Document:

SECURITY AGREEMENT

         THIS SECURITY  AGREEMENT  (the  "AGREEMENT"),  is entered into and made
effective  as of December  13, 2004,  by and between  NANOSCIENCE  TECHNOLOGIES,
INC.,  (the  "COMPANY"),  and the BUYER(S)  listed on Schedule I attached to the
Securities Purchase Agreement dated the date hereof (the "SECURED PARTY").

         WHEREAS,  the Company and the Secured Party are parties to that certain
Securities  Purchase  Agreement of even date herewith (the "SECURITIES  PURCHASE
AGREEMENT"),  pursuant to which,  subject to the terms and  conditions set forth
therein,  the Company shall issue and sell to the Secured Party, and the Secured
Party shall purchase up to One Million Dollars ($1,000,000)  principal amount of
five percent (5%) secured convertible debentures (the "CONVERTIBLE DEBENTURES"),
which shall be convertible  into shares of the Company's common stock, par value
$0.001 (the "COMMON STOCK") (as converted, the "CONVERSION SHARES"), for a total
purchase price of up to One Million Dollars ($1,000,000);

         WHEREAS,  to induce the  Secured  Party to enter  into the  transaction
contemplated  by the  Securities  Purchase  Agreement,  the Secured  Convertible
Debenture,  the Investor Registration Rights Agreement, the Irrevocable Transfer
Agent Instructions,  and the Escrow Agreement  (collectively  referred to as the
"TRANSACTION  DOCUMENTS"),  the Company  hereby  grants to the  Secured  Party a
security  interest  in and to the  pledged  property  identified  on EXHIBIT "A"
hereto   (collectively   referred  to  as  the  "PLEDGED  PROPERTY")  until  the
satisfaction of the Obligations, as defined herein below.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants herein contained,  and for other good and valuable consideration,  the
adequacy and receipt of which are hereby acknowledged, the parties hereto hereby
agree as follows:

                                   ARTICLE 1.

                         DEFINITIONS AND INTERPRETATIONS

         Section 1.1.      RECITALS.

         The above recitals are true and correct and are incorporated herein, in
their entirety, by this reference.

         Section 1.2.      INTERPRETATIONS.

         Nothing  herein  expressed or implied is intended or shall be construed
to confer  upon any person  other than the  Secured  Party any right,  remedy or
claim under or by reason hereof.

         Section 1.3.      OBLIGATIONS SECURED.

         The  obligations  secured  hereby  are any and all  obligations  of the
Company now existing or hereinafter  incurred to the Secured Party, whether oral
or written and whether  arising before,  on or after the date hereof  including,
without limitation,  those obligations of the Company to the

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Secured Party under the Securities Purchase  Agreement,  the Secured Convertible
Debenture,  the Investor  Registration Rights Agreement and Irrevocable Transfer
Agent  Instructions,  and any other amounts now or hereafter owed to the Secured
Party by the Company thereunder or hereunder (collectively, the "OBLIGATIONS").

                                   ARTICLE 2.

                PLEDGED COLLATERAL, ADMINISTRATION OF COLLATERAL
                      AND TERMINATION OF SECURITY INTEREST

         Section 2.1.      PLEDGED PROPERTY.

                  (a) Company hereby  pledges to the Secured Party,  and creates
in the Secured  Party for its benefit,  a security  interest for such time until
the  Obligations  are paid in full, in and to all of the property of the Company
as set  forth  in  EXHIBIT  "A"  attached  hereto  (collectively,  the  "PLEDGED
PROPERTY"):

         The Pledged Property,  as set forth in EXHIBIT "A" attached hereto, and
the  products  thereof  and the  proceeds  of all  such  items  are  hereinafter
collectively referred to as the "PLEDGED COLLATERAL."

                  (b)  Simultaneously  with the  execution  and delivery of this
Agreement,  the  Company  shall make,  execute,  acknowledge,  file,  record and
deliver to the Secured Party any documents  reasonably  requested by the Secured
Party to perfect its security interest in the Pledged  Property.  Simultaneously
with the  execution  and  delivery of this  Agreement,  the Company  shall make,
execute,  acknowledge  and  deliver  to the  Secured  Party such  documents  and
instruments, including, without limitation, financing statements,  certificates,
affidavits  and forms as may, in the Secured  Party's  reasonable  judgment,  be
necessary to effectuate,  complete or perfect, or to continue and preserve,  the
security interest of the Secured Party in the Pledged Property,  and the Secured
Party shall hold such documents and instruments as secured party, subject to the
terms and conditions contained herein.

         Section 2.2.      RIGHTS; INTERESTS; ETC.

                  (a) So long as no Event of Default  (as  hereinafter  defined)
shall have occurred and be continuing:

                           (i) the Company shall be entitled to exercise any and
all rights  pertaining  to the  Pledged  Property  or any part  thereof  for any
purpose not inconsistent with the terms hereof; and

                           (ii) the  Company  shall be  entitled  to receive and
retain any and all payments paid or made in respect of the Pledged Property.

                  (b) Upon the occurrence and during the continuance of an Event
of Default:

                           (i) All rights of the Company to exercise  the rights
which it would otherwise be entitled to exercise  pursuant to Section  2.2(a)(i)
hereof and to receive payments

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which it would otherwise be authorized to receive and retain pursuant to Section
2.2(a)(ii) hereof shall be suspended, and all such rights shall thereupon become
vested in the Secured Party who shall  thereupon have the sole right to exercise
such  rights  and to  receive  and hold as  Pledged  Collateral  such  payments;
PROVIDED,  HOWEVER,  that if the Secured  Party shall become  entitled and shall
elect to  exercise  its right to realize on the Pledged  Collateral  pursuant to
Article 5 hereof,  then all cash sums received by the Secured Party,  or held by
Company for the benefit of the Secured  Party and paid over  pursuant to Section
2.2(b)(ii) hereof, shall be applied against any outstanding Obligations; and

                           (ii)  All  interest,   dividends,  income  and  other
payments and  distributions  which are  received by the Company  contrary to the
provisions  of  Section  2.2(b)(i)  hereof  shall be  received  in trust for the
benefit of the Secured  Party,  shall be segregated  from other  property of the
Company and shall be forthwith paid over to the Secured Party; or

                           (iii) The Secured Party in its sole discretion  shall
be  authorized  to sell any or all of the Pledged  Property at public or private
sale in order to recoup all of the outstanding  principal plus accrued  interest
owed pursuant to the Convertible Debenture as described herein

                  (c) Each of the  following  events shall  constitute a default
under this Agreement (each an "EVENT OF DEFAULT"):

                           (i) any default,  whether in whole or in part,  shall
occur in the payment to the Secured Party of  principal,  interest or other item
comprising the  Obligations as and when due or with respect to any other debt or
obligation of the Company to a party other than the Secured Party;

                           (ii) any default,  whether in whole or in part, shall
occur  in the  due  observance  or  performance  of  any  obligations  or  other
covenants,  terms or  provisions  to be  performed  under this  Agreement or the
Transaction Documents;

                           (iii)  the   Company   shall:   (1)  make  a  general
assignment  for the  benefit of its  creditors;  (2) apply for or consent to the
appointment  of  a  receiver,   trustee,  assignee,   custodian,   sequestrator,
liquidator or similar  official for itself or any of its assets and  properties;
(3)  commence a voluntary  case for relief as a debtor  under the United  States
Bankruptcy Code; (4) file with or otherwise submit to any governmental authority
any petition,  answer or other  document  seeking:  (A)  reorganization,  (B) an
arrangement  with  creditors or (C) to take  advantage  of any other  present or
future  applicable  law  respecting  bankruptcy,   reorganization,   insolvency,
readjustment of debts, relief of debtors,  dissolution or liquidation;  (5) file
or otherwise submit any answer or other document admitting or failing to contest
the  material  allegations  of a petition or other  document  filed or otherwise
submitted  against it in any proceeding under any such applicable law, or (6) be
adjudicated a bankrupt or insolvent by a court of competent jurisdiction; or

                           (iv) any case,  proceeding  or other  action shall be
commenced  against  the  Company  for the  purpose  of  effecting,  or an order,
judgment  or decree  shall be  entered  by any court of  competent  jurisdiction
approving  (in  whole or in part)  anything  specified  in

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Section  2.2(c)(iii)  hereof,  or any receiver,  trustee,  assignee,  custodian,
sequestrator,  liquidator or other  official  shall be appointed with respect to
the Company, or shall be appointed to take or shall otherwise acquire possession
or control of all or a  substantial  part of the  assets and  properties  of the
Company,  and any of the foregoing shall continue unstayed and in effect for any
period of sixty (60) days.

                                   ARTICLE 3.

                          ATTORNEY-IN-FACT; PERFORMANCE

         Section 3.1.      SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
                           ----------------------------------------

         Upon the occurrence of an Event of Default, the Company hereby appoints
the Secured Party as its attorney-in-fact,  with full authority in the place and
stead of the Company and in the name of the Company or  otherwise,  from time to
time in the  Secured  Party's  discretion  to take any action and to execute any
instrument  which the Secured Party may reasonably  deem necessary to accomplish
the purposes of this Agreement,  including,  without limitation,  to receive and
collect all instruments made payable to the Company representing any payments in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same.  The  Secured  Party may demand,  collect,  receipt  for,  settle,
compromise,  adjust, sue for,  foreclose,  or realize on the Pledged Property as
and when the Secured Party may determine. To facilitate collection,  the Secured
Party may notify account debtors and obligors on any Pledged Property or Pledged
Collateral to make payments directly to the Secured Party.

