instruments that previously had been filed by
the Company with the SEC and are currently in effect.

            SECTION 3.09.  Litigation.  Except as set forth on Section 3.09
of the Disclosure Schedule, there is no Action pending (or, to the knowledge
of the Company, threatened) by or against the Company or any of its
Subsidiaries.  Neither the Company nor any of its Subsidiaries is subject to
any Governmental Order (nor, to the knowledge of the Company, are there any
Governmental Orders threatened to be imposed by any Governmental Authority)
which has had or would reasonably be expected to have a Material Adverse
Effect.

            SECTION 3.10.  Compliance with Laws.  Except as set forth in
Section 3.10 of the Disclosure Schedule and except as would not reasonably be
expected to have a Material Adverse Effect, to the knowledge of the Company
(a) the Company and its Subsidiaries have conducted and continue to conduct
their business in all respects in accordance with all Laws and Governmental
Orders applicable to the Company and such Subsidiaries, and (b) neither the
Company nor its Subsidiaries is in violation of any such Law or Governmental
Order.

            SECTION 3.11.  Material Contracts.  The Company has filed with
the Company SEC Reports all contracts and agreements that are required to be
filed therewith under applicable Law.

            SECTION 3.12.  Brokers.  No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement and the
License Agreement based upon arrangements made by or on behalf of the Company.

                                       10
<PAGE>

            SECTION 3.13.  Regulatory Compliance.  To the knowledge of the
Company, each product or drug that is being or has been tested or created by
the Company is being or was tested or created in compliance with all material
requirements of applicable Law. Except as disclosed in Section 3.13 of the
Disclosure Schedule, the Company has not received any notice from the FDA or
any other Governmental Authority alleging any violation by the Company of any
Law.  Except as disclosed in Section 3.13 of the Disclosure Schedule, the
Company has not received any written notice that the FDA or any other
Governmental Authority has threatened to investigate or suspend any research
activities, pre-clinical programs or clinical trials being conducted by the
Company.

            SECTION 3.14.  Intellectual Property.  v)  Section 3.14(a) of the
Disclosure Schedule sets forth a true and complete list of (i) all patents
and patent applications, registered trademarks and trademark applications,
registered copyrights and copyright applications, and domain names included
in the Owned Intellectual Property, and (ii) all Company IP Agreements,
except for any commercial off-the-shelf software licenses, "shrink-wrap" or
"click through" licenses that are not material to the Company's business and
(iii) other Owned Intellectual Property material to the Company's business.

             b) The Company is the exclusive owner of the entire right,
title and interest in and to the Owned Intellectual Property, and has a valid
license to use the Licensed Intellectual Property in connection with its
business as currently conducted.  The Company is entitled to use all Owned
Intellectual Property and Licensed Intellectual Property in the continued
operation of its business without limitation, subject only to the terms of
the Company IP Agreements, as the case may be.  The Owned Intellectual
Property and the Licensed Intellectual Property have not been adjudged
invalid or unenforceable in whole or in part, and, to the knowledge of the
Company, are valid and enforceable.

             c) To the knowledge of the Company, the conduct of its
business as currently conducted does not infringe or misappropriate the
Intellectual Property of any third party, and no Action alleging any of the
foregoing is pending, and no unresolved, written claim has been threatened in
writing or received by the Company alleging any of the foregoing.  To the
knowledge of the Company, no person is engaging in any activity that
infringes the Owned Intellectual Property.

             d) No Owned Intellectual Property is subject to any
outstanding decree, order, injunction, judgment or ruling restricting the use
of such Intellectual Property or that would impair the validity or
enforceability of such Intellectual Property.

             e)The consummation of the transactions contemplated by this
Agreement will not result in the termination, loss or impairment of any of
the Owned Intellectual Property or the rights of the Company under the
Company IP Agreements.

             f)The Company has taken reasonable steps in accordance with
industry standards to maintain the security, confidentiality and value of its
technology, trade secrets and other confidential Intellectual Property
material to the Company's business, including, without limitation, all
tangible embodiments thereof.

