Document:

Exhibit 10.1

                               SECURITY AGREEMENT

                  This SECURITY AGREEMENT, dated as of October 11, 2006 (the
"Agreement") is by and among Biophan Technologies, Inc., a company duly
organized and validly existing under the laws of Nevada (the "Company"), the
Purchasers identified on the signature pages hereto (each, a "Purchaser" and
collectively, the "Purchasers") and Iroquois Master Fund Ltd., as agent for the
Purchasers (in such capacity, together with its successors in such capacity, the
"Agent").

                  The Company and each of the Purchasers are parties to a
Securities Purchase Agreement dated as of October 11, 2006 (as modified and
supplemented and in effect from time to time, the "Purchase Agreement"), that
provides, subject to the terms and conditions thereof, for the issuance and sale
by the Company to each of the Purchasers, severally and not jointly, Notes and
Warrants as more fully described in the Purchase Agreement.

                  To induce each of the Purchasers to enter into the Purchase
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company has agreed to pledge
and grant a security interest in the Collateral (as hereinafter defined) as
security for the Secured Obligations (as hereinafter defined). Accordingly, the
parties hereto agree as follows:

                  Section 1. Definitions. Each capitalized term used herein and
not otherwise defined shall have the meaning assigned to such term in the
Purchase Agreement. In addition, as used herein:

                  "Accounts" shall have the meaning ascribed thereto in Section
3(d) hereof.

                  "Business" shall mean the businesses from time to time, now or
hereafter, conducted by the Company and its Subsidiaries.

                  "Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.

                  "Copyright Collateral" shall mean all Copyrights, whether now
owned or hereafter acquired by the Company, that are associated with the
Business.

                  "Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations, including those
shown on Annex 3 hereto, and, without limitation, all renewals and extensions
thereof, the right to recover for all past, present and future infringements
thereof, and all other rights of any kind whatsoever accruing thereunder or
pertaining thereto.

                  "Documents" shall have the meaning ascribed thereto in Section
3(j) hereof.

<PAGE>

                  "Equipment" shall have the meaning ascribed thereto in Section
3(h) hereof.

                  "Event of Default" shall have the meaning ascribed thereto in
Section 8 of the Notes.

                  "Excluded Assets": the collective reference to (i) any asset
subject to a purchase money security interest ("PMSI Assets") in each case to
the extent the grant by the Company of a security interest pursuant to this
Agreement in the Company's right, title and interest in such PMSI Asset (A) is
prohibited by legally enforceable provisions of any contract, agreement,
instrument or indenture governing such Intangible Asset or PMSI Asset, (B) would
give any other party to such contract, agreement, instrument or indenture a
legally enforceable right to terminate its obligations thereunder or accelerate
the indebtedness evidenced thereby or (C) is permitted only with the consent of
another party, if the requirement to obtain such consent is legally enforceable
and such consent has not been obtained; (ii) Motor Vehicles the perfection of a
security interest in which is excluded from the Uniform Commercial Code in the
relevant jurisdiction; and (iii) the Capital Stock in any Foreign Subsidiary, to
the extent (but only to the extent) required to prevent the Collateral from
including more than 65% of all capital stock of any Foreign Subsidiary of the
Company.

                  "Excluded Collateral" shall mean the assets of the Company
which secure the Permitted Indebtedness and the assets listed on Annex 2 hereto.

                  "Foreign Subsidiary": any subsidiary of the Company that is
organized under the laws of a jurisdiction outside the United States.

                  "Instruments" shall have the meaning ascribed thereto in
Section 3(e) hereof.

                  "Intellectual Property" shall mean, collectively, all
Copyright Collateral, all Patent Collateral and all Trademark Collateral,
together with (a) all inventions, processes, production methods, proprietary
information, know-how and trade secrets used or useful in the Business; (b) all
licenses or user or other agreements granted to the Company with respect to any
of the foregoing, in each case whether now or hereafter owned or used including,
without limitation, the licenses or other agreements with respect to the
Copyright Collateral, the Patent Collateral or the Trademark Collateral; (c) all
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys, manuals,
materials standards, processing standards, catalogs, computer and automatic
machinery software and programs, and the like pertaining to the operation by the
Company of the Business; (d) all sales data and other information relating to
sales now or hereafter collected and/or maintained by the Company that pertain
to the Business; (e) all accounting information which pertains to the Business
and all media in which or on which any of the information or knowledge or data
or records which pertain to the Business may be recorded or stored and all
computer programs used for the compilation or printout of such information,
knowledge, records or data; (f) all licenses, consents, permits, variances,
certifications and approvals of governmental agencies now or hereafter held by
the Company pertaining to the operation by the Company and its Subsidiaries of
the Business; and (g) all causes of action, claims and warranties now or
hereafter owned or acquired by the Company in respect of any of the items listed
above.

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<PAGE>

                  "Inventory" shall have the meaning ascribed thereto in Section
3(f) hereof.

                  "Issuers" shall mean, collectively, the respective entities
identified on Annex 1 hereto, and all other entities formed by the Company or
entities in which the Company owns or acquires any capital stock or similar
interest.

                  "Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, whether or not the title thereto is governed by a
certificate of title or ownership.

                  "Patent Collateral" shall mean all Patents, whether now owned
or hereafter acquired by the Company that are associated with the Business.