         Section 3.2.      SECURED PARTY MAY PERFORM.

         If the Company fails to perform any  agreement  contained  herein,  the
Secured Party, at its option, may itself perform,  or cause performance of, such
agreement,  and  the  expenses  of the  Secured  Party  incurred  in  connection
therewith shall be included in the Obligations secured hereby and payable by the
Company under Section 8.3.

                                   ARTICLE 4.

                         REPRESENTATIONS AND WARRANTIES

         Section 4.1.      AUTHORIZATION; ENFORCEABILITY.

         Each of the parties  hereto  represents  and warrants that it has taken
all action  necessary to authorize the  execution,  delivery and  performance of
this Agreement and the transactions  contemplated hereby; and upon execution and
delivery,  this Agreement shall constitute a valid and binding obligation of the
respective party, subject to applicable bankruptcy, insolvency,  reorganization,
moratorium  and similar laws  affecting  creditors'  rights or by the principles
governing the availability of equitable remedies.

         Section 4.2.      OWNERSHIP OF PLEDGED PROPERTY.

         The Company warrants and represents that it is the legal and beneficial
owner of the Pledged  Property  free and clear of any lien,  security  interest,
option or other charge or encumbrance  except for the security  interest created
by this Agreement.

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                                   ARTICLE 5.

                    DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

         Section 5.1.      DEFAULT AND REMEDIES.

                  (a) If an Event of Default  described in Section 2.2(c)(i) and
(ii) occurs and is not cured within ten (10)  business  days,  then in each such
case the  Secured  Party  may  declare  the  Obligations  to be due and  payable
immediately,  by a  notice  in  writing  to  the  Company,  and  upon  any  such
declaration,  the Obligations  shall become  immediately due and payable.  If an
Event of  Default  described  in  Sections  2.2(c)(iii)  or (iv)  occurs  and is
continuing  for the  period  set  forth  therein,  then  the  Obligations  shall
automatically  become  immediately due and payable without  declaration or other
act on the part of the Secured Party.

                  (b) Upon the  occurrence of an Event of Default,  which is not
cured within ten (10) business days, the Secured Party shall: (i) be entitled to
receive all distributions with respect to the Pledged Collateral,  (ii) to cause
the Pledged Property to be transferred into the name of the Secured Party or its
nominee,  (iii) to dispose of the Pledged Property, and (iv) to realize upon any
and all rights in the Pledged Property then held by the Secured Party.

         Section 5.2.      METHOD OF REALIZING UPON THE PLEDGED PROPERTY: OTHER
REMEDIES.

         Upon the  occurrence of an Event of Default,  which is not cured within
ten (10) business days, in addition to any rights and remedies  available at law
or in equity, the following provisions shall govern the Secured Party's right to
realize upon the Pledged Property:

                  (a) Any item of the Pledged  Property  may be sold for cash or
other value in any number of lots at brokers  board,  public  auction or private
sale and may be sold without  demand,  advertisement  or notice (except that the
Secured Party shall give the Company ten (10) days' prior written  notice of the
time and place or of the time after which a private  sale may be made (the "SALE
NOTICE")),  which notice period is hereby agreed to be commercially  reasonable.
At any  sale or sales  of the  Pledged  Property,  the  Company  may bid for and
purchase the whole or any part of the Pledged Property and, upon compliance with
the terms of such  sale,  may hold,  exploit  and  dispose  of the same  without
further  accountability  to the  Secured  Party.  The Company  will  execute and
deliver,  or cause to be executed and delivered,  such  instruments,  documents,
assignments,  waivers,  certificates,  and  affidavits and supply or cause to be
supplied such further  information  and take such further  action as the Secured
Party reasonably shall require in connection with any such sale.

                  (b) Any  cash  being  held by the  Secured  Party  as  Pledged
Collateral  and all cash  proceeds  received by the Secured Party in respect of,
sale  of,  collection  from,  or other  realization  upon all or any part of the
Pledged Collateral shall be applied as follows:

                           (i) to the  payment of all  amounts  due the  Secured
Party for the  expenses  reimbursable  to it hereunder or owed to it pursuant to
Section 8.3 hereof;

                           (ii) to the payment of the  Obligations  then due and
unpaid.

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                           (iii) the balance, if any, to the Company.

                  (c) In  addition to all of the rights and  remedies  which the
Secured Party may have pursuant to this Agreement,  the Secured Party shall have
all of the rights and remedies provided by law,  including,  without limitation,
those under the Uniform Commercial Code.

                           (i) If the Company fails to pay such amounts due upon
the  occurrence  of an Event of Default  which is  continuing,  then the Secured
Party may institute a judicial  proceeding for the collection of the sums so due
and unpaid,  may prosecute  such  proceeding to judgment or final decree and may
enforce the same against the Company and collect the monies  adjudged or decreed
to be payable in the manner  provided  by law out of the  property  of  Company,
wherever situated.

                           (ii) The  Company  agrees that it shall be liable for
any  reasonable  fees,  expenses  and costs  incurred  by the  Secured  Party in
connection  with  enforcement,  collection and  preservation  of the Transaction
Documents,  including,  without limitation,  reasonable legal fees and expenses,
and such amounts  shall be deemed  included as  Obligations  secured  hereby and
payable as set forth in Section 8.3 hereof.

         Section 5.3.      PROOFS OF CLAIM.

                  In  case  of the  pendency  of any  receivership,  insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relating to the Company or the property of the Company
or of such other obligor or its creditors,  the Secured Party  (irrespective  of
whether the Obligations shall then be due and payable as therein expressed or by
declaration  or otherwise  and  irrespective  of whether the Secured Party shall
have made any demand on the Company for the payment of the Obligations), subject
to the rights of Previous Security Holders, shall be entitled and empowered,  by
intervention in such proceeding or otherwise:

                           (i) to file and prove a claim for the whole amount of
the  Obligations  and to file such other papers or documents as may be necessary
or advisable  in order to have the claims of the Secured  Party  (including  any
claim for the  reasonable  legal fees and  expenses and other  expenses  paid or
incurred by the  Secured  Party  permitted  hereunder  and of the Secured  Party
allowed in such judicial proceeding), and

                           (ii) to  collect  and  receive  any  monies  or other
property  payable or  deliverable on any such claims and to distribute the same;
and any custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator or
other similar official in any such judicial  proceeding is hereby  authorized by
the Secured  Party to make such  payments to the Secured Party and, in the event
that the Secured Party shall consent to the making of such payments  directed to
the Secured  Party,  to pay to the Secured Party any amounts for expenses due it
hereunder.

         Section 5.4.      DUTIES REGARDING PLEDGED COLLATERAL.

         The Secured Party shall have no duty as to the collection or protection
of the Pledged  Property or any income thereon or as to the  preservation of any
rights pertaining thereto, beyond

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the safe custody and reasonable care of any of the Pledged Property  actually in
the Secured Party's possession.

                                   ARTICLE 6.

                              AFFIRMATIVE COVENANTS

         The Company  covenants and agrees that,  from the date hereof and until
the  Obligations  have been fully paid and  satisfied,  unless the Secured Party
shall consent otherwise in writing (as provided in Section 8.4 hereof):

         Section 6.1.      EXISTENCE, PROPERTIES, ETC.

                  (a) The Company shall do, or cause to be done, all things,  or
proceed with due  diligence  with any actions or courses of action,  that may be
reasonably necessary (i) to maintain Company's due organization, valid existence
and good  standing  under  the laws of its state of  incorporation,  and (ii) to
preserve  and keep in full  force and effect all  qualifications,  licenses  and
registrations in those  jurisdictions in which the failure to do so could have a
Material Adverse Effect (as defined below); and (b) the Company shall not do, or
cause to be done, any act impairing the Company's  corporate  power or authority
(i) to carry on the Company's business as now conducted,  and (ii) to execute or
deliver this Agreement or any other document  delivered in connection  herewith,
including,  without limitation,  any UCC-1 Financing  Statements required by the
Secured  Party  to  which  it is or  will  be a  party,  or  perform  any of its
obligations  hereunder or thereunder.  For purpose of this  Agreement,  the term
"MATERIAL ADVERSE EFFECT" shall mean any reasonably  material and adverse affect
as determined by Secured Party in its sole discretion,  whether  individually or
in  the  aggregate,  upon  (a)  the  Company's  assets,  business,   operations,
properties  or  condition,  financial or  otherwise;  (b) the  Company's to make
payment  as and  when  due of all or any  part  of the  Obligations;  or (c) the
Pledged Property.

         Section 6.2.      FINANCIAL STATEMENTS AND REPORTS.

         The Company shall furnish to the Secured Party such  financial  data as
the Secured Party may reasonably  request.  Without limiting the foregoing,  the
Company  shall  furnish to the Secured  Party (or cause to be  furnished  to the
Secured Party) the following:

                  (a) as soon as practicable and in any event within ninety (90)
days after the end of each fiscal year of the Company,  the balance sheet of the
Company as of the close of such fiscal  year,  the  statement  of  earnings  and
retained  earnings  of the  Company  as of the close of such  fiscal  year,  and
statement of cash flows for the Company for such fiscal year,  all in reasonable
detail,  prepared in accordance with generally  accepted  accounting  principles
consistently  applied,  certified  by the chief  executive  and chief  financial
officers  of the  Company  as  being  true  and  correct  and  accompanied  by a
certificate of the chief executive and chief financial  officers of the Company,
stating  that the Company  has kept,  observed,  performed  and  fulfilled  each
covenant,  term and condition of this Agreement during such fiscal year and that
no Event of Default hereunder has occurred and is continuing,  or if an Event of
Default has  occurred  and is  continuing,  specifying  the nature of same,  the
period of  existence  of same and the action  the  Company  proposes  to take in
connection therewith;

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                  (b) within thirty (30) days of the end of each calendar month,
a balance  sheet of the Company as of the close of such month,  and statement of
earnings and retained earnings of the Company as of the close of such month, all
in reasonable  detail,  and prepared  substantially in accordance with generally
accepted  accounting  principles  consistently  applied,  certified by the chief
executive and chief financial officers of the Company as being true and correct;
and

                  (c) promptly upon receipt thereof,  copies of all accountants'
reports  and  accompanying   financial  reports  submitted  to  the  Company  by
independent  accountants  in  connection  with each  annual  examination  of the
Company.

