STOCK
AND NOTE PURCHASE AGREEMENT




This
Stock and Note Purchase Agreement (this “Agreement”) is entered into
as of the date set forth on the signature page hereof by and between
HemoBioTech, Inc. a Delaware corporation (the “Company”), and the
undersigned investor (together with its successors and permitted assigns, the
“Investor”).




In
consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:




ARTICLE
I


TERMS
OF THE OFFERING




1.1
            The
      Company is offering to the undersigned Investor, a bridge financing (the
      “Bridge Offering”)
      by the Company of an aggregate of $350,000 in 10% Promissory Notes and
      1,400,000 shares of HemoBioTech, Inc. Common Stock (the “Bridge
      Unit”).  Each Bridge Unit consists of  the
      principal amount of a 10% Promissory Note (“Bridge Note”) set forth
      on the signature page hereof plus 4 shares of  shares of Common
      Stock for each $1.00 invested in the Bridge Notes (collectively, the “Securities”), to be
      offered on a “best efforts”  basis.  The Bridge
      Offering is being made only to Investors who qualify as “accredited
      investors” as such term is defined in Rule 501 of Regulation D under the
      Securities Act of 1933, as amended (the “Securities Act”). The
      Company also expects to effect a subsequent private placement (the “Private Placement”) to
      be sold only to “accredited investors.”  The Investors shall be
      required to convert their Bridge Notes (but not the shares of Common Stock
      included in the Bridge Units) for the securities offered in the proposed
      Private Placement unless earlier prepaid by the
  Company.




1.2
            This
      Bridge Offering shall terminate at 5:00 p.m. Eastern Time on November 12,
      2009 (the “Termination
      Date”), unless extended by the Company at its sole discretion, for
      up to an additional 30 days.




1.3
            Subject
      to the terms and conditions of this Agreement, the Company desires to
      issue to the Investor, and the Investor agrees to subscribe to, the number
      of Bridge Units set forth upon the signature page hereof on the terms and
      conditions set forth in this
Agreement.




1.4
            An
      executed and properly completed copy of this Agreement together with the
      other documents set forth above under “Subscription
      Instructions” should be delivered, to Meyers Associates, L.P., 45
      Broadway, New York, NY 10006; Attention:  Ms. Eileen
      Slitkin.




1.5
            If
      this Agreement is accepted by the Company, in whole or in part, and
      subject to the conditions set forth in Section 2.2 of this Agreement, the
      Company shall issue the Bridge Units subscribed for hereby, dated the date
      of closing of the Bridge Offering of such Agreement (the “Closing”) and return to
      the Investor a fully executed copy of this Agreement.  The
      Investor hereby authorizes and directs the Company to deliver certificates
      representing the Bridge Units to be issued to such Investor pursuant to
      this Agreement.







1.6
            The
      undersigned may not withdraw this subscription or any amount, paid
      pursuant thereto, except as otherwise provided
  below.




1.7
            If
      the Investor is not a United States person, such Investor hereby
      represents that it has satisfied itself as to the full observance of the
      laws of its jurisdiction in connection with any invitation to subscribe
      for the Bridge Units or any use of this Agreement, including (i) the legal
      requirements within its jurisdiction for the purchase of the Bridge Units,
      (ii) any foreign exchange restrictions applicable to such purchase, (iii)
      any governmental or other consents that may need to be obtained, and (iv)
      the income tax and other tax consequences, if any, that may be relevant to
      the purchase, holding, redemption, sale or transfer of the Bridge
      Units.  Such Investor’s subscription and payment for, and his or
      her continued beneficial ownership of the Bridge Units, will not violate
      any applicable securities or other laws of the Investor’s
      jurisdiction.




ARTICLE
II


PURCHASE
OF BRIDGE UNITS




In consideration of the mutual promises
contained herein and other good and valuable consideration, receipt of which is
hereby acknowledged, the parties of this Agreement agree as
follows:




2.1
            Conditions of Bridge
      Offering.  It is understood and agreed that this
      Agreement is made subject to the following terms and
      conditions:




(i)
            The
      Company shall have the right to accept or reject this Agreement in
      whole.  Unless this subscription is accepted in whole by the
      Company prior to the Termination Date, this Agreement shall be deemed
      rejected in whole.  Agreements accepted in whole by the Company
      shall be irrevocable, except as otherwise provided by
      law.  Agreements need not be accepted in the order
      received.




(ii)
            At
      the date of the Closing, the Company shall have been furnished with such
      information, documents, certificates, and opinions as it may reasonably
      require to evidence the accuracy, completeness, or satisfaction of the
      representations, warranties, covenants, agreements, and conditions herein
      contained or as it otherwise may reasonably
  request.




(iii)
            The
      Investor acknowledges that the Company may, in its sole and absolute
      discretion, reduce the Investor’s Subscription Offer for Bridge Units to
      any number of Bridge Units less than the number of Bridge Units set forth
      on the signature page hereof, or that the Company may reject the
      Investor’s subscription in its entirety, in each case without prior notice
      to or consent by the Investor. Upon acceptance of the Investor’s
      Subscription Offer for Bridge Units, the Company shall issue the Bridge
      Units to the Investor subject to the terms and conditions of this
      Agreement. The Closing of the Bridge Offering is set forth in Section 2.2
      hereof.  The Company and the Investor shall each bear their own
      expenses in connection with the Bridge
Offering.


2




(iv)
            The
      Company and the Investors agree that purchases by officers, directors,
      their affiliates and other insiders may be made in this Bridge
      Offering.




2.2
            Closing;
      Deliver.




(i)
            The
      “Closing” shall mean such date, after all the conditions precedent in
      Section 2.2 and Article V are fulfilled or waived in writing, as the case
      may be, prior to the Termination Date (the “Initial
      Closing”).  On each Closing, exercise of theBridge Unitsshall take place
      at such time and place as the Company and the Investors mutually agree
      upon, orally or in writing. The Investors shall not be liable to any
      party, including, but not limited to, the Company, in the event any
      Closing does not take place owing to the conditions set out in Section 2.2
      and Article V not being fulfilled or waived as the case may
      be.




(ii)
            At
      each Closing, the Company shall deliver the respective Bridge Units to be
      purchased by each Investor at the Closing against delivery of counterpart
      signature pages to this Agreement and the Offering
  Price.




(iii)
            This
      Agreement shall terminate and be of no further force and effect if the
      Initial Closing does not occur on or before November 12 , 2009, unless
      extended by consent of the Company, for up to an additional 30
      days.




ARTICLE
III


REPRESENTATION
AND WARRANTIES OF INVESTORS




Each
Investor represents and warrants to the Company that:




3.1
            Such
      Investor has full power and authority to enter into this
      Agreement.  This Agreement, when executed and delivered by the
      Investor, will constitute a valid and legally binding obligation of the
      Investor, enforceable in accordance with its terms, except as limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
      conveyance, and any other laws of general application affecting
      enforcement of creditors’ rights generally, and as limited by laws
      relating to the availability of a specific performance, injunctive relief,
      or other equitable remedies.


3




3.2
            This
      Agreement is made with the Investor in reliance upon the Investor’s
      representation to the Company, which by the Investor’s execution of this
      Agreement, the Investor hereby confirms, that the Bridge Units to be
      acquired by the Investor will be acquired for investment for the
      Investor’s own account, not as a nominee or agent, and not with a view to
      the resale or distribution of any part thereof as at the date of this
      Agreement, and that the Investor has no present intention of selling,
      granting any participation in, or otherwise distributing the
      same.  By executing this Agreement, the Investor further
      represents that the Investor does not presently have any contract,
      undertaking, agreement or arrangement with any person to sell, transfer or
      grant participations to such person or to any third person, with respect
      to any of the Bridge Units. The Investor has not been formed for the
      specific purpose of acquiring any of the Bridge
  Units.




3.3
            The
      Investor acknowledges receipt and careful review of this Agreement and all
      exhibits thereto and other documents furnished in connection with this
      transaction and provided on at www.sec.gov (collectively, the “Bridge Offering
      Documents”) and hereby represents that he has been furnished by the
      Company during the course of this transaction with all information
      regarding the Company which he has requested or desires to know; and that
      such information and documents have, in his opinion, afforded the Investor
      with all of the same information that would be provided him in a
      registration statement filed under the Act; that he has been afforded the
      opportunity to ask questions of and receive answers from duly authorized
      officers or other representatives of the Company concerning the terms and
      conditions of the Bridge Offering, and any additional information which he
      had requested.