                  "Patents" shall mean all patents and patent applications,
including those shown on Annex 3 hereto, and, without limitation, the inventions
and improvements described and claimed therein together with the reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, all income, royalties, damages and payments now or hereafter due and/or
payable under and with respect thereto, including, without limitation, damages
and payments for past or future infringements thereof, the right to sue for
past, present and future infringements thereof, and all rights corresponding
thereto throughout the world.

                  "Permitted Indebtedness" shall mean the Company's existing
indebtedness, liabilities and obligations as disclosed on Annex 5 hereto and any
future capitalized leases, purchase money indebtedness and the Notes.

                  "Permitted Liens" shall mean (i) the Company's existing Liens
as disclosed in Annex 6 hereto, (ii) the security interests created by this
Agreement, (iii) Liens of local or state authorities for franchise, real estate
or other like taxes, (iv) statutory Liens of landlords and liens of carriers,
warehousemen, bailees, mechanics, materialmen and other like Liens imposed by
law, created in the ordinary course of business and for amounts not yet due, (v)
tax Liens not yet due and payable and (vi) existing Liens which do not
materially affect the value of the Company's property and do not materially
interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries.

                  "Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.

                  "Real Estate" shall have the meaning ascribed thereto in
Section 3(l) hereof.

                  "Secured Obligations" shall mean, collectively, (a) the
principal of and interest on the Notes issued or issuable (as applicable) by the
Company and held by the applicable Purchaser and all other amounts from time to
time owing to such Purchasers by the Company under the Purchase Agreement and
the Notes and (b) all obligations of the Company to such Purchasers thereunder.

                  "Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof and the proceeds of and
to any such property and, to the extent related to any such property or such
proceeds, all books, correspondence, credit files, records, invoices and other
papers.

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<PAGE>

                  "Trademark Collateral" shall mean all Trademarks, whether now
owned or hereafter acquired by the Company, that are associated with the
Business. Notwithstanding the foregoing, the Trademark Collateral does not and
shall not include any Trademark which would be rendered invalid, abandoned, void
or unenforceable by reason of its being included as part of the Trademark
Collateral.

                  "Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service mark registrations, and applications
for trademark and service mark registrations, including those shown on Annex 3
hereto, and, without limitation, all renewals of trademark and service mark
registrations, all rights corresponding thereto throughout the world, the right
to recover for all past, present and future infringements thereof, all other
rights of any kind whatsoever accruing thereunder or pertaining thereto,
together, in each case, with the product lines and goodwill of the business
connected with the use of, and symbolized by, each such trade name, trademark
and service mark.

                  "Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the State of Nevada from time to time.

                  Section 2. Representations and Warranties. The Company
represents and warrants to each of the Purchasers that:

                  a.    the Company is the sole beneficial owner of the
                        Collateral and no Lien exists or will exist upon any
                        Collateral at any time (and, with respect to the Stock
                        Collateral, no right or option to acquire the same
                        exists in favor of any other Person), except for
                        Permitted Liens and the pledge and security interest in
                        favor of each of the Purchasers created or provided for
                        herein which pledge and security interest will
                        constitute a first priority perfected pledge and
                        security interest in and to all of the Collateral (other
                        than (i) Intellectual Property registered or otherwise
                        located outside of the United States of America, (ii)
                        Real Estate, and (iii) as otherwise set forth in this
                        Agreement) upon the filing of the applicable financing
                        statements or delivery of stock certificates required
                        hereunder or other action required by this Agreement
                        necessary to establish "control" as that term is defined
                        in the Uniform Commercial Code over the Collateral for
                        the benefit of the Agent.

                  b.    the Pledged Stock directly or indirectly owned by the
                        Company in the entities identified in Annex 1 hereto is,
                        and all other Pledged Stock, whether issued now or in
                        the future, will be, duly authorized, validly issued,
                        fully paid and nonassessable, free and clear of all
                        Liens other than Permitted Liens and none of such
                        Pledged Stock is or will be subject to any contractual
                        restriction, preemptive and similar rights, or any
                        restriction under the charter or by-laws of the
                        respective Issuers of such Pledged Stock, upon the
                        transfer of such Pledged Stock (except for any such
                        restriction contained herein);

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<PAGE>

                  c.    the Pledged Stock directly or indirectly owned by the
                        Company in the entities identified in Annex 1 hereto
                        constitutes all of the issued and outstanding shares of
                        capital stock of any class of such Issuers beneficially
                        owned by the Company on the date hereof (whether or not
                        registered in the name of the Company) and said Annex 1
                        correctly identifies, as at the date hereof, the
                        respective Issuers of such Pledged Stock;

                  d.    the Company owns and possesses the right to use, and has
                        done nothing to authorize or enable any other Person to
                        use, all of its Copyrights, Patents and Trademarks, and
                        all registrations of its material Copyrights, Patents
                        and Trademarks are valid and in full force and effect.
                        Except as may be set forth in said Annex 3, the Company
                        owns and possesses the right to use all material
                        Copyrights, Patents and Trademarks, necessary for the
                        operation of the Business;

                  e.    to the Company's knowledge, (i) except as set forth in
                        Annex 3 hereto, there is no violation by others of any
                        right of the Company with respect to any material
                        Copyrights, Patents or Trademarks, respectively, and
                        (ii) the Company is not, in connection with the
                        Business, infringing in any material respect upon any
                        Copyrights, Patents or Trademarks of any other Person;
                        and no proceedings have been instituted or are pending
                        against the Company or, to the Company's knowledge,
                        threatened, and no claim against the Company has been
                        received by the Company, alleging any such violation,
                        except as may be set forth in said Annex 3;

                  f.    the Company does not own any material Trademarks
                        registered in the United States of America to which the
                        last sentence of the definition of Trademark Collateral
                        applies; and