         Section 6.3.      ACCOUNTS AND REPORTS.

         The  Company  shall  maintain  a  standard   system  of  accounting  in
accordance with generally accepted accounting  principles  consistently  applied
and provide, at its sole expense, to the Secured Party the following:

                  (a) as  soon  as  available,  a copy of any  notice  or  other
communication  alleging any nonpayment or other material  breach or default,  or
any  foreclosure or other action  respecting any material  portion of its assets
and properties,  received  respecting any of the  indebtedness of the Company in
excess of $15,000 (other than the  Obligations),  or any demand or other request
for  payment  under any  guaranty,  assumption,  purchase  agreement  or similar
agreement or arrangement respecting the indebtedness or obligations of others in
excess of $15,000,  including  any received  from any person acting on behalf of
the Secured Party or beneficiary thereof; and

                  (b)  within  fifteen  (15)  days  after  the  making  of  each
submission or filing, a copy of any report, financial statement, notice or other
document,  whether  periodic or otherwise,  submitted to the shareholders of the
Company, or submitted to or filed by the Company with any governmental authority
involving  or  affecting  (i) the  Company  that could  have a Material  Adverse
Effect; (ii) the Obligations;  (iii) any part of the Pledged Collateral; or (iv)
any of the transactions contemplated in this Agreement or the Loan Instruments.

         Section 6.4.      MAINTENANCE OF BOOKS AND RECORDS; INSPECTION.

         The  Company  shall  maintain  its  books,   accounts  and  records  in
accordance with generally accepted accounting  principles  consistently applied,
and permit the Secured Party,  its officers and employees and any  professionals
designated by the Secured Party in writing, upon reasonable prior written notice
during business hours to visit and inspect any of its properties  (including but
not limited to the collateral  security  described in the Transaction  Documents
and/or the Loan  Instruments),  corporate  books and financial  records,  and to
discuss  its  accounts,  affairs  and  finances  with any  employee,  officer or
director thereof.

         Section 6.5.      MAINTENANCE AND INSURANCE.

                  (a) The Company shall maintain or cause to be  maintained,  at
its own expense,  all of its assets and  properties  in good  working  order and
condition,  making all necessary  repairs thereto and renewals and  replacements
thereof.

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                  (b) The Company shall maintain or cause to be  maintained,  at
its  own  expense,   insurance  in  form,   substance  and  amounts   (including
deductibles),  which the Company  deems  reasonably  necessary to the  Company's
business, (i) adequate to insure all assets and properties of the Company, which
assets and properties are of a character  usually  insured by persons engaged in
the same or similar business against loss or damage resulting from fire or other
risks included in an extended coverage policy; (ii) against public liability and
other tort claims that may be incurred by the Company;  (iii) as may be required
by the Transaction Documents and/or applicable law and (iv) as may be reasonably
requested by Secured Party, all with adequate,  financially  sound and reputable
insurers.

         Section 6.6.      CONTRACTS AND OTHER COLLATERAL.

         The Company shall perform all of its obligations  under or with respect
to each instrument,  receivable,  contract and other intangible  included in the
Pledged  Property  to which the Company is now or  hereafter  will be party on a
timely basis and in the manner therein required,  including, without limitation,
this Agreement.

         Section 6.7.      DEFENSE OF COLLATERAL, ETC.

         The Company  shall defend and enforce its right,  title and interest in
and to any part of: (a) the Pledged Property; and (b) if not included within the
Pledged  Property,  those assets and  properties  whose loss would be reasonably
likely to have a Material  Adverse Effect,  the Company shall defend the Secured
Party's  right,  title and interest in and to each and every part of the Pledged
Property, each against all manner of claims and demands on a timely basis to the
full extent permitted by applicable law.

         Section 6.8.      PAYMENT OF DEBTS, TAXES, ETC.

         The Company shall pay, or cause to be paid, all of its indebtedness and
other liabilities and perform, or cause to be performed,  all of its obligations
in accordance with the respective terms thereof, and pay and discharge, or cause
to be paid or discharged,  all taxes, assessments and other governmental charges
and levies  imposed upon it, upon any of its assets and  properties on or before
the last day on which the same may be paid without  penalty,  as well as pay all
other  lawful  claims  (whether  for  services,  labor,  materials,  supplies or
otherwise) as and when due.

         Section 6.9.      TAXES AND ASSESSMENTS; TAX INDEMNITY.

         The Company  shall (a) file all tax returns and  appropriate  schedules
thereto that are required to be filed under applicable law, prior to the date of
delinquency,  (b) pay and  discharge  all taxes,  assessments  and  governmental
charges or levies imposed upon the Company,  upon its income and profits or upon
any  properties  belonging  to it, prior to the date on which  penalties  attach
thereto,  and (c) pay all taxes,  assessments and governmental charges or levies
that,  if  unpaid,  might  become a lien or charge  upon any of its  properties;
PROVIDED,  HOWEVER,  that the  Company in good faith may  contest  any such tax,
assessment,  governmental  charge or levy described in the foregoing clauses (b)
and (c) so long as appropriate reserves are maintained with respect thereto.

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         Section 6.10.     COMPLIANCE WITH LAW AND OTHER AGREEMENTS.

         The Company shall  maintain its business  operations and property owned
or used in connection  therewith in compliance with (a) all applicable  federal,
state and  local  laws,  regulations  and  ordinances  governing  such  business
operations and the use and ownership of such property,  and (b) all  agreements,
licenses,  franchises,  indentures and mortgages to which the Company is a party
or by which the Company or any of its properties is bound.

         Section 6.11.     NOTICE OF DEFAULT.

         The  Company  shall give  written  notice to the  Secured  Party of the
occurrence  of any  default  or Event  of  Default  under  this  Agreement,  the
Transaction  Documents  or any other  agreement  of Company  for the  payment of
money, promptly upon the occurrence thereof.

         Section 6.12.     NOTICE OF LITIGATION.

         The Company shall give notice, in writing,  to the Secured Party of (a)
any actions,  suits or  proceedings  wherein the amount at issue is in excess of
$50,000,  instituted by any persons against the Company, or affecting any of the
assets of the Company, and (b) any dispute, not resolved within thirty (30) days
of the  commencement  thereof,  between  the  Company  on the one  hand  and any
governmental  or regulatory  body on the other hand,  which might  reasonably be
expected  to have a  Material  Adverse  Effect  on the  business  operations  or
financial condition of the Company.

                                   ARTICLE 7.

                               NEGATIVE COVENANTS

         The Company  covenants and agrees that,  from the date hereof until the
Obligations  have been fully paid and satisfied,  the Company shall not,  unless
the Secured Party shall consent otherwise in writing:

         Section 7.1.      INDEBTEDNESS.

         The Company shall not directly or  indirectly  permit,  create,  incur,
assume, permit to exist,  increase,  renew or extend on or after the date hereof
any indebtedness on its part,  including  commitments,  contingencies and credit
availabilities, or apply for or offer or agree to do any of the foregoing.

         Section 7.2.      LIENS AND ENCUMBRANCES.

         The Company  shall not  directly or  indirectly  make,  create,  incur,
assume or permit to exist any assignment,  transfer, pledge, mortgage,  security
interest or other lien or  encumbrance  of any nature in, to or against any part
of the Pledged Property or of the Company's  capital stock, or offer or agree to
do so,  or own or  acquire  or agree to  acquire  any asset or  property  of any
character  subject  to  any  of  the  foregoing   encumbrances   (including  any
conditional sale contract or other title retention agreement), or assign, pledge
or in any way  transfer  or  encumber  its right to receive  any income or other
distribution or proceeds from any part of the Pledged  Property or

                                       10
<PAGE>

the  Company's  capital  stock;  or  enter  into  any  sale-leaseback  financing
respecting  any part of the Pledged  Property as lessee,  or cause or assist the
inception or continuation of any of the foregoing.

         Section 7.3.      ARTICLES    OF    INCORPORATION,  BY-LAWS,   MERGERS,
                           CONSOLIDATIONS, ACQUISITIONS AND SALES.

         Without the prior express  written  consent of the Secured  Party,  the
Company shall not: (a) Amend its Articles of Incorporation or By-Laws; (b) issue
or sell its stock, stock options,  bonds, notes or other corporate securities or
obligations  (except as otherwise  permitted  in Section 4(l) of the  Securities
Purchase  Agreement  of  even  date  herewith);  (c) be a party  to any  merger,
consolidation or corporate reorganization, (d) purchase or otherwise acquire all
or  substantially  all of the  assets or stock of, or any  partnership  or joint
venture  interest  in, any other  person,  firm or entity,  (e) sell,  transfer,
convey, grant a security interest in or lease all or any substantial part of its
assets,  nor (f)  create  any  subsidiaries  nor convey any of its assets to any
subsidiary.

