Document:

THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE  "ACT"),  OR ANY  STATE  SECURITIES  LAW AND MAY NOT BE SOLD,  TRANSFERRED,
ASSIGNED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT
UNDER THE ACT COVERING SUCH SECURITIES  UNLESS THE ISSUER RECEIVES AN OPINION OF
COUNSEL  FOR THE  HOLDER  OF THIS NOTE  REASONABLY  SATISFACTORY  TO THE  ISSUER
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION  AND PROSPECTUS  DELIVERY  REQUIREMENTS  OF SUCH ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT.

                                HEMOBIOTECH, INC.

                            UNSECURED PROMISSORY NOTE

$________                                                       October __, 2004
                                                                   Dallas, Texas

                  FOR VALUE RECEIVED,  Hemobiotech, Inc., a Delaware corporation
(the "Company" or "Hemobiotech") with its principal office at 2110 Research Row,
Dallas, Texas, promises to pay to the order of _________________ (the "Payee" or
the "Holder"),  or registered assigns, the principal amount of _________________
Dollars  ($______) and unpaid  interest on the unpaid  principal  balance hereof
accruing from the date of this Note at the rate of 10% per annum, on the earlier
of (i) one year from the date of the final  closing of the  Offering or (ii) the
date on which the Company consummates a financing ("Follow-On  Financing") after
the date hereof having gross proceeds of not less than $4,000,000 (the "Maturity
Date").  Payments  of  principal  and  interest  shall  be made in such  coin or
currency  of the United  States of  America  as at the time of payment  shall be
legal tender for the payment of public or private debts.

                  This  Note  is  being  issued  in  connection  with a  private
placement  offering  (the  "Private  Placement")  by the Company of a minimum of
$2,000,000 and a maximum of $3,500,000 (plus up to an additional  $1,000,000) of
Units,  being sold only to  accredited  investors,  as  described in the Private
Placement Offering  Memorandum,  dated as of August 20, 2004 (the "Memorandum").
This Note is  identical  to all other  Notes  issued  in the  Private  Placement
(together,  the  "Notes"),  except  for  the  number  of  Note  Shares  issuable
hereunder.  Capitalized  terms used but not  defined  herein  have the  meanings
ascribed thereto in the Subscription Agreement,  dated as of the date hereof, by
and  between  the  holder of this Note and the  Company,  pursuant  to which the
holder of this Note has purchased this Note (the "Subscription Agreement"). This
Note is being  issued PARI PASSU with the other Notes sold by the Company in the
Private Placement.

         1.       TERMS OF REPAYMENT

                  1.1 All  payments  received  on  account of this Note shall be
applied  first to the  payment of accrued  interest on this Note and then to the
reduction  of the  unpaid  principal  balance of this  Note.  Interest  shall be
computed  on the  basis of a year of 360  days,  for the  actual  number of days
elapsed. Unless previously converted in full in accordance with Section 2 hereof
and so long as the Note  Interest  Shares (as  defined  below) are covered by an
effective  registration  statement providing for the resale thereof, the accrued
but unpaid interest on this Note may be paid, at the sole option of the Company,
in cash or in shares (the "Note  Interest  Shares") of Common  Stock,  par value
$.001 per share,

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of the Company (the "Common Stock"),  upon at least ten (10) days' prior written
notice (the "Note Interest  Share  Notice").  In such event,  the holder of this
Note shall be entitled to receive that number of Note  Interest  Shares equal to
(i) the  then-accrued  but unpaid  interest of this Note  divided by the average
closing bid price for the five (5) consecutive trading days ending not more than
three  (3) days  prior to the date of such  notice  or (ii) if the  Company  has
completed a Follow-On  Financing,  the  then-accrued but unpaid interest of this
Note divided by the Conversion  Price then in effect as determined in accordance
with Section 2 hereof. Once the Company has sent the Note Interest Share Notice,
the holder of this Note shall no longer be  entitled  to convert the accrued but
unpaid interest on this Note covered by the Note interest Share Notice.

                  1.2 If payment  of the  outstanding  principal  amount of this
Note,  together with accrued unpaid  interest  thereon at the applicable rate of
interest (as set forth  herein),  is not made on the earlier to occur of (i) the
Maturity Date (as such date may be extended  pursuant to the  extension  options
set forth in  Section  3  hereof)  and (ii) the  Accelerated  Maturity  Date (as
defined below),  then interest shall accrue on the outstanding  principal amount
due under this Note and on any unpaid  accrued  interest due on this date of the
payment in full of such amounts  (including from and after the date of the entry
of  judgment  in favor of the  Holder in an action to  collect  this Note) at an
annual rate equal to the lesser of twelve  percent  (12%) or the maximum rate of
interest permitted by applicable law.

                  1.3 Notwithstanding anything to the contrary contained in this
Note,  the Company  shall not be  obligated  to pay, and the Holder shall not be
entitled to charge, collect, or receive,  interest in excess of the maximum rate
allowed by applicable  law. During any period of time in which the interest rate
specified herein exceeds such maximum rate, any amounts of interest collected by
the Holder in excess of such  maximum rate shall be deemed to apply to principal
and all payments of interest and principal  shall be  recalculated  to allow for
such characterization.

                  1.4 In the event  that the date for the  payment of any amount
payable under this Note falls due on a Saturday,  Sunday or public holiday under
the laws of the State of Delaware,  the time for payment of such amount shall be
extended to the next  succeeding  business  day and interest  shall  continue to
accrue on any  principal  amount so effected  until the payment  thereof on such
extended due date.

         2.       CONVERSION RIGHTS

                  2.1 Subject to Section 1.1 hereof,  the Holder  shall have the
right  prior to the date on which  this Note is paid in full,  to convert at any
time, or from time to time,  any part of the  outstanding  principal  amount and
accrued  but unpaid  interest  of this Note into  fully paid and  non-assessable
shares of the Common Stock or other securities as may be issued in the Follow-On
Financing (the  "Conversion  Shares" and together with the Note Interest Shares,
the "Note Shares"),  of Hemobiotech (the "Conversion  Rights") at the Conversion
Price (as defined  below)  determined as provided in this Section 2.3.  Promptly
after the  surrender  of this Note,  accompanied  by a Notice of  Conversion  of
Convertible  Note in the form attached  hereto as EXHIBIT A, properly  completed
and duly executed by the Holder (a "Conversion Notice"), Hemobiotech shall issue
and  deliver to or upon the order of the Holder  that number of shares of Common
Stock (or other  securities)  for the balance of this Note converted as shall be
determined in accordance herewith.

                  2.2 The  number of  Conversion  Shares to be issued  upon each
conversion  of this Note  shall be  determined  by  dividing  (i) the  amount of
principal  and accrued but unpaid  interest of this Note to be converted by (ii)
the Conversion Price in effect on the date the Conversion Notice is delivered to
Hemobiotech by the Holder.

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                  2.3 CONVERSION  PRICE.  The conversion price shall be equal to
the issue price of the Common Stock or other securities issued by the Company in
the  Follow-On  Financing,  subject  to  adjustment  from  time to time upon the
happening of certain events (as adjusted,  the "Conversion  Price") as set forth
below.

                  2.4 SUBDIVISION.  If Hemobiotech,  at any time while this Note
remains  outstanding,  shall (i) subdivide the Common Stock (or effect a similar
transaction),  the  Conversion  Price shall be  proportionately  reduced or (ii)
effect a reverse stock split or similar transaction,  the Conversion Price shall
be  proportionately  increased,  as the case may be, as of the effective date of
such subdivision, reverse stock split or similar transaction, or, if Hemobiotech
shall take a record of holders of its Common  Stock for the  purpose of any such
transaction,  as of such record  date,  whichever  is earlier  (provided if such
transaction does not actually occur, such adjustment shall not be made).

                  2.5 STOCK  DIVIDENDS.  If Hemobiotech,  at any time while this
Note  is  outstanding,  shall  pay a  dividend  in  shares  of,  or  make  other
distribution of shares of, the Common Stock,  then the Conversion Price shall be
adjusted,  as of the date Hemobiotech  shall take a record of the holders of its
Common Stock for the purpose of receiving  such  dividend or other  distribution
(or if no  such  record  is  taken,  as at the  date of such  payment  or  other
distribution),  to that price  determined by multiplying the Conversion Price in
effect immediately prior to such payment or other distribution by a fraction (a)
the  numerator  of which  shall be the total  number  of shares of Common  Stock
outstanding  immediately  prior to such  dividend or  distribution,  and (b) the
denominator  of which  shall be the total  number  of  shares  of  Common  Stock
outstanding immediately after such dividend or distribution.

                  2.6  RECLASSIFICATION,  CONSOLIDATION  OR MERGER.  At any time
while this Note remains  outstanding,  in case of any reclassification or change
of Common Stock  (other than a change in par value,  or from par value to no par
value per share, or from no par value per share to par value or as a result of a
subdivision or combination of Common Stock) or in case of any  consolidation  or
merger of Hemobiotech with or into another corporation (other than a merger with
another  corporation in which Hemobiotech is a continuing  corporation and which
does not result in any  reclassification  or change,  other than a change in par
value,  or from par value to no par value  per  share,  or from no par value per
share to par  value,  or as a result  of a  subdivision  or  combination  Common
Stock),  or in the case of any sale or  transfer to another  corporation  of the
property  of  Hemobiotech  as an  entirety  or  substantially  as  an  entirety,
Hemobiotech,  or such successor or purchasing  corporation,  as the case may be,
shall,  without payment of any additional  consideration  therefor,  execute new
notes  providing  that the holders of the Notes shall have the right to exercise
such new notes (upon  terms not less  favorable  to the holders  than those then
applicable  to the  Notes) and to receive  upon such  exercise,  in lieu of each
share of Common Stock theretofore  issuable upon exercise of the Notes, the kind
and amount of shares of stock,  other securities,  money or property  receivable
upon such reclassification,  change, consolidation,  merger, sale or transfer by
the Holder of one share of Common Stock  issuable upon exercise of the Notes had
the Notes been converted  immediately  prior to such  reclassification,  change,
consolidation,  merger,  sale or  transfer.  Such new Notes  shall  provide  for
adjustments  which shall be as nearly  equivalent as may be  practicable  to the
adjustments  provided for in this Section 2. The  provisions of this Section 2.6
shall similarly apply to successive reclassifications,  changes, consolidations,
mergers, sales and transfers.

                  2.7 METHOD OF CONVERSION. Except as otherwise provided in this
Note or agreed to by the  Holder,  this Note may be  converted  by the Holder in
whole at any  time or in part  (provided  such  partial  conversion  is at least
$25,000) from time to time by (i) submitting to Hemobiotech a Conversion  Notice
(by facsimile  dispatched on the  Conversion  Date and confirmed by U.S. mail or
overnight  mail  service  sent within two  business  days  thereafter)  and (ii)
surrendering this Note with the mailed  confirmation of the Conversion Notice at
the principal  office of  Hemobiotech.  Upon partial  exercise of

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the  Conversion  Rights,  a new note  containing the same date and provisions as
this Note  shall be issued by  Hemobiotech  to the Holder  for the  balance  due
hereunder which shall not have been converted.

                  2.8  RESTRICTIONS ON SHARES.  This Note has been issued by the
Company pursuant to the exemption from registration  under the Securities Act of
1933 (the "Act").  The shares of Common Stock  issuable upon  conversion of this
Note may not be offered,  sold or  otherwise  transferred  unless (i) they first
shall have been registered under the Act and applicable state securities laws or
(ii) Hemobiotech  shall have been furnished with an opinion of legal counsel (in
form,  substance and scope  reasonably  acceptable to Hemobiotech) to the effect
that such sale or transfer is exempt from the  registration  requirements of the
Act. Each  certificate  for shares of Common Stock  issuable upon  conversion of
this Note that have not been so registered  and that have not been sold pursuant
to an exemption  that permits  removal of the  applicable  legend,  shall bear a
legend substantially in the following form, as appropriate:

         THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED  UNDER THE
         SECURITIES ACT OF 1933 (THE "ACT").  THE SECURITIES  REPRESENTED HEREBY
         MAY NOT BE  OFFERED,  SOLD OR  OTHERWISE  TRANSFERRED  UNLESS  THEY ARE
         REGISTERED  UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR SUCH
         OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION
         FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

Upon the request of a holder of a certificate  representing any shares of Common
Stock  issuable  upon  conversion  of this Note,  Hemobiotech  shall  remove the
foregoing  legend from the certificate or issue to such Holder a new certificate
therefor free of any transfer legend, if (x) (i) with such request,  Hemobiotech
shall have received an opinion of counsel,  reasonably satisfactory to the Maker
in form,  substance and scope, to the effect that any such legend may be removed
from such  certificate or (ii) a registration  statement  under the Act covering
such  securities  is in effect and (y) removal of the legend is not otherwise in
contravention of any terms of the Subscription Agreement.

                  2.9 REGISTRATION  RIGHTS.  The Holder of this Note is entitled
to  registration  rights as provided for in the  Registration  Rights  Agreement
entered  into as of the date hereof  between the Company and Meyers  Associates,
L.P., as agent on behalf of the original Holder of this Note ("Meyers").