                  Section 3. Collateral. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations, the Company hereby pledges, grants,
collaterally assigns, hypothecates and transfers to the Agent on behalf of the
Purchasers as hereinafter provided, a security interest in and Lien upon all of
the Company's right, title and interest in, to and under all personal property
and other assets of the Company, whether now owned or hereafter acquired by or
arising in favor of the Company, whether now existing or hereafter coming into
existence, whether owned or consigned by or to, or leased from or to the Company
and regardless of where located, except for the Excluded Collateral and the
Excluded Assets, (all being collectively referred to herein as "Collateral")
including:

                  a.    the Company's direct or indirect ownership interest in
                        the respective shares of capital stock of the Issuers
                        and all other shares of capital stock of whatever class
                        of the Issuers, now or hereafter owned by the Company,
                        together with in each case the certificates evidencing
                        the same (collectively, the "Pledged Stock");

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<PAGE>

                  b.    all shares, securities, moneys or property representing
                        a dividend on any of the Pledged Stock, or representing
                        a distribution or return of capital upon or in respect
                        of the Pledged Stock, or resulting from a split-up,
                        revision, reclassification or other like change of the
                        Pledged Stock or otherwise received in exchange
                        therefor, and any subscription warrants, rights or
                        options issued to the holders of, or otherwise in
                        respect of, the Pledged Stock;

                  c.    without affecting the obligations of the Company under
                        any provision prohibiting such action hereunder or under
                        the Purchase Agreement or the Notes, in the event of any
                        consolidation or merger in which any Issuer is not the
                        surviving corporation, all shares of each class of the
                        capital stock of the successor corporation (unless such
                        successor corporation is the Company itself) formed by
                        or resulting from such consolidation or merger (the
                        Pledged Stock, together with all other certificates,
                        shares, securities, properties or moneys as may from
                        time to time be pledged hereunder pursuant to clause (a)
                        or (b) above and this clause (c) being herein
                        collectively called the "Stock Collateral");

                  d.    all accounts and general intangibles (each as defined in
                        the Uniform Commercial Code) of the Company constituting
                        any right to the payment of money, including (but not
                        limited to) all moneys due and to become due to the
                        Company in respect of any loans or advances for the
                        purchase price of Inventory or Equipment or other goods
                        sold or leased or for services rendered, all moneys due
                        and to become due to the Company under any guarantee
                        (including a letter of credit) of the purchase price of
                        Inventory or Equipment sold by the Company and all tax
                        refunds (such accounts, general intangibles and moneys
                        due and to become due being herein called collectively
                        "Accounts");

                  e.    all instruments, chattel paper or letters of credit
                        (each as defined in the Uniform Commercial Code) of the
                        Company evidencing, representing, arising from or
                        existing in respect of, relating to, securing or
                        otherwise supporting the payment of, any of the
                        Accounts, including (but not limited to) promissory
                        notes, drafts, bills of exchange and trade acceptances
                        (herein collectively called "Instruments");

                  f.    all inventory (as defined in the Uniform Commercial
                        Code) of the Company and all goods obtained by the
                        Company in exchange for such inventory (herein
                        collectively called "Inventory");

                  g.    all Intellectual Property and all other accounts or
                        general intangibles of the Company not constituting
                        Intellectual Property or Accounts;

                  h.    all equipment (as defined in the Uniform Commercial
                        Code) of the Company (herein collectively called
                        "Equipment");

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<PAGE>

                  i.    each contract and other agreement of the Company
                        relating to the sale or other disposition of Inventory
                        or Equipment;

                  j.    all deposit accounts (as defined in the Uniform
                        Commercial Code) of the Company (herein collectively
                        called "Deposit Accounts");

                  k.    all documents of title (as defined in the Uniform
                        Commercial Code) or other receipts of the Company
                        covering, evidencing or representing Inventory or
                        Equipment (herein collectively called "Documents");

                  l.    all rights, claims and benefits of the Company against
                        any Person arising out of, relating to or in connection
                        with Inventory or Equipment purchased by the Company,
                        including, without limitation, any such rights, claims
                        or benefits against any Person storing or transporting
                        such Inventory or Equipment;

                  m.    all estates in land together with all improvements and
                        other structures now or hereafter situated thereon,
                        together with all rights, privileges, tenements,
                        hereditaments, appurtenances, easements, including, but
                        not limited to, rights and easements for access and
                        egress and utility connections, and other rights now or
                        hereafter appurtenant thereto ("Real Estate");

                  n.    all other tangible or intangible property of the
                        Company, including, without limitation, all proceeds,
                        products and accessions of and to any of the property of
                        the Company described in clauses (a) through (m) above
                        in this Section 3 (including, without limitation, any
                        proceeds of insurance thereon), and, to the extent
                        related to any property described in said clauses or
                        such proceeds, products and accessions, all books,
                        correspondence, credit files, records, invoices and
                        other papers, including without limitation all tapes,
                        cards, computer runs and other papers and documents in
                        the possession or under the control of the Company or
                        any computer bureau or service company from time to time
                        acting for the Company.