3.4
            The
      Investor recognizes that the purchase of Bridge Units involves a high
      degree of risk in that (i) an investment in the Company is highly
      speculative and only Investors who can afford the loss of their entire
      investment should consider investing in the Company and the Securities;
      (ii) he may not be able to liquidate his investment; (iii) transferability
      of the Bridge Units is extremely limited; and (iv) an Investor could
      suffer the loss of his entire investment, as well as other risk factors as
      more fully set forth herein.




3.5
            The
      Investor represents and warrants that he is still an “accredited investor”
      as such term in defined in Rule 501 of Regulation D promulgated under the
      Act, as indicated by his prior responses to the Purchaser Questionnaire
      and Statement (“Purchaser
      Questionnaire”), and that he is able to bear the economic risk of
      an investment in the Bridge Units. The Investor further represents and
      warrants that the information furnished in the Purchaser Questionnaire
      remains accurate and complete in all material
  respects.




3.6
            The
      Investor acknowledges that he has prior investment experience, including
      investment in non-listed and non-registered securities, or he has employed
      the services of an investment advisor, attorney or accountant to read all
      of the documents furnished or made available by the Company both to him
      and to all other prospective Investors in the Bridge Units and to evaluate
      the merits and risks of such an investment on his behalf, and that he
      recognizes the highly speculative nature of this
    investment.


4




3.7
            The
      Investor acknowledges that this Bridge Offering may involve tax
      consequences and that the contents of the Bridge Offering Documents do not
      contain tax advice or information. The Investor acknowledges that he must
      retain his own professional advisors to evaluate the tax and other
      consequences of an investment in the Bridge Units.  The Investor
      acknowledges that he has had an opportunity to consult with counsel of his
      choice and that he must retain his own legal advisor.  The
      Investor has not relied on the Company, it officers, directors, or
      professional advisors for advise as to such
  consequences.




3.8
            The
      Investor acknowledges that this Bridge Offering has not been reviewed by
      the SEC because of the Company’s representations that this is intended to
      be a nonpublic offering pursuant to Sections 4(2), 4(6) or 3(b) of the Act
      and Rule 506 of Regulation D promulgated thereunder. The Investor
      represents that the Bridge Unit is being purchased for his own account,
      for investment and not with a view to, or for resale in connection with,
      their distribution within the meaning of the Act. The Investor agrees that
      he will not sell or otherwise transfer the Bridge Units unless it is
      registered under the Act or unless an exemption from such registration is
      available.




3.9
            The
      Investor understands that, except as set forth in Article VII, the Bridge
      Units and the Securities have not been, , registered under the Act, by
      reason of a specific exemption from the registration provisions of the Act
      which depends upon, among other things, the bona fide nature of the
      investment intent and the accuracy of the Investor’s representations as
      expressed herein.  In this connection, the Investor understands
      that it is the position of the SEC that the statutory basis for such
      exemption would not be present if his representation merely meant that his
      present intention was to hold such securities for a short period, such as
      the capital gains period of tax statutes, for a deferred sale, for a
      market rise, assuming that a market develops, or for any other fixed
      period. The Investor realizes that, in the view of the SEC, a purchase now
      with an intent to resell would represent a purchase with an intent
      inconsistent with his representation to the Company, and the SEC might
      regard such a sale or disposition as a deferred sale to which such
      exemptions are not available.




3.10
            The
      Investor understands that the Bridge Units, and the Securities issued in
      respect thereof, may bear one or all of the following
    legends:




(i) “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”




5


(ii) Any
legend required by the Blue Sky laws of any state to the extent such laws are
applicable to the shares represented by the certificate so
legended.




3.11
            The
      Investor understands that Rule 144 (“Rule 144”) promulgated
      under the Act requires, among other conditions, a six-month holding period
      prior to the resale (in limited amounts) of securities acquired in a
      non-public offering without having to satisfy the registration
      requirements under the Act.  The Investor understands that the
      Company makes no representation or warranty regarding its fulfillment in
      the future of any reporting requirements under the Securities Exchange Act
      of 1934, as amended (the “Exchange Act”), or its
      dissemination to the public of any current financial or other information
      concerning the Company, as is required by Rule 144 as one of the
      conditions of its availability.  The Investor consents that the
      Company may, if it desires, permit the transfer of the Bridge Units out of
      his name only when his request for transfer is accompanied by an opinion
      of counsel reasonably satisfactory to the Company that neither the sale
      nor the proposed transfer results in a violation of the Act or any
      applicable state “blue sky” laws (collectively “Securities Laws”). The
      Investor agrees to hold the Company and its directors, officers and
      controlling persons and their respective heirs, representatives,
      successors and assigns harmless and to indemnify them against all
      liabilities, costs and expenses incurred by them as a result of any
      misrepresentation made by him contained herein or in the Purchaser
      Questionnaire or any sale or distribution by the undersigned Investor in
      violation of any Securities Laws.




3.12
            The
      Investor understands that the Company will review this Agreement and the
      Purchaser Questionnaire and otherwise review the financial standing of the
      Investor, and it is agreed that the Company reserves the unrestricted
      right to reject or limit any
subscription.




3.13
            The
      Investor hereby represents that the address of Investor furnished by him
      at the end of this Agreement is the undersigned’s principal residence if
      he is an individual or its principal business address if it is a
      corporation or other entity.  If a natural person, the Investor
      is at least 21 years of age and legally competent to execute this
      Agreement.




3.14
            The
      Investor acknowledges that if he is a Registered Representative of a FINRA
      member firm, he must give such firm the notice required by FINRA’s Rules
      of Fair Practice, receipt of which must be acknowledged by such firm on
      the signature page hereof.




3.15
            The
      Investor acknowledges that at such time, if ever, as the Bridge Units are
      registered, sales of such securities will be subject to state securities
      laws, including those of states which may require any securities sold
      therein to be sold through a registered broker-dealer or in reliance upon
      an exemption from registration.


6




3.16
            Investor
      hereby agrees that prior to the Closing Date of this Bridge Offering, he
      will not sell short any shares of the Company’s Common Stock or otherwise
      sell any shares of the Company’s Common Stock that Investor does not own,
      or engage in any sale that is consummated by the delivery of the Company’s
      shares borrowed by or from the Investor or his
  affiliates.




3.17
            If
      the undersigned Investor is a partnership, corporation, trust or other
      entity, such partnership, corporation, trust or other entity further
      represents and warrants that: (i) it was not formed for the purpose of
      investing in the Company; (ii) it is authorized and otherwise duly
      qualified to purchase and hold the Bridge Units; and (iii) that this
      Agreement has been duly and validly authorized, executed and delivered
      constitutes the legal, binding and enforceable obligation of the
      undersigned.




3.18
            Each
      recipient of this Agreement understands that the fact that the Company is
      undertaking this offering, as well as certain information contained in
      this Agreement, may be considered to be material, non-public information
      under Regulation FD (Fair Disclosure) promulgated under the Exchange Act.
      Each recipient expressly agrees to maintain such information in confidence
      until such time as public disclosure of same is
  made.




3.19
            -It
      never has been represented, guaranteed or warranted by any broker, the
      Company, any of the Company’s officers, directors, stockholders, partners,
      employees or agents, or any other persons, whether expressly or by
      implication, that: (i) the Company or the undersigned will realize any
      given percentage of profits and/or amount or type of consideration, profit
      or loss as a result of the Company’s activities or the undersigned’s
      investment in the Company; or (ii) the past performance or experience of
      the management of the Company, or of any other person, will in any way
      indicate the predictable results of the ownership of the Securities or of
      the Company’s activities.




3.20
            No
      oral or written representations have been made other than as stated in
      this Agreement, and no oral or, written information furnished to the
      undersigned or the undersigned’s advisor(s) in connection with the Bridge
      Offering were in any way inconsistent with the information stated in this
      Agreement.




3.21
            The
      undersigned is not entering into this Agreement as a result of or
      subsequent to any advertisement, article, notice or other communication
      published in any newspaper, magazine or similar media or broadcast over
      television or radio, posted on the Internet, or presented at any seminar
      or meeting, or any solicitation of a subscription by a person other than a
      representative of the Company with which the undersigned had a
      pre-existing relationship in connection with investments in securities
      generally.




3.22
            The
      undersigned understands that the net proceeds (see Article VI) from this
      Bridge Offering (after deduction for expenses of the Bridge Offering,
      including the fees and expenses payable to a FINRA member firm) will be
      used in all material respects for the purposes set forth under “Use of
      Proceeds” in this Agreement.