                  2.10  MARKET  STAND-OFF.   Notwithstanding   anything  to  the
contrary  contained  herein,  to the extent the Company  consummates  an initial
public offering prior to effective date of the registration  statement  required
to be filed under the  Registration  Rights  Agreement  described in Section 2.9
hereof,  the holder of this Note or any Note Shares issued upon partial  payment
and/or  conversion  of this Note shall not be  entitled to sell any part of this
Note or Note Shares within the nine (9)-month period  immediately  following the
consummation  of the Company's  initial public  offering (if so requested by the
underwriter  involved  in such  initial  public  offering),  provided  that  all
officers and directors of the Company and Meyers are similarly bound.

         3. COVENANTS.  The Company covenants and agrees that for so long as any
portion of the indebtedness  evidenced by this Note, whether principal,  accrued
and  unpaid  interest  or any other  amount at any time due  hereunder,  remains
unpaid:

                  3.1  NEGATIVE  COVENANTS.  The Company  will not,  without the
prior written  consent of Meyers,  as agent on behalf of the original  Holder of
this Note:

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                  (a) Make any loan or advance to any person who is or hereafter
becomes an officer,  director or  shareholder of the Company or any affiliate of
any such person,  other than for reasonable advances for expenses to be incurred
by officers, directors, employees and consultants of the Company in the ordinary
course of the business of the Company.

                  (b)  Purchase or  otherwise  redeem any Common  Stock or other
equity  securities  of the Company  (other than the  Warrants  contained  in the
Units) or declare  or pay any  dividends  in cash or other  assets on any of its
Common Stock or other equity securities.

                  (c) Issue, create, incur, assume, permit,  guarantee or suffer
to exist any  indebtedness or other  obligations for money borrowed,  except for
(i)  indebtedness  under the Notes and any  extension,  renewal  or  refinancing
thereof, (ii) indebtedness under any notes that may be issued in connection with
the Follow-On Offering; (iii) trade indebtedness incurred in the ordinary course
of business;  (iv)  indebtedness  incurred  with any banking or other  financial
institution;  and (v) indebtedness or other obligations for money borrowed which
are  subordinate  in all  respects  to the Notes;  PROVIDED,  HOWEVER,  that the
restrictions  contained in (v) above shall not be  applicable  if the  aggregate
outstanding principal amount of such other indebtedness or other obligations for
money borrowed is less than Four Million  Dollars  ($4,000,000)  (together,  the
"Permitted Indebtedness").

                  (d) (i) Amend the certificate or articles of  incorporation or
by-laws of  Hemobiotech in any manner which would impair or reduce the rights of
the  holders of the Notes,  (ii) effect a merger or  consolidation  in which the
Company is not the surviving  entity  unless the Notes are expressly  assumed by
the surviving entity, or (iii) liquidate, wind up its affairs or dissolve.

                  (d) Directly or indirectly, enter into any transaction with or
for the benefit of an affiliate  (other than the reasonable  compensation  of an
affiliate for services as an officer, director, employee or consultant).

                  3.2      AFFIRMATIVE COVENANTS.  The Company will:

                  (a)  Pay and  discharge  all  lawful  taxes,  assessments  and
governmental  charges or levies  imposed upon it, upon its income and profits or
upon any of its assets,  before the same shall become in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such properties or any part thereof, provided, however, that
the Company will not be required to pay and discharge any such tax,  assessment,
charge,  levy or claim so long as (i) the  validity,  applicability  and/or  the
amount thereof shall be contested in good faith by appropriate proceedings, (ii)
at all times after the completion of the Maximum  Offering,  the Company,  shall
have set aside on its  books  adequate  reserves  in  accordance  with GAAP with
respect to any such tax,  assessment,  charge,  levy or claim so contested,  and
(iii)  enforcement of any lien on any assets of the Company  associated with any
such taxes,  assessments,  charges, levies or claims shall have been effectively
stayed or fully bonded pending the final determination of any such proceedings.

                  (b) Do or cause to be done all things reasonably  necessary to
preserve and keep in full force and effect its corporate  existence,  rights and
franchises and to comply in all material respects with all laws, regulations and
orders of each governmental authority having jurisdiction over the Company.

                  (c) After such time as the Company has  completed  the Maximum
Offering and at all times  thereafter,  maintain  true and complete  records and
books of account in which all of the financial  transactions  of the Company are
duly recorded in conformance with GAAP.

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                  (d)  At  all  times  reserve  and  keep  available  out of its
authorized  shares of Common  Stock,  solely for the  purpose of  issuance  upon
conversion  of this Note or payment of accrued but unpaid  interest on this Note
in Note  Interest  Shares,  such  number of  shares of Common  Stock as shall be
issuable upon such event.

                  (e) Take all action  which may be  necessary  or  expedient to
assure that,  upon  conversion of this Note or payment of the accrued but unpaid
interest on this Note in Note Interest Shares, all Conversion Shares and/or Note
Interest Shares issuable upon such event will be duly and validly issued,  fully
paid,   non-assessable   and  not  subject  to  the  preemptive  rights  of  any
stockholder.

                  (f) Use the proceeds  from the sale of the Notes  primarily as
disclosed in the Memorandum.

                  (g)  Permit  Meyers,  as agent  for the  Holder,  to visit and
inspect any of the  properties of the Company to examine the books of account of
the Company (and to make copies thereof and extracts therefrom),  and to discuss
the affairs,  finances and accounts of the Company with, and to be advised as to
the same by, its and their officers,  upon at least two (2) business days' prior
written notice; provided, however, that Meyers shall not be entitled to make any
such  inspection  or  examination  more  than  twice in any  fiscal  year of the
Company;  provided,  further,  however,  that the costs associates with any such
inspection or examination in excess of $1,000 shall be borne by Meyers.

                  (h) Comply in all material  respects  with (i) the  applicable
laws and regulations wherever its business is conducted,  (ii) the provisions of
its charter documents and by-laws, (iii) all agreements and instruments by which
it or any of its properties may be bound and (iv) all applicable decrees, orders
and judgments.

         4. EVENTS OF DEFAULT. If any of the following events (each an "Event of
Default") shall occur:

                  4.1 The Company fails to pay the principal of, any installment
of interest  accrued on, or any other amount at anytime owing under,  this Note,
as and when the same becomes due and payable hereunder, and such default has not
been cured within ten (10) business  days after the  occurrence of such default;
or

                  4.2 Hemobiotech  defaults in the due observance or performance
of or breach any of its  covenants  contained in this Note (other than a default
involving  the  payment of money due under this Note) and such  default  has not
been cured within ten (10) business  days after the  occurrence of such default;
or

                  4.3 The Company or any  Subsidiary  thereof  shall (i) becomes
insolvent,  (ii) apply for or consent  to the  appointment  of, or the taking of
possession by, a receiver, trustee or similar official of or for itself or of or
for all or a substantial part of its property,  (iii) make an assignment for the
benefit of its  creditors,  (iv)  commence a  voluntary  case under the  Federal
Bankruptcy Code, as now or hereafter in effect (the "Code"), (v) file a petition
seeking  to take  advantage  of any other  bankruptcy,  insolvency,  moratorium,
reorganization  or other similar law of any  jurisdiction  ("Other Laws"),  (vi)
acquiesce as to, or fail to controvert  in a timely or  appropriate  manner,  an
involuntary case filed against the Company or such Subsidiary under the Code, or
(vii) take any corporate  action in  furtherance of any of the foregoing and any
such  action  has  not  been  withdrawn   within  ninety  (90)  days  after  the
commencement thereof; or

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                  4.4 A  proceeding  or  involuntary  case  shall be  commenced,
without the application or consent of the Company or any Subsidiary  thereof, in
any  court  of  competent   jurisdiction   (i)  under  the  Code,  (ii)  seeking
liquidation,   reorganization,   dissolution,   winding  up  or  composition  or
readjustment of its debts under any Other Laws, or (iii) seeking the appointment
of a trustee,  receiver or similar official for it or for all or any substantial
part of its assets, and any such proceeding or case shall continue  undismissed,
or unstayed and in effect, for a period of ninety (90) days; or

                  4.5 A final  judgment  for  the  payment  of  money  shall  be
rendered  by a court  of  competent  jurisdiction  against  the  Company  or any
Subsidiary  thereof,  and the Company or such Subsidiary shall not discharge the
same,  or procure a stay of execution  thereof  within thirty (30) days from the
date of entry  thereof  and within  such  thirty  (30) day period or such longer
period during which  execution of such judgment  shall have been stayed,  appeal
therefrom and cause the execution  thereof to be stayed during such appeal,  and
such judgment,  together with all other judgments against the Company (including
all  subsidiaries),  shall  exceed in the  aggregate  $300,000  in excess of any
insurance as to the subject matter of such  judgments,  as to which coverage has
not been declined or the underlying claim rejected by the applicable insurer; or

                  4.6 The  liquidation  or  dissolution  of the  Company  or any
Subsidiary  thereof or any vote in favor  thereof by the board of directors  and
shareholders of the Company that has not been withdrawn or revoked within thirty
(30) days after such vote; or

                  4.7 The  Company or any  Subsidiary  thereof  defaults  in the
payment when due of the  principal  of,  interest on, or any other  liability on
account of, any indebtedness of the Company or such Subsidiary  (other than with
respect to any  Permitted  Indebtedness)  having an unpaid  principal  amount in
excess of  $1,000,000,  which  causes the  maturity of such  indebtedness  to be
accelerated or permits the holder or holders of such indebtedness to declare the
same to be due prior to the stated  maturity  thereof,  and such default has not
been cured  within  fifteen  (15)  business  days after the  occurrence  of such
default;  provided,  however,  that it shall not be  deemed an Event of  Default
under this Section 4.7 if the reason for the Company or any  Subsidiary  to make
such payment when due is due to the fact that such  payment or  indebtedness  is
being disputed in good faith by the Company or such Subsidiary; or

                  4.8 Any representation,  warranty or statement of fact made by
the Company in the Notes, or in any certificate or audited  financial  statement
delivered  by the Company to the Holder or Meyers at any time proves to be false
or misleading  in any material  respect when made or deemed made by the Company;
or

                  4.9  The  Company  or  any of its  Subsidiaries  sells  all or
substantially  all of its  assets  or  merges or is  consolidated  with  another
corporation in which the Company or such Subsidiary,  as the case may be, is not
the surviving corporation,  and the Notes have not been expressly assumed by the
surviving entity;

then, and in any such event the Holder of this Note may by written notice to the
Company  declare the entire  unpaid  principal  amount of this Note  outstanding
together  with accrued  interest  thereon due and  payable,  and the same shall,
unless such default be cured within the applicable cure period, forthwith become
due and payable upon the  expiration  of such  applicable  cure period,  without
presentment,  demand,  protest,  or other  notice of any kind,  all of which are
expressly waived.

                  As used in this Note,  "Accelerated  Maturity  Date" means any
date prior to the  Maturity  Date on which the  principal of and any accrued and
unpaid interest on this Note is declared to be, or becomes, due pursuant to this
Section 4.

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         5. SUITS FOR  ENFORCEMENT  AND  REMEDIES.  If any one or more Events of
Default shall occur,  the Holder may proceed to (i) protect and enforce Holder's
rights  either by suit in equity or by action at law,  or both,  whether for the
specific  performance of any covenant,  condition or agreement contained in this
Note  or in any  agreement  or  document  referred  to  herein  or in aid of the
exercise  of any power  granted  in this Note or in any  agreement  or  document
referred to herein,  (ii) enforce the payment of this Note, or (iii) enforce any
other legal or equitable  right of the Holder.  No right or remedy  herein or in
any other  agreement  or  instrument  conferred  upon the Holder of this Note is
intended to be exclusive  of any other right or remedy,  and each and every such
right or remedy  shall be  cumulative  and shall be in  addition  to every other
right and remedy  given  hereunder  or now or  hereafter  existing  at law or in
equity or by statute or otherwise.

         6. RESTRICTION ON TRANSFER.  This Note has been acquired for investment
and has not been  registered  under the securities  laws of the United States of
America or any state  thereof.  Accordingly,  neither this Note nor any interest
therein  may be  offered  for  sale,  sold  or  transferred  in the  absence  of
registration and  qualification of this Note under applicable  federal and state
securities laws or an opinion of counsel of the Holder  reasonably  satisfactory
to the Company that such registration and qualification are not required.

         7.  PREPAYMENT.  The principal of and accrued interest on this Note may
be prepaid in full at any time without premium or penalty.

         8. HOLDER DEEMED OWNER.  The Company may deem and treat the  registered
Holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Company,  for the purpose of receiving  payment  hereof or
thereof or on account  hereof and for all other  purposes) and the Company shall
not be affected by notice to the contrary.

         9. CORPORATE  OBLIGATION.  It is expressly understood that this Note is
solely a corporate  obligation  of the  Company,  and that any and all  personal
liability,  either at common law or in equity or by constitution or statute, of,
and any and all such  rights and claims  against,  every  promoter,  subscriber,
incorporator,  shareholder,  officer, or director, as such, are hereby expressly
waived and released by the Holder hereof by the acceptance of this Note and as a
part of the consideration for the issue hereof.

         10. MISCELLANEOUS

                  10.1 The obligations to make the payments provided for in this
Note are absolute  and  unconditional  and not subject to any defense,  set-off,
counterclaim,  rescission,  recoupment or adjustment whatsoever. No provision of
this Note shall alter or impair the obligations of the Company hereby.

                  10.2 If, following the occurrence of an Event of Default,  the
Holder of this Note  shall  seek to  enforce  the  collection  of any  amount of
principal  and/or accrued  interest on this Note, there shall be immediately due
and payable by the  Company,  in addition to the then unpaid  principal  of, and
accrued unpaid  interest on, this Note,  all costs and expenses  incurred by the
Holder of this Note in  connection  therewith,  not to  exceed an  aggregate  of
$10,000  per  instance  and which  costs and  expenses  shall  include,  without
limitation, reasonable attorneys' fees and disbursements.