         Section 7.4.      MANAGEMENT, OWNERSHIP.

         The Company shall not materially change its ownership,  executive staff
or  management  without  the prior  written  consent of the Secured  Party.  The
ownership, executive staff and management of the Company are material factors in
the Secured Party's willingness to institute and maintain a lending relationship
with the Company.

         Section 7.5.      DIVIDENDS, ETC.

         The Company  shall not declare or pay any dividend of any kind, in cash
or in property, on any class of its capital stock, nor purchase,  redeem, retire
or  otherwise  acquire  for  value  any  shares  of such  stock,  nor  make  any
distribution of any kind in respect  thereof,  nor make any return of capital to
shareholders,  nor make any payments in respect of any pension,  profit sharing,
retirement,  stock option, stock bonus,  incentive  compensation or similar plan
(except as required or permitted  hereunder),  without the prior written consent
of the Secured Party.

         Section 7.6.      GUARANTIES; LOANS.

         The Company shall not  guarantee  nor be liable in any manner,  whether
directly or  indirectly,  or become  contingently  liable after the date of this
Agreement in connection  with the  obligations or  indebtedness of any person or
persons,  except  for  (i)  the  indebtedness  currently  secured  by the  liens
identified on the Pledged  Property  identified on Exhibit A hereto and (ii) the
endorsement  of  negotiable  instruments  payable to the  Company for deposit or
collection  in the ordinary  course of business.  The Company shall not make any
loan,  advance or  extension  of credit to any  person  other than in the normal
course of its business.

         Section 7.7.      DEBT.

         The  Company  shall not  create,  incur,  assume or suffer to exist any
additional  indebtedness of any description whatsoever in an aggregate amount in
excess of $25,000  (excluding  any  indebtedness  of the  Company to the Secured
Party,  trade  accounts  payable and accrued  expenses  incurred in the ordinary
course of business and the endorsement of negotiable

                                       11
<PAGE>

instruments  payable to the Company,  respectively  for deposit or collection in
the ordinary course of business).

         Section 7.8.      CONDUCT OF BUSINESS.

         The Company will  continue to engage,  in an efficient  and  economical
manner, in a business of the same general type as conducted by it on the date of
this Agreement.

         Section 7.9.      PLACES OF BUSINESS.

         The location of the Company's chief place of business is 45 Rockefeller
Plaza, Suite 2000, New York, NY 10111. The Company shall not change the location
of its chief place of business,  chief executive office or any place of business
disclosed  to the  Secured  Party or move any of the Pledged  Property  from its
current  location  without thirty (30) days' prior written notice to the Secured
Party in each instance.

                                   ARTICLE 8.

                                  MISCELLANEOUS

         Section 8.1.      NOTICES.

         All notices or other  communications  required or permitted to be given
pursuant to this  Agreement  shall be in writing and shall be considered as duly
given on:  (a) the date of  delivery,  if  delivered  in person,  by  nationally
recognized  overnight  delivery  service or (b) five (5) days  after  mailing if
mailed from within the  continental  United  States by  certified  mail,  return
receipt requested to the party entitled to receive the same:

        If to the Secured Party:         Highgate House, LP
                                         101 Hudson Street-Suite 3700
                                         Jersey City, New Jersey 07302
                                         Attention:  Mark Angelo
                                                     Portfolio Manager
                                         Telephone:  (201) 986-8300
                                         Facsimile:  (201) 985-8266

                                         Montgomery Equity Partners, LP
                                         101 Hudson Street-Suite 3700
                                         Jersey City, New Jersey 07302
                                         Attention:  Mark Angelo
                                                     Portfolio Manager
                                         Telephone:  (201) 986-8300
                                         Facsimile:  (201) 985-8266

                                       12
<PAGE>

        With a copy to:                  David Gonzalez, Esq.
                                         101 Hudson Street - Suite 3700
                                         Jersey City, NJ 07302
                                         Telephone:  (201) 985-8300
                                         Facsimile:  (201) 985-8266

        And if to the Company:           Nanoscience Technologies, Inc.
                                         45 Rockefeller Plaza - Suite 2000
                                         New York, NY 10111
                                         Attention:  David Rector
                                         Telephone:  (212) 332-3443
                                         Facsimile:  (212) 332-3401

        With a copy to:                  Reitler Brown & Rosenblatt LLC
                                         800 Third Avenue, 21st Floor
                                         New York, NY 10022
                                         Attention:  Robert S. Brown, Esq.
                                         Telephone:  (212) 209-3050
                                         Facsimile:  (212) 371-5500

         Any party may change its  address by giving  notice to the other  party
stating its new address.  Commencing on the tenth (10th) day after the giving of
such notice, such newly designated address shall be such party's address for the
purpose of all notices or other communications required or permitted to be given
pursuant to this Agreement.

         Section 8.2.      SEVERABILITY.

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

         Section 8.3.      EXPENSES.

         In the  event of an  Event  of  Default,  the  Company  will pay to the
Secured  Party the  amount of any and all  reasonable  expenses,  including  the
reasonable  fees and expenses of its counsel,  which the Secured Party may incur
in connection with: (i) the custody or preservation of, or the sale,  collection
from, or other realization upon, any of the Pledged Property;  (ii) the exercise
or enforcement of any of the rights of the Secured Party  hereunder or (iii) the
failure by the Company to perform or observe any of the provisions hereof.

         Section 8.4.      WAIVERS, AMENDMENTS, ETC.

         The Secured  Party's delay or failure at any time or times hereafter to
require  strict  performance  by  Company  of any  undertakings,  agreements  or
covenants shall not waiver,  affect,

                                       13
<PAGE>

or diminish any right of the Secured Party under this Agreement to demand strict
compliance  and  performance  herewith.  Any waiver by the Secured  Party of any
Event of Default  shall not waive or affect any other Event of Default,  whether
such Event of Default is prior or subsequent  thereto and whether of the same or
a different  type.  None of the  undertakings,  agreements  and covenants of the
Company contained in this Agreement, and no Event of Default, shall be deemed to
have been  waived by the  Secured  Party,  nor may this  Agreement  be  amended,
changed or modified,  unless such waiver,  amendment,  change or modification is
evidenced by an instrument in writing specifying such waiver, amendment,  change
or modification and signed by the Secured Party.

         SECTION 8.5.      CONTINUING SECURITY INTEREST.

         This  Agreement  shall  create a  continuing  security  interest in the
Pledged Property and shall: (i) remain in full force and effect until payment in
full of the Obligations; and (ii) be binding upon the Company and its successors
and  assigns  and  (iii)  inure to the  benefit  of the  Secured  Party  and its
successors  and  assigns.  Upon  the  payment  or  satisfaction  in  full of the
Obligations,  the Company  shall be entitled to the return,  at its expense,  of
such of the  Pledged  Property  as shall not have been sold in  accordance  with
Section 5.2 hereof or otherwise applied pursuant to the terms hereof.

         Section 8.6.      INDEPENDENT REPRESENTATION.

         Each party hereto  acknowledges  and agrees that it has received or has
had the opportunity to receive  independent  legal counsel of its own choice and
that it has been sufficiently  apprised of its rights and responsibilities  with
regard to the substance of this Agreement.

         Section 8.7.      APPLICABLE LAW:  JURISDICTION.

         This Agreement  shall be governed by and interpreted in accordance with
the laws of the State of Nevada  without regard to the principles of conflict of
laws.  The parties  further agree that any action between them shall be heard in
Hudson County,  New Jersey,  and expressly consent to the jurisdiction and venue
of the  Superior  Court of New Jersey,  sitting in Hudson  County and the United
States  District  Court for the  District of New Jersey  sitting in Newark,  New
Jersey  for the  adjudication  of any civil  action  asserted  pursuant  to this
Paragraph.

         Section 8.8.      WAIVER OF JURY TRIAL.

         AS A  FURTHER  INDUCEMENT  FOR THE  SECURED  PARTY TO ENTER  INTO  THIS
AGREEMENT AND TO MAKE THE FINANCIAL  ACCOMMODATIONS TO THE COMPANY,  THE COMPANY
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING  RELATED IN ANY
WAY TO THIS  AGREEMENT  AND/OR  ANY  AND ALL  OTHER  DOCUMENTS  RELATED  TO THIS
TRANSACTION.

         Section 8.9.      ENTIRE AGREEMENT.

         This Agreement  constitutes the entire  agreement among the parties and
supersedes any prior agreement or  understanding  among them with respect to the
subject matter hereof.

                                       14
<PAGE>

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

                                        COMPANY:
                                        NANOSCIENCE TECHNOLOGIES, INC.