7




3.23
            The
      undersigned acknowledges that the representations, warranties and
      agreements made by the undersigned herein shall survive the execution and
      delivery of this Agreement and the purchase of the Bridge
      Units.




ARTICLE
IV


REPRESENTATIONS
AND WARRANTIES OF THE COMPANY




4.1
            The
      Company hereby represents and warrants to each Investor on the date hereof
      and at the Closing Date.  The Company is a corporation duly
      organized, validly existing and in good standing under the laws of the
      State of  Delaware and has all requisite corporate power and
      authority to carry on its business as now conducted and as proposed to be
      conducted.  The Company is duly qualified to transact business
      and is in good standing in each jurisdiction in which the failure so to
      qualify would have a material adverse effect on its business or
      properties.




4.2
            This
      Agreement, the Notes and the Bridge Units, have been duly authorized by
      the Board of Directors of the Company and its shareholders.This Agreement and
      the Notes shall constitute valid and legally binding obligations of the
      Company, enforceable against the Company in accordance with their
      respective terms except as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance, and other laws of
      general application affecting enforcement of creditors’ rights generally,
      and as limited by laws relating to the availability of specific
      performance, injunctive relief, or other equitable
    remedies.




4.3
            The
      execution, delivery and performance of this Agreement by the Company will
      have been duly approved by the Board of Directors of the Company and all
      other actions required to authorize and effect the offer and sale of the
      Bridge Units contained herein will have been duly taken and
      approved.




4.4
            The
      Bridge Units, Notes and Underlying Common Stock have been duly and validly
      authorized and when issued and paid for in accordance with the terms
      hereof, will be duly and validly issued, fully paid and non-assessable and
      the shares of Underlying Common Stock will not be issued in violation of
      any preemptive or other rights of stockholders known to the
      Company.




4.5
            The
      Company has obtained, or is in the process of obtaining, all licenses,
      permits and other governmental authorizations necessary to the conduct of
      its business; such licenses, permits and other governmental authorizations
      obtained are in full force and effect; and the Company is in all material
      respects complying therewith.




4.6
            The
      Company knows of no pending or threatened legal or governmental
      proceedings to which the Company is a party, which could materially
      adversely affect the business, property, financial condition or operations
      of the Company.


8




4.7
            The
      Company is not in violation of or has been notified of a default under,
      nor will the execution and delivery of this Agreement, the issuance of the
      Bridge Units, and the incurrence of the obligations herein and therein set
      forth and the consummation of the transactions herein or therein
      contemplated, result in a violation of, or constitute a default under, the
      Company’s articles of incorporation or by-laws, any material obligations,
      agreement, covenant or condition contained in any bond, debenture, note or
      other evidence of indebtedness or in any material contract, indenture,
      mortgage, loan agreement, lease, joint venture or other agreement or
      instrument to which the Company is a party or by which it or any of its
      properties may be bound or any material order, rule, regulation, writ,
      injunction, or decree of any government, governmental instrumentality or
      court, domestic or foreign.




4.8
            -We
      are authorized to issue Fifty Five million (55,000,000) shares of $0.001
      par value common stock of which 21,192,600 shares are currently
      outstanding as of September 30, 2009.  Each outstanding share of
      Common Stock is duly authorized, validly issued, fully paid and non
      assessable.  .  The Company does not own or have any
      contract to acquire, any equity securities or other securities of any
      person or any, direct or indirect, equity or ownership interest in any
      other business.




4.9
            Except
      for a Form D filing with the SEC and any required blue sky filings, no
      consent, authorization, approval, order, license, certificate or permit of
      or from, or declaration or filing with, any federal, state, local or other
      governmental authority or any court or any other tribunal is required by
      the Company for the execution, delivery or performance by the Company of
      this Agreement or the execution, issuance, sale or delivery of the Bridge
      Units.




4.10
            No
      consent of any party to any material contract, agreement, instrument,
      lease, license, arrangement or understanding to which the Company is a
      party or to which any of its properties or assets are subject is required
      for the execution, delivery or performance by the Company of this
      Agreement, or the execution, issuance, sale or delivery of the
      Securities.




ARTICLE
V


CONDITIONS
TO CLOSING




5.1
            Conditions of the
      Investors’ Obligations at
Closing.




(a)   Conditions
of the Investors’ Obligations at Each Closing.The obligations of each
Investor to the Company to subscribe to Bridge Units at the Closing in
accordance with the provisions of this Agreement are subject to the fulfillment,
on or before the Closing, of each of the following conditions, unless otherwise
waived:




(i)    Representations
and Warranties.  The
representations and warranties of the Company contained in Article IV shall be
true on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of the date of each
Closing.


9


(ii)   Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Bridge Units pursuant to
this Agreement shall be obtained and effective as of the Initial
Closing.




(iii)
Receipt
of Securities.  The Investors shall have received such Bridge
Units and the executed Agreement duly executed by the Company and acceptable in
all respects to the Investors.




(iv)  Corporate
Proceedings; Consents, etc.  All consents and other proceedings
to be taken and all waivers and consents to be obtained in connection with the
transactions contemplated by the Agreements shall have been taken or
obtained.




5.2
            Conditions
      of the Company’s Obligations at Closing.  The
      obligations of the Company to each Investor under this Agreement are
      subject to the fulfillment, on or before both the Closing, of each of the
      following conditions, unless otherwise
waived:




(a)  Representations
and Warranties.  The
representations and warranties of each Investor contained in Article III shall
be true on and as of each Closing with the same effect as though such
representations and warranties had been made on and as of such
Closing.




(b)  Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Securities pursuant to this
Agreement shall be obtained and effective as of each Closing.




ARTICLE
VI


USE
OF PROCEEDS





If all of
the Bridge Units are sold, the Company will receive gross proceeds of
$350,000.  The $304,500 of net proceeds of the Bridge Offering after
payment of a 10% sales commission and a 3% non-accountable expense allowance
payable to FINRA member firms shall be used for general corporate purposes,
including working capital.





ARTICLE
VII


REGISTRATION
RIGHTS





There are no separate registration
rights in this offering.  Investors shall be entitled to the same
registration rights as provided for in the proposed Private
Placement.  If such private placement does not occur then the Investor
will receive the same registration rights they would have received if the
private placement had been completed.


10


ARTICLE
VIII


RISK
FACTORS




An
investment in the securities offered hereby is highly speculative and involves a
high degree of risk and should be made only by investors who can afford to lose
their entire investment Prospective Investors, prior to making any investment
decision should carefully consider along with other matters referred to herein
the following risk factors.




RISK
FACTORS




Investment
in the Bridge Units involves a high degree of risk and should be regarded as
speculative.  As a result, the purchase of Bridge Units should be
considered only by persons who can afford a loss of their entire
investment.  This Agreement contains certain forward-looking
statements.  Actual results could differ materially from those
projected in the forward-looking statements as a result of certain of the risk
factors set forth below and elsewhere in this Agreement.  This
Agreement contains forward-looking statements and information that are based on
management’s beliefs as well as assumptions made by, and information currently
available, to management.  When used in this Agreement (including
Exhibits), words such as “anticipate,” “believe,” “estimate,” “except,” and,
depending on the context, “will” and similar expressions, are intended to
identify forward-looking statements.  Such statements reflect the
Company’s current views with respect to future events and are subject to certain
risks, uncertainties and assumptions, including the specific risk factors
described above.  Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, believed, estimated or
expected.  The Company does not intend to update these forward-looking
statements and information.  In addition to the other information
contained in this Agreement, prospective investors should carefully consider the
following risk factors before purchasing the Bridge Units offered
hereby.





We
have a history of losses and our future profitability is uncertain.





The
financial statements have been prepared assuming that the Company will continue
as a going concern which contemplates the realization of assets and satisfaction
of liabilities in the normal course of business. The Company has incurred
cumulative losses of $16,287,000 from inception through June 30, 2009, and has
not generated any revenue, and has been dependent on funding operations through
the private sale of convertible debt and equity securities. These conditions
indicate that there is substantial doubt that the Company will be able to
continue as a going concern. The auditors have issued a “Going Concern” opinion
for our 2008 financial statements.





We expect
to continue to incur substantial losses and may not generate significant
revenue, if any, for the foreseeable future. Our ability to generate revenue is
dependent on obtaining additional financing for our plannedoperations. Our immediate
planned operations for the next twelve months include the payment of our general
and administrative expenses (including salaries, legal and other professional
fees, consulting and advisory fees), the costs associated with making certain
upgrades to the HemoTech production facility, to begin the production of
HemoTech (our human blood substitute), conduct animal studies, including
preparation of our U.S. Investigational New Drug (“IND”) application. At June
30, 2009, the Company had $141,000 in cash and cash equivalents.  We
believe that the cash available will not be sufficient to fund our current
operations beyond six months. The Company recently significantly reduced its
actual and projected expenses and plans to aggressively manage costs which can
be reduced at management’s discretion based on the Company’s available cash. The
Company is exploring all opportunities to raise additional
capital.