                  Section 4. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 3 hereof, the
Company hereby agrees with the Agent and each of the Purchasers as follows:

                  4.01  Delivery and Other Perfection. The Company shall:

                  a.    if any of the above-described shares, securities, monies
                        or property required to be pledged by the Company under
                        clauses (a), (b) and (c) of Section 3 hereof are
                        received by the Company, forthwith either (x) transfer
                        and deliver to the Agent such shares or securities so
                        received by the Company (together with the certificates
                        for any such shares and securities duly endorsed in
                        blank or accompanied by undated stock powers duly
                        executed in blank) all of which thereafter shall be held
                        by the Agent, pursuant to the terms of this Agreement,
                        as part of the Collateral or (y) take such other action
                        as the Agent shall reasonably deem necessary or
                        appropriate to duly record the Lien created hereunder in
                        such shares, securities, monies or property referred to
                        in said clauses (a), (b) and (c) of Section 3;

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<PAGE>

                  b.    deliver and pledge to the Agent, at the Agent's request,
                        any and all Instruments, endorsed and/or accompanied by
                        such instruments of assignment and transfer in such form
                        and substance as the Agent may request; provided, that
                        so long as no Event of Default shall have occurred and
                        be continuing, the Company may retain for collection in
                        the ordinary course any Instruments received by it in
                        the ordinary course of business and the Agent shall,
                        promptly upon request of the Company, make appropriate
                        arrangements for making any other Instrument pledged by
                        the Company available to it for purposes of
                        presentation, collection or renewal (any such
                        arrangement to be effected, to the extent deemed
                        appropriate by the Agent, against trust receipt or like
                        document);

                  c.    give, execute, deliver, file and/or record any financing
                        statement, notice, instrument, document, agreement or
                        other papers that may be necessary (in the reasonable
                        judgment of the Agent) to create, preserve, perfect or
                        validate any security interest granted pursuant hereto
                        or to enable the Agent to exercise and enforce their
                        rights hereunder with respect to such security interest,
                        including, without limitation, causing any or all of the
                        Stock Collateral to be transferred of record into the
                        name of the Agent or its nominee (and the Agent agrees
                        that if any Stock Collateral is transferred into its
                        name or the name of its nominee, the Agent will
                        thereafter promptly give to the Company copies of any
                        notices and communications received by it with respect
                        to the Stock Collateral), provided that notices to
                        account debtors in respect of any Accounts or
                        Instruments shall be subject to the provisions of
                        Section 4.09 below;

                  d.    upon the acquisition after the date hereof by the
                        Company of any Equipment covered by a certificate of
                        title or ownership cause the Agent to be listed as the
                        lienholder on such certificate of title and within 120
                        days of the acquisition thereof (or such other time as
                        the Agent may approve in its sole discretion) deliver
                        evidence of the same to the Agent;

                  e.    keep accurate books and records relating to the
                        Collateral, and, during the continuation of an Event of
                        Default, stamp or otherwise mark such books and records
                        in such manner as the Agent may reasonably require in
                        order to reflect the security interests granted by this
                        Agreement;

                  f.    furnish to the Agent from time to time (but, unless an
                        Event of Default shall have occurred and be continuing,
                        no more frequently than quarterly) statements and
                        schedules further identifying and describing the
                        material Copyright Collateral, the Patent Collateral and
                        the Trademark Collateral, respectively, and such other
                        reports in connection with the Copyright Collateral, the
                        Patent Collateral and the Trademark Collateral, as the
                        Agent may reasonably request, all in reasonable detail;

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<PAGE>

                  g.    permit representatives of the Agent, upon reasonable
                        notice, at any time during normal business hours to
                        inspect and make abstracts from its books and records
                        pertaining to the Collateral, and permit representatives
                        of the Agent to be present at the Company's place of
                        business to receive copies of all communications and
                        remittances relating to the Collateral, and forward
                        copies of any notices or communications by the Company
                        with respect to the Collateral, all in such manner as
                        the Agent may reasonably require; provided, however,
                        that so long as an Event of Default is not continuing,
                        such visits shall be made not more than once per fiscal
                        year at Company's expense; and

                  h.    upon the occurrence and during the continuance of any
                        Event of Default, upon request of the Agent, promptly
                        notify each account debtor in respect of any Accounts or
                        Instruments that such Collateral has been assigned to
                        the Agent hereunder, and that any payments due or to
                        become due in respect of such Collateral are to be made
                        directly to the Agent.

                  4.02 Other Financing Statements and Liens. Except with respect
to Permitted Indebtedness or as otherwise permitted under Schedule 3.1(a) of the
Purchase Agreement, without the prior written consent of the Agent, the Company
shall not file or authorize or permit to be filed, in any jurisdiction, any
financing statement or like instrument with respect to the Collateral in which
the Agent is not named as the sole secured party for the benefit of each of the
Purchasers, except for Permitted Liens.