                  10.3 No forbearance,  indulgence, delay or failure to exercise
any right or remedy with respect to this Note shall operate as a waiver or as an
acquiescence  in any  Default,  nor shall any single or

                                       8
<PAGE>

partial  exercise of any right or remedy preclude any other or further  exercise
thereof or the exercise of any other right or remedy.

                  10.4 This Note may not be modified or  discharged  (other than
by payment), except by a writing duly executed by the Company and Holder.

                  10.5 The headings of various  sections and subsections of this
Note are for convenience of reference only and shall in no way modify any of the
terms or provisions of this Note.

                  10.6 All  notices  required  to be given to any of the parties
hereunder  shall be in  writing  and shall be  deemed to have been  sufficiently
given  for  all  purposes  when  presented  personally  to such  party,  sent by
telecopier (with the original timely mailed),  or sent by registered,  certified
or express  mail,  return  receipt  requested,  to such party at its address set
forth below:

                  If to the Company, to:

                  Hemobiotech, Inc.
                  2110 Research Row
                  Dallas, TX 75235
                  Telecopier No.: (469) 585-7613
                  Attention:  Mr. Arthur Bollon

                  with a copy to:

                  Robert Cohen, Esq.
                  Greenberg Traurig, LLP
                  200 Park Avenue
                  New York, New York 10166
                  Telecopier No.:    (212) 801-6400

                  If to the Payee, to:

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

                  with a copy to:

                  Meyers Associates, L.P.
                  45 Broadway, 2nd Floor
                  New York, New York 10006
                  Telecopier:  (212)
                  Attention: President

or hereafter  given to the other party hereto pursuant to the provisions of this
Note.

                  10.7 The Company may not delegate its  obligations  under this
Note and such attempted  delegations  shall be null and void. The Holder may not
assign, pledge or otherwise transfer this Note without the prior written consent
of the Company (which consent shall not be unreasonably  withheld except in such
instance  where the  proposed  assignee  or  transferee  is a direct or indirect

                                       9
<PAGE>

competitor  or owns any  interest in any  business  that  competes,  directly or
indirectly,  with the  Company).  This Note inures to the benefit of Payee,  its
successors  and its  assignee  of this  Note  and  binds  the  Company,  and its
successors  and  assigns,  and the  terms  "Payee"  and "the  Company"  whenever
occurring  herein  shall be deemed  and  construed  to include  such  respective
successors  and assigns.  Any  assignment  or transfer made in violation of this
Section 10.7 shall be void AB INITIO.

                  10.8  This  Note  shall   continue  to  be   effective  or  be
reinstated,  as the case may be, if at any time any payment made  pursuant to it
is rescinded  or must  otherwise  be returned by the Holder upon  bankruptcy  or
reorganization  or otherwise of the Company,  all as though such payment had not
been made.

                  10.9 THE COMPANY AND THE HOLDER EACH (I) AGREES THAT ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE SHALL BE INSTITUTED
EXCLUSIVELY  IN THE  APPROPRIATE  STATE COURT COUNTY OF NEW YORK, NEW YORK OR IN
THE UNITED STATES  DISTRICT  COURT FOR THE SOUTHERN  DISTRICT OF NEW YORK,  (II)
WAIVES ANY  OBJECTION  WHICH THE  COMPANY MAY HAVE NOW OR  HEREAFTER  BASED UPON
FORUM NON CONVENIENS OR TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
(III) IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE COURT, COUNTY OF NEW
YORK, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE COMPANY AND THE HOLDER EACH
FURTHER  AGREES TO ACCEPT AND  ACKNOWLEDGE  SERVICE OF ANY AND ALL PROCESS WHICH
MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE COURT,  COUNTY
OF NEW YORK,  NEW YORK OR IN THE UNITED STATES  DISTRICT  COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND AGREES THAT  SERVICE OF PROCESS UPON THE COMPANY OR THE
HOLDER, MAILED BY CERTIFIED MAIL TO THEIR RESPECTIVE ADDRESSES,  SUCH SERVICE TO
BECOME EFFECTIVE THREE BUSINESS DAYS AFTER SUCH MAILING, WILL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE COMPANY OR THE HOLDER, AS THE CASE
MAY BE, IN ANY SUIT,  ACTION OR  PROCEEDING.  FURTHER,  BOTH THE COMPANY AND THE
HOLDER  HEREBY  WAIVE  TRIAL BY JURY IN ANY ACTION TO  ENFORCE  THIS NOTE AND IN
CONNECTION  WITH ANY DEFENSE,  COUNTERCLAIM  OR CROSSCLAIM  ASSERTED IN ANY SUCH
ACTION.

                  10.10  This Note shall be  construed  in  accordance  with and
governed by the laws of the State of Delaware  without  regard to  principles of
conflicts of law, and cannot be changed,  discharged  or  terminated  orally but
only by an instrument in writing signed by the party against whom enforcement of
any change, discharge or termination is sought.

                  10.11 Upon  receipt  by the  Company  of  evidence  reasonably
satisfactory to it of the loss,  theft,  destruction or mutilation of this Note,
and, in case of loss, theft or destruction,  of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable  expenses
incidental  thereto,  and upon  surrender  and  cancellation  of this  Note,  if
mutilated,  the Company will make and deliver a new Note of like date and tenor,
in lieu hereof.

                  10.12 The  obligations  to make the  payments  provided for in
this  Note are  absolute  and  unconditional  and not  subject  to any  defense,
set-off,  counterclaim,  rescission,  recoupment  or adjustment  whatsoever.  No
provision  of this Note shall  alter or impair the  obligations  of the  Company
hereby.

                                       10
<PAGE>

                  10.13 No forbearance, indulgence, delay or failure to exercise
any right or remedy with respect to this Note shall operate as a waiver or as an
acquiescence in any Event of Default,  nor shall any single or partial  exercise
of any right or remedy  preclude  any other or further  exercise  thereof or the
exercise of any other right or remedy.

PAYOR:

HEMOBIOTECH, INC.

By:      __________________________________________________
         Arthur Bollon, President & Chief Executive Officer

                                       11
<PAGE>

                                    EXHIBIT A

                            FORM OF CONVERSION NOTICE

TO:  HEMOBIOTECH, INC.

       The undersigned owner of the Unsecured Promissory Note, dated ___________
(the "Note"),  issued by  Hemobiotech,  Inc. (the  "Maker")  hereby  irrevocably
exercises the option to exchange  $_______________ of the outstanding  principal
amount and  accrued but unpaid  interest  of the Note into Common  Stock or such
other securities as may be issued in the Follow-On  Financing (as defined in the
Note) (in either case, the "Shares").  The  undersigned  directs that the Shares
and certificates therefor (to the extent that certificates evidencing the Shares
are then being issued by the Maker) deliverable upon the exchange,  be issued in
the name of and delivered, if appropriate, to the undersigned unless a different
name has been indicated below.

Dated:   _____________________

                         Signature: _______________________

Please issue the Shares
to the following individual or entity, if different from above:

Name:    ___________________________
Address:      ___________________________
              ___________________________
              ___________________________
              ___________________________
              (including zip code)

Social Security Number
or PIN Number:    ___________________________

                                       12EXHIBIT 10.1

                               HEMOBIOTECH, INC.
                     _____________________________________

                     2003 STOCK OPTION/STOCK ISSUANCE PLAN

                     _____________________________________

<PAGE>

                               TABLE OF CONTENTS
                               _________________

1.       Purpose .............................................................1
2.       Definitions .........................................................1
3.       Structure of the Plan ...............................................6
4.       Eligibility .........................................................6
5.       Shares Available Under the Plan .....................................6
6.       Option Grant Program ................................................7
7.       Exercisability of Option rights .....................................8
8.       Stock Issuance Program ..............................................8
9.       First Refusal Rights ................................................9
10.      Transfer Restrictions on Option Shares and Common Shares ............9
11.      Market Stand-Off Agreement .........................................10
12.      Transferability of Options and Unvested Common Shares ..............11
13.      Adjustments ........................................................11
14.      Fractional Shares ..................................................11
15.      Withholding Taxes ..................................................11
16.      Foreign Employees ..................................................11
17.      Incentive Stock Option Agreement ...................................12
18.      Nonqualified Stock Option Agreement ................................12
19.      Stock Issuance Agreement ...........................................12
20.      Administration of the Plan .........................................12
21.      Amendment, Etc. ....................................................13
22.      Effective Date .....................................................13
23.      Governing Law ......................................................14
24.      Term of Plan .......................................................14
25.      Regulatory Approvals ...............................................14
26.      California Provisions ..............................................14

<PAGE>

                               HEMOBIOTECH, INC.

                     2003 STOCK OPTION/STOCK ISSUANCE PLAN

     1. PURPOSE. This 2003 Stock Option/Stock Issuance Plan (the "PLAN") is
intended to promote share ownership by eligible Employees of Hemobiotech, Inc.,
a Delaware corporation (the "COMPANY") and other Participants, by providing
eligible Employees and other Participants with the opportunity to acquire a
proprietary interest, or otherwise increase their proprietary interest, in the
Company, thereby reinforcing a mutuality of interests with other stockholders,
and as an incentive for attracting, retaining and motivating eligible Employees
and other Participants to achieve superior performance by permitting them to
share in the Company's growth.

     2. DEFINITIONS. Where the following words appear in the Plan, they shall
have the respective meanings set forth below, unless their context clearly
indicates otherwise:

        (a) "AFFILIATE" means with respect to any Person, any other Person
(other than the Company or any Subsidiary of the Company) that directly or
indirectly controls, or is controlled by or is under common control with such
Person.

        (b) "BOARD" means the Board of Directors of the Company and, to the
extent of any delegation by the Board to a Committee pursuant to Section 20,
such Committee.

        (c) "CLAUSE" means (i) any material breach of the provisions of the
Participant's Confidentiality, Proprietary Information and Inventions Agreement,
after a demand for substantial performance is delivered to the Participant by
the Board or the Chief Executive Officer (where such demand specifically
identifies the manner in which the Board or the Chief Executive Officer of the
Company, as the case may be, believes that the Participant has not substantially
performed his duties), and such breach is not cured after a period of 30 days
(or such other longer period as is acceptable to the Board) after such demand,
(ii) the Participant's continued failure to perform reasonably assigned duties
after a demand for substantial performance is delivered to the Participant by
the Board and the Chief Executive Officer (or only the Board if the Participant
being terminated is the Chief Executive Officer) where such demand specifically
identifies the manner in which the Board and the Chief Executive Officer of the
Company believes that the Participant has not substantially performed his duties
and, in the opinion of the Chief Executive Officer (or in the opinion of the
Board if the Participant being terminated is the Chief Executive Officer), such
failure to perform is not cured after a period of 30 days (or such other longer
period as is acceptable to the Chief Executive Officer or the Board, as the case
may be) after such demand, (iii) the Participant's willful misconduct or gross
negligence, (iv) conduct by the Participant involving dishonesty for personal
gain, fraud or unlawful activity which is injurious to the Company, or (v) a
conviction of a plea of NOLO CONTENDERE to a felony or any crime involving moral
turpitude; PROVIDED, HOWEVER, that if the term or concept has been defined in an
employment agreement between the Company and the Participant, then Cause shall
have the definition set forth in the employment agreement.

        (d) "CHANGE IN CONTROL" shall mean a change in ownership or control of
the Company effected through any of the following transactions:

<PAGE>

            (i) a stockholder-approved mreger, consolidation or other
reorganization in which securities representing more than 50% of the total
combined voting power of the Company's outstanding securities are beneficially
owned, directly or indirectly, by a person or persons different from the person
or persons who beneficially owned those securities immediately prior to such
transaction;

            (ii) a stockholder-approved sale, transfer or other disposition of
all or substantially all of the Company's assets; or

            (iii) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company), of beneficial ownership (within the meaning of Rule 13-d3 of the
Exchange Act) of securities possessing more than 50% of the total combined
voting power of the Company's outstanding securities from a person or persons
other than the Company.

     In no event shall any public offering of the Company's securities be deemed
to constitute a Change in Control.

        (e) "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto.

        (f) "COMMITTEE" means a committee of two or more Nonemployee Directors
appointed by the Board pursuant to Section 20 to exercise one or more
administrative functions under the Plan.

        (g) "COMMON SHARES" means the Common Stock, par value $0.001 per share,
of the Company or any security into which such Common Shares may be changed by
reason of any transaction or event of the type referred to in Section 13 of this
Plan.

        (h) "DATE OF GRANT" means the date specified by the Board on which a
grant of Option Rights under the Option Grant Program shall become effective,
which date shall not be earlier than the date on which the Board takes action
with respect thereto.

        (i) "DATE OF ISSUANCE" means the date specified by the Board on which a
grant of Common Shares under the Stock Issuance Program shall become effective,
which date shall not be earlier than the date on which the Board takes action
with respect thereto.

        (j) "DIRECTOR" means a member of the Board of Directors of the Company.

        (k) "DISABILITY" means the inability of the Optionee or the Participant
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment and shall be determined by the Plan
Administrator on the basis of such medical evidence as the Plan Administrator
deems warranted under the circumstances.

        (l) "EMPLOYEE" means an individual who is in the employ of the Company
(or any Parent or Subsidiary), subject to the control and direction of the
employer entity as to both the work to be performed and the manner and method of
performance.