11





We
are a development stage company with no revenues or profits.





We are in
the development stage and, through June 30, 2009, have generated no sales
revenue and have no prospects for revenue in the foreseeable future. We
currently have no source of operating revenue and there can be no assurance that
we will be able to develop any revenue source or that our operations will become
profitable, even if we are able to commercialize any products. Further, as a
development stage company, we have a limited relevant operating history on which
an evaluation of our prospects can be made. Such prospects must be considered in
light of the risks, expenses and difficulties frequently encountered in
establishing a new business in the evolving, heavily regulated biotechnology industry, which is characterized by an increasing number of
market entrants, intense competition and a high failure rate. In addition,
significant challenges are often encountered by businesses shifting from
developmental to commercial activities.





Following
completion of our U.S. IND application, the next stage of our planned operations
will include submission of our U.S. IND application to the FDA, and upon
approval, commencement and completion of our Phase I U.S. clinical
trials.  Additional operations will include further research and
development of HemoTech and payment of operational and overhead expenses that we
will incur during our Phase I U.S. clinical trials as well as preparation for
Phase II clinical trials, assuming Phase I clinical trials are successful. In
order to complete these additional planned operations, we will need to raise
additional capital. If we fail to generate enough cash resources, either from
future equity or debt sales, exercise of our remaining warrants or revenue, our
ability to implement our business plan and complete these planned operations
will be materially affected, and you may lose all or substantially all of your
investment.





We
are reliant on the success of our two products which are in an early stage of
product development and may never be successfully developed or, if successfully
developed, may never become viable marketable products.





Our
products are on early stage development and if we fail to successfully develop
these products, we have no other products on which our business can be
developed. There can be no assurance that our research and development
activities will result in any commercially viable products. The development of
our products will be subject to the risks of failure inherent in the development
of products based on innovative technologies and the expense and difficulty of
obtaining regulatory approvals. One of our products is a human blood substitute
which is currently under development and will require significant additional
research and development and pre-clinical testing and clinical testing prior to
submission of any regulatory application for commercial use. There can be no
assurance that our product development efforts will be successfully completed,
that our products currently under development will be successfully transformed
into marketable products, that required regulatory approvals can be obtained,
that the products can be manufactured at acceptable cost in accordance with
regulatory requirements or that any of the approved products can be successfully
marketed or achieve customer acceptance.


12





We
depend on key personnel, and the loss of such personnel could significantly
impair our ability to further develop HemoTech, implement our business plan or
continue operations.





Our
success depends on the continued contributions of our executive officers and
scientific and technical personnel and consultants. We are particularly
dependent on Arthur P. Bollon, Ph.D., our Chairman, President and Chief
Executive Officer, Dr. Mario Feola, our Chief Medical Officer, and Dr. Jan
Simoni, our Acting Vice President and Principal Investigator or Research and
Development and Advisor. Drs. Feola and Simoni are the two principal Texas Tech
University Health Services Center (“TTUHSC”) researchers who developed HemoTech.
Drs. Feola and Simoni continue to be the two main developers of HemoTech. Dr.
Simoni is an employee of TTUHSC and his services are made available to us under
our Sponsored Research Agreement with TTUHSC. Dr. Simoni's activities related to
research and development, production, regulatory and clinical testing of
HemoTech are covered under the Sponsored Research Agreement with TTUHSC, which
may be terminated at any time by either party on 90 days' prior written
notice.





We
currently have four full-time employees including Drs. Bollon and Feola and Mr.
Mark Rosenblum, our Chief Financial Officer. We have entered into an employment
agreement with Dr. Bollon which expires in October 2010, and we have entered
into an employment agreement with Dr. Feola, in which Dr. Feola agreed to serve
as our Chief Medical Officer until such time as either party terminates Dr.
Feola's employment agreement. We have also entered into an employment agreement
with Mr. Rosenblum, which expires in April 2010. We do not maintain "key person"
life insurance on the lives of any executive officer and their death or
incapacity would have a material adverse effect on us. During our limited
operating history, many of our key responsibilities have been assigned to a
relatively small number of individuals. The competition for qualified personnel
is intense, and the loss of services of certain key personnel could adversely
affect our business, although we have not experienced problems attracting or
retaining key personnel to date.





If
our product offerings are not commercially successful, we will be unable to
successfully generate revenue.





We expect
significant amount of our revenues to come from the production and distribution
of our products. The success of these offerings depends primarily on their
acceptance by the public, the medical community, and other third-party consumers
and payers, which is difficult to predict. The commercial success of our
products depends on the availability of alternative forms of technology and
general economic conditions and other tangible and intangible factors, all of
which can change quickly. If we fail to produce these products with broad
industry appeal, we will be unable to successfully generate
revenue.





The
market for our products is competitive and we may not be able to compete
successfully against competitors that may be having substantially more
development, marketing and sales resources than we do.


13





The
market for our products is competitive and there can be no assurance that we
will be able to compete successfully in these markets. We cannot be assured that
some other competitive technologies have not been, or will not be, developed by
either government, academic or private entities. Any competing technologies
could make our technologies either obsolete or of lesser value. Many of our
competitors have greater financial and other resources than we have, which may
limit our ability to compete effectively.





Although
the proposed products of our main competitors in the human blood substitute
market have been rejected by the FDA, have been abandoned and are not yet ready
to submit their applications to the FDA for approval of their products, many of
these competitors are continuing to develop and test their respective products.
There can be no assurance that one of all these products may be approved by the
FDA before our blood substitute product, HemoTech, to the extent HemoTech ever
receives FDA approval.





In
addition, our competitors also may generally be able to respond more quickly to
new or emerging technologies or changes in the regulatory requirements. These
competitors may also:





·
            benefit
      from greater economies of scale;


·
            offer
      more aggressive pricing;


·
            devote
      greater resources to the promotion of their products;
  and


·
            be
      better positioned to develop future
  technologies.





We
depend on, and will continue to depend on, collaboration with and licenses from
third parties, and if we are not able to enter into such collaborations or
licenses, or if these collaborations or licenses expire, terminate or fail, we
may not be able to further develop our products or implement our business plan
without substantial additional expenditures and delays, if at all.





In
addition to maintaining our collaborative relationship with TTUHSC, our strategy
for the development, clinical testing, manufacturing and commercialization of
our proposed products includes entering into various collaborations
with  corporate partners, licensors, licensees and other third parties
in the future, and is dependent on the subsequent success of these third parties
in performing their responsibilities. We intend to seek to enter into additional
arrangements with other collaborators, although there can be no assurance that
we will be able to enter into such collaborations and licenses, or, to the
extent that we do, that such collaborations will be successful. Further, there
can be no assurance that any future arrangements we may enter into will lead to
the development of our products with commercial potential, that we will be able
to obtain proprietary rights or licenses for proprietary rights with respect to
any technology developed in connection with these arrangements or that we will
be able to insure the confidentiality of any proprietary rights and information
developed in such collaborative arrangements or prevent the public disclosure
thereof.


14





In
general, collaborative agreements provide that they may be terminated under
certain circumstances. There can be no assurance that we will be able to extend
any of our product collaborative agreements on their termination or expiration,
or that we will be able to enter into new collaborative agreements with existing
or new partners in the future. To the extent we choose not to or are unable to
establish any additional collaborative arrangements, it would require
substantially greater capital to undertake research, development and marketing
of our proposed products into certain markets or find that the development,
manufacture or sale of our proposed products in such markets is adversely
affected by the absence of such collaborative agreements.





The
FDA regulatory process is costly, lengthy and requires specific expertise, and
even if we invest the time and money and other resources required to advance
through the FDA approval process, we may never receive FDA approval for our
products.





We will
rely initially on consultants with prior experience working with the FDA. We
expect to hire experienced employees and consultants to analyze, prepare and
present and IND application to the FDA for our blood substitute product. The
process of obtaining regulatory approvals can be extremely costly and time
consuming and there is no guarantee of success. If we do not receive approval of
our IND application, we will not be able to proceed with Phase I U.S. clinical
testing. In addition, clinical testing is not  predictable. Even if the FDA
approves the IND application, we cannot guarantee that the FDA will approve our
Phase I U.S. clinical results. Our failure to obtain required regulatory
approvals would have a material adverse effect on our business, financial
condition and results of operations and could require us to curtail or cease our
operations.