                                        By: /s/ David Rector
                                            ------------------------------------
                                        Name:  David Rector
                                        Title: President & CEO

                                        SECURED PARTY:

                                        HIGHGATE HOUSE, LP

                                        BY:    YORKVILLE ADVISORS, LLC
                                        ITS:   GENERAL PARTNER

                                        By: /s/ Mark Angelo
                                            -----------------------------------
                                        Name:  Mark Angelo
                                        Title: Portfolio Manager

                                        MONTGOMERY EQUITY PARTNERS, LP

                                        BY:    YORKVILLE ADVISORS, LLC
                                        ITS:   GENERAL PARTNER

                                        By: /s/ Mark Angelo
                                            -----------------------------------
                                        Name:  Mark Angelo

                                       15
<PAGE>

                                    EXHIBIT A
                         DEFINITION OF PLEDGED PROPERTY

         For the purpose of securing prompt and complete payment and performance
by the  Company  of all of the  Obligations,  the  Company  unconditionally  and
irrevocably hereby grants to the Secured Party a continuing security interest in
and to, and lien upon, the following Pledged Property of the Company:

                  (a) all goods of the Company,  including,  without limitation,
machinery,  equipment, furniture,  furnishings,  fixtures, signs, lights, tools,
parts,  supplies  and  motor  vehicles  of every  kind and  description,  now or
hereafter owned by the Company or in which the Company may have or may hereafter
acquire any interest, and all replacements, additions, accessions, substitutions
and proceeds thereof,  arising from the sale or disposition  thereof,  and where
applicable,  the proceeds of insurance  and of any tort claims  involving any of
the foregoing;

                  (b) all inventory of the Company,  including,  but not limited
to, all goods, wares,  merchandise,  parts, supplies,  finished products,  other
tangible  personal  property,  including such inventory as is temporarily out of
Company's  custody or possession  and including any returns upon any accounts or
other  proceeds,  including  insurance  proceeds,  resulting  from  the  sale or
disposition of any of the foregoing;

                  (c)  all  contract  rights  and  general  intangibles  of  the
Company,  including,  without limitation,  goodwill,  trademarks,  trade styles,
trade  names,  leasehold  interests,  partnership  or joint  venture  interests,
patents and patent applications,  copyrights, deposit accounts whether now owned
or hereafter created;

                  (d) all documents, warehouse receipts, instruments and chattel
paper of the Company whether now owned or hereafter created;

                  (e) all accounts and other  receivables,  instruments or other
forms of obligations and rights to payment of the Company  (herein  collectively
referred  to as  "ACCOUNTS"),  together  with the  proceeds  thereof,  all goods
represented  by such  Accounts  and all such goods that may be  returned  by the
Company's  customers,  and  all  proceeds  of any  insurance  thereon,  and  all
guarantees,  securities  and liens which the Company may hold for the payment of
any such  Accounts  including,  without  limitation,  all rights of  stoppage in
transit,  replevin and reclamation and as an unpaid vendor and/or lienor, all of
which  the  Company  represents  and  warrants  will be bona  fide and  existing
obligations of its respective customers, arising out of the sale of goods by the
Company in the ordinary course of business;

                  (f) to the  extent  assignable,  all of the  Company's  rights
under all present and future  authorizations,  permits,  licenses and franchises
issued or granted in connection with the operations of any of its facilities;

                  (g) all products and proceeds (including,  without limitation,
insurance proceeds) from the above-described Pledged Property.

                                      A-1INVESTOR REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION  RIGHTS  AGREEMENT (this  "AGREEMENT"),  dated as of
December  13,  2004,  by and among  NANOSCIENCE   TECHNOLOGIES,  INC.,  a Nevada
corporation,  with its principal office located at 45 Rockefeller  Plaza,  Suite
2000, New York, NY 10111 (the "COMPANY"),  and the undersigned  investors (each,
an "INVESTOR" and collectively, the "INVESTORS").

         WHEREAS:

         A. In connection  with the Securities  Purchase  Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE  AGREEMENT"),
the  Company has agreed,  upon the terms and  subject to the  conditions  of the
Securities  Purchase  Agreement,  to  issue  and sell to the  Investors  secured
convertible debentures (the "CONVERTIBLE DEBENTURES") which shall be convertible
into that number of shares of the Company's common stock, par value US$0.001 per
share (the "COMMON  STOCK"),  pursuant to the terms of the  Securities  Purchase
Agreement  for an aggregate  purchase  price of up to One Million  U.S.  Dollars
($1,000,000).  Capitalized  terms not  defined  herein  shall  have the  meaning
ascribed to them in the Securities Purchase Agreement.

         B. To induce  the  Investors  to execute  and  deliver  the  Securities
Purchase  Agreement,  the  Company  has agreed to provide  certain  registration
rights  under  the  Securities  Act of  1933,  as  amended,  and the  rules  and
regulations  there under, or any similar successor  statute  (collectively,  the
"1933 ACT"), and applicable state securities laws.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the Company and the
Investors hereby agree as follows:

         1. DEFINITIONS.

         As used in this Agreement, the following terms shall have the following
meanings:

            (a) "PERSON" means a corporation,  a limited liability  company,  an
association,  a partnership,  an  organization,  a business,  an  individual,  a
governmental or political subdivision thereof or a governmental agency.

            (b)  "REGISTER,"   "REGISTERED,"  and  "REGISTRATION"   refer  to  a
registration   effected  by  preparing  and  filing  one  or  more  Registration
Statements  (as defined  below) in compliance  with the 1933 Act and pursuant to
Rule 415  under  the 1933  Act or any  successor  rule  providing  for  offering
securities on a continuous or delayed basis ("RULE 415"), and the declaration or
ordering of effectiveness of such Registration Statement(s) by the United States
Securities and Exchange Commission (the "SEC").

            (c)  "REGISTRABLE  SECURITIES"  means the  shares  of  Common  Stock
issuable to Investors upon conversion of the Convertible  Debentures pursuant to
the Securities  Purchase

<PAGE>

Agreement  and the  Investor's  Shares,  as this term is defined in the  Standby
Equity Distribution Agreement dated the date hereof.

            (d)  "REGISTRATION  STATEMENT" means a registration  statement under
the 1933 Act which covers the Registrable Securities.

         2. REGISTRATION.

            (a)  Subject  to the terms and  conditions  of this  Agreement,  the
Company shall prepare and file, no later than forty five (45) days from the date
hereof (the "SCHEDULED FILING DEADLINE"),  with the SEC a registration statement
on Form S-1 or SB-2 (or, if the Company is then eligible, on Form S-3) under the
1933 Act (the "INITIAL  REGISTRATION  STATEMENT") for the  registration  for the
resale by all  Investors who purchased  Convertible  Debentures  pursuant to the
Securities Purchase Agreement 3,906,250 shares of Common Stock to be issued upon
conversion  of the  Convertible  Debentures  issued  pursuant to the  Securities
Purchase  Agreement  and the  Investor's  Shares.  The  Company  shall cause the
Registration  Statement to remain  effective  until  either (i) the  Registrable
Securities  are eligible to be sold  pursuant to Rule 144(k) under the 1933 Act,
or (ii) all of the Registrable  Securities have been sold,  whichever  period is
shorter.  Prior to the filing of the  Registration  Statement  with the SEC, the
Company  shall  furnish  a copy of the  Initial  Registration  Statement  to the
Investors for their review and comment.  The Investors shall furnish comments on
the Initial Registration  Statement to the Company within twenty-four (24) hours
of the receipt thereof from the Company.

            (b) EFFECTIVENESS OF THE INITIAL REGISTRATION STATEMENT. The Company
shall  use its best  efforts  (i) to have  the  Initial  Registration  Statement
declared  effective by the SEC no later than one hundred twenty (120) days after
the date hereof (the "SCHEDULED EFFECTIVE DEADLINE") and (ii) to insure that the
Initial Registration Statement and any subsequent Registration Statement remains
in effect until all of the Registrable Securities have been sold, subject to the
terms  and  conditions  of this  Agreement.  It shall  be an  event  of  default
hereunder if the Initial Registration Statement is not declared effective by the
SEC within one hundred twenty (120) days after filing thereof.

            (c)  FAILURE  TO FILE OR OBTAIN  EFFECTIVENESS  OF THE  REGISTRATION
STATEMENT. In the event the Registration Statement is not filed by the Scheduled
Filing  Deadline  or is not  declared  effective  by the  SEC on or  before  the
Scheduled  Effective  Date,  or if after  the  Registration  Statement  has been
declared effective by the SEC, sales cannot be made pursuant to the Registration
Statement  (whether  because  of a failure  to keep the  Registration  Statement
effective,  failure to disclose such information as is necessary for sales to be
made  pursuant to the  Registration  Statement,  failure to register  sufficient
shares of Common  Stock or otherwise  then as partial  relief for the damages to
any holder of Registrable Securities by reason of any such delay in or reduction
of its ability to sell the underlying shares of Common Stock (which remedy shall
not be  exclusive of any other  remedies at law or in equity),  the Company will
pay as  liquidated  damages (the  "LIQUIDATED  DAMAGES")  to the holder,  at the
holder's  option,  either a cash amount or shares of the Company's  Common Stock
within three (3) business  days,  after demand  therefore,  equal to two percent
(2%) of the  liquidated  value  of the  Convertible  Debentures  outstanding  as
Liquidated  Damages for each thirty (30) day period after the  Scheduled  Filing
Deadline or the Scheduled Effective Date as the case may be.

                                       2
<PAGE>

            (d)  LIQUIDATED  DAMAGES.   The  Company  and  the  Investor  hereto
acknowledge  and agree that the sums payable under  subsection  2(c) above shall
constitute liquidated damages and not penalties and are in addition to all other
rights of the  Investor,  including  the right to call a  default.  The  parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
is incapable or is difficult to precisely  estimate,  (ii) the amounts specified
in such  subsections  bear a reasonable  relationship to, and are not plainly or
grossly  disproportionate  to,  the  probable  loss  likely  to be  incurred  in
connection   with  any  failure  by  the  Company  to  obtain  or  maintain  the
effectiveness  of a  Registration  Statement,  (iii) one of the  reasons for the
Company  and the  Investor  reaching  an  agreement  as to such  amounts was the
uncertainty and cost of litigation regarding the question of actual damages, and
(iv) the Company and the Investor are  sophisticated  business  parties and have
been  represented by  sophisticated  and able legal counsel and negotiated  this
Agreement at arm's length.