                                       2
<PAGE>

        (m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.

        (n) "EXERCISE DATE" means the date on which the Company shall have
received written notice of the option exercise.

        (o) "FAIR MARKET VALUE" means the value per share of Common Shares on
any relevant date which shall be determined in accordance with the following
provisions:

            (i) If the Common Shares are at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the volume-weighted average
sales price on that date as reported by Nasdaq.

            (ii) If the Common Shares are at the time listed on The New York
Stock Exchange or any other stock exchange, then the Fair Market Value shall be
the volume-weighted average price of the Common Shares on the principal exchange
on which Common Shares are then trading, if any, on that date or, if shares were
not traded on that date, then on the next preceding trading day during which a
sale occurred.

            (iii) If the Common Shares are at the time neither listed on any
stock exchange nor traded on the Nasdaq National Market, then the Fair Market
Value shall be determined by the Board in good faith after taking into account
such factors as the Board shall deem appropriate.

        (p) "INCENTIVE STOCK OPTIONS" mean Option Rights that are intended to
qualify as "incentive stock options" under Section 422 of the Code or any
successor provision. (q) "INCENTIVE STOCK OPTION AGREEMENT" means the agreement
entered into by the Company and Optionee pursuant to Section 17 of this Plan.

        (r) "INITIAL PUBLIC OFFERING" shall mean the closing of the initial sale
of Common Shares or other capital stock of the Company in a BONA FIDE
underwritten public offering, pursuant to an effective registration statement
under the Securities Act.

        (s) "LIQUIDITY EVENT" means (a) the Initial Public Offering, (b) any
voluntary or involuntary liquidation of the Company or (c) any Change in
Control.

        (t) "NONEMPLOYEE DIRECTOR" means a Director who is not an employee of
the Company or any Parent or Subsidiary.

        (u) "NONQUALIFIED OPTIONS" shall mean Option Rights not intended to
satisfy the requirements of Section 422 of the Code.

        (v) "NONQUALIFIED STOCK OPTION AGREEMENT" means the agreement entered
into by the Company and Optionee pursuant to Section 18 of this Plan.

        (w) "OPTION GRANT PROGRAM" shall mean the option grant program in effect
under this Plan.

                                       3
<PAGE>

        (x) "OPTIONEE" means the optionee to whom an Option is granted under
this Plan and named in an agreement evidencing an outstanding Option Right.

        (y) "OPTION PRICE" means the purchase price payable on exercise of an
Option Right, provided that, in the case of an Incentive Stock Option, the
Option Price shall be equal to at least 100% of the Fair Market Value (or 110%
of the fair market value in the case of a Ten-Percent Holder) of the Common
Shares on the Date of Grant.

        (z) "OPTION RIGHT" means the right to purchase Common Shares upon
exercise of an option granted pursuant to Section 6 of this Plan.

        (aa) "OPTION SHARES" means Common Shares acquired upon the exercise of
an Option Right.

        (bb) "OWNER" means a Participant who holds Option Shares acquired
through the Stock Option Program or Common Shares acquired through the Stock
Issuance Program and all subsequent holders of the Option Shares or Common
Shares, as the case may be, who derive their claim of ownership through a
Permitted Transfer from such Participant.

        (cc) "PARENT" shall mean any company (other than the Company) in an
unbroken chain of companies ending with the Company, provided each company in
the unbroken chain (other than the Company) owns, at the time of the
determination, stock possessing 50% or more of the total combined voting power
of all classes of stock in one of the other companies in such chain.

        (dd) "PARTICIPANT" means an individual who is selected by the Board to
receive benefits under this Plan and who is at the time (i) an Employee, (ii) a
member of the Board or the member of the board of directors of any Parent or
Subsidiary, (iii) an independent contractor who provides services to the Company
(or any Parent or Subsidiary), or (iv) an employee of an independent contractor
who provides services to the Company (or any Parent or Subsidiary).

        (ee) "PERMITTED TRANSFER" means a transfer of Option Shares or Common
Shares, as the case may be, (i) by a Participant who is a natural person
pursuant to applicable laws of descent and distribution or to such Participant's
spouse or children or trusts or other entities for the benefit of such spouse or
children, (ii) by a Participant which is a corporation to a Person controlling,
controlled by or under common control with the corporate Participant ("CONTROL"
shall mean the power to vote at least 51% or more of the securities or other
equity interests of a Person having voting power pursuant to the statutes or
organizational documents to which such Person is subject); (iii) by a
Participant which is a partnership or limited liability company to its general
partners or its limited partners or members, (iv) by a Participant who is a
natural person to an individual retirement account or other tax deferred
retirement plan (an "IRA") in his or her name, (v) by a Participant to the
Company, or (vii) by a Participant to a lender as a bona fide pledge of the
Option Shares or Common Shares held by such Participant as security for a loan
by such lender; PROVIDED, HOWEVER, that (x) the restrictions contained in this
Plan will continue to be applicable to the Option Shares and Common Shares after
any such transfer, and (y) no transfer of any Option Shares or Common Shares
shall be made to any transferee unless such transferee shall first have agreed,
by executing and delivering a counterpart to the Incentive Stock Option
Agreement, Nonqualified Stock Option Agreement or

                                       4
<PAGE>

Stock  Issuance  Agreement,  as the case may be, to hold such  Option  Shares or
Common  Shares  subject to such  agreement  and to be bound by all terms of this
Plan.

        (ff) "PERSON" means any individual, company, partnership, limited
liability company, limited liability partnership, trust, unincorporated
association or other entity.

        (gg) "PLAN" means this Hemobiotech, Inc. 2003 Stock Option/Stock
Issuance Plan.

        (hh) "PLAN ADMINISTRATOR" means either the Board or the Committee acting
in its capacity as administrator of the Plan.

        (ii) "RECAPITALIZATION" means any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, exchange of shares or
other change affecting the Company's outstanding Common Shares as a class
without the Company's receipt of consideration.

        (jj) "SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations thereunder.

        (kk) "SERVICE" means the provision of services to the Company (or any
Parent or Subsidiary) by a Person in the capacity of an Employee, a member of
the Board or the board of directors of any Parent or Subsidiary, an independent
contractor or an employee of an independent contractor, except to the extent
otherwise specifically provided in the documents evidencing the Option grant.

        (11) "STOCK ISSUANCE AGREEMENT" means the agreement entered into by the
Company and the Participant pursuant to Section 19 of this Plan at the time of
issuance of Common Shares under the Stock Issuance Program.

        (mm) "STOCK ISSUANCE PROGRAM" means the stock issuance program in effect
under this Plan.

        (nn) "SUBSIDIARY" means a company or other entity (i) more than 50% of
whose outstanding shares or securities (representing the right to vote for the
election of directors or other managing authority) are, or (ii) which does not
have outstanding shares or securities (as may be the case in a partnership,
joint venture or unincorporated association), but more than 50% of whose
ownership interest representing the right generally to make decisions for such
other entity is, now or hereafter, owned or controlled, directly or indirectly,
by the Company except that for purposes of determining whether any Employee may
be a Participant for purposes of any grant of Incentive Stock Options,
"Subsidiary" means any company in which, at the time, the Company owns or
controls, directly or indirectly, more than 50% of the total combined voting
power represented by all classes of stock issued by such Company.

        (oo) "TEN-PERCENT HOLDER" means a Participant, who, at the time an
Option Right is to be granted or Common Shares issued to him or her, owns
(within the meaning of Section 422(b)(6) of the Code) stock possessing more than
10% of the total combined voting power of all classes of stock of the Company,
or of a Parent or a Subsidiary.

                                       5
<PAGE>

     3. STRUCTURE OF THE PLAN. The Plan shall be divided into two separate
equity programs:

        (a) the Option Grant Program under which eligible Employees and other
Participants may, at the discretion of the Board, be granted options to purchase
Common Shares, and

        (b) the Stock Issuance Program under which eligible Employees may, at
the discretion of the Board, be issued Common Shares directly, either through
the immediate purchase of the Common Shares or as a bonus for services rendered
to the Company (or any Parent or Subsidiary).

     4. ELIGIBILITY. Only Employees and other Participants shall be eligible to
participate in the Plan. The Board shall have the absolute discretion to grant
options in accordance with the Option Grant Program and to effect issuances of
Common Shares in accordance with the Stock Issuance Program. With respect to
awards granted under this Plan, the Board shall have full authority to
determine:

        (a) with respect to the grants under the Option Grant Program, which
eligible Employees and other Participants are to receive the option grants, the
time or times when those grants are to be made, the number of shares to be
covered by each such grant, the status of the granted option as either an
Incentive Stock Option or a Nonqualified Option, the time or times when each
option is to become exercisable, the vesting schedule (if any) applicable to the
option and/or the Option Shares and the maximum term for which the option is to
remain outstanding; provided, however, that only Employees may be granted
Incentive Stock Options; and

        (b) with respect to issuances of Common Shares under the Stock Issuance
Program, which eligible Employees are to receive such issuances, the time or
times when such issuances are to be made, the number of Common Shares to be
issued to each Participant, the vesting schedule (if any) applicable to the
issued Common Shares and the consideration (if any) to be paid by the
Participant for the Common Shares.

     5. SHARES AVAILABLE UNDER THE PLAN.

        (a) Subject to adjustment as provided in Section 5(b) and Section 13,
the stock issuable under the Plan shall be shares of authorized but unissued or
reacquired Common Shares. The maximum number of Common Shares that may be issued
or transferred (i) upon the exercise of Option Rights or (ii) as stock issuances
shall not exceed in the aggregate____________Common Shares, plus any shares
described in Section 5(b). Any Common Shares issued under this Plan may be
treasury shares or shares of original issue or a combination of the foregoing.

        (b) The number of shares available in Section 5(a) above shall be
adjusted to account for shares relating to awards that expire, are forfeited or
are transferred, surrendered or relinquished upon the payment of any Option
Price by the transfer to the Company of Common Shares or upon satisfaction of
any withholding amount. Upon payment in cash of the benefit provided by any
award granted under this Plan, any shares that were covered by that award shall
again be available for issue or transfer hereunder.

                                       6
<PAGE>

        (c) Notwithstanding anything in this Section 5 or elsewhere in this Plan
to the contrary and subject to adjustment as provided in Section 13 of this
Plan, the aggregate number of Common Shares actually issued or transferred by
the Company upon the exercise of Incentive Stock Options shall not exceed
______________ Common Shares.

     6. OPTION GRANT PROGRAM. The Board may, from time to time and upon such
terms and conditions as it may determine, authorize the grant to Participants of
Option Rights to purchase Common Shares. Each grant may utilize any or all of
the authorizations, and shall be subject to all of the applicable requirements,
as follows:

        (a) Each grant shall specify the number of Common Shares to which it
pertains (subject to the limitations set forth in Section 5).

        (b) Each grant shall specify an Option Price per share, which may not be
less than 100% of the Fair Market Value per Common Share (or, in the case of an
Incentive Stock Option granted to a Ten-Percent Holder, 110% of the Fair Market
Value per Common Share) on the Date of Grant.

        (c) Each grant shall specify whether the Option Price shall be payable
(i) in cash, by check or other consideration acceptable to the Company, (ii) by
the actual or constructive transfer to the Company of Common Shares owned by the
Optionee for at least six months (or other consideration authorized pursuant to
Section 6(d)) having a value at the time of exercise equal to the total Option
Price, or (iii) by a combination of such methods of payment.

        (d) Any grant may provide for payment of the Option Price, at the
election of the Optionee, in installments, with or without interest, upon terms
determined by the Board.

        (e) Successive grants may be made to the same Optionee whether or not
any Option Rights previously granted to such Participant remain unexercised.

        (f) Each grant shall specify the period or periods of continuous Service
by the Optionee with the Company or any Parent or Subsidiary that is necessary
before the Option Rights or installments thereof will become exercisable and may
provide for the earlier exercise of such Option Rights in the event of a Change
in Control or similar event or upon the achievement of specified performance
criteria. Any grant of Option Rights may also specify performance criteria that
must be achieved as a condition to the exercise of such rights.

        (g) Option Rights granted under this Plan may be (i) Option Rights that
are intended to qualify under particular provisions of the Code, including,
without limitation, Incentive Stock Options, (ii) Option Rights that are not
intended so to qualify, or (iii) combinations of the foregoing.

        (h) No Option Right shall be exercisable more than 10 years from the
Date of Grant or, in the case of an Incentive Stock Option granted to a
Ten-Percent Holder, five years from the Date of Grant.

        (i) To the extent that the aggregate Fair Market Value (determined as of
the Date of Grant) of the Common Shares with respect to which Incentive Stock
Options granted under the Plan and any other plan of the Company (or any Parent
or Subsidiary) are exercisable

                                       7
<PAGE>

for the first time by an Optionee  during any calendar  year  exceeds  $100,000,
such Option Rights shall constitute  Nonqualified Options. The rule set forth in
the preceding  sentence shall by applied by taking Option Rights into account in
the order in which they were granted.

        (j) An Optionee may exercise an Option Right in whole or in part at any
time and from time to time during the period within which the Option Right may
be exercised. To exercise an Option Right, an Optionee shall give written notice
to the Company in the form attached hereto as EXHIBIT A or EXHIBIT B, as
applicable, specifying the number of Common Shares to be purchased and provide
payment of the Option Price and any other documentation that may be required by
the Company.