Our newly
licensed technology from TTUHSC titled Orthogonal Method for the Removal of
Transmissible Spongiform Encephalopathy Agents from Biological Fluids (“ORTH
Technology”) helps in the clearance and inactivation of infectious agents such
as prions (which can cause Mad Cow Disease) and viruses. Such removal and
inactivation is critical in the purification of animal products for human
use.  It can be used not only for HemoTech production but also has the
potential for generating sublicensing revenue from pharmaceutical, biotechnology
and the cosmetic industries. We will rely on internal personnel and external
consultants to analyze and present this product for appropriate approval in
order to market this product. There can be no assurance that regulatory approval
for this product will be obtained on a timely basis. In addition, our
competitors also may generally be able to respond more quickly to similar and
new or emerging technologies or changes in the regulatory requirements and
obtain an approval before us.





The FDA
and comparable agencies in foreign countries impose substantial requirements on
the introduction of therapeutic and diagnostic pharmaceutical and biological
products through lengthy and detailed laboratory and clinical testing
procedures, sampling activities and other costly and time-consuming procedures.
Satisfaction of these requirements typically takes several years or more and
varies substantially based on the type, complexity and novelty of the product.
The regulatory review may result in extensive delay in the regulatory approval
process. Regulatory requirements ultimately imposed could adversely affect our
ability to clinically test, manufacture or market potential products. Government
regulation also applies to the manufacture and marketing of pharmaceutical and
biological products. The effect of government regulation may be to delay
marketing of new products for a considerable period of time, to impose costly
procedures on our activities and to furnish a competitive advantage to larger
companies that compete with us.


15





There can
be no assurance that FDA or other regulatory approval for any products developed
by us will be granted on a timely basis or at all. Any such delay in obtaining,
or failure to obtain, such approvals would adversely affect the marketing of any
contemplated products and the ability to earn product revenue. Further,
regulation of manufacturing facilities by state, local and other authorities is
subject to change. Any additional regulation could result in limitations or
restrictions on our ability to utilize any of our technologies, thereby
adversely affecting our operations.





We
need to raise additional capital to continue our business.





We do not
have sufficient funds to meet the costs of our immediate planned operations. To
meet the costs of the next stage of its planned operations, including the cost
of upgrades to the HemoTech production facility and conducting additional
research and development, submission of its U.S. IND application, commencing and
completing Phase I U.S. clinical trials, conducting additional research and
development of HemoTech as Phase I U. S. clinical trials progress, and paying
for operational and overhead costs that will be incurred during Phase I U.S.
trials, we will need to raise additional capital. It is likely that we will seek
to meet these liquidity requirements through public or private equity offerings
or debt financings. There can be no assurance that we will be able to secure
additional financing or obtain favorable terms for such financing if it is
available.  If we are unable to raise additional capital to continue
our business we would be required to curtail or cease our
operations.





We plan
to raise additional funds in the future by issuing additional shares of common
stock or securities such as convertible notes, options, warrants or preferred
stock that are convertible into common stock. Any such sale of common stock or
other securities will lead to further dilution of the equity ownership of
existing holders of our common stock.





We
have no marketing experience, are dependent on third parties for marketing
services, and we may never be able to successfully market HemoTech, even if it
receives FDA approval.





We have
no marketing and sales personnel and no experience with respect to marketing
biochemical or pharmaceutical products. Significant additional expenditures and
management resources would be required to develop an internal sales force, and
there can be no assurance that such funds would be available. Further, there can
be no assurance that, with such a sales force, we would be successful in
penetrating the markets for any products developed. We will seek to enter a
partnership to develop and market our product. Under certain of these
agreements, our marketing partner may have the responsibility for all or a
significant portion of the development and regulatory approval. In the event
that the marketing and development partner fails to develop a marketable product
or fails to market a product successfully, our business may be adversely
affected. The sale of certain products outside the United States will also be
dependent on the successful completion of arrangements with future partners,
licensees or distributors in each territory. There can be no assurance that we
will be successful in establishing any additional collaborative arrangements, or
that, if established, such future partners will be successful in commercializing
products.


16





We
may be sued for product liability in the future, and since we currently maintain
no product liability insurance, in the event of a successful suit against us, we
may not be able to pay any awarded damages or, if we are able to do so, payment
of any such awarded damages could significantly deplete our financial
resources.





The use
of our proposed HemoTech blood substitute product in clinical trials and the
marketing of any product may expose us to product liability claims. We currently
have no product liability insurance, but will, however, attempt to obtain such
insurance prior to commencement of such trials, if any. We are required by our
license agreement with TTUHSC to obtain such insurance. There can be no
assurance that we will be able to obtain such insurance or, if obtainable, that
such insurance can be acquired at a reasonable cost or will be sufficient to
cover all possible liabilities. In the event of a successful suit against us,
lack or insufficiency of insurance coverage could have a material adverse effect
on us. Furthermore, certain distributors of pharmaceutical and biological
products require minimum product liability insurance coverage as a condition
precedent to purchasing or accepting products for distribution. Failure to
satisfy such insurance requirements could impede our ability to achieve broad
distribution of our proposed product, which would have a material adverse effect
on our business and financial condition.





We
currently use labs, equipment, personnel, research and development facilities
and production facilities located at TTUHSC, and if we ever seek to or need to
find or build alternate facilities, we may not be able to do so at all or, if we
are, it will be costly and may cause significant delays in the development and
commercialization of HemoTech, which could materially impair our
operations.





We do not
currently own, lease or operate any laboratory, research and development or
manufacturing facilities. Our current plans include using labs, equipment,
personnel and an upgraded blood substitute production facility located at TTUHSC
for the production of HemoTech under our Sponsored Research Agreement. After the
completion of Phase II U.S. clinical trials for HemoTech, if any, our Sponsored
Research Agreement with TTUHSC contemplates that we may establish independent
manufacturing facilities either alone or through partnering. Establishing our
own facilities would result in significant additional expenses and may result in
potential delays in testing and production. Building and operating our own
production facilities would require substantial additional funds and other
resources of which there can be no assurance that we will be able to secure nor
can there be any assurance that we would be able to enter into any arrangement
with third parties to manufacture our product, if any, on acceptable terms or at
all. Certain products outside the United States will also be dependent on the
successful completion of arrangements with future partners, licensees or
distributors in each territory. There can be no assurance that we will be
successful in establishing any additional collaborative arrangements, or that,
if established, such future partners will be successful in commercializing
products.





Uncertainty
over proposed health care reforms and whether the costs of using our proposed
product will be reimbursed to consumer health insurance companies could cause
our product to become unmarketable, which would result in our inability to
generate revenue.


17





Our
success in generating revenue from sales of our proposed HemoTech blood
substitute product may depend, in part, on the extent to which reimbursements
for the costs of such a product and related treatments will be available from
government health administration authorities, private health insurers and other
organizations. Significant uncertainty exists as to the reimbursement status of
newly-approved health care products. There can be no assurance that adequate
third-party insurance coverage will be available for us to establish and
maintain price levels sufficient for realization of an appropriate return on our
investment in developing new products. Government and other third-party payors
are increasingly attempting to contain health care costs by limiting both
coverage and the level of reimbursement of new therapeutic and diagnostic
products approved for marketing by the FDA and by refusing, in some cases, to
provide any coverage of uses of approved products for disease indications for
which the FDA has not granted marketing approval. If adequate coverage and
reimbursement levels are not provided by government and third-party payors for
uses of our product, then market acceptance of these products would be adversely
affected.




Risks
Related to Our Intellectual Property





Our
success depends on our ability to protect our intellectual
property.