                  4.03 Preservation of Rights. The Agent shall not be required
to take steps necessary to preserve any rights against prior parties to any of
the Collateral.

                  4.04 Special Provisions Relating to Certain Collateral.

                  a.    Stock Collateral.

                        (1)   The Company will cause the Stock Collateral to
                              constitute at all times 100% of the total number
                              of shares of each class of capital stock of each
                              Issuer then outstanding that is owned directly or
                              indirectly by the Company.

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<PAGE>

                        (2)   So long as no Event of Default shall have occurred
                              and be continuing, the Company shall have the
                              right to exercise all voting, consensual and other
                              powers of ownership pertaining to the Stock
                              Collateral for all purposes not inconsistent with
                              the terms of this Agreement, the Purchase
                              Agreement, the Notes or any other instrument or
                              agreement referred to herein or therein, provided
                              that the Company agrees that it will not vote the
                              Stock Collateral in any manner that is
                              inconsistent with the terms of this Agreement, the
                              Purchase Agreement, the Notes or any such other
                              instrument or agreement; and the Agent shall
                              execute and deliver to the Company or cause to be
                              executed and delivered to the Company all such
                              proxies, powers of attorney, dividend and other
                              orders, and all such instruments, without
                              recourse, as the Company may reasonably request
                              for the purpose of enabling the Company to
                              exercise the rights and powers which it is
                              entitled to exercise pursuant to this Section
                              4.04(a)(2).

                        (3)   Unless and until an Event of Default has occurred
                              and is continuing, the Company shall be entitled
                              to receive and retain any dividends on the Stock
                              Collateral paid in cash out of earned surplus.

                        (4)   If any Event of Default shall have occurred, then
                              so long as such Event of Default shall continue,
                              and whether or not the Agent exercises any
                              available right to declare any Secured Obligations
                              due and payable or seeks or pursues any other
                              relief or remedy available to it under applicable
                              law or under this Agreement, the Purchase
                              Agreement, the Notes or any other agreement
                              relating to such Secured Obligations, all
                              dividends and other distributions on the Stock
                              Collateral shall be paid directly to the Agent and
                              retained by it as part of the Stock Collateral,
                              subject to the terms of this Agreement, and, if
                              the Agent shall so request in writing, the Company
                              agrees to execute and deliver to the Agent
                              appropriate additional dividend, distribution and
                              other orders and documents to that end, provided
                              that if such Event of Default is cured, any such
                              dividend or distribution theretofore paid to the
                              Agent shall, upon request of the Company (except
                              to the extent theretofore applied to the Secured
                              Obligations) be returned by the Agent to the
                              Company.

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<PAGE>

                  b.    Intellectual Property.

                        (1)   For the purpose of enabling the Agent to exercise
                              rights and remedies under Section 4.05 hereof at
                              such time as the Agent shall be lawfully entitled
                              to exercise such rights and remedies, and for no
                              other purpose, the Company hereby grants to the
                              Agent, to the extent assignable, an irrevocable,
                              non-exclusive license (exercisable without payment
                              of royalty or other compensation to the Company)
                              to use, assign, license or sublicense any of the
                              Intellectual Property (other than the Trademark
                              Collateral or goodwill associated therewith) now
                              owned or hereafter acquired by the Company,
                              wherever the same may be located, including in
                              such license reasonable access to all media in
                              which any of the licensed items may be recorded or
                              stored and to all computer programs used for the
                              compilation or printout thereof.

                        (2)   Notwithstanding anything contained herein to the
                              contrary, so long as no Event of Default shall
                              have occurred and be continuing and following
                              notice by the Agent of the termination of
                              Company's rights with respect thereto, the Company
                              will be permitted to exploit, use, enjoy, protect,
                              license, sublicense, assign, sell, dispose of or
                              take other actions with respect to the
                              Intellectual Property in the ordinary course of
                              the business of the Company. In furtherance of the
                              foregoing, unless an Event of Default shall have
                              occurred and is continuing, the Agent shall from
                              time to time, upon the request of the Company,
                              execute and deliver any instruments, certificates
                              or other documents, in the form so requested,
                              which the Company shall have certified are
                              appropriate (in its judgment) to allow it to take
                              any action permitted above (including
                              relinquishment of the license provided pursuant to
                              clause (1) immediately above as to any specific
                              Intellectual Property). Further, upon the payment
                              in full of all of the Secured Obligations or
                              earlier expiration of this Agreement or release of
                              the Collateral, the Agent shall grant back to the
                              Company the license granted pursuant to clause (1)
                              immediately above. The exercise of rights and
                              remedies under Section 4.05 hereof by the Agent
                              shall not terminate the rights of the holders of
                              any licenses or sublicenses theretofore granted by
                              the Company in accordance with the first sentence
                              of this clause (2).