        (k) Each grant of Option Rights shall be evidenced by an agreement
executed by an authorized officer on behalf of the Company and delivered to the
Optionee, and such agreement shall contain such terms and provisions, consistent
with this Plan as set forth in Sections 17 and 18, as applicable, as the Board
may approve.

        (l) The holder of an Option Right shall have no stockholder rights with
respect to the Option Shares until he or she (i) has exercised the Option Right
or all restrictions have lapsed, (ii) has paid the Option Price and (iii) has
become a holder of record of the Option Shares.

     7. EXERCISABILITY OF OPTION RIGHTS. Each Option Right shall be exercisable
at such time or times, during such period and for such number of shares as shall
be determined by the Board and set forth in the agreement evidencing the grant
of the Option Right pursuant to Section 17 or 18, as applicable.

     8. STOCK ISSUANCE PROGRAM. The Board may, from time to time, and upon such
terms and conditions as it may determine, authorize the grant or sale to
Participants of Common Shares issued under the Stock Issuance Program through
direct and immediate issuances without any intervening option grants. Each stock
issuance shall be evidenced by a Stock Issuance Agreement as set forth in
Section 19, which shall be subject to all of the requirements contained in the
following provisions:

        (a) Each grant or sale may be made without additional consideration or
in consideration of a payment by the Participant that is less than Fair Market
Value per share at the date of issuance.

        (b) Common Shares may be issued under the Stock Issuance Program for any
of the following items of consideration which the Board may deem appropriate in
each individual instance:

            (i) cash or check made payable to the Company, or

            (ii) past services rendered to the Company (or any Parent or
     Subsidiary).

        (c) Common Shares issued under the Stock Issuance Program may, in the
discretion of the Board, be fully and immediately vested upon issuance or may
vest in one or more installments over the Participant's period of Service.

                                       8
<PAGE>

        (d) Any new, substituted or additional securities or other property
(including, without limitation, money paid other than as a regular cash
dividend) which the Participant may have the right to receive with respect to
the Participant's unvested Common Shares by reason of any stock dividend, stock
split, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Shares as a class without the Company's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested Common Shares and (ii)
such escrow arrangements as the Board shall deem appropriate.

        (e) Unless otherwise determined by the Board, the Participant shall have
full stockholder rights with respect to any Common Shares issued to the
Participant under the Stock Issuance Program, whether or not the Participant's
interest in those shares has vested. Accordingly, unless otherwise determined by
the Board, the Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares.

        (f) Should the Participant cease to remain in Service while holding one
or more unvested Common Shares issued under the Stock Issuance Program, then
those shares shall be immediately surrendered to the Company for cancellation,
and the Participant shall have no further stockholder rights with respect to
those shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent, the Company shall
pay to the Participant the lesser of (i) consideration paid by the Participant
for the surrendered shares and (ii) the Fair Market Value of the Common Shares
on the date of surrender.

        (g) The Board may, in its discretion, waive the surrender and
cancellation of one or more unvested Common Shares (or other assets attributable
thereto) which would otherwise occur upon the non-completion of the vesting
schedule applicable to such shares. Such waiver shall result in the immediate
vesting of the Participant's interest in the Common Shares as to which the
waiver applies. Such waiver may be effected at any time, whether before or after
the Participant's cessation of Service.

        (h) Unvested shares may, in the Board's discretion, be held in escrow by
the Company until the Participant's interest in such shares vests or may be
issued directly to the Participant with restrictive legends on the certificates
evidencing those unvested shares.

     9. FIRST REFUSAL RIGHTS. The Company shall have the right of first refusal
with respect to any proposed disposition by the Owner of any Option Shares or
Common Shares issued under the Plan. Such right of first refusal shall be
exercisable and lapse in accordance with the terms established by the Plan
Administrator.

     10. TRANSFER RESTRICTIONS ON OPTION SHARES AND COMMON SHARES. Other than
Permitted Transfers, Owners may not sell or transfer, directly or indirectly,
any Option Shares or Common Shares or any interest therein during the period
commencing on the date on which they acquire the Option Shares or Common Shares
until a Liquidity Event shall have occurred. Any attempt by an Owner to sell any
Option Shares or Common Shares prior to a Liquidity Event unless permitted by
the Plan shall be null and void and of no force or effect. Notwithstanding the
foregoing, the Option Shares or Common Shares may, after the death of the Owner,
be transferred by will or the laws of descent and distribution and sold by such
transferee or sold by the Owner's executor.

                                       9
<PAGE>

     11. MARKET STAND-OFF AGREEMENT. The Company may require in connection with
the Initial Public Offering and any underwritten public offering by the Company
of its equity securities pursuant to an effective registration statement filed
under the Securities Act within two years after the effective date of the
Company's Initial Public Offering that an Owner agree that any Option Shares,
Common Shares or Option Rights may not be sold, offered for sale or otherwise
disposed of for a period of time as determined by the Board.

     12. TRANSFERABILITY OF OPTIONS AND UNVESTED COMMON SHARES.

        (a) No Option Right granted under the Plan and no unvested Common Shares
shall be transferable by a Participant other than by will or the laws of descent
and distribution. Except as otherwise determined by the Board, Option Rights
shall be exercisable during the Optionee's lifetime only by him or her or by his
or her guardian or legal representative.

        (b) Notwithstanding the provisions of Section 12(a), the Board may
specify that Option Rights (other than Incentive Stock Options) shall be
transferable by a Participant, with or without payment of consideration therefor
by the transferee, by way of a Permitted Transfer.

     13. ADJUSTMENTS. The Board may make or provide for such adjustments (i) in
the number of Option Shares covered by outstanding Option Rights and the Common
Shares issued hereunder, (ii) in the Option Price and (iii) in the kind of
shares covered thereby, as the Board, in its sole discretion, exercised in good
faith, may determine is equitably required to prevent dilution or enlargement of
the rights of Participants that otherwise would result from (a) any
Recapitalization or other change in the capital structure of the Company, or (b)
any merger, consolidation, spin-off, split-off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Board, in its
discretion, may provide in substitution for any or all outstanding awards under
this Plan such alternative consideration as it, in good faith, may determine to
be equitable under the circumstances and may require in connection therewith the
surrender of all awards so replaced. The Board may also make or provide for such
adjustments in the number of shares specified in Section 5 of this Plan as the
Board in its sole discretion, exercised in good faith, may determine is
appropriate to reflect any transaction or event described in this Section 13;
PROVIDED, HOWEVER, that any such adjustment to the number specified in Section
5(c) shall be made only if and to the extent that such adjustment would not
cause any Option Right intended to qualify as an Incentive Stock Option to fail
so to qualify.

     14. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional Option Shares or Common Shares pursuant to this Plan. The Board may
provide for the elimination of fractions or for the settlement of fractions in
cash.

     15. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other Person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
shall be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other Person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld,

                                       10
<PAGE>

which arrangements (in the discretion of the Board) may include relinquishment
of a portion of such benefit. Common Shares or benefits shall not be withheld in
excess of the minimum number required for such tax withholding.

     16. FOREIGN EMPLOYEES. In order to facilitate the making of any grant or
combination of grants under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals or who are employed
by the Company or any Subsidiary outside of the United States of America as the
Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such supplements to
or amendments, restatements or alternative versions of this Plan as it may
consider necessary or appropriate for such purposes, without thereby affecting
the terms of this Plan as in effect for any other purpose, and the Secretary or
other appropriate officer of the Company may certify any such document as having
been approved and adopted in the same manner as this Plan. No such special
terms, supplements, amendments or restatements, however, shall include any
provisions that are inconsistent with the terms of this Plan as then in effect
unless this Plan could have been amended to eliminate such inconsistency without
further approval by the stockholders of the Company.

     17. INCENTIVE STOCK OPTION AGREEMENT. The form of each Incentive Stock
Option Agreement shall be prescribed, and any Incentive Stock Option Agreement
evidencing an outstanding Option Right may with the concurrence of the affected
Optionee be amended, by the Board, provided that the terms and conditions of
each Incentive Stock Option Agreement and amendment are not inconsistent with
this Plan and that no amendment shall adversely affect the rights of the
Optionee with respect to any outstanding Option Right without the Optionee's
consent.

     18. NONQUALIFIED STOCK OPTION AGREEMENT. The form of each Nonqualified
Stock Option Agreement shall be prescribed, and any Nonqualified Stock Option
Agreement evidencing an outstanding Option Right may with the concurrence of the
affected Optionee be amended, by the Board, provided that the terms and
conditions of each Nonqualified Stock Option Agreement and amendment are not
inconsistent with this Plan and that no amendment shall adversely affect the
rights of the Optionee with respect to any outstanding Option Right without the
Optionee's consent.

     19. STOCK ISSUANCE AGREEMENT. The form of each Stock Issuance Agreement
shall be prescribed, and any Stock Issuance Agreement evidencing an issuance of
Common Shares may with the concurrence of the affected Participant be amended,
by the Board, provided that the terms and conditions of each Stock Issuance
Agreement and amendment are not inconsistent with this Plan and that no
amendment shall adversely affect the rights of the Participant with respect to
any issuance of Common Shares without the Participant's consent.

     20. ADMINISTRATION OF THE PLAN.

        (a) This Plan shall be administered by the Board, which may from time to
time delegate all or any part of its authority under this Plan to the Committee.
A majority of the Committee shall constitute a quorum, and the action of the
members of the Committee present at any meeting at which a quorum is present, or
acts unanimously approved in writing, shall be the acts of the Committee. To the
extent of any such delegation, references in this Plan to the Board shall be
deemed to be references to any such Committee.

                                       11
<PAGE>

         (b) The Board shall have full power and authority (subject to the
provisions of the Plan) to establish such rules and regulations as it may deem
appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan or of any
agreement, notification or document evidencing the grant of Option Rights or
stock issuances thereunder as it may deem necessary or advisable. Decisions of
the Board shall be final, conclusive and binding on all parties who have an
interest in the Plan or any option thereunder. No member of the Board shall be
liable for any such action or determination made in good faith.

     21. AMENDMENT, ETC.

         (a) The Board may permit Participants to elect to defer the issuance of
Common Shares under the Plan pursuant to such rules, procedures or programs as
it may establish for purposes of this Plan. The Board may provide that deferred
issuances and settlements include the payment or crediting of dividend
equivalents or interest on the deferral amounts.

         (b) In the case of termination of Service by reason of death,
Disability or normal or early retirement, or in the case of hardship or other
special circumstances, of an Optionee who holds an Option Right not immediately
exercisable in full, or who holds Common Shares subject to any transfer
restriction imposed pursuant to Section 10 or 12, the Board may, in its sole
discretion, accelerate the time at which such Option Right may be exercised or
the time at which such substantial risk of forfeiture or prohibition or
restriction on transfer will lapse or may waive any other limitation or
requirement under any such award. Notwithstanding anything to the contrary, in
the case of termination of Service by reason of death or Disability, upon the
death or Disability of an Optionee (each an "EXERCISE EVENT") any portion of the
option granted to such Optionee that otherwise would have become exercisable in
the same calendar year as the Exercise Event shall become immediately
exercisable in full on the date of the Exercise Event.

         (c) This Plan shall not confer upon any Participant any right with
respect to the continuance of employment or other service with the Company or
any Subsidiary, nor shall it interfere in any way with any right the Company or
any Subsidiary would otherwise have to terminate such Participant's employment
or other service at any time.

         (d) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock Option from
qualifying as such, that provision shall be null and void with respect to such
Option Right. Such provision, however, shall remain in effect for other Option
Rights and there shall be no further effect on any provision of this Plan.

         (e) If the Board determines, with the advice of legal counsel, that any
provision of the Plan would prevent the payment of any Option Right intended to
qualify as performance-based compensation within the meaning of Section 162(m)
of the Code from so qualifying, such Plan provision will be invalid and cease to
have my effect without affecting the validity or effectiveness of any other
provision of the Plan.

     22. EFFECTIVE DATE. This Plan shall be effective when adopted by the Board;
PROVIDED, HOWEVER, that the effectiveness of this Plan, the exercisability of
Option Rights and the issuance of Common Shares under this Plan are conditioned
on the Plan's approval by the

                                       12
<PAGE>

stockholders  of the  Company at a meeting  duly held or by  written  consent in
accordance  with  Delaware  law  within  12  months  after the date this Plan is
adopted by the Board.  All awards  under this Plan shall be null and void if the
Plan is not approved by the stockholders within such 12-month period. Subject to
such limitation, the Board may grant Option Rights and issue Common Shares under
the Plan at any time  after the  effective  date of the Plan and before the date
fixed herein for termination of the Plan.

     23. GOVERNING LAW. The Plan and all grants and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
[Delaware], without giving effect to the principles of conflicts of law in that
State.

     24. TERM OF PLAN. The Plan shall terminate upon the EARLIEST of:

         (a) the expiration of the 10-year period measured from the date the
Plan is adopted by the Board,

         (b) the date on which all Common Shares available for issuance under
the Plan shall have been issued as vested shares, or

         (c) the termination of all outstanding Option Rights in connection with
a Liquidity Event. All Option Rights and unvested stock issuances outstanding at
that time under the Plan shall continue in full force and effect in accordance
with the provisions of the documents evidencing the grant of the Option Rights
or the issuance of the Common Shares.

     25. REGULATORY APPROVALS. The implementation of the Plan, the granting of
any Options under the Plan and the issuance of any Common Shares (i) upon the
exercise of an Option Right or (ii) under the Stock Issuance Program shall be
subject to the Company's procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the Option Rights
granted under it and the Common Shares issued pursuant to it.