                                       11
<PAGE>

                                  ARTICLE IV

                        REPRESENTATIONS AND WARRANTIES
                               OF THE INVESTOR

            The Investor hereby represents and warrants to the Company as
follows:

            SECTION 4.01.  Organization and Authority of the Investor.  The
Investor is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Minnesota and has all necessary
corporate power and authority to enter into this Agreement and the License
Agreement, to carry out its obligations hereunder or thereunder and to
consummate the transactions contemplated hereby or thereby.  The execution
and delivery by the Investor of this Agreement and the License Agreement, the
performance by the Investor of its obligations hereunder or thereunder and
the consummation by the Investor of the transactions contemplated hereby or
thereby have been duly authorized by all requisite corporate action on the
part of the Investor.  This Agreement and the License Agreement have been, or
upon their execution shall be, duly executed and delivered by the Investor,
and (assuming due execution and delivery hereof and thereof by each other
party thereto, if applicable) this Agreement and the License Agreement
constitute, or upon their execution shall constitute, the legal, valid and
binding obligations of the Investor, enforceable against the Investor in
accordance with their terms, subject to (a) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, and other similar Laws
relating to or affecting creditors' rights and remedies generally, and
(b) the effect of general equitable principles, regardless of whether
asserted in a proceeding in equity or at law.

            SECTION 4.02.  No Conflict.  The execution, delivery and
performance by the Investor of this Agreement and the License Agreement do
not (a) violate, conflict with or result in the breach of any provision of
the certificate of incorporation or the by-laws of the Investor, (b) conflict
with or violate any Law or Governmental Order applicable to the Investor or
any of its assets, properties or businesses or (c) conflict with, or result
in any breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument or arrangement to which the Investor is a party
or by which any of its assets or properties is bound or affected, which, in
the case of this clause (c), would adversely affect the ability of the
Investor to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement and the License Agreement.

            SECTION 4.03.  Governmental Consents and Approvals.  The
execution, delivery and performance by the Investor of this Agreement and the
License Agreement do not require any consent, approval, authorization or
other order of, action by, filing with, or notification to any Governmental
Authority.

                                       12
<PAGE>

            SECTION 4.04.  Brokers.  No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement and the
License Agreement based upon arrangements made by or on behalf of the
Investor.

            SECTION 4.05.  Investment Intent.  The Investor is acquiring the
Shares for its own account solely for the purpose of investment and not as a
nominee or agent and not with a view to, or for offer or sale in connection
with, any distribution thereof.

                                  ARTICLE V

                             REGISTRATION RIGHTS

            SECTION 5.01.  Restriction on Sale of the Shares.  The Investor
acknowledges that the Shares are being issued pursuant to an exemption from
registration under the Securities Act, have not been registered under the
Securities Act and, therefore, cannot be resold unless they are registered
under the Securities Act and any applicable securities laws or unless an
exemption from such registration is available.

            SECTION 5.02.  Restrictive Legend.  xi) Each certificate
representing the Shares shall be stamped or otherwise imprinted with a legend
substantially in the following form:

            THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
            RESTRICTED BY THE INVESTMENT AGREEMENT, DATED [o], 2005, BETWEEN
            THE COMPANY AND BOSTON SCIENTIFIC SCIMED, INC., ON FILE AT THE
            OFFICES OF THE COMPANY.  THE SECURITIES REPRESENTED BY THIS
            CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933 (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE
            AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
            AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
            APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO
            THE REGISTRATION REQUIREMENTS OF SUCH LAWS.

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

            (c)   The Company shall, at the request of the Investor, remove
from each certificate evidencing the Shares the legend described in Section
5.02(a) and cause its transfer agent to remove any stop transfer instructions
if in the opinion of counsel reasonably satisfactory to the Company the
securities evidenced thereby may be publicly sold without registration under
the Securities Act and applicable state securities laws.