                  4.05  Events of Default, etc. During the period during which
an Event of Default shall have occurred and be continuing:

                  a.    the Company shall, at the request of the Agent, assemble
                        the Collateral owned by it at such place or places,
                        reasonably convenient to both the Agent and the Company,
                        designated in its request;

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<PAGE>

                  b.    the Agent may make any reasonable compromise or
                        settlement deemed desirable with respect to any of the
                        Collateral and may extend the time of payment, arrange
                        for payment in installments, or otherwise modify the
                        terms of, any of the Collateral;

                  c.    the Agent shall have all of the rights and remedies with
                        respect to the Collateral of a secured party under the
                        Uniform Commercial Code (whether or not said Code is in
                        effect in the jurisdiction where the rights and remedies
                        are asserted) and such additional rights and remedies to
                        which a secured party is entitled under the laws in
                        effect in any jurisdiction where any rights and remedies
                        hereunder may be asserted, including, without
                        limitation, the right, to the maximum extent permitted
                        by law, to exercise all voting, consensual and other
                        powers of ownership pertaining to the Collateral as if
                        the Agent were the sole and absolute owner thereof (and
                        the Company agrees to take all such action as may be
                        appropriate to give effect to such right);

                  d.    the Agent in its discretion may, in its name or in the
                        name of the Company or otherwise, demand, sue for,
                        collect or receive any money or property at any time
                        payable or receivable on account of or in exchange for
                        any of the Collateral, but shall be under no obligation
                        to do so; and

                  e.    the Agent may, upon 10 Business Days, prior written
                        notice to the Company of the time and place, with
                        respect to the Collateral or any part thereof which
                        shall then be or shall thereafter come into the
                        possession, custody or control of the Agent, or any of
                        its respective agents, sell, lease, assign or otherwise
                        dispose of all or any of such Collateral, at such place
                        or places as the Agent deems best, and for cash or on
                        credit or for future delivery (without thereby assuming
                        any credit risk), at public or private sale, without
                        demand of performance or notice of intention to effect
                        any such disposition or of time or place thereof (except
                        such notice as is required above or by applicable
                        statute and cannot be waived) and the Agent or anyone
                        else may be the purchaser, lessee, assignee or recipient
                        of any or all of the Collateral so disposed of at any
                        public sale (or, to the extent permitted by law, at any
                        private sale), and thereafter hold the same absolutely,
                        free from any claim or right of whatsoever kind,
                        including any right or equity of redemption (statutory
                        or otherwise), of the Company, any such demand, notice
                        or right and equity being hereby expressly waived and
                        released. In the event of any sale, assignment, or other
                        disposition of any of the Trademark Collateral, the
                        goodwill of the Business connected with and symbolized
                        by the Trademark Collateral subject to such disposition
                        shall be included, and the Company shall supply to the
                        Agent or its designee, for inclusion in such sale,
                        assignment or other disposition, all Intellectual
                        Property relating to such Trademark Collateral. The
                        Agent may, without notice or publication, adjourn any
                        public or private sale or cause the same to be adjourned
                        from time to time by announcement at the time and place
                        fixed for the sale, and such sale may be made at any
                        time or place to which the same may be so adjourned.

                                       12
<PAGE>

The proceeds of each collection, sale or other disposition under this Section
4.05, including by virtue of the exercise of the license granted to the Agent in
Section 4.04(b)(1) hereof, shall be applied in accordance with Section 4.09
hereof.

                  The Company recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Agent may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. The Company
acknowledges that any such private sales to an unrelated third party in an arm's
length transaction may be at prices and on terms less favorable to the Agent
than those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and that the Agent
shall have no obligation to engage in public sales and no obligation to delay
the sale of any Collateral for the period of time necessary to permit the
respective Issuer thereof to register it for public sale.

                  4.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 4.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Company shall remain liable for any
deficiency.

                  4.07 Removals, etc. Without at least 30 days' prior written
notice to the Agent or unless otherwise required by law, the Company shall not
(i) maintain any of its books or records with respect to the Collateral at any
office or maintain its chief executive office or its principal place of business
at any place, or permit any Inventory or Equipment to be located anywhere other
than at the address indicated for the Company in Section 7.4 of the Purchase
Agreement or at one of the locations identified in Annex 4 hereto or in transit
from one of such locations to another or (ii) change its corporate name, or the
name under which it does business, from the name shown on the signature page
hereto.

                  4.08 Private Sale. The Agent shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
to an unrelated third party in an arm's length transaction pursuant to Section
4.05 hereof conducted in a commercially reasonable manner. The Company hereby
waives any claims against the Agent arising by reason of the fact that the price
at which the Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale or was less than the
aggregate amount of the Secured Obligations, even if the Agent accepts the first
offer received and does not offer the Collateral to more than one offeree.

                  4.09 Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Agent under this Section 4, shall be applied by the Agent:

                                       13
<PAGE>

                  First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable out-of-pocket costs
and expenses of the Agent and the fees and expenses of its agents and counsel,
and all expenses, and advances made or incurred by the Agent in connection
therewith;

                  Next, to the payment in full of the Secured Obligations in
each case equally and ratably in accordance with the respective amounts thereof
then due and owing to each of the Purchasers; and

                  Finally, to the payment to the Company, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus then
remaining.

As used in this Section 4, "proceeds" of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the Company or any issuer of or obligor on any of the
Collateral.

                  4.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default, the Agent is hereby appointed the attorney-in-fact of the Company
for the purpose of carrying out the provisions of this Section 4 and taking any
action and executing any instruments which the Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Purchasers shall be entitled
under this Section 4 to make collections in respect of the Collateral, the Agent
shall have the right and power to receive, endorse and collect all checks made
payable to the order of the Company representing any dividend, payment, or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.