     26. CALIFORNIA PROVISIONS. The following provisions shall apply to any
grant of Option Rights under the Option Grant Program and any sale of Common
Shares under the Stock Issuance Program to an individual who is eligible to
receive such Option Rights or Common Shares pursuant to the Plan and who resides
in the State of California.

         (a) OPTION GRANT PROGRAM.

             (i) The Option Price per share applicable to each Option Right
     shall not be less than 85% of the Fair Market Value per Common Share on the
     Date of Grant. If the person to whom the Option Right is granted is a
     Ten-Percent Holder, then the Option Price per share shall not be less than
     110% of the Fair Market Value per Common Share on the Date of Grant.

             (ii) The Board may not impose a vesting schedule upon any Option
     Right which is more restrictive than 20% per year vesting, with the initial
     vesting to occur not later than one year after the Date of Grant. However,
     such limitation shall not be applicable to any grants of Option Rights made
     to individuals who are officers or independent contractors of the Company,
     employees of independent contractors of the Company or Nonemployee
     Directors.

                                       13
<PAGE>

             (iii) If an Optionee's Service terminates for a reason other than
     Cause, the vested portion of the Optionee's Option Right will be
     exercisable for a period of not less than 30 days from the date of
     termination of Service or, if such termination is caused by death or
     disability, not less than six months from the date of termination of
     Service.

             (iv) Notwithstanding Section 12(a), a Nonstatutory Option will also
     be transferable by instrument to an inter vivos or testamentary trust in
     which the Option Rights are to be passed to beneficiaries upon the death of
     the trustor (settlor), or by gift to a member of the "immediate family" as
     that term is defined in 17 C.F.R. 240.16a-(c).

         (b) STOCK ISSUANCE PROGRAM.

             (i) The purchase price per share for Common Shares issued under the
     Stock Issuance Program shall be fixed by the Board but shall not be less
     than 85% of the Fair Market Value per Common Share on the Date of Issue.
     The purchase price per share of Common Shares issued to a Ten-Percent
     Holder shall not be less than 100% of such Fair Market Value.

             (ii) The Board may not impose a vesting schedule upon any stock
     issuance effected under the Stock Issuance Program which is more
     restrictive than 20% per year vesting, with initial vesting to occur not
     later than one year after the issuance date. However, such limitation shall
     not be applicable to any issuances made to individuals who are officers or
     independent contractors of the Company, employees of independent
     contractors of the Company or Nonemployee Directors.

         (c) FINANCIAL INFORMATION. The Company shall deliver a balance sheet
and an income statement at least annually to each Participant, unless such
individual is a key Employee whose duties in connection with the Company (or any
Parent or Subsidiary) assure such individual access to equivalent information.

         (d) SHARE RESERVE. The maximum number of Common Shares that may be
issued over the term of the Plan together with the total number of Common Shares
provided for under any stock bonus or similar plan of the Company shall not
exceed 30% of the then outstanding shares (on an as if converted basis) of the
Company unless a percentage higher than 30% is approved by at least 2/3 of the
outstanding shares of the Company entitled to vote on such matter.

         (e) REPURCHASE RIGHTS. To the extent specified in an Incentive Stock
Option Agreement, Nonqualified Stock Option Agreement or Stock Issuance
Agreement, the Company and/or its assigns shall have the right to repurchase any
or all of the [Option Shares or] Unvested Shares held by a Participant when such
person's Service ceases. However, except with respect to grants to officers or
independent contractors of the Company, employees of independent contractors of
the Company or Nonemployee Directors, the repurchase right must satisfy the
conditions of either Subparagraph (1) or (2) below:

             (i) The repurchase price is not less than the Fair Market Value on
     the date that Service ceased, the Company's right to repurchase the [Option
     Shares or] Unvested Shares must be exercised within 90 days of the date
     that Company Service ceased (or the date the shares were purchased, if
     later), the Company must pay the

                                       14
<PAGE>

purchase price in cash or cancellation of purchase money indebtedness for the
shares, and the Company's repurchase right terminates if and when its securities
becomes publicly traded.

             (ii) The repurchase price is the [Exercise Price or] original
     purchase price, the Company's right to repurchase lapses at the rate of at
     least 20% per year over five years from the date the [Option Right was
     granted or the] Common Shares were issued, the repurchase right must be
     exercised within 90 days of the date that Service ceased (or the date the
     shares were purchased, if later), and the purchase price must be paid in
     the form of cash or cancellation of purchase money indebtedness for the
     shares.

        (f) FILING REQUIREMENT. The Company must file the notice of transaction
and pay the filing fee computed under Section 25608(y) of the California General
Corporation Law. Such filling should be made within thirty days after the
initial issuance of any security under the Plan to a California resident.

                                       15
<PAGE>

                                HEMOBIOTECH, INC.
                      2003 STOCK OPTION/STOCK ISSUANCE PLAN

                        INCENTIVE STOCK OPTION AGREEMENT

     WHEREAS, ____________________(the "OPTIONEE") is an Employee of
Hemobiotech, Inc., a Delaware corporation (the "COMPANY"), or a Subsidiary;

     WHEREAS, the grant of an Option Right to the Optionee has been duly
authorized by resolution of the Board duly adopted on or before the Date of
Grant; and

     WHEREAS, the Option Right granted hereunder is intended to be an "incentive
stock option" within the meaning of that term under Section 422 of the Internal
Revenue Code of 1986, as amended (the "CODE").

     NOW, THEREFORE, pursuant to the Company's 2003 Stock Option/Stock Issuance
Plan (the "PLAN"), the Company hereby grants to the Optionee an Option Right
pursuant to this Incentive Stock Option Agreement (this "AGREEMENT") to purchase
the number of Common Shares as set forth on the cover page hereof, subject to
adjustment as provided in the Plan. The Option Price shall be as set forth on
the cover page hereof, subject to adjustment as provided in the Plan. The
Company agrees to cause certificates for any Common Shares purchased hereunder
to be delivered to the Optionee upon full payment of the Option Price, subject
to the applicable terms and conditions of the Plan and this Agreement.

     1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
shall have the meanings given to those terms in the Plan.

     2. EXERCISE OF OPTION.

        (a) Subject to expiration or earlier termination of this Option Right,
this Option Right shall become exercisable as set forth on the Notice of Grant
for so long as the Optionee remains in the continuous Service of the Company or
a Subsidiary. To the extent the Option Right is exercisable, it may be exercised
in whole or in part from time to time. In no event shall the Optionee be
entitled to acquire a fraction of an Option Share pursuant to this Option Right.
The Optionee shall be entitled to the privileges of ownership with respect to
the Option Shares purchased and delivered to him or her upon the exercise of all
or part of this Option Right. For purposes of this Agreement, the continuous
Service of the Optionee with the Company or a Subsidiary will not be deemed to
have been interrupted, and the Optionee will not be deemed to have ceased to be
an Employee of the Company or a Subsidiary, by reason of (i) the transfer of his
or her Service among the Company and its Subsidiaries or (ii) an approved leave
of absence.

        (b) Notwithstanding the provisions of Section 2(a), in the case of
termination of Service by reason of death or Disability, upon the death or
Disability of the Optionee (each an "EXERCISE EVENT"), any portion of this
Option Right that otherwise would have become exercisable in the same calendar
year as the Exercise Event shall become immediately

<PAGE>

exercisable in full on the date of the Exercise Event. The remaining portion of
this Option Right that has not become exercisable shall be forfeited.

     3. PAYMENT OF OPTION PRICE. The Option Price may be paid by any of the
following methods:

        (a) in cash or by certified or cashier's check or other cash equivalent
acceptable to the Company payable to the order of the Company;

        (b) by Common Shares (including by attestation) owned by the Optionee
for (i) more than one year prior to the Exercise Date and for more than two
years from the Date of Grant, if they were originally acquired by the Optionee
pursuant to the exercise of an "incentive stock option" (within the meaning of
Section 422 of the Code), or (ii) more than six months prior to the Exercise
Date, if they were originally acquired by the Optionee other than pursuant to
the exercise of an incentive stock option; or

        (c) by a combination of Common Shares and cash or certified or cashier's
check.

     The requirement of payment in cash will be deemed satisfied if the Optionee
has made arrangements satisfactory to the Company with a bank or broker that is
a member of the National Association of Securities Dealers, Inc. to sell on the
date of exercise a sufficient number of Common Shares being purchased so that
the net proceeds of the sale transaction will at least equal the aggregate
Option Price and pursuant to which the bank or broker undertakes to deliver the
aggregate Option Price to the Company not later than the date on which the sale
transaction will settle in the ordinary course of business.

     4. TERM OF OPTION.

        (a) This Option Right will terminate on the earliest to occur of the
following dates:

            (i) 60 days after the Optionee ceases to provide Service to the
     Company or a Subsidiary for any reason other than as a result of an
     Exercise Event;

            (ii) 12 months after the date of an Exercise Event, if the Optionee
     dies or becomes disabled while an employee of the Company or a Subsidiary;
     and

            (iii) 10 years from the Date of Grant (or five years from the Date
     of Grant in the case of an Optionee who is also a Ten-Percent Holder).

        (b) If the Optionee's Service with the Company and its Subsidiaries is
terminated for Cause, the Option Right will terminate as of the termination
date, notwithstanding any other provision of this Agreement.

     5. CHANGE IN CONTROL.

                                       2
<PAGE>

        (a) Immediately prior to the effective date of a Change in Control, this
Option Right shall become exercisable for all of the Option Shares covered by
this Option Right. However, the Option Right shall not become exercisable on
such an accelerated basis if and to the extent: (i) this Option Right is to be
assumed by the successor corporation (or parent thereof) or is otherwise to be
continued in full force and effect pursuant to the terms of the Change in
Control transaction or (ii) this Option Right is to be replaced with a cash
incentive program of the successor corporation which preserves the spread
existing on the Option Shares covered by this Option Right at the time of the
Change in Control (the excess of the Fair Market Value of those Option Shares
over the aggregate Option Price payable for such shares) and provides for the
subsequent payout of that spread no later than the time the Option Shares would
have otherwise become exercisable.

        (b) Immediately following the consummation of the Change in Control,
this Option Right shall terminate, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in effect pursuant to the
terms of the Change in Control transaction.

        (c) If this Option Right is assumed in connection with a Change in
Control or otherwise continued in effect, then this Option Right shall be
appropriately adjusted, upon such Change in Control, to apply to the number and
class of securities which would have been issuable to Optionee in consummation
of such Change in Control had the Option Right been exercised immediately prior
to such Change in Control, and appropriate adjustments shall also be made to the
Option Price, provided the aggregate Option Price shall remain the same. To the
extent that the holders of Common Shares receive cash consideration for their
Common Shares in consummation of the Change in Control, the successor
corporation (or its parent) may, in connection with the assumption of this
Option Right, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common
Shares in such Change in Control.

        (d) This Agreement shall not in any way affect the right of the Company
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

     6. TRANSFERABILITY, REPURCHASE RIGHTS. This Option Right may not be
transferred except, after the Optionee's death, by will or the laws of descent
and distribution and may not be exercised during the lifetime of the Optionee
except by the Optionee or the Optionee's guardian or legal representative acting
on behalf of the Optionee in a fiduciary capacity under state law and court
supervision. The Option Shares shall be subject to the rights of repurchase set
forth in Section 8.

     7. RIGHT OF FIRST REFUSAL.

        (a) GRANT. The Company shall have the right of first refusal (the "FIRST
REFUSAL RIGHT") exercisable in connection with any proposed transfer of Option
Shares. For purposes of this Section 7, the term "transfer" shall include any
sale, assignment, pledge, encumbrance or other disposition of Option Shares
intended to be made by Owner, but shall not include any Permitted Transfer.

                                       3
<PAGE>

        (b) NOTICE OF INTENDED DISPOSITION. In the event any Owner of Option
Shares desires to accept a bona fide third-party offer for the transfer of any
or all of such shares (Option Shares subject to such offer to be hereinafter
referred to as the "TARGET SHARES"), Owner shall promptly (i) deliver to the
Company written notice (the "DISPOSITION NOTICE") of the terms of the offer,
including the purchase price and the identity of the third-party offeror, and
(ii) provide satisfactory proof that the disposition of the Target Shares to
such third-party offeror would not be in contravention of the provisions set
forth in the Plan and this Agreement.

        (c) EXERCISE OF THE FIRST REFUSAL RIGHT.

            (i) The Company shall have the right to repurchase any or all of the
     Target Shares subject to the Disposition Notice upon the same term as those
     specified therein or upon such other terms (not materially different from
     those specified in the Disposition Notice) to which Owner consents. Such
     right shall be exercisable by delivery of written notice (the "EXERCISE
     NOTICE") to Owner prior to the twenty-fifth day following the Company's
     receipt of the Disposition Notice. If such right is exercised with respect
     to all of the Target Shares, then the Company shall effect the repurchase
     of such shares, including payment of the aggregate purchase price, not more
     than five business days after delivery of the Exercise Notice; and at such
     time the certificates representing the Target Shares shall be delivered to
     the Company.