            SECTION 5.03.  Registration Procedures.  The Company shall:

                                       13
<PAGE>

            (a)   as soon as practicable, but in any event no later than
sixty (60) Business Days following the date hereof, prepare and file with the
SEC a Registration Statement under the Securities Act on Form S-1, or such
other form that the Company is eligible to use for such purpose, relating to
the sale of the Registrable Securities by the Investor from time to time on
the facilities of any securities exchange or other trading system on which
the Common Stock is then traded or in privately-negotiated transactions;

            (b)   use its reasonable best efforts to cause such Registration
  Statement promptly to become and remain effective for a period of time
  required for the disposition of such securities by the holders thereof or
  until the Unrestricted Date, whichever is earlier; provided, however, that
  before filing such registration statement or any amendments thereto, the
  Company shall furnish the representatives of the Investor copies of all
  documents proposed to be filed, which documents shall be subject to the
  review of such representatives.  The Company shall not be deemed to have
  used its reasonable best efforts to keep a Registration Statement effective
  if it voluntarily takes any action that would result in the Investor not
  being able to sell its Registrable Securities, unless such action is
  required under applicable Law;

            (c)   prepare and file with the SEC such amendments and
  supplements to such Registration Statement and the prospectus used in
  connection therewith as may be necessary to keep such Registration
  Statement effective and to comply with the provisions of the Securities Act
  with respect to the sale or other disposition of all securities covered by
  such Registration Statement until such time as all of such securities have
  been disposed of or until the Unrestricted Date, whichever is earlier;

            (d)   furnish to the Investor such number of conformed copies of
  the applicable Registration Statement and each such amendment and
  supplement thereto (including in each case all exhibits if requested by the
  Investor), and of each prospectus, in conformity with the requirements of
  the Securities Act, and such other documents, as the Investor may
  reasonably request;

            (e)   use its reasonable best efforts to register or qualify the
  securities covered by such Registration Statement under such other
  securities or blue sky laws of such jurisdictions within the United States
  and Puerto Rico as the Investor shall reasonably request, and to keep such
  registration or qualification in effect for so long as such Registration
  Statement remains in effect (provided, however, that the Company shall not
  be required in connection therewith or as a condition thereto to qualify to
  do business, subject itself to taxation in or to file a general consent to
  service of process in any jurisdiction wherein it would not but for the
  requirements of this paragraph (d) be obligated to do so; and provided
  further that the Company shall not be required to qualify such Registrable
  Securities in any jurisdiction in which the securities regulatory authority
  requires that the Investor submit any shares of its Registrable Securities
  to the terms, provisions and restrictions of any escrow, lockup or similar
  agreement(s) for consent to sell Registrable Securities in such
  jurisdiction unless the Investor agrees to do so), and do such other
  reasonable acts and things as may be required of it to enable the Investor
  to consummate the disposition in such jurisdiction of the securities
  covered by such Registration Statement;

                                       14
<PAGE>

            (f)   otherwise use its reasonable best efforts to comply with
  all applicable rules and regulations of the SEC, and make an earnings
  statement satisfying the provisions of Section 11(a) of the Securities Act
  generally available to the Investor no later than 45 days after the end of
  any twelve-month period (or 90 days, if such period is a fiscal year)
  (i) commencing at the end of any fiscal quarter in which Registrable
  Securities are sold to underwriters in an underwritten public offering, or
  (ii) if not sold to underwriters in such an offering, beginning with the
  first month of the Company's first fiscal quarter commencing after the
  effective date of the Registration Statement, which statement shall cover
  said twelve-month period;

            (g)   use its reasonable best efforts to cause all such
  Registrable Securities to be listed on each securities exchange or
  quotation system on which the Common Stock is then listed or quoted, if any;

            (h)   give written notice to the Investor:

                  (i)   when such Registration Statement or any amendment
            thereto has been filed with the SEC and when such Registration
            Statement or any post-effective amendment thereto has become
            effective;

                  (ii)  of any request by the SEC for amendments or
            supplements to such Registration Statement or the prospectus
            included therein or for additional information;

                  (iii) of the issuance by the SEC of any stop order
            suspending the effectiveness of such Registration Statement or
            the initiation of any proceedings for that purpose;

                  (iv)  of the receipt by the Company or its legal counsel of
            any notification with respect to the suspension of the
            qualification of the Common Stock for sale in any jurisdiction or
            the initiation or threatening of any proceeding for such purpose;
            and

                  (v)   of the happening of any event that requires the
            Company to make changes in such Registration Statement or the
            prospectus in order to make the statements therein not misleading
            (which notice shall be accompanied by an instruction to suspend
            the use of the prospectus until the requisite changes have been
            made);

            (i)   use its reasonable best efforts to prevent the issuance or
      obtain the withdrawal of any order suspending the effectiveness of such
      Registration Statement at the earliest possible time;

            (j)   furnish to the Investor, without charge, at least one copy
      of such Registration Statement and any post-effective amendment
      thereto, including financial statements and schedules, and, if the
      Investor so requests in writing, all exhibits (including those, if any,
      incorporated by reference);

                                       15
<PAGE>

            (k)   upon the occurrence of any event contemplated by Section
      5.03(h)(v) above, promptly prepare a post-effective amendment to such
      Registration Statement or a supplement to the related prospectus or
      file any other required document so that, as thereafter delivered to
      the Investor, the prospectus will not contain an untrue statement of a
      material fact or omit to state any material fact necessary to make the
      statements therein, in light of the circumstances under which they were
      made, not misleading.  If the Company notifies the Investor in
      accordance with Section 5.03(h)(v) above to suspend the use of the
      prospectus until the requisite changes to the prospectus have been
      made, then the Investor shall suspend use of such prospectus and use
      its reasonable best efforts to return to the Company all copies of such
      prospectus (at the Company's expense) other than permanent file copies
      then in the Investor's possession;

            (l)   make reasonably available for inspection by representatives
      of the Investor, any underwriter participating in any disposition
      pursuant to such Registration Statement and any attorney, accountant or
      other agent retained by such representative or any such underwriter all
      relevant financial and other records, pertinent corporate documents and
      properties of the Company and cause the Company's officers, directors
      and employees to supply all relevant information reasonably requested
      by such representative or any such attorney, accountant or agent in
      connection with the registration; and

            (m)   use reasonable best efforts to procure the cooperation of
      the Company's transfer agent in settling any offering or sale of
      Registrable Securities, including with respect to the transfer of
      physical stock certificates into book-entry form in accordance with any
      procedures reasonably requested by the Investor.

            (n)   Notwithstanding anything in this Article V to the contrary,
      the Company shall not be obligated to request acceleration of the
      effectiveness of the registration statement or to prepare and file a
      post-effective amendment or supplement to the registration statement or
      the prospectus constituting a part thereof during the continuance of a
      Blackout Event.  A "Blackout Event" means any of the following: (i) 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 (ii) 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; provided, however,
      that no Blackout Event may last for more than 90 days.

            SECTION 5.04.  Expenses.  All expenses incurred in connection
with each registration pursuant to Section 5.03, including without limitation
all registration, filing and qualification fees, word processing,
duplicating, printers' and accounting fees (including the expenses of any
special audits or "comfort" letters required by or incident to such
performance and compliance), listing fees or fees of the NASD, messenger and
delivery expenses, all fees and expenses of complying with state securities
or blue sky laws and fees and disbursements of counsel for the Company, shall
be paid by the Company, except that the Investor shall bear and pay (i) any
commissions or discounts applicable to securities offered for its account in
connection with any registrations, filings and qualifications made pursuant
to this Agreement and (ii) any fees and expenses incurred in respect of
counsel or other advisors to the Investor.