         3. RELATED OBLIGATIONS.

            (a) The  Company  shall keep the  Registration  Statement  effective
pursuant to Rule 415 at all times until  either (i) the  Registrable  Securities
are eligible to be sold  pursuant to Rule 144(k) under the 1933 Act, or (ii) the
date on which  the  Investor  shall  have  sold all the  Registrable  Securities
covered  by such  Registration  Statement,  whichever  period  is  shorter  (the
"REGISTRATION  PERIOD"),  which Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein,  or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.

            (b) The Company shall prepare and file with the SEC such  amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under the 1933 Act,  as may be  necessary  to keep such  Registration  Statement
effective at all times during the Registration  Period, and, during such period,
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers  thereof  as set forth in such  Registration  Statement.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this Agreement  (including  pursuant to this Section 3(b)) by
reason of the Company's filing a report on Form 10-KSB,  Form 10-QSB or Form 8-K
or any analogous  report under the  Securities  Exchange Act of 1934, as amended
(the "1934 ACT"),  the Company shall  incorporate  such report by reference into
the  Registration  Statement,  if applicable,  or shall file such  amendments or
supplements  with the SEC on the same day on which the 1934 Act  report is filed
which  created  the  requirement  for the  Company  to amend or  supplement  the
Registration Statement.

            (c) The Company  shall furnish to each  Investor  whose  Registrable
Securities are included in any Registration  Statement,  without charge,  (i) at
least one (1) copy of such Registration  Statement as declared  effective by the
SEC and any amendment(s) thereto,  including financial statements and schedules,
all  documents  incorporated  therein  by  reference,   all  exhibits  and  each
preliminary prospectus, (ii) ten (10) copies of the final prospectus included in

                                       3
<PAGE>

such Registration  Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may  reasonably  request) and (iii) such
other  documents as such  Investor may  reasonably  request from time to time in
order to facilitate the disposition of the Registrable  Securities owned by such
Investor.

            (d) The  Company  shall use its best  efforts  to (i)  register  and
qualify the  Registrable  Securities  covered by a Registration  Statement under
such other  securities  or "blue sky" laws of such  jurisdictions  in the United
States as any  Investor  reasonably  requests,  (ii)  prepare  and file in those
jurisdictions,   such  amendments  (including  post-effective   amendments)  and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (w) make any change to its articles of incorporation or by-laws,  (x)
qualify to do  business  in any  jurisdiction  where it would not  otherwise  be
required to qualify but for this  Section  3(d),  (y) subject  itself to general
taxation in any such  jurisdiction,  or (z) file a general consent to service of
process  in any such  jurisdiction.  The  Company  shall  promptly  notify  each
Investor who holds  Registrable  Securities of the receipt by the Company of any
notification with respect to the suspension of the registration or qualification
of any of the Registrable Securities for sale under the securities or "blue sky"
laws of any jurisdiction in the United States or its receipt of actual notice of
the initiation or threat of any proceeding for such purpose.

            (e) As promptly as practicable after becoming aware of such event or
development,  the Company shall notify each Investor in writing of the happening
of any event as a result  of which the  prospectus  included  in a  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated  therein or necessary to
make the statements therein, in light of the circumstances under which they were
made,  not  misleading  (provided that in no event shall such notice contain any
material, nonpublic information), and promptly prepare a supplement or amendment
to such Registration Statement to correct such untrue statement or omission, and
deliver ten (10) copies of such  supplement or amendment to each  Investor.  The
Company  shall  also  promptly  notify  each  Investor  in  writing  (i)  when a
prospectus or any  prospectus  supplement or  post-effective  amendment has been
filed,  and when a Registration  Statement or any  post-effective  amendment has
become effective  (notification of such effectiveness shall be delivered to each
Investor  by  facsimile  on the  same  day of such  effectiveness),  (ii) of any
request by the SEC for amendments or supplements to a Registration  Statement or
related prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective  amendment to a Registration Statement would
be appropriate.

            (f) The Company  shall use its best  efforts to prevent the issuance
of any  stop  order or  other  suspension  of  effectiveness  of a  Registration
Statement,  or the  suspension of the  qualification  of any of the  Registrable
Securities for sale in any jurisdiction within the United States of America and,
if such an order or suspension is issued, to obtain the withdrawal of such order
or  suspension at the earliest  possible  moment and to notify each Investor who
holds

                                       4
<PAGE>

Registrable  Securities  being  sold  of the  issuance  of  such  order  and the
resolution  thereof or its receipt of actual notice of the  initiation or threat
of any proceeding for such purpose.

            (g) At the  reasonable  request of any  Investor,  the Company shall
furnish to such Investor,  on the date of the  effectiveness of the Registration
Statement  and  thereafter  from time to time on such dates as an  Investor  may
reasonably request (i) a letter, dated such date, from the Company's independent
certified  public  accountants in form and substance as is customarily  given by
independent  certified  public  accountants to  underwriters  in an underwritten
public  offering,  and  (ii) an  opinion,  dated  as of such  date,  of  counsel
representing the Company for purposes of such Registration  Statement,  in form,
scope and substance as is customarily given in an underwritten  public offering,
addressed to the Investors.

            (h) The  Company  shall make  available  for  inspection  by (i) any
Investor and (ii) one (1) firm of  accountants  or other agents  retained by the
Investors  (collectively,  the "INSPECTORS")  all pertinent  financial and other
records,  and  pertinent  corporate  documents  and  properties  of the  Company
(collectively,  the "RECORDS"),  as shall be reasonably deemed necessary by each
Inspector,  and cause the Company's officers,  directors and employees to supply
all information which any Inspector may reasonably request;  provided,  however,
that each Inspector  shall agree,  and each Investor  hereby agrees,  to hold in
strict  confidence and shall not make any disclosure  (except to an Investor) or
use any Record or other information  which the Company  determines in good faith
to be confidential,  and of which  determination the Inspectors are so notified,
unless (a) the  disclosure  of such  Records is  necessary to avoid or correct a
misstatement or omission in any Registration  Statement or is otherwise required
under the 1933 Act,  (b) the  release of such  Records is ordered  pursuant to a
final,  non-appealable  subpoena  or order  from a court or  government  body of
competent  jurisdiction,  or (c) the  information  in such Records has been made
generally  available to the public other than by disclosure in violation of this
or any other  agreement of which the Inspector  and the Investor has  knowledge.
Each  Investor  agrees that it shall,  upon  learning  that  disclosure  of such
Records  is  sought  in  or  by  a  court  or  governmental  body  of  competent
jurisdiction or through other means, give prompt notice to the Company and allow
the  Company,  at its  expense,  to  undertake  appropriate  action  to  prevent
disclosure  of,  or to  obtain  a  protective  order  for,  the  Records  deemed
confidential.

            (i) The Company shall hold in confidence and not make any disclosure
of  information  concerning  an  Investor  provided  to the  Company  unless (i)
disclosure  of such  information  is  necessary  to comply with federal or state
securities  laws, (ii) the disclosure of such  information is necessary to avoid
or correct a misstatement or omission in any Registration  Statement,  (iii) the
release of such  information  is ordered  pursuant to a subpoena or other final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

                                       5
<PAGE>

            (j) The Company  shall use its best efforts  either to cause all the
Registrable  Securities covered by a Registration  Statement (i) to be listed on
each securities  exchange on which securities of the same class or series issued
by the Company  are then  listed,  if any,  if the  listing of such  Registrable
Securities  is then  permitted  under  the  rules of such  exchange  or (ii) the
inclusion for quotation on the National Association of Securities Dealers,  Inc.
OTC Bulletin Board for such  Registrable  Securities.  The Company shall pay all
fees and  expenses in  connection  with  satisfying  its  obligation  under this
Section 3(j).

            (k)  The  Company  shall  cooperate  with  the  Investors  who  hold
Registrable  Securities  being  offered  and,  to  the  extent  applicable,   to
facilitate the timely  preparation and delivery of certificates (not bearing any
restrictive  legend)  representing  the  Registrable  Securities  to be  offered
pursuant to a Registration  Statement and enable such certificates to be in such
denominations  or amounts,  as the case may be, as the Investors may  reasonably
request and registered in such names as the Investors may request.

            (l) The Company shall use its best efforts to cause the  Registrable
Securities  covered by the  applicable  Registration  Statement to be registered
with or approved by such other  governmental  agencies or  authorities as may be
necessary to consummate the disposition of such Registrable Securities.

            (m) The  Company  shall make  generally  available  to its  security
holders  as soon as  practical,  but not later than  ninety  (90) days after the
close of the period covered  thereby,  an earnings  statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering a twelve (12) month
period  beginning not later than the first day of the Company's  fiscal  quarter
next following the effective date of the Registration Statement.

            (n) The Company shall  otherwise use its best efforts to comply with
all  applicable  rules  and  regulations  of the  SEC  in  connection  with  any
registration hereunder.

(o) Within two (2) business  days after a  Registration  Statement  which covers
Registrable  Securities  is declared  effective  by the SEC,  the Company  shall
deliver,  and shall  cause legal  counsel  for the  Company to  deliver,  to the
            transfer agent for such  Registrable  Securities (with copies to the
Investors
whose  Registrable  Securities  are  included  in such  Registration  Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as EXHIBIT A.

            (p) The Company shall take all other reasonable actions necessary to
expedite and facilitate  disposition by the Investors of Registrable  Securities
pursuant to a Registration Statement.