            (ii) Should the purchase price specified in the Disposition Notice
     be payable in property other than cash or evidences of indebtedness, the
     Company shall have the right to pay the purchase price in the form of cash
     equal in amount to the value of such property. If Owner and the Company
     cannot agree on such cash value within 10 days after the Company's receipt
     of the Disposition Notice, then valuation shall be made by an appraiser of
     recognized standing selected by Owner and the Company or, if they cannot
     agree on an appraiser within 20 days after the Company's receipt of the
     Disposition Notice, each shall select an appraiser of recognized standing
     and the two appraisers shall designate a third appraiser of recognized
     standing, whose appraisal shall be determinative of such value. Owner and
     the Company shall share the cost of such appraisal equally. The closing
     shall then be held on the later of (i) the fifth business day following
     delivery of the Exercise Notice or (ii) the fifth business day after such
     valuation shall have been made.

        (d) NON-EXERCISE OF THE FIRST REFUSAL RIGHT. In the event the Exercise
Notice is not given to Owner prior to the expiration of the 25-day exercise
period, Owner shall have a period of 30 days thereafter in which to sell or
otherwise dispose of the Target Shares to the third-party offeror identified in
the Disposition Notice upon terms (including the purchase price) no more
favorable to such third-party offeror than those specified in the Disposition
Notice; PROVIDED, HOWEVER, that any such sale or disposition must not be
effected in contravention of the provisions of this Agreement or the Plan. The
third-party offeror shall acquire the Target Shares subject to the First Refusal
Right and the provisions and restrictions of this Agreement, and any subsequent
disposition of the acquired share must be effected in compliance with the terms
and conditions of such First Refusal Right and the provisions and restrictions
of this Agreement and the Plan. In the event Owner does not effect such sale or
disposition of the Target Shares within Shares within

                                       4
<PAGE>

the specified 30-day period, the First Refusal Right shall continue to be
applicable to any subsequent disposition of the Target Shares by Owner until
such right lapses.

        (e) PARTIAL EXERCISE OF THE FIRST REFUSAL RIGHT. In the event the
Company timely exercises the First Refusal Right with respect to a portion, but
not all, of the Target Shares specified in the Disposition Notice, Owner shall
have the option, exercisable by written notice to the Company delivered within
five business days after Owner's receipt of the Exercise Notice, to effect the
sale of the Target Shares pursuant to either of the following alternatives:

            (i) sale or other disposition of some or all the Target Shares to
     the third-party offeror identified in the Disposition Notice, but in full
     compliance with the requirements of Section 7(d), as if the Company did not
     exercise the First Refusal Right; or

            (ii) sale to the Company of the portion of the Target Shares which
     the Company has elected to purchase, such sale to be effected in
     substantial conformity with the provisions of Section 7(c). The First
     Refusal Right shall continue to be applicable to any subsequent disposition
     of the remaining Target Shares until such right lapses.

        Owner's failure to deliver timely notification to the Company shall be
deemed to be an election by Owner to sell the Target Shares pursuant to
alternative (i) above.

        (f) RECAPITALIZATION/REORGANIZATION.

            (i) Any new, substituted or additional securities or other property
     that is by reason of any Recapitalization distributed with respect to
     Common Shares shall be immediately subject to the First Refusal Right.

            (ii) In the event of a reorganization of the Company, the First
     Refusal Right shall remain in full force and effect and shall apply to the
     new capital stock or other property received in exchange for Common Shares
     in consummation of the reorganization.

        (g) LAPSE. The First Refusal Right shall lapse upon the earlier to occur
of (i) an Initial Public Offering or (ii) the acquisition of the Company by an
entity that is traded on a stock exchange or the Nasdaq Stock Market. However,
the Market Stand-Off shall continue to remain in full force and effect following
the lapse of the First Refusal Right, in the case of a transaction described in
clause (i) above.

     8. MARKET STAND-OFF.

        (a) In connection with the Company's Initial Public Offering and any
underwritten public offering by the Company of its equity securities pursuant to
an effective registration statement filed under the Securities Act within two
years after the effective date of the Company's Initial Public Offering, Owner
shall not sell, make any short sale of, hedge with, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or transfer for value
or otherwise agree to engage in any of the foregoing transactions with respect
to, any Common Shares without the prior written consent of the Company or its
underwriters (the

                                       5
<PAGE>

"MARKET STAND-OFF"). The Market Stand-Off shall be in effect for such period of
time from and after the effective date of the final prospectus for the offering
as may be requested by the Company or such underwriters; PROVIDED, HOWEVER, that
such period shall not exceed 180 days.

        (b) Owner shall be subject to the Market Stand-Off provided and only if
the officers and directors of the Company are also subject to similar
restrictions.

        (c) Any new, substituted or additional securities that are distributed
with respect to Common Shares by reason of any Recapitalization or
reorganization of the Company shall be immediately subject to the Market
Stand-Off.

        (d) In order to enforce the Market Stand-Off, the Company may impose
stop-transfer instructions with respect to Common Shares until the end of the
applicable stand-off period.

     9. NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement or the Plan
shall confer upon the Optionee any right with respect to continuance of Service
by the Company or any Subsidiary, nor limit or affect in any manner the right of
the Company or any Subsidiary to terminate the Service or adjust the
compensation of the Optionee.

     10. NO STOCKHOLDER RIGHTS. The holder of an Option Right shall have no
stockholder rights with respect to the Common Shares subject to the Option Right
until the Optionee shall have exercised the Option Right.

     11. WITHHOLDING. To the extent that the Company shall be required to
withhold any federal, state, local or foreign taxes in connection with the
exercise of the Option Right, and the amounts available to the Company for such
withholding are insufficient it shall be a condition to the exercise of the
Option Right that the Optionee shall pay such taxes or make provisions that are
satisfactory to the Company for the payment thereof. The Company will pay any
and all issue and other taxes in the nature thereof which may be payable by the
Company in respect of any issue or delivery upon a purchase pursuant to this
Option Right.

     12. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Option Right shall
not be exercisable and the Company will not be obligated to issue any Common
Shares pursuant to this Agreement if the exercise and issuance thereof would
result in a violation of any such law.

     13. ADJUSTMENTS. This Option Right is subject to any adjustments which may
be
made pursuant to the Plan;  provided,  however,  that no adjustment  may be made
without  the prior  written  consent of the  Optionee  if the  adjustment  would
constitute a "modification" within the meaning of Section 424 of the Code.

     14. AVAILABILITY OF COMMON SHARES. The Company shall at all times until
expiration of the Option Right reserve and keep available, either in its
treasury or out of its authorized but unissued Common Shares, the full number of
Option Shares deliverable upon the exercise of this Option Right.

                                       6
<PAGE>

     15. MANDATORY NOTICE OF DISQUALIFYING DISPOSITION. Without limiting any
other provision hereof, the Optionee hereby agrees that if the Optionee disposes
(whether by sale, exchange, gift or otherwise) of any of his or her Option
Shares within two years of the Date of Grant or within one year after the
transfer of the Option Shares to the Optionee, the Optionee shall notify the
Company in writing of the disposition within 30 days after the date of such
disposition. The written notice shall state the principal terms of the
disposition and the type and amount of consideration received by the Optionee
for the Option Shares. Nothing contained in this Section 13 shall be deemed to
relieve the Optionee of complying with any transfer restrictions set forth in
the Plan.

     16. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement will not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company or a
Subsidiary and will not affect the amount of any life insurance coverage
available to any beneficiary under any life insurance plan covering employees of
the Company or any Subsidiary, unless provided otherwise in any such plan.

     17. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; PROVIDED, HOWEVER, that no amendment shall adversely affect the rights
of the Optionee under this Agreement without the Optionee's consent.

     18. SEVERABILITY. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.

     19. AGREEMENT SUBJECT TO PLAN. The Option Right granted under this
Agreement and all of the terms and conditions hereof is subject to all the terms
and conditions of the Plan. In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern. The Board
acting pursuant to the Plan shall, except as otherwise expressly provided
herein, have the right to determine any questions which arise in connection with
this Option Right or its exercise.

     20. SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer set
forth in the Plan, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Optionee, and the successors and assigns of
the Company.

     21. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of [Delaware], without
giving effect to the principles of conflicts of laws in that State.

     22. NOTICES. Any notice necessary under this Agreement will be addressed to
the Company or the Board at the principal executive office of the Company and to
the Optionee at the address appearing in the personnel records of the Company
for such Optionee, or to either party at such other address as either party may
designate in writing to the other. Except as

                                       7
<PAGE>

otherwise provided herein, any written notice shall be deemed to be duly given
if and when delivered personally, by overnight courier or by facsimile (receipt
confirmed) or three days after it is deposited in the United States mail, first
class certified or registered mail, postage and fees prepaid, return receipt
requested, and addressed as aforesaid. Any party may change the address to which
notices are to be given hereunder by written notice to the other party as herein
specified.

     23. INTERPRETATION. This Agreement shall be construed in a manner that will
enable this Option to be qualified as an "incentive stock option" within the
meaning of that term under Section 422 of the Code. Any reference herein to a
statute, rule or regulation shall also include any successor provision thereto.
[The grant made pursuant to this Agreement is subject to the approval of the
Plan by the stockholders of the Company within 12 months after the date the Plan
is adopted by the Board. If the Plan is not so approved, the grant and this
Agreement shall be null and void and of no further effect.]

     This Agreement is executed as of the ________ day of _______ 200__.

                                             HEMOBIOTECH, INC.

                                             By: _______________________________
                                                 Name: _________________________
                                                 Title: ________________________

     The undersigned Optionee hereby acknowledges receipt of an executed
original of this Incentive Stock Option Agreement and accepts the Option Right
subject to the applicable terms and conditions of the Plan and the terms and
conditions of this Agreement.

                                              __________________________________
                                              Optionee

                                       8
<PAGE>

                                HEMOBIOTECH, INC.
                      2003 STOCK OPTION/STOCK ISSUANCE PLAN

              NOTICE OF GRANT AND INCENTIVE STOCK OPTION AGREEMENT

NAME OF OPTIONEE:               ________________________

DATE OF GRANT:                  ________________________

EXPIRATION DATE:                ________________________

NUMBER OF OPTION SHARES:        ________________________ shares of
                                Common Stock
OPTION PRICE:                   $_______________________ per share

RIGHT TO EXERCISE:

     Subject to the terms of this Incentive Stock Option Agreement (this
"AGREEMENT") and the Hemobiotech, Inc. 2003 Stock Option/Stock Issuance Plan
(the "PLAN"), this Option Right shall become exercisable:

             (i) on the first anniversary of the Date of Grant to the extent of
        25% of the Common Shares covered by the Option Right, and

             (ii) thereafter, in a series of thirty-six successive equal monthly
        installments upon Optionee's completion of each additional month of
        Service over the thirty-six month period measured from the one year
        anniversary of the Date of Grant.

     Optionee understands and agrees that the Option Right is granted subject to
and in accordance with the terms of the Plan. Optionee further agrees to be
bound by the terms of the Plan and the terms of the Option Right as set forth in
the attached Incentive Stock Option Agreement.

TRANSFER RESTRICTIONS AND REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL
OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION RIGHT SHALL BE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS AND REPURCHASE RIGHTS EXERCISABLE BY THE COMPANY
AND ITS ASSIGNS. THE TERMS OF SUCH RIGHTS ARE SPECIFIED IN THE PLAN.

THIS AGREEMENT SHALL BE VOID IF IT HAS NOT BEEN EXECUTED AND RETURNED TO THE
COMPANY WITHIN 30 DAYS AFTER THE DATE OF GRANT.

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") NOR REGISTERED UNDER THE
SECURITIES LAWS OF ANY STATE OR JURISDICTION. THIS INCENTIVE STOCK OPTION
AGREEMENT AND THE SECURITIES UNDERLYING THIS INCENTIVE STOCK OPTION AGREEMENT
MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER SHALL HAVE BEEN

<PAGE>

REGISTERED UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS OR UNTIL THE COMPANY SHALL HAVE RECEIVED A LEGAL OPINION,
SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, THAT SUCH SECURITIES MAY BE
LEGALLY SOLD OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION AND COMPLIANCE.

THE SECURITIES EVIDENCED HEREBY MAY NOT BE SOLD, TRANSFERRED, PLEDGED, ASSIGNED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF
THE PLAN, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE WITH THE
COMPANY. THE COMPANY WILL FURNISH A COPY OF THE PLAN WITHOUT CHARGE TO ANY PARTY
HAVING A VALID INTEREST THEREIN.

                                       2
<PAGE>

IN WITNESS  WHEREOF,  the Company has caused  this  Notice and  Agreement  to be
executed on its behalf by its duly  authorized  officer,  and  Optionee has also
executed  this  Agreement  in  duplicate,  as of the day and  year  first  above
written.

                                         HEMOBIOTECH, INC.

                                         By:      ______________________________
                                            Name:    ___________________________
                                            Title:   ___________________________

                                         _______________________________________
                                         Optionee

                                       3
<PAGE>

                                HEMOBIOTECH, INC.
                      2003 STOCK OPTION/STOCK ISSUANCE PLAN

             NOTICE OF GRANT AND NONQUALIFIED STOCK OPTION AGREEMENT

NAME OF OPTIONEE:                   ______________________

DATE OF GRANT:                      ______________________

EXPIRATION DATE:                    ______________________

NUMBER OF OPTION SHARES:            ______________________ shares of
                                    Common Stock

OPTION PRICE:                       $_____________________ per share

RIGHT TO EXERCISE:

     Subject to the terms of this Nonqualified Stock Option Agreement (this
"AGREEMENT") and the Hemobiotech, Inc. 2003 Stock Option/Stock Issuance Plan
(the "PLAN"), this Option Right shall become exercisable:

             (i) on the first anniversary of the Date of Grant to the extent of
     25% of the Common Shares covered by the Option Right, and

             (ii) thereafter, in a series of thirty-six successive equal monthly
     installments upon Optionee's completion of each additional month of Service
     over the thirty-six month period measured from the one year anniversary of
     the Date of Grant.