We intend
to protect our intellectual property through patents and trademarks. The patent
positions of biotechnology companies generally are highly uncertain and involve
complex legal and factual questions that will determine who has the right to
develop a particular product or process. As a result, we cannot predict which of
our patent applications will result in the granting of patents or the timing of
the granting of the patents. Additionally, many of our competitors have
significantly greater capital with which to pursue patent litigation. As of
September 30, 2009, we have no pending intellectual property-related
litigations, legal actions, investigations, court challenges, negotiations or
similar activities. There can be no assurance that we would have the resources
to defend our patents in the face of a lawsuit. Further, we rely on trade
secrets, know-how and other proprietary information. We seek to protect this
information, in part, through the use of confidentiality agreements with
employees, consultants, advisors and others. Nonetheless, there can be no
assurance that those agreements will provide adequate protection for our trade
secrets, know-how or other proprietary information and prevent their
unauthorized use or disclosure. There is also the risk that our employees,
consultants, advisors or others will not maintain confidentiality of our trade
secrets or proprietary information, or that this information may become known in
some other way or be independently developed by our competitors. We may also be
exposed to future litigation by third parties based on claims that our patents,
products or activities infringe on the intellectual property rights of others or
that we have misappropriated the trade secrets of others. Any litigation or
claims against us, whether or not valid, could result in substantial costs,
could place a significant strain on our financial and managerial resources, and
could harm our reputation. In addition, intellectual property litigation or
claims could force us to do one or more of the following, any of which could
have a material adverse effect on us or cause us to curtail or cease our
operations:





·
            cease
      testing, developing, using and commercializing
  HemoTech;


18


·
            obtain
      a license from the holder of the infringed intellectual property right,
      which could also be costly or may not be available on reasonable terms;
      or


·
            reformulate
      HemoTech, which may be impossible or too
costly.





The
patents underlying our products, may expire prior to our receipt, if ever, of
FDA or foreign approval, to the extent such approval is granted at
all.





We have
obtained from TTUHSC exclusive worldwide rights to HemoTech under a U.S. patent
issued in August 1995 as well as various foreign patents. The patent, U.S.
Patent No. 5,439,882, entitled "Blood Substitute" and its foregoing counterparts
claims various alternative compositions of the novel blood substitute based on
hemoglobin of both bovine and human origin as well as methods for its production
and use. Protection under the U.S. patent expires on August 8, 2012, which may
coincide with or even precede our receipt of FDA approval of HemoTech; to the
extent FDA approval is granted at all. The Japanese patent and certain of the
European patents may also expire on or after August 8, 2012. If the U.S. patent
expires before we are able to commercialize our proposed HemoTech product, then
we could utilize new potential patents related to HemoTech, such as the proposed
pending erythropoiesis patent, seek commercial exclusivity for a defined time
with the FDA and utilize our trade secrets for manufacturing and use of
HemoTech. If we are unable to obtain additional patent coverage in advance of
the time the existing patent expires or at all, and we fail to receive
additional patents, then our competitive position and our ability to
successfully commercialize or generate revenues from sales of HemoTech would be
materially and adversely affected.





We have
filed for a patent for our newly licensed technology from TTUHSC titled
Orthogonal Method for the Removal of Transmissible Spongiform Encephalopathy
Agents from Biological Fluids (“ORTH Technology”) although there can be no
assurance that the patent would be successfully obtained. Our failure to obtain
the patent would adversely affect the marketing of any contemplated products and
the ability to earn product revenue. In addition, our competitors also may
generally be able to get a patent approval before us for comparable
technologies.





Risks
Related to Our Common Stock





The
public market for our common stock is thin and subject to
manipulation.





The
market price of our common stock, which is traded on the OTC Bulletin Board, may
fluctuate significantly in response to the following factors, most of which are
beyond our control:





·
            variations
      in our quarterly operating results;


·
            changes
      in securities analysts’ estimates of our financial
      performance;


·
            changes
      in general economic conditions and in the healthcare
    industry;


·
            changes
      in market valuations of similar
companies;


·
            announcements
      by us or our competitors of significant new contracts with artists,
      acquisitions, strategic partnerships or joint ventures, or capital
      commitments;


·
            loss
      of a major customer, partner or joint venture participant;
    and


·
            the
      addition or loss of key managerial and collaborative
      personnel.


19





The
equity markets have, on occasion, experienced significant price and volume
fluctuations that have affected the market prices for many companies’ securities
and that have often been unrelated to the operating performance of these
companies. Any such fluctuations may adversely affect the market price of our
common stock, regardless of our actual operating performance. As a result,
stockholders may be unable to sell their shares, or may be forced to sell them
at a loss.





Obtaining
additional capital through the future sale of common stock and derivative
securities will result in dilution of stockholder
interests. We do not intend
to pay cash dividends to our stockholders, so you will not receive any return on
your investment in our company prior to selling your interest in
HemoBioTech.





We have
never paid any dividends to our stockholders. We currently intend to retain any
future earnings for funding growth and, therefore, do not expect to pay any cash
dividends in the foreseeable future. If we determine that we will pay cash
dividends to the holders of our common stock, we cannot assure that such cash
dividends will be paid on a timely basis. As a result, you will not receive any
return on your investment prior to selling your shares in our company and, for
the other reasons discussed in this “Risk Factors” section, you may not receive
any return on your investment even when you sell your shares in our
company.





We
have agreed to indemnify our officers and directors and, if an indemnification
claim is successfully made, we may be forced to use our working capital to pay
our indemnification obligations, which could result in our inability to use such
working capital for our operations.





Our
certificate of incorporation includes certain provisions permitted under
Delaware law allowing our officers and directors to be indemnified against
certain liabilities. Our certificate of incorporation also limits, to the
fullest extent permitted by Delaware law, a director’s liability for monetary
damages for breach of fiduciary duty, including gross
negligence,  except liability for the following:





·
            breach
      of the director’s duty of loyalty;


·
            acts
      or omissions not in good faith or which involve intentional misconduct or
      a knowing violation of the law;


·
            the
      unlawful payment of a dividend or unlawful stock purchase or redemption;
      and


·
            any
      transaction from which the director derives an improper personal
      benefit.




Delaware
law does not eliminate a director’s duty of care and this provision has no
effect on the availability of equitable remedies such as injunction or
rescission based on a director’s breach of the duty of care. In December 2004,
we purchased a $5.0 million insurance policy providing coverage for certain
liabilities of our officers and directors. In addition, we have entered into
separate director and officer indemnification agreements with each of Arthur
Bollon, Ghassan Nino, Robert Baron, Bernhard Mittemeyer, Mark Rosenblum and
Robert Comer, under which we agreed to indemnify and advance expenses to each of
these directors and officers, as the case may be, against any losses arising out
of or relating to any actual, alleged or suspected act or failure to act by such
person in his capacity as a director, officer, employee or agent of HemoBioTech
or any affiliated company, trust, joint venture, corporation, limited liability
company or partnership for which such person was acting or had acted as a
director, officer, employee or agent at HemoBioTech’s request. Further, in
connection with Ghassan Nino’s resignation as an officer of HemoBioTech under an
employment separation and release agreement dated as of July 15, 2004, we agreed
to indemnify Mr. Nino and his heirs, executors, administrators and assigns,
against all losses arising out of any claim made by a third party against Mr.
Nino or HemoBioTech as a result of an action taken or not taken by Mr. Nino as
an officer of HemoBioTech, so long as such actions or inactions were taken or
not taken by Mr. Nino in good faith within the scope of his
employment.


20




Our
common stock is considered a “penny stock” and is subject to regulations that
limit or restrict the potential market for our stock.





Our
common stock is deemed to be “penny stock” (as that term is defined under the
Securities Exchange Act of 1934, as amended) resulting in increased risk to our
investors and certain requirements being imposed on some brokers who execute
transactions in our common stock. In general, a penny stock is an equity
security that:





·
            is
      priced under $5.00;


·
            is
      not traded on a national securities exchange, the Nasdaq Global Market or
      the Nasdaq Capital Market;


·
            may
      be listed in the “Pink Sheets” or the OTC Bulletin
  Board;


·
            is
      issued by a company that has less than $5.0 million in net tangible assets
      (if it has been in business less than three years) or has less than $2.0
      million in net tangible assets (if it has been in business at least three
      years); and


·
            is
      issued by a company that has average revenues of less than $6.0 million
      for the past three years.





At any
time the common stock qualifies as a penny stock, the following requirements,
among others, will generally apply:





·
            certain
      broker-dealers who recommend penny stock to persons other than established
      customers and accredited investors must make a special written suitability
      determination for the purchaser and receive the purchaser’s written
      agreement to a transaction prior to
sale.


·
            Prior
      to executing any transaction involving a penny stock, certain
      broker-dealers must deliver to certain purchasers a disclosure schedule
      explaining the risks involved in owning penny stock, the broker-dealer’s
      duties to the customer, a toll-free telephone number for inquiries about
      the broker-dealer’s disciplinary history and the customer’s rights and
      remedies in case of fraud or abuse in the
sale.