                                       16
<PAGE>

            SECTION 5.05.  Indemnification and Contribution.  xii)The Company
shall indemnify and hold harmless the Investor, each of its directors and
officers, each Person who participates in the offering of such Registrable
Securities, including underwriters (as defined in the Securities Act), and
each Person, if any, who controls the Investor or a participating Person
within the meaning of the Securities Act (collectively, the "Investor
Indemnified Parties"), against any losses, claims, damages or liabilities,
joint or several, to which any such Investor Indemnified Party may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or proceedings in respect thereof) arise out
of or are based on any untrue or alleged untrue statement of any material
fact contained in such registration statement on the effective date thereof
(including any prospectus filed under Rule 424 under the Securities Act or
any amendments or supplements thereto) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and shall reimburse any such Investor Indemnified Party for any legal or
other expenses reasonably incurred by them (but not in excess of expenses
incurred in respect of one counsel for all of them unless there is an actual
conflict of interest between any indemnified parties, which indemnified
parties may be represented by separate counsel) in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable to an Investor
Indemnified Party in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
(i) made in connection with such registration statement, preliminary
prospectus, final prospectus or amendments or supplements thereto, in
reliance upon and in conformity with written information furnished expressly
for use in connection with such registration by such Investor Indemnified
Party, or (ii) contained in any Prospectus that is corrected or disclosed in
any subsequent Prospectus that was delivered to the Investor prior to the
pertinent sale or sales by the Investor.  Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Investor Indemnified Party, and shall survive the transfer of such securities
by the Investor.

            (b)   The Investor shall indemnify and hold harmless the Company,
each of its directors and officers, each Person, if any, who controls the
Company within the meaning of the Securities Act, and each agent and any
underwriter for the Company (within the meaning of the Securities Act)
(collectively, "Company Indemnified Parties") against any losses, claims,
damages or liabilities, joint or several, to which any of them may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or proceedings in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such registration statement on the effective date
thereof (including any prospectus filed under Rule 424 under the Securities
Act or any amendments or supplements thereto) or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in such registration statement, preliminary or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity with
written information furnished by or on behalf of the Investor expressly for
use in connection with such registration; and the Investor shall reimburse
any legal or other expenses reasonably incurred by any Company Indemnified
Party (but not in excess of expenses incurred in respect of one counsel for
all of them unless there is an actual conflict of interest between any
indemnified parties, which indemnified parties may be represented by separate
counsel) in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the liability of the
Investor hereunder shall be limited to the net proceeds received by the
Investor in connection with any such registration under the Securities Act.

                                       17
<PAGE>

            (c)   If the indemnification provided for in this Section 5.05
from the indemnifying party is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred
to therein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and indemnified parties in connection with the
actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations.  The
relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been made by,
or relates to information supplied by, such indemnifying party or indemnified
parties, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action.  The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall include any legal or other fees or
expenses reasonably incurred by such party in connection with any
investigation or proceeding.  If the allocation provided in this
paragraph (c) is not permitted by applicable Law, the parties shall
contribute based upon the relevant benefits received by the Company from the
original issuance of the securities on the one hand and the aggregate
proceeds received by the Investor from the sale of securities on the other.

            The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5.05(c) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph.  No party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the other party who was not guilty of such fraudulent
misrepresentation.