                  4.11 Perfection. (i) Concurrently with the execution and
delivery of this Agreement or within 10 Business Days following the date hereof,
the Company shall file such financing statements and other documents in such
offices as the Agent may reasonably request to perfect the security interests
granted by Section 3 of this Agreement that may be perfected by such filing;
(ii) the Company shall within 10 Business Days following the date hereof, grant
control over any Deposit Accounts to the Agent];and (iii) at any time requested
by the Agent, the Company shall deliver to the Agent all share certificates of
capital stock directly or indirectly owned by the Company in the entities
identified in Annex 1 hereto, accompanied by undated stock powers duly executed
in blank.

                  4.12 Termination. When all Secured Obligations shall have been
paid in full under the Purchase Agreement, this Agreement shall terminate, and
the Agent shall forthwith cause to be assigned, transferred and delivered,
against receipt but without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect thereof, to or on the
order of the Company and to be released and cancelled all licenses and rights
referred to in Section 4.04(b)(1) hereof. The Agent shall also execute and
deliver to the Company upon such termination such Uniform Commercial Code
termination statements, certificates for terminating the Liens on the Motor
Vehicles and such other documentation as shall be reasonably requested by the
Company to effect the termination and release of the Liens on the Collateral.

                                       14
<PAGE>

                  4.13 Expenses. The Company agrees to pay to the Agent all
reasonable out-of-pocket expenses (including reasonable expenses for legal
services of every kind) of, or incident to, the enforcement of any of the
provisions of this Section 4, or performance by the Agent of any obligations of
the Company in respect of the Collateral which the Company has failed or refused
to perform upon reasonable notice, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any of
the Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Agent in respect thereof, by litigation or otherwise,
including expenses of insurance, and all such expenses shall be Secured
Obligations to the Agent secured under Section 3 hereof.

                  4.14 Further Assurances. The Company agrees that, from time to
time upon the written reasonable request of the Agent, the Company will execute
and deliver such further documents and do such other acts and things as the
Agent may reasonably request in order fully to effect the purposes of this
Agreement.

                  4.15 Indemnity. Each of the Purchasers hereby jointly and
severally covenants and agrees to reimburse, indemnify and hold the Agent
harmless from and against any and all claims, actions, judgments, damages,
losses, liabilities, costs, transfer or other taxes, and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred or
suffered without any gross negligence, bad faith or willful misconduct by the
Agent, arising out of or incident to any investigation, proceeding or litigation
arising out of this Agreement or the administration of the Agent's duties
hereunder, or resulting from its actions or inactions as Agent.

                  Section 5. Miscellaneous.

                  5.01 No Waiver. No failure on the part of the Agent or any of
its agents to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any of its
agents of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.

                  5.02 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Nevada.

                  5.03 Notices. All notices, requests, consents and demands
hereunder shall be in writing and facsimile (facsimile confirmation required) or
delivered to the intended recipient at its address or telex number specified
pursuant to Section 7.4 of the Purchase Agreement and shall be deemed to have
been given at the times specified in said Section 7.4.

                  5.04 Waivers, etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the Company
and the Agent. Any such amendment or waiver shall be binding upon each of the
Purchasers and the Company.

                                       15
<PAGE>

                  5.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company and each of the Purchasers (provided, however, that the Company shall
not assign or transfer its rights hereunder without the prior written consent of
the Agent).

                  5.06 Counterparts. This Agreement may be executed in any
number of counterparts, all of which together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.

                  5.07 Agent. Each Purchaser agrees to appoint Iroquois Master
Fund Ltd. as its Agent for purposes of this Agreement. The Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.

                  5.08 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Purchasers in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.

                                       16
<PAGE>

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

COMPANY:                                BIOPHAN TECHNOLOGIES, INC.

                                        By:  /s/ Darryl L. Canfield
                                             ------------------------------
                                             Name:  Darryl L. Canfield
                                             Title: Chief Financial Officer

AGENT:                                  IROQUOIS MASTER FUND LTD.

                                        By:  /s/ Joshua Silverman
                                             ------------------------------
                                             Name:  Joshua Silverman
                                             Title: Authorized Signatory

<PAGE>

PURCHASERS:                             IROQUOIS MASTER FUND LTD.

                                        By:  /s/ Joshua Silverman
                                             ------------------------------
                                             Name:  Joshua Silverman
                                             Title: Authorized Signatory

<PAGE>

                              OTHER PURCHASERS

                              Crescent International Ltd.
                              [Print Purchaser's Name]

                              By:   /s/ Maxi Brezzi  /s/ Bachir Taleb-Ibrahimi
                                    ------------------------------------------
                              Name:     Maxi Brezzi      Bachir Taleb-Ibrahimi
                              Title:    Authorized Signatories

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        CAMOFI MASTER LDC
                                        [Print Purchaser's Name]

                                         By: /s/ Jeffrey M. Haas
                                             ------------------------------
                                             Name:  Jeffrey M. Haas
                                             Title: Authorized Signatory

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        Truk Opportunity Fund, LLC
                                        [Print Purchaser's Name]