·
            In
      connection with the execution of any transaction involving a penny stock,
      certain broker-dealers must deliver to certain purchasers the
      following:


·
            the
      broker-dealer’s compensation for the
trade;


·
            bid
      and offer price quotes and volume
information;


·
            the
      compensation received by certain salespersons for the
    trade;


·
            monthly
      accounts statements; and


21


·
            a
      written statement of the customer’s financial situation and investment
      goals.





Should a
broker-dealer required to provide the above disclosure or fail to deliver such
disclosure on the execution of any transaction involving a penny stock in
violation of federal or state securities laws, you may be able to cancel your
purchase and get your money back. In addition, if the stocks are sold in a
fraudulent manner, you may be able to sue the persons and firms that caused the
fraud for damages. If you have signed an arbitration agreement, however, you may
have to pursue your claim through arbitration.


These
requirements significantly add to the burden of the broker-dealer and limit the
market for penny stocks. These regulatory burdens may severely affect our
ability to create a market for our stock and the liquidity and market price for
our common stock.





A significant
number of our shares will be eligible for sale and their sale or potential sale
may depress the market price of our common stock.





Sales of
a significant number of shares of our common stock in the public market could
harm the market price of our common stock. 20,192,600 shares of our common stock
are currently outstanding, as of September 30, 2009. In addition, an aggregate
of 4,893,589 shares of our common stock may be issued in the future upon
exercise of currently outstanding warrants as of June 30, 2009, and 1,853,031
shares of our common stock may be issued in the future upon exercise of stock
options or other awards granted and available for grant under our 2003 Stock
Option/Stock Issuance Plan as of June 30, 2009.  As additional shares
of our common stock become available for resale in the public market, the supply
of our common stock will increase, which could decrease its price. Some or all
of the shares of common stock may be offered from time to time in the open
market under Rule 144, and these sales may have a depressive effect on the
market for our shares of common stock. In general, a non-affiliates who have
held restricted shares for a period of six months may sell our common stock into
the market.





Our
management and principal stockholders own a substantial amount of our common
stock and have effective control of HemoBioTech, which may not always be in the
best interests of all of our stockholders.





Our
officers, directors and principal stockholders control approximately 63% of our
outstanding common stock as of September  30, 2009. If these
stockholders act together, they will be capable of controlling our management
and affairs requiring stockholder approval, including approval of significant
corporate transactions. This concentration of ownership may have the effect of
delaying or preventing a change in control and might adversely affect the market
price of our common stock. This concentration of ownership may not be in the
best interests of all our stockholders.





Investors
of Bridge Notes may be forced to convert into shares of Common Stock earlier
than anticipated.


22


The
Company, at its option, may prepay the full principal amount of the Bridge Notes
plus accrued and unpaid interest (in cash or in kind) at any time upon 20 days’
prior written notice.  During the 20 day notice period, Investors may
convert their Bridge Notes into shares of Common Stock at a 25% discount to the
then current market price.  In addition, Investors of Bridge Notes,
unless earlier pre-paid or converted, shall be subject to Mandatory Conversion
into the proposed Private Placement.  Thus, the Investors could be
forced to convert their Bridge Notes at time when it may be disadvantageous to
do so.  See Form of Promissory Note attached hereto as Item
IV.





Some
provisions of our certificate of incorporation and bylaws may deter takeover
attempts, which may limit the opportunity of our stockholders to sell their
shares at a favorable price.





We are
governed by the provisions of Section 203 of the General Corporation Law of the
State of Delaware, an anti-takeover law enacted in 1988. In general, the law
prohibits a public Delaware corporation from engaging in a “business
combination” with an “interested stockholder” for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
“Business combination” is defined to include mergers, asset sales and certain
other transactions resulting in a financial benefit to the stockholders. An
“interested stockholder” is defined as a person who together with affiliates and
associates, owns (or, within the prior three years, did own) 15% or more of a
corporation’s voting stock. As a result of the application of Section 203, our
potential acquirers may be discouraged from attempting to effect an acquisition
transaction with us, thereby possibly depriving holders of our securities of
certain opportunities to sell or otherwise dispose of such securities at
above-market prices under such transaction.





Some
provisions of our executive officers’ employment agreements contain obligations
of the company to make salary payments.





In addition, certain
provisions contained in the employment agreements with Dr. Bollon, our Chairman,
President and Chief Executive Officer, and Mr. Rosenblum, our Chief Financial
Officer, obligate us to make certain salary payments including if their
employment is terminated without just cause or due to a disability. If Dr.
Bollon’s employment is terminated without just cause or as a result of Dr.
Bollon’s disability (which means Dr. Bollon’s inability to perform his duties
under the agreement for three consecutive months due to injury, illness or
disability (mental or physical), as determined by an independent physician
selected by Dr. Bollon with our approval), we will be required to pay Dr. Bollon
a severance payment equal to his base salary then in effect, payable in monthly
installments until the expiration of the remainder of the term of his employment
agreement or the expiration of 23 months, whichever is less. Dr. Bollon will be
entitled to receive severance payments totaling not less than six months’ of his
base salary. Similarly, if Mr. Rosenblum’s employment is terminated without just
cause or as a result of Mr. Rosenblum’s disability, we will be required to pay
Mr. Rosenblum a severance payment equal to his base salary then in effect,
payable in monthly installments until the expiration of the remainder of the
term of his employment agreement or the expiration of a fixed number of months,
based on the number of years Mr. Rosenblum has been employed by us. Mr.
Rosenblum will be entitled to receive severance payments totaling not less than
six months’ of his base salary. The foregoing factors, together with the
effective control of our outstanding common stock by our officers, directors and
principal stockholders, may serve as an incentive for our officers and directors
to discourage certain takeover transactions, possibly resulting in the
entrenchment of management and consequently reducing the value of our common
stock.  Dr. Bollon and Mr Rosenblum have agreed to amend their
employment agreements as part of the Bridge Financing.


23





Anti-Takeover,
Limited Liability and Indemnification Provisions





Certificate of
Incorporation and By-laws.Under our certificate of incorporation,
our


Board of
Directors may issue additional shares of common or preferred
stock.  Any additional issuance of common stock could have the effect
of impeding or discouraging the acquisition of control of us by means of a
merger, tender offer, proxy contest or otherwise, including a transaction in
which our stockholders would receive a premium over the market price for their
shares, and thereby protects the continuity of our
management.  Specifically, if in the due exercise of its fiduciary
obligations, the Board of Directors were to determine that a takeover proposal
was not in our best interest, shares could be issued by our Board of Directors
without stockholder approval in one or more transactions that might prevent or
render more difficult or costly the completion of the takeover by:





·
            diluting
      the voting or other rights of the proposed acquirer or insurgent
      stockholder group,


·
            putting
      a substantial voting block in institutional or other hands that might
      undertake to support the incumbent Board of Directors,
  or


·
            effecting
      an acquisition that might complicate or preclude the
    takeover.





Our
certificate of incorporation also allows our Board of Directors to fix the
number of directors in the bylaws.  Cumulative voting in the election
of directors is specifically denied in our certificate of
incorporation.  The effect of these provisions may be to delay or
prevent a tender offer or takeover attempt that a stockholder may determine to
be in his or its best interest, including attempts that might result in a
premium over the market price for the shares held by the
stockholders.





Delaware
Anti-Takeover Law.We
are subject to the provisions of Section 203 of the Delaware General Corporation
Law concerning corporate takeovers.  This section prevents many
Delaware corporations from engaging in a business combination with any
interested stockholder, under specified circumstances.  For these
purposes, a business combination includes a merger or sale of more than 10% of
our assets, and an interested stockholder includes a stockholder who owns 15% or
more of our outstanding voting stock, as well as affiliates and associates of
these persons.  Under these provisions, this type of business
combination is prohibited for three years following the date that the
stockholder became an interested stockholder unless:





·
            the
      transaction in which the stockholder became an interested stockholder is
      approved by the Board of directors prior to the date the interested
      stockholder attained that status;


·
            on
      consummation of the transaction that resulted in the stockholder’s
      becoming an interested stockholder, the interested stockholder owned at
      least 85% of the voting stock of the corporation outstanding at the time
      the transaction was commenced, excluding those shares owned by persons who
      are directors and also officers;
or


24


·
            on
      or subsequent to that date, the business combination is approved by the
      Board of Directors and authorized at an annual or special meeting of
      stockholders by the affirmative vote of at least two-thirds of the
      outstanding voting stock that is not owned by the interested
      stockholder.





This
statute could prohibit or delay mergers or other takeover or change in control
attempts and, accordingly, may discourage attempts to acquire us.