                                       18
<PAGE>

            (d)   Any Person entitled to indemnification hereunder agrees to
give prompt written notice to the indemnifying party after the receipt by the
indemnified party of any written notice of the commencement of any action,
suit, proceeding or investigation or threat thereof made in writing for which
the indemnified party intends to claim indemnification or contribution
pursuant to this Agreement; provided, that the failure so to notify the
indemnified party shall not relieve the indemnifying party of any liability
that it may have to the indemnifying party hereunder unless such failure is
materially prejudicial to the indemnifying party.  If notice of commencement
of any such action is given to the indemnifying party as provided above, the
indemnifying party shall be entitled to participate in and, to the extent it
may wish, to assume the defense of such action at its own expense, with
counsel chosen by it and reasonably satisfactory to such indemnified party.
The indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be paid by the indemnified party unless (i) the
indemnifying party agrees to pay the same, (ii) the indemnifying party fails
to assume the defense of such action, or (iii) the named parties to any such
action (including any impleaded parties) have been advised by such counsel
that either (A) representation of such indemnified party and the indemnifying
party by the same counsel would be inappropriate under applicable standards
of professional conduct or (B) there are one or more legal defenses available
to it which are substantially different from or additional to those available
to the indemnifying party.  No indemnifying party shall be liable for any
settlement entered into without its written consent, which consent shall not
be unreasonably withheld.

            (e)   The agreements contained in this Section 5.05 shall survive
the transfer of the Registrable Securities by the Investor and sale of all
the Registrable Securities pursuant to any registration statement and shall
remain in full force and effect, regardless of any investigation made by or
on behalf of the Investor, the Investor's directors or officers or any
participating or controlling Person.

            SECTION 5.06.  Prospectus Delivery.  In connection with the sale
of any Shares pursuant to a registration statement, the Investor shall
deliver to the purchaser thereof the Prospectus forming a part of the
registration statement and all relevant supplements thereto which have been
provided by the Company to the Investor 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 state
securities laws.  If at any time or from time to time, the Company notifies
the Investor in writing that the 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 misleading, the
Investor shall not offer or sell any Shares or engage in any other
transaction involving or relating to the Shares, from the time of the giving
of notice with respect to such untrue statement or omission until the
Investor 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 the registration statement or a valid
prospectus supplement to the prospectus forming a part thereof.

                                  ARTICLE VI

                              GENERAL PROVISIONS

            SECTION 6.01.  Public Announcements and Publications.  Except as
required by Law or by the requirements of any securities exchange on which
the securities of a Party hereto are listed, no Party to this Agreement shall
make, or cause to be made, any press release or public announcement in
respect of this Agreement or the License Agreement or the transactions
contemplated hereby or thereby or otherwise communicate with any news media
in respect of this Agreement or the transactions contemplated hereby without
the prior written consent of the other Party.  The Parties shall cooperate as
to the timing and contents of any such press release or public announcement.

                                       19
<PAGE>

            SECTION 6.02.  Further Action.  Each of the Parties shall use
commercially reasonable efforts to take, or cause to be taken, all
appropriate action, do or cause to be done all things necessary, proper or
advisable under applicable Law, and to execute and deliver such documents and
other papers, as may be required to carry out the provisions of this
Agreement and consummate and make effective the transactions contemplated
hereby.

            SECTION 6.03.  Expenses.  Except as otherwise specified in this
Agreement, all costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated by this
Agreement shall be paid by the Party incurring such costs and expenses.

            SECTION 6.04.  Notices.  All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made by delivery in person, by an internationally recognized overnight
courier service, by telecopy or registered or certified mail (postage
prepaid, return receipt requested) to the respective Parties at the following
addresses (or at such other address for a party as shall be specified in a
notice given in accordance with this Section 6.04):

            (a)   if to the Company:

                  Biophan Technologies, Inc.
                  150 Lucius Gordon Drive
                  West Henrietta, New York 14586
                  Telecopy:  (585) 427-2433
                  Attention:  Michael L. Weiner, President and CEO

                  with a copy to:

                  Nixon Peabody LLP
                  100 Summer Street
                  Boston, Massachusetts 02110-2131
                  Telecopy:  (866) 743-4899
                  Attention:  William E. Kelly, Esq.

            (b)   if to the Investor:

                  Boston Scientific Corporation
                  One Boston Scientific Place
                  Natick, Massachusetts  01760-1537
                  Telecopy:  (508) 650 8956
                  Attention:  General Counsel

                  with a copy to:

                  Shearman & Sterling LLP
                  599 Lexington Ave.
                  New York, New York 10022-6069
                  Telecopy:  (646) 848-8966
                  Attention:  Clare O'Brien, Esq.

                                       20
<PAGE>

            Any notice, if mailed and properly addressed with postage prepaid
or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any notice, if transmitted by facsimile, shall be
deemed given when the confirmation of transmission thereof is received by the
transmitter.

            SECTION 6.05.  Severability.  If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law
or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect for so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the Parties shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the Parties as
closely as possible in an acceptable manner in order that the transactions
contemplated by this Agreement are consummated as originally contemplated to
the greatest extent possible.

            SECTION 6.06.  Entire Agreement.  This Agreement and the License
Agreement constitute the entire agreement of the Parties with respect to the
subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, among the Parties with respect to the
subject matter hereof and thereof.

            SECTION 6.07.  Assignment.  This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.  Neither Party may assign this Agreement
without the prior written consent of the other Party.  No assignment by
either Party permitted hereunder shall relieve the applicable Party of its
then-existing obligations under this Agreement.

            SECTION 6.08.  No Third Party Beneficiaries.  This Agreement
shall be binding upon and inure solely to the benefit of the Parties and
their permitted assigns and nothing herein, express or implied, is intended
to or shall confer upon any other Person any legal or equitable right,
benefit or remedy of any nature whatsoever.  Without limiting the generality
of the foregoing, no purchaser of Shares from the Investor shall have any
rights under this Agreement without the prior written consent of the Company.

            SECTION 6.09.  Amendment.  This Agreement may not be amended or
modified except by an instrument in writing signed by authorized
representatives of the Company and the Investor.

            SECTION 6.10.  No Waiver.  The delay or failure of either Party
to enforce at any time for any period the provisions of or any rights
deriving from this Agreement shall not be construed to be a waiver of such
provisions or rights or the right of such Party thereafter to enforce such
provisions.

                                       21
<PAGE>

            SECTION 6.11.  Dispute Resolution.  Except to the limited extent
necessary to (i) avoid expiration of a claim, (ii) comply with deadlines
under applicable Law, or (iii) obtain interim relief, including injunctive
relief, to preserve the status quo or prevent irreparable harm, neither Party
shall file an action or institute legal proceedings with respect to any
dispute, controversy, or claim arising out of this Agreement or the validity,
interpretation, breach or termination thereof, including claims seeking
redress or asserting rights under any Law, until:

            (a)   the aggrieved Party has given the other Party written
      notice ("Notice of Disagreement"), in accordance with Section 6.04 of
      this Agreement, of its grievance setting forth the basis for such
      dispute and the remedy desired;

            (b)   the other Party has failed to provide a prompt and
      effective remedy (in the view of the aggrieved Party);

            (c)   the aggrieved Party has requested in writing senior
      executives for both Parties to promptly meet and discuss the matter
      detailed in the Notice of Disagreement in order to consider informal
      and amicable means of resolution; and

            (d)   (i) the senior executives for both Parties have met at
      least three times and have not been able to resolve the dispute to the
      mutual satisfaction of the Parties or (ii) more than sixty (60)
      Business Days have passed since the date of the Notice of Disagreement.

            SECTION 6.12.  Governing Law.  This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of New York.  The
Parties unconditionally and irrevocably agree and consent to the exclusive
jurisdiction of the federal and state courts located in the Borough of
Manhattan, State of New York and waive any objection with respect thereto,
for the purpose of any action, suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby, and further agree
not to commence any such action, suit or proceeding except in any such
court.

            SECTION 6.13.  Counterparts.  This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts,
and by the different Parties in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.  Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.

            SECTION 6.14.  Waiver of Jury Trial.  Each of the Company and the
Investor hereby knowingly, voluntarily and irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Agreement or
any course of conduct, course of dealing or statements (whether oral or
written) or actions of the Company or the Investor in the negotiation,
administration, performance or enforcement thereof.

                                       22
<PAGE>

            SECTION 6.15.  Construction; Interpretation.  The Parties have
participated jointly in the negotiation and drafting of this Agreement.  In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party
by virtue of the authorship of any of the provisions of this Agreement.

            SECTION 6.16.  Remedies.  The Parties hereto agree that
irreparable damage would occur in the event any covenant or agreement in this
Agreement was not performed in accordance with the terms hereof and that the
Parties shall be entitled to specific performance of the covenants and
agreements contained herein.  The Parties further agree that the right of
each Party hereto to assert claims for damages shall be the sole and
exclusive right and remedy exercisable by such Party with respect to any
breach by the other Party hereto of any representation or warranty contained
in this Agreement.  Neither Party to this Agreement shall be liable to the
other Party to this Agreement for any consequential, incidental, special or
punitive damages, including without limitation lost profits, by virtue of any
breach or inaccuracy of any covenant, agreement, representation or warranty
contained in this Agreement except to the extent a Party to this Agreement
becomes liable to a person or entity not a party to this Agreement for any
such damages and the facts and circumstances giving rise to such damages are
of the sort that would otherwise entitle such Party to assert claims for such
damages against the other Party pursuant to the immediately preceding
sentence.  From and after the Closing, neither the Company nor the Investor
shall be entitled to rescind the transactions contemplated by this Agreement
by virtue of any failure of any Party's representations or warranties herein
to have been true or any breach of any Party's covenants or agreements
hereunder except as provided in this Agreement.

            SECTION 6.17.  Survival.  Neither Party makes any representation
or warranty, implied or otherwise, to the other Party except as specifically
made in this Agreement.  All representations and warranties of the Company
contained in this Agreement shall survive the execution and delivery of this
Agreement and shall continue in full force and effect for a period of six (6)
months after the Closing Date, and all liability with respect to such
representations and warranties shall thereupon be extinguished.
Notwithstanding the foregoing, (i) the representations and warranties of the
Company contained in Sections 3.01, 3.03 and 3.04(a) shall continue in full
force and effect indefinitely and (ii) the provisions of Article V shall
continue in full force and effect until the Unrestricted Date, except that
the provisions of Section 5.05 shall continue in full force and effect until
60 Business Days following the expiration of the statute of limitations
applicable to any claims which may be brought against a Party to this
Agreement and for which such Party is entitled to seek indemnification from
the other party to this Agreement.  The obligations of the Company with
respect to claims made pursuant to a particular representation or warranty
shall expire simultaneously with such representation or warranty; provided,
however, that such obligations shall survive with respect to any pending
claim until the pending claim is settled or otherwise satisfied if written
notice of such claim, specifying in reasonable detail the factual basis
therefor and the amount or estimated amount thereof, is given by the Investor
to the Company prior to the expiration of the representation or warranty upon
which it is based.

            SECTION 6.18.  Termination. This Agreement may be terminated at
any time prior to the Closing by either Party if the Closing has not occurred
by August 15, 2005; provided however, that the right to terminate this
Agreement under this Section 6.18 shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the
cause of, or shall have resulted in, the failure of the Closing to occur on
or prior to such date.

                           [Signature Page Follows]

                                       23
<PAGE>

            IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed as of the date first written above.

                                    BIOPHAN TECHNOLOGIES, INC.

                                    By:  /s/  Robert J.Wood
                                         ---------------------------------------
                                         Name:  Robert J. Wood
                                         Title:    Chief Financial Officer

                                    BOSTON SCIENTIFIC SCIMED, INC.

                                    By:  /s/  Lawrence C. Best
                                         ---------------------------------------

                                         Name:  Lawrence C. Best
                                         Title:     Vice President
                                         and Chief Financial Officer

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