     Optionee understands and agrees that the Option Right is granted subject to
and in accordance with the terms of the Plan. Optionee further agrees to be
bound by the terms of the Plan and the terms of the Option Right as set forth in
the attached Nonqualified Stock Option Agreement.

TRANSFER RESTRICTIONS AND REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL
OPTION SHARES ACQUIRED UPON THE EXERCISE OF THE OPTION RIGHT SHALL BE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS AND REPURCHASE RIGHTS EXERCISABLE BY THE COMPANY
AND ITS ASSIGNS. THE TERMS OF SUCH RIGHTS ARE SPECIFIED IN THE PLAN.

THIS AGREEMENT SHALL BE VOID IF IT HAS NOT BEEN EXECUTED AND RETURNED TO THE
COMPANY WITHIN 30 DAYS AFTER THE DATE OF GRANT.

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") NOR REGISTERED UNDER THE
SECURITIES LAWS OF ANY STATE OR JURISDICTION. THIS NONQUALIFIED STOCK OPTION
AGREEMENT AND THE SECURITIES UNDERLYING THIS NONQUALIFIED STOCK OPTION AGREEMENT
MAY NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER SHALL HAVE BEEN

<PAGE>

REGISTERED UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS OR UNTIL THE COMPANY SHALL HAVE RECEIVED A LEGAL OPINION,
SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY, THAT SUCH SECURITIES MAY BE
LEGALLY SOLD OR OTHERWISE TRANSFERRED WITHOUT SUCH REGISTRATION AND COMPLIANCE.

THE SECURITIES EVIDENCED HEREBY MAY NOT BE SOLD, TRANSFERRED, PLEDGED, ASSIGNED
OR OTHERWISE DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF
THE PLAN, AS AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE WITH THE
COMPANY. THE COMPANY WILL FURNISH A COPY OF THE PLAN WITHOUT CHARGE TO ANY PARTY
HAVING A VALID INTEREST THEREIN.

                                       2
<PAGE>

IN WITNESS  WHEREOF,  the Company has caused  this  Notice and  Agreement  to be
executed on its behalf by its duly  authorized  officer,  and  Optionee has also
executed  this  Agreement  in  duplicate,  as of the day and  year  first  above
written.

                                    HEMOBIOTECH, INC.

                                    By:  _______________________________________
                                       Name:    ________________________________
                                       Title:   ________________________________

                                    ____________________________________________
                                    Optionee

                                       3
<PAGE>

                                HEMOBIOTECH, INC.
                      2003 STOCK OPTION/STOCK ISSUANCE PLAN

                       NONQUALIFIED STOCK OPTION AGREEMENT

     WHEREAS, ______________________(the "Optionee") is an Employee of
Hemobiotech, Inc., a Delaware corporation (the "Company"), or a Subsidiary;

     WHEREAS, the grant of an Option Right to the Optionee has been duly
authorized by resolution of the Board duly adopted on or before the Date of
Grant; and

     WHEREAS, the Option Right granted hereunder is intended to be a
nonqualified stock option and will not be treated as an "incentive stock option"
within the meaning of that term under Section 422 of the Internal Revenue Code
of 1986, as amended (the "CODE").

     NOW, THEREFORE, pursuant to the Company's 2003 Stock Option/Stock Issuance
Plan (the "PLAN"), the Company hereby grants to the Optionee an Option Right
pursuant to this Nonqualified Stock Option Agreement (this "AGREEMENT") to
purchase the number of Common Shares as set forth on the cover page hereof,
subject to adjustment as provided in the Plan. The Option Price shall be as set
forth on the cover page hereof, subject to adjustment as provided in the Plan.
The Company agrees to cause certificates for any Common Shares purchased
hereunder to be delivered to the Optionee upon full payment of the Option Price,
subject to the applicable terms and conditions of the Plan and this Agreement.

     1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
shall have the meanings given to those terms in the Plan.

     2. EXERCISE OF OPTION.

        (a) Subject to expiration or earlier termination of this Option Right,
this Option Right shall become exercisable as set forth on the Notice of Grant
for so long as the Optionee remains in the continuous Service of the Company or
a Subsidiary. To the extent the Option Right is exercisable, it may be exercised
in whole or in part from time to time. In no event shall the Optionee be
entitled to acquire a fraction of an Option Share pursuant to this Option Right.
The Optionee shall be entitled to the privileges of ownership with respect to
the Option Shares purchased and delivered to him or her upon the exercise of all
or part of this Option Right. For purposes of this Agreement, the continuous
Service of the Optionee with the Company or a Subsidiary will not be deemed to
have been interrupted, and the Optionee will not be deemed to have ceased to be
an Employee of the Company or a Subsidiary, by reason of (i) the transfer of his
or her Service among the Company and its Subsidiaries or (ii) an approved leave
of absence.

        (b) Notwithstanding the provisions of Section 2(a), in the case of
termination of Service by reason of death or Disability, upon the death or
Disability of the Optionee (each an "EXERCISE EVENT"), any portion of this
Option Right that otherwise would have become exercisable in the same calendar
year as the Exercise Event shall become immediately

<PAGE>

exercisable in full on the date of the Exercise Event. The remaining portion of
this Option Right that has not become exercisable shall be forfeited.

     3. PAYMENT OF OPTION PRICE. The Option Price may be paid by any of the
following methods:

        (a) in cash or by certified or cashier's check or other cash equivalent
acceptable to the Company payable to the order of the Company;

        (b) by Common Shares (including by attestation) owned by the Optionee
for (i) more than one year prior to the Exercise Date and for more than two
years from the Date of Grant, if they were originally acquired by the Optionee
pursuant to the exercise of an "incentive stock option" (within the meaning of
Section 422 of the Code), or (ii) more than six months prior to the Exercise
Date, if they were originally acquired by the Optionee other than pursuant to
the exercise of an incentive stock option; or

        (c) by a combination of Common Shares and cash or certified or cashier's
check.

     The requirement of payment in cash will be deemed satisfied if the Optionee
has made arrangements satisfactory to the Company with a bank or broker that is
a member of the National Association of Securities Dealers, Inc. to sell on the
date of exercise a sufficient number of Common Shares being purchased so that
the net proceeds of the sale transaction will at least equal the aggregate
Option Price and pursuant to which the bank or broker undertakes to deliver the
aggregate Option Price to the Company not later than the date on which the sale
transaction will settle in the ordinary course of business.

     4. TERM OF OPTION.

        (a) This Option Right will terminate on the earliest to occur of the
following dates:

            (i) 60 days after the Optionee ceases to provide Service to the
     Company or a Subsidiary for any reason other than as a result of an
     Exercise Event;

            (ii) 12 months after the date of an Exercise Event, if the Optionee
     dies or becomes disabled while an employee of the Company or a Subsidiary;
     and

            (iii) 10 years from the Date of Grant.

        (b) If the Optionee's Service with the Company and its Subsidiaries is
terminated for Cause, the Option Right will terminate as of the time of such
termination, notwithstanding any other provision of this Agreement.

     5. CHANGE IN CONTROL.

        (a) Immediately prior to the effective date of a Change in Control, this
Option Right shall become exercisable for all of the Option Shares covered by
this Option Right.

                                       2
<PAGE>

However, the Option Right shall not become exercisable on such an accelerated
basis if and to the extent: (i) this Option Right is to be assumed by the
successor corporation (or parent thereof) or is otherwise to be continued in
full force and effect pursuant to the terms of the Change in Control transaction
or (ii) this Option Right is to be replaced with a cash incentive program of the
successor corporation which preserves the spread existing on the Option Shares
covered by this Option Right at the time of the Change in Control (the excess of
the Fair Market Value of those Option Shares over the aggregate Option Price
payable for such shares) and provides for the subsequent payout of that spread
no later than the time the Option Shares would have otherwise become
exercisable.

        (b) Immediately following the consummation of the Change in Control,
this Option Right shall terminate, except to the extent assumed by the successor
corporation (or parent thereof) or otherwise continued in effect pursuant to the
terms of the Change in Control transaction.

        (c) If this Option Right is assumed in connection with a Change in
Control or otherwise continued in effect, then this Option Right shall be
appropriately adjusted, upon such Change in Control, to apply to the number and
class of securities which would have been issuable to Optionee in consummation
of such Change in Control had the Option Right been exercised immediately prior
to such Change in Control, and appropriate adjustments shall also be made to the
Option Price, provided the aggregate Option Price shall remain the same. To the
extent that the holders of Common Shares receive cash consideration for their
Common Shares in consummation of the Change in Control, the successor
corporation (or its parent) may, in connection with the assumption of this
Option Right, substitute one or more shares of its own common stock with a fair
market value equivalent to the cash consideration paid per share of Common
Shares in such Change in Control.

        (d) This Agreement shall not in any way affect the right of the Company
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

     6. TRANSFERABILITY; REPURCHASE RIGHTS. This Option Right may not be
transferred except, after the Optionee's death, by will or the laws of descent
and distribution and may not be exercised during the lifetime of the Optionee
except by the Optionee or the Optionee's guardian or legal representative acting
on behalf of the Optionee in a fiduciary capacity under state law and court
supervision. The Option Shares shall be subject to the rights of repurchase set
forth in Section 8.

     7. RIGHT OF FIRST REFUSAL.

        (a) GRANT. The Company shall have the right of first refusal (the "FIRST
REFUSAL RIGHT") exercisable in connection with any proposed transfer of Option
Shares. For purposes of this Section 7, the term "transfer" shall include any
sale, assignment, pledge, encumbrance or other disposition of Option Shares
intended to be made by Owner, but shall not include any Permitted Transfer.

                                       3
<PAGE>

        (b) NOTICE OF INTENDED DISPOSITION. In the event any Owner of Option
Shares desires to accept a bona fide third-party offer for the transfer of any
or all of such shares (Option Shares subject to such offer to be hereinafter
referred to as the "TARGET SHARES"), Owner shall promptly (i) deliver to the
Company written notice (the "DISPOSITION NOTICE") of the terms of the offer,
including the purchase price and the identity of the third-party offeror, and
(ii) provide satisfactory proof that the disposition of the Target Shares to
such third-party offeror would not be in contravention of the provisions set
forth in the Plan and this Agreement.

        (c) EXERCISE OF THE FIRST REFUSAL RIGHT.

            (i) The Company shall have the right to repurchase any or all of the
     Target Shares subject to the Disposition Notice upon the same terms as
     those specified therein or upon such other terms (not materially different
     from those specified in the Disposition Notice) to which Owner consents.
     Such right shall be exercisable by delivery of written notice (the
     "EXERCISE NOTICE") to Owner prior to the twenty-fifth day following the
     Company's receipt of the Disposition Notice. If such right is exercised
     with respect to all of the Target Shares, then the Company shall effect the
     repurchase of such shares, including payment of the aggregate purchase
     price, not more than five business days after delivery of the Exercise
     Notice; and at such time the certificates representing the Target Shares
     shall be delivered to the Company.

            (ii) Should the purchase price specified in the Disposition Notice
     be payable in property other than cash or evidences of indebtedness, the
     Company shall have the right to pay the purchase price in the form of cash
     equal in amount to the value of such property. If Owner and the Company
     cannot agree on such cash value within 10 days after the Company's receipt
     of the Disposition Notice, then valuation shall be made by an appraiser of
     recognized standing selected by Owner and the Company or, if they cannot
     agree on an appraiser within 20 days after the Company's receipt of the
     Disposition Notice, each shall select an appraiser of recognized standing
     and the two appraisers shall designate a third appraiser of recognized
     standing, whose appraisal shall be determinative of such value. Owner and
     the Company shall share the cost of such appraisal equally. The closing
     shall then be held on the later of (i) the fifth business day following
     delivery of the Exercise Notice or (ii) the fifth business day after such
     valuation shall have been made.

        (d) NON-EXERCISE OF THE FIRST REFUSAL RIGHT. In the event the Exercise
Notice is not given to Owner prior to the expiration of the 25-day exercise
period, Owner shall have a period of 30 days thereafter in which to sell or
otherwise dispose of the Target Shares to the third-party offeror identified in
the Disposition Notice upon terms (including the purchase price) no more
favorable to such third-party offeror than those specified in the Disposition
Notice; PROVIDED, HOWEVER, that any such sale or disposition must not be
effected in contravention of the provisions of this Agreement or the Plan. The
third-party offeror shall acquire the Target Shares subject to the First Refusal
Right and the provisions and restrictions of this Agreement, and any subsequent
disposition of the acquired shares must be effected in compliance with the terms
and conditions of such First Refusal Right and the provisions and restrictions
of this Agreement and the Plan. In the event Owner does not effect such sale or
disposition of the Target Shares within

                                       4
<PAGE>

the specified 30-day period, the First Refusal Right shall continue to be
applicable to any subsequent disposition of the Target Shares by Owner until
such right lapses.

        (e) PARTIAL EXERCISE OF THE FIRST REFUSAL RIGHT. In the event the
Company timely exercises the First Refusal Right with respect to a portion, but
not all, of the Target Shares specified in the Disposition Notice, Owner shall
have the option, exercisable by written notice to the Company delivered within
five business days after Owner's receipt of the Exercise