Limited Liability
and Indemnification.  Our certificate of incorporation
eliminates the personal liability of our directors for monetary damages arising
from a breach of their fiduciary duty as directors to the fullest extent
permitted by Delaware law.  This limitation does not affect the
availability of equitable remedies, such as injunctive relief or
rescission.  Our certificate of incorporation requires us to indemnify
our directors and officers to the fullest extent permitted by Delaware law,
including in circumstances in which indemnification is otherwise discretionary
under Delaware law.





Under
Delaware law, we may indemnify our directors or officers or other persons who
were, are or are threatened to be made a named defendant or respondent in a
proceeding because the person is or was our director, officer, employee or
agent, if we determine that the person:





·
            conducted
      himself or herself in good faith, reasonably believed, in the case of
      conduct in his or her official capacity as our director or officer, that
      his or her conduct was in our best interests, and, in all other cases,
      that his or her conduct was at least not opposed to our best interests;
      and


·
            in
      the case of any criminal proceeding, had no reasonable cause to believe
      that his or her conduct was
unlawful.





These
persons may be indemnified against expenses, including attorneys fees,
judgments, fines, including excise taxes, and amounts paid in settlement,
actually and reasonably incurred, by the person in connection with the
proceeding.  If the person is found liable to the corporation, no
indemnification will be made unless the court in which the action was brought
determines that the person is fairly and reasonably entitled to indemnity in an
amount that the court will establish.  Insofar as indemnification for
liabilities under the Securities Act may be permitted to directors, officers or
persons controlling us under the above provisions, we have been informed that,
in the opinion of the SEC, such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable.


25




ARTICLE
IX


MISCELLANEOUS




9.1
            Any
      notice or other communication given hereunder shall be deemed sufficient
      if in writing and sent by registered or certified mail, return receipt
      requested, addressed to the Company, and to the Investor at his address
      indicated on the signature page of this Agreement. Notices shall be deemed
      to have been given on the date of mailing, except notices of change of
      address, which shall be deemed to have been given when
      received.




9.2
            This
      Agreement shall not be changed, modified or amended except by a writing
      signed by the parties to be charged, and this Agreement may not be
      discharged except by performance in accordance with its terms or by a
      writing signed by the party to be
charged.




9.3
            This
      Agreement shall be binding upon and inure to the benefit of the parties
      hereto and to their respective heirs, legal representatives, successors
      and assigns. This Agreement sets forth the entire agreement and
      understanding between the parties as to the subject matter thereof and
      merges and supersedes all prior discussions, agreements and understandings
      of any and every nature among them.




9.4
            Notwithstanding
      the place where this Agreement may be executed by any of
      the  parties hereto, the parties expressly agree that all the
      terms and provisions hereof shall be construed in accordance with and
      governed by the law of the State of Delaware. The parties hereby agree
      that any dispute which may arise between them arising out of or in
      connection with this Agreement shall be adjudicated before a court located
      in Delaware and they hereby submit to the exclusive jurisdiction of the
      courts of the State of Delaware with respect to any action or legal
      proceeding commenced by any party, and irrevocably waive any objection
      they now or hereafter may have respecting the venue of any such action or
      proceeding brought in such a court or respecting the fact that such court
      is an inconvenient forum, relating to or arising out of this Agreement or
      any acts or omissions relating to the sale of the securities hereunder,
      and consent to the service of process in any such action or legal
      proceeding by means of registered or certified mail, return receipt
      requested, in care of the address set forth below or such other address as
      the undersigned shall furnish in writing to the
  other.




9.5
            This
      Agreement may be executed in counterparts. Upon the execution and delivery
      of this Agreement by the Investor, this Agreement shall become a binding
      obligation of the Investor with respect to the purchase of the purchased
      Bridge Units as herein provided; subject, however, to the
      right hereby reserved to the Company to enter into the same agreements
      with other subscribers and to add and/or to delete other persons as
      subscribers.


26




9.6
            The
      holding of any provision of this Agreement to be invalid or unenforceable
      by a court of competent jurisdiction shall not affect any other provision
      of this Agreement, which shall remain in full force and
      effect.




9.7
            It
      is agreed that a waiver by either party of a breach of any provision of
      this Agreement shall not operate, or be construed, as a waiver of any
      subsequent breach by that same
party.




9.8
            The
      parties agree to execute and deliver all such further documents,
      agreements and instruments and take such other and further action as may
      be necessary or appropriate to carry out the purposes and intent of this
      Agreement.




9.9
            The
      Company agrees not to disclose the names, addresses or any other
      information about the Investors, except as required by law, provided, that
      the Company may use information relating to the Investor in any
      registration statement under the Act with respect to the Bridge
      Units.




9.10
            Any
      notice required or permitted by this Agreement shall be in writing and
      shall be deemed sufficient upon receipt, when delivered personally or by
      courier, overnight delivery service or confirmed facsimile, or 48 hours
      after being deposited in the U.S. mail as certified or registered mail
      with postage prepaid, if such notice is addressed to the party to be
      notified at such party’s address or facsimile numberas set forth below
      or as subsequently modified by written
notice.




9.11
            Each
      party represents that it neither is nor will be obligated for any finder’s
      fee or commission in connection with this transaction.  Each
      Investor agrees to indemnify and to hold harmless the Company from any
      liability for any commission or compensation in the nature of a finder’s
      fee (and the costs and expenses of defending against such liability
      or asserted liability) for which each Investor or any of its
      officers, employees, or representatives is responsible.  The
      Company agrees to indemnify and hold harmless each Investor from any
      liability for any commission or compensation in the nature of a
      finder’s fee (and the costs and expenses of defending against such
      liability or asserted liability) for which the Company or any of its
      officers, employees or representatives
  is responsible.




9.12
            This
      Agreement, and the documents referred to herein constitute the entire
      agreement between the parties hereto pertaining to the subject matter
      hereof, and any and all other written or oral agreements, including any
      term sheet or memorandum of understanding relating to the transaction
      contemplated by this Agreement, existing between the parties hereto are
      expressly canceled.




9.13
            Agreement
      does not create, and shall not be construed as creating, any rights
      enforceable by any person not a party to this Agreement (except as
      provided in Sections 9.3 and
9.13).


27




ARTICLE
X


DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS




Statements
in this Agreement are certain statements which are not historical or current
fact and constitute “forward-looking statements” within the meaning of such term
in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.  Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that could cause the actual
financial or operating results of the Company to be materially different from
the historical results or from any future results expressed or implied by such
forward-looking statement. Such forward-looking statements are based on our best
estimates of future results, performance or achievements, based on current
conditions and the most recent results of the Company.  In addition to
statements which explicitly describe such risks and uncertainties, readers are
urged to consider statements labeled with the terms “may,” “will,” “potential,”
“opportunity,” “believes,” “belief,” “expects,” “intends,” “estimates,” “
anticipates” or “plans” to be uncertain and forward-looking.  The
forward-looking statements contained herein are also subject generally to other
risks and uncertainties that are described from time to time in the Company’s
reports and registration statements filed with the Securities and Exchange
Commission.  Consequently, all of the forward-looking statements made
in this Agreement are qualified by these cautionary statements and there can be
no assurance that the actual results anticipated by the Company will be realized
or, even if substantially realized, that they will have the expected
consequences to or effects on the Company or its business or
operations.




ARTICLE
XI


BLUE
SKY LEGENDS




NASAA
UNIFORM LEGEND




IN MAKING AN INVESTMENT DECISION
INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE
BRIDGE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE
NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


28




IN
WITNESS WHEREOF, the parties have executed this Stock and Note Purchase
Agreement as of the day and year set forth below.





(a)Signature
      of Investor
                              
                              Signature
      of Co-InvestorPrinted
      Name of Investor
                              
                              Printed
      Name of Co-InvestorAddress
      of Investor
                              
                              Address
      of Co-InvestorSocial
      Security Number of Investor
                              
                              Social
      Security Number of Co-Investor(b)  If
      Entity Investor:By:Name:Title:Address
      of InvestorTaxpayer
      Identification Number of Investor





(c)
              Number
      of Bridge Units
            
            $
              Amount
      of Investment




29




*If
      Investor is a Registered Representative with a FINRA member firm, have the
      following acknowledgement signed by the appropriate party:
            
            Subscription
      Accepted:
              
              HemoBioTech,
      Inc.





The
      undersigned FINRA member firm acknowledges receipt of the notice required
      by Rule 3050 of the FINRA Conduct Rules.
              
              By:Arthur
      P. Bollon, Ph.D., President
                &
      Chief Executive Officer





Name
      of FINRA Member FirmBy:Authorized
      Officer


30