         4. OBLIGATIONS OF THE INVESTORS.

         Each Investor  agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e),  such Investor will  immediately  discontinue  disposition  of
Registrable  Securities pursuant to any Registration  Statement(s) covering such
Registrable  Securities  until  such  Investor's  receipt  of the  copies of the
supplemented  or amended  prospectus  contemplated by Section 3(e) or receipt of
notice that no supplement or amendment is required.  Notwithstanding anything to
the contrary,  the

                                       6
<PAGE>

Company shall cause its transfer agent to deliver  unlegended  certificates  for
shares of Common Stock to a  transferee  of an Investor in  accordance  with the
terms  of the  Securities  Purchase  Agreement  in  connection  with any sale of
Registrable  Securities  with  respect to which an Investor  has entered  into a
contract for sale prior to the  Investor's  receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e) and for which the Investor has not yet settled.

         5. EXPENSES OF REGISTRATION.

         All expenses  incurred in  connection  with  registrations,  filings or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration,  listing and qualifications fees,  printers,  legal and accounting
fees shall be paid by the Company.

         6. INDEMNIFICATION.

         With  respect  to  Registrable  Securities  which  are  included  in  a
Registration Statement under this Agreement:

            (a) To the fullest  extent  permitted by law, the Company will,  and
hereby does, indemnify,  hold harmless and defend each Investor,  the directors,
officers, partners,  employees, agents,  representatives of, and each Person, if
any, who  controls  any Investor  within the meaning of the 1933 Act or the 1934
Act (each,  an  "INDEMNIFIED  Person"),  against  any losses,  claims,  damages,
liabilities,  judgments, fines, penalties, charges, costs, reasonable attorneys'
fees,  amounts paid in settlement or expenses,  joint or several  (collectively,
"CLAIMS") incurred in investigating,  preparing or defending any action,  claim,
suit, inquiry,  proceeding,  investigation or appeal taken from the foregoing by
or before any court or governmental,  administrative or other regulatory agency,
body or the SEC,  whether  pending or threatened,  whether or not an indemnified
party is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them
may become subject  insofar as such Claims (or actions or  proceedings,  whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any  untrue  statement  or alleged  untrue  statement  of a  material  fact in a
Registration Statement or any post-effective  amendment thereto or in any filing
made in connection with the  qualification  of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered  ("BLUE SKY  FILING"),  or the  omission or alleged  omission to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading; (ii) any untrue statement or alleged untrue statement of
a material fact contained in any final  prospectus (as amended or  supplemented,
if the Company files any amendment  thereof or supplement  thereto with the SEC)
or the omission or alleged omission to state therein any material fact necessary
to make the statements made therein,  in light of the circumstances  under which
the  statements  therein were made,  not  misleading;  or (iii) any violation or
alleged  violation  by the Company of the 1933 Act, the 1934 Act, any other law,
including,  without  limitation,  any  state  securities  law,  or any  rule  or
regulation  there  under  relating  to the  offer  or  sale  of the  Registrable
Securities  pursuant to a  Registration  Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively,  "VIOLATIONS"). The Company shall
reimburse  the  Investors  and each such  controlling  person  promptly  as such
expenses  are  incurred  and  are  due  and  payable,  for  any  legal  fees  or
disbursements or other reasonable  expenses  incurred by them in connection with
investigating  or  defending  any such  Claim.  Notwithstanding  anything to the
contrary  contained

                                       7
<PAGE>

herein, the indemnification  agreement contained in this Section 6(a): (x) shall
not apply to a Claim by an  Indemnified  Person  arising  out of or based upon a
Violation  which  occurs in reliance  upon and in  conformity  with  information
furnished in writing to the Company by such Indemnified Person expressly for use
in connection  with the  preparation of the  Registration  Statement or any such
amendment  thereof or  supplement  thereto;  (y) shall not be  available  to the
extent  such Claim is based on a failure of the  Investor to deliver or to cause
to be delivered the prospectus made available by the Company, if such prospectus
was timely made available by the Company pursuant to Section 3(c); and (z) shall
not apply to  amounts  paid in  settlement  of any Claim if such  settlement  is
effected  without the prior written consent of the Company,  which consent shall
not be  unreasonably  withheld.  Such  indemnity  shall remain in full force and
effect regardless of any  investigation  made by or on behalf of the Indemnified
Person and shall  survive the  transfer  of the  Registrable  Securities  by the
Investors pursuant to Section 9 hereof.

            (b) In  connection  with a  Registration  Statement,  each  Investor
agrees to severally and not jointly indemnify,  hold harmless and defend, to the
same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its  directors,  each of its officers,  employees,  representatives,  or
agents and each Person,  if any, who controls the Company  within the meaning of
the 1933 Act or the 1934 Act (each an "INDEMNIFIED Party"), against any Claim or
Indemnified Damages to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise,  insofar as such Claim or  Indemnified  Damages arise
out of or is based upon any Violation,  in each case to the extent,  and only to
the extent,  that such Violation  occurs in reliance upon and in conformity with
written information  furnished to the Company by such Investor expressly for use
in connection with such  Registration  Statement;  and, subject to Section 6(d),
such Investor will reimburse any legal or other expenses  reasonably incurred by
them in connection  with  investigating  or defending any such Claim;  provided,
however,  that the  indemnity  agreement  contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to
amounts paid in settlement of any Claim if such  settlement is effected  without
the  prior  written  consent  of  such  Investor,  which  consent  shall  not be
unreasonably withheld;  provided,  further,  however, that the Investor shall be
liable under this  Section  6(b) for only that amount of a Claim or  Indemnified
Damages as does not exceed the net proceeds to such  Investor as a result of the
sale of Registrable  Securities  pursuant to such Registration  Statement.  Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the   Registrable   Securities   by  the   Investors   pursuant  to  Section  9.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained in this Section 6(b) with respect to any  prospectus  shall
not inure to the benefit of any  Indemnified  Party if the untrue  statement  or
omission of material fact contained in the prospectus was corrected and such new
prospectus  was delivered to each Investor  prior to such  Investor's use of the
prospectus to which the Claim relates.

            (c) Promptly after receipt by an  Indemnified  Person or Indemnified
Party  under  this  Section  6 of notice of the  commencement  of any  action or
proceeding  (including any governmental action or proceeding) involving a Claim,
such  Indemnified  Person or  Indemnified  Party  shall,  if a Claim in  respect
thereof is to be made  against  any  indemnifying  party  under this  Section 6,
deliver to the indemnifying party a written notice of the commencement  thereof,
and the  indemnifying  party shall have the right to participate in, and, to the
extent the indemnifying  party so desires,  jointly with any other  indemnifying
party similarly  noticed,  to assume control of

                                       8
<PAGE>

the defense thereof with counsel mutually satisfactory to the indemnifying party
and the  Indemnified  Person  or the  Indemnified  Party,  as the  case  may be;
provided,  however,  that an Indemnified  Person or Indemnified Party shall have
the right to retain its own counsel  with the fees and expenses of not more than
one (1) counsel for such Indemnified  Person or Indemnified  Party to be paid by
the indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
or Indemnified  Party and the indemnifying  party would be inappropriate  due to
actual or  potential  differing  interests  between such  Indemnified  Person or
Indemnified  Party and any  other  party  represented  by such  counsel  in such
proceeding.  The Indemnified  Party or Indemnified  Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense of any
such  action  or  claim by the  indemnifying  party  and  shall  furnish  to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified  Person which relates to such action or claim.  The  indemnifying
party shall keep the Indemnified  Party or Indemnified  Person fully apprised at
all times as to the status of the defense or any  settlement  negotiations  with
respect thereto. No indemnifying party shall be liable for any settlement of any
action,  claim  or  proceeding  effected  without  its  prior  written  consent;
provided,  however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent.  No indemnifying party shall,  without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other  compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified  Person of a release from all liability
in respect to such claim or litigation.  Following  indemnification  as provided
for hereunder,  the indemnifying  party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations  relating to the matter for which indemnification has been made.
The  failure  to  deliver  written  notice to the  indemnifying  party  within a
reasonable  time of the  commencement  of any such action shall not relieve such
indemnifying  party of any liability to the  Indemnified  Person or  Indemnified
Party under this Section 6, except to the extent that the indemnifying  party is
prejudiced in its ability to defend such action.

            (d) The indemnification  required by this Section 6 shall be made by
periodic  payments of the amount thereof during the course of the  investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

            (e) The indemnity  agreements  contained herein shall be in addition
to (i) any  cause  of  action  or  similar  right  of the  Indemnified  Party or
Indemnified  Person  against  the  indemnifying  party or  others,  and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

         7. CONTRIBUTION.

         To  the  extent  any   indemnification  by  an  indemnifying  party  is
prohibited or limited by law, the indemnifying  party agrees to make the maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no seller of Registrable  Securities guilty of fraudulent  misrepresentation
(within  the  meaning of Section  11(f) of the 1933 Act)  shall be  entitled  to
contribution  from any seller of  Registrable  Securities  who was not guilty of
fraudulent

                                       9
<PAGE>

misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

         8. REPORTS UNDER THE 1934 ACT.

         With a view to making  available to the  Investors the benefits of Rule
144 promulgated  under the 1933 Act or any similar rule or regulation of the SEC
that may at any time permit the  Investors to sell  securities of the Company to
the public without registration ("RULE 144") the Company agrees to:

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

            (b) file  with the SEC in a timely  manner  all  reports  and  other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company  remains  subject to such  requirements  (it being  understood  that
nothing herein shall limit the Company's  obligations  under Section 4(c) of the
Securities  Purchase  Agreement)  and the  filing  of  such  reports  and  other
documents as are required by the applicable provisions of Rule 144; and

            (c)  furnish  to  each  Investor  so  long  as  such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company that it has complied  with the reporting  requirements  of Rule 144, the
1933 Act and the 1934 Act,  (ii) a copy of the most recent  annual or  quarterly
report of the  Company  and such other  reports  and  documents  so filed by the
Company,  and (iii) such other  information  as may be  reasonably  requested to
permit  the  Investors  to sell such  securities  pursuant  to Rule 144  without
registration.