                                        By:  Atoll Asset Management, LLC
                                        By:  /s/ Michael E. Fein
                                             ------------------------------
                                             Name:  Michael E. Fein
                                             Title: Principal

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        Cranshire Caspital, L.P.
                                        [Print Purchaser's Name]

                                        By:  /s/ Michael P. Koph
                                             -----------------------------------
                                             Name: Michael P. Koph
                                             Title:President - Downsview Capital
                                                   The General Partner

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        Harborview Master Fund LP
                                        [Print Purchaser's Name]

                                        By:  /s/ Dale Elliott
                                             -------------------------------
                                             Name:  Navigator Management Ltd
                                             Title: Authorized Signatory

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        HIGHBRIDGE INTERNATIONAL LLC
                                        [Print Purchaser's Name]

                                        By:  Highbridge Capital Management LLC
                                        By:  /s/ Adam J. Chill
                                             ------------------------------
                                             Name:  Adam J. Chill
                                             Title: Managing Director

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        Rockmore Investment Master Fund Ltd
                                        [Print Purchaser's Name]

                                        By:  /s/ Bruce Bernstein
                                             ------------------------------
                                             Name:  Bruce Bernstein
                                             Title: Managing Member

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        BridgePointe Master Fund Ltd.
                                        [Print Purchaser's Name]

                                        By:  /s/ Michael C. Kendrick
                                             ------------------------------
                                             Name:  Michael C. Kendrick
                                             Title: Director

                     [Signature Page to Security Agreement]

<PAGE>

                                        OTHER PURCHASERS

                                        CASTLERIGG MASTER INVESTMENTS LTD.
                                        [Print Purchaser's Name]

                                        By:  SANDELL ASSET MANAGEMENT CORP.
                                        By:  /s/ Patrick T. Burke
                                             ------------------------------
                                             Name:  Patrick T. Burke
                                             Title: Senior Managing Director

                     [Signature Page to Security Agreement]Exhibit 10.2

                                 AMENDMENT NO. 1
                                       TO
                            LINE OF CREDIT AGREEMENT

         This Agreement of Amendment is made as of October 11, 2006, by and
between Biophan Technologies, Inc., a Nevada corporation (the "Borrower") and
Biomed Solutions, LLC, a New York limited liability company (the "Lender").

         Whereas the Borrower and the Lender are parties to a certain Line of
Credit Agreement dated as of January 24, 2006 (the "Agreement"), pursuant to
which the Lender agreed to lend to the Borrower an amount of up to $5,000,000
(the "Line of Credit");

         Whereas, to evidence the Borrower's obligations with respect to the
Line of Credit, on January 24, 2006 the Borrower issued to the Lender a
Convertible Promissory Note in the original principal amount of $5,000,000 (the
"Note")

         Whereas, the Borrower proposes to enter into a Securities Purchase
Agreement dated as of the date hereof (the "Purchase Agreement") among the
Borrower and the Purchasers named therein (the "Purchasers"), pursuant to which
the Purchasers propose to extend credit to the Borrower;

         Whereas, as a condition to the extension of credit under the Purchase
Agreement, the Purchasers have requested that the Borrower and the Lender make
certain amendments to the Agreement; and

         Whereas, the Borrower and the Lender have agreed that the extension of
credit to the Borrower pursuant to the Purchase Agreement will redound to the
benefit of the Borrower and the Lender;

         Now, therefore, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Borrower and the Lender hereby agree as follows:

I. Amendments to the Agreement. The Agreement is hereby amended as follows:

   1. The last sentence of Section 2 is deleted in its entirety.

   2. The first sentence of Section 4 is amended and restated to read in entity
      as follows:

   "Payment shall be made on demand following the Termination Date in accordance
    with the terms of the Note."

II. Amendments to the Note. The Note shall, simultaneously herewith, be
cancelled and, in replacement therefor the Borrower shall deliver to the Lender
an Amended and Restated Convertible Promissory Note reading in its entirety as
set forth in Exhibit A attached hereto (the "Amended and Restated Note").

III. Waiver of Requirement to Reserve Shares. The Lender hereby waives, until
the any requirement on the part of the Borrower to reserve and set aside shares
of the Borrower's common stock for issuance upon conversion of the Amended and
Restated Note until the Charter Amendment Effective Date (as such term is
defined in the Purchase Agreement).

<PAGE>

IV. Subordination and Standstill Agreement. On the date hereof, the Borrower,
the Lender and the Purchasers have entered into a Subordination and Standstill
Agreement (the "Subordination Agreement"). The Lender hereby acknowledges that
the Lender may not exercise certain of its rights under the Agreement or the
Amended and Restated Note (including, without limitation, the right to demand
and receive payment on the Amended and Restated Note) except as permitted under
the Subordination Agreement.

V. No Other Changes. Except as expressly amended hereby, the Agreement shall
remain full force and effect without any other alteration or change.

         In witness whereof, the parties have executed this Agreement of
Amendment as of the date first above written.

BIOMED SOLUTIONS, LLC                        BIOPHAN TECHNOLOGIES, INC.

By: /s/ Michael L. Weiner                    By: /s/ Darryl L. Canfield
   ------------------------------               --------------------------------
    Michael L. Weiner, Manager                   Darryl L. Canfield,
                                                 Chief Financial Officer

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