         9. AMENDMENT OF REGISTRATION RIGHTS.

         Provisions of this Agreement may be amended and the observance  thereof
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively  or  prospectively),  only with the written consent of the Company
and  Investors  who then  hold at  least  two-thirds  (2/3)  of the  Registrable
Securities.  Any amendment or waiver  effected in accordance with this Section 9
shall be binding upon each Investor and the Company.  No such amendment shall be
effective  to the extent that it applies to fewer than all of the holders of the
Registrable Securities.  No consideration shall be offered or paid to any Person
to amend or consent to a waiver or  modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.

         10. MISCELLANEOUS.

            (a) A Person  is deemed  to be a holder  of  Registrable  Securities
whenever  such  Person  owns or is  deemed  to own of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from two (2) or more  Persons  with  respect to the same  Registrable
Securities,  the  Company  shall act upon the basis of  instructions,  notice or
election received from the registered owner of such Registrable Securities.

                                       10
<PAGE>

            (b) Any notices,  consents, waivers or other communications required
or  permitted to be given under the terms of this  Agreement  must be in writing
and will be deemed to have been  delivered:  (i) upon  receipt,  when  delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) one (1) business day after  deposit with a nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

If to the Company, to:         Nanoscience Technologies, Inc.
                               45 Rockefeller Plaza - Suite 2000
                               New York, NY 10111
                               Attention:  David Rector
                               Telephone:  (212) 332-3443
                               Facsimile:  (212) 332-3401

With a copy to:                Reitler Brown & Rosenblatt LLC
                               800 Third Avenue, 21st Floor
                               New York, NY 10022
                               Attention:  Robert S. Brown, Esq.
                               Telephone:  (212) 209-3050
                               Facsimile:  (212) 371-5500

If to an  Investor,  to its  address  and  facsimile  number on the  Schedule of
Investors attached hereto, with copies to such Investor's representatives as set
forth on the  Schedule of Investors or to such other  address  and/or  facsimile
number and/or to the  attention of such other person as the recipient  party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written  confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,   waiver  or  other  communication,   (B)
mechanically  or  electronically  generated  by the sender's  facsimile  machine
containing the time, date,  recipient facsimile number and an image of the first
page of such  transmission  or (C)  provided by a courier or  overnight  courier
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

            (c) Failure of any party to exercise  any right or remedy under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            (d) The  laws  of the  State  of  Nevada  shall  govern  all  issues
concerning  the  relative  rights  of  the  Company  and  the  Investors  as its
stockholders.  All  other  questions  concerning  the  construction,   validity,
enforcement  and  interpretation  of this  Agreement  shall be  governed  by the
internal laws of the State of New Jersey, without giving effect to any choice of
law or conflict of law  provision or rule (whether of the State of New Jersey or
any other  jurisdiction)  that would  cause the  application  of the laws of any
jurisdiction  other than the State of New Jersey.  Each party hereby irrevocably
submits to the non-exclusive jurisdiction of the Superior Courts of the State of
New Jersey,  sitting in Hudson  County,  New Jersey and  federal

                                       11
<PAGE>

courts for the  District  of New Jersey  sitting  Newark,  New  Jersey,  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit, action or proceeding is brought in an inconvenient  forum or that the
venue of such  suit,  action  or  proceeding  is  improper.  Each  party  hereby
irrevocably  waives  personal  service of process and consents to process  being
served in any such suit,  action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve  process in any  manner  permitted  by law.  If any  provision  of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or  unenforceability  shall not affect the  validity  or  enforceability  of the
remainder  of  this   Agreement  in  that   jurisdiction   or  the  validity  or
enforceability  of any  provision of this  Agreement in any other  jurisdiction.
EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE,  AND AGREES NOT TO
REQUEST,  A JURY  TRIAL FOR THE  ADJUDICATION  OF ANY  DISPUTE  HEREUNDER  OR IN
CONNECTION  HEREWITH  OR  ARISING  OUT OF  THIS  AGREEMENT  OR  ANY  TRANSACTION
CONTEMPLATED HEREBY.

            (e) This Agreement, the Irrevocable Transfer Agent Instructions, the
Securities  Purchase  Agreement and related documents  including the Convertible
Debenture  and the  Escrow  Agreement  dated  the date  hereof  by and among the
Company,  the Investors set forth on the Schedule of Investors  attached hereto,
and David Gonzalez,  Esq. (the "ESCROW  AGREEMENT")  and the Security  Agreement
dated the date hereof (the "SECURITY AGREEMENT") constitute the entire agreement
among the parties  hereto with respect to the subject matter hereof and thereof.
There are no  restrictions,  promises,  warranties or  undertakings,  other than
those  set  forth or  referred  to  herein  and  therein.  This  Agreement,  the
Irrevocable  Transfer Agent Instructions,  the Securities Purchase Agreement and
related documents including the Convertible Debenture,  the Escrow Agreement and
the Security Agreement  supersede all prior agreements and understandings  among
the parties hereto with respect to the subject matter hereof and thereof.

            (f) This Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of each of the parties hereto.

            (g) The headings in this Agreement are for  convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

            (h) This Agreement may be executed in identical  counterparts,  each
of which shall be deemed an original but all of which shall  constitute  one and
the same agreement.  This Agreement,  once executed by a party, may be delivered
to the other party hereto by facsimile  transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.

            (i)  Each  party  shall  do and  perform,  or  cause  to be done and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the

                                       12
<PAGE>

intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

The language used in this Agreement will be deemed to be the language  chosen by
the parties to express their mutual  intent and no rules of strict  construction
will be applied against any party.

            (j) This Agreement is intended for the benefit of the parties hereto
and  their  respective  permitted  successors  and  assigns,  and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Investor  Registration
Rights Agreement to be duly executed as of day and year first above written.

                                            COMPANY:
                                            NANOSCIENCE TECHNOLOGIES, INC.

                                            By: /s/ David Rector
                                                -------------------------------
                                            Name:  David Rector
                                            Title: President & CEO

                                       14
<PAGE>

                                   SCHEDULE I

                              SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
                                                                                        ADDRESS/FACSIMILE
           NAME                                 SIGNATURE                              NUMBER OF INVESTORS
------------------------------     ---------------------------------         ---------------------------------
<S>                                <C>                                       <C>
Highgate House, LP                 By:   Yorkville Advisors, LLC             101 Hudson Street - Suite 3700
                                   Its:  General Partner                     Jersey City, NJ  07303
                                                                             Facsimile: (201) 985-8266

                                   By: /s/ Mark Angelo
                                       ---------------------------
                                   Name: Mark A. Angelo
                                   Its:  Portfolio Manager

Montgomery Equity Partners, LP     By:   Yorkville Advisors, LLC             101 Hudson Street - Suite 3700
                                   Its:  General Partner                     Jersey City, NJ  07303
                                                                             Facsimile: (201) 985-8266

                                   By: /s/ Mark Angelo
                                       ---------------------------
                                   Name: Mark A. Angelo
                                   Its:  Portfolio Manager

With a copy to:                    David Gonzalez, Esq.                      101 Hudson Street - Suite 3700
                                                                             Jersey City, NJ 07302
                                                                             Facsimile: (201) 985-8266
</TABLE>

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

Attention:

         Re:  NANOSCIENCE TECHNOLOGIES, INC.

Ladies and Gentlemen:

         We are counsel to Nanoscience Technologies,  Inc., a Nevada corporation
(the  "COMPANY"),  and have  represented  the  Company in  connection  with that
certain  Securities  Purchase  Agreement (the "SECURITIES  PURCHASE  AGREEMENT")
entered  into  by  and  among  the  Company  and  the  investors  named  therein
(collectively,  the  "INVESTORS")  pursuant to which the  Company  issued to the
Investors  shares of its Common Stock, par value US$0.001 per share (the "COMMON
STOCK"). Pursuant to the Purchase Agreement, the Company also has entered into a
Registration  Rights  Agreement with the Investors  (the "INVESTOR  REGISTRATION
RIGHTS AGREEMENT")  pursuant to which the Company agreed, among other things, to
register  the  Registrable  Securities  (as defined in the  Registration  Rights
Agreement)  under the  Securities  Act of 1933, as amended (the "1933 ACT").  In
connection  with  the  Company's   obligations  under  the  Registration  Rights
Agreement,  on ____________ ____, the Company filed a Registration  Statement on
Form ________ (File No.  333-_____________) (the "REGISTRATION  STATEMENT") with
the  Securities  and  Exchange  SEC  (the  "SEC")  relating  to the  Registrable
Securities  which names each of the  Investors  as a selling  stockholder  there
under.

         In connection  with the  foregoing,  we advise you that a member of the
SEC's  staff has  advised  us by  telephone  that the SEC has  entered  an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF  EFFECTIVENESS]  on [ENTER DATE OF  EFFECTIVENESS]  and we have no knowledge,
after  telephonic  inquiry of a member of the SEC's  staff,  that any stop order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and the  Registrable
Securities  are  available  for  resale  under  the  1933  Act  pursuant  to the
Registration Statement.

                                    Very truly yours,

                                    By:
                                       -----------------------------------------

cc:  [LIST NAMES OF INVESTORS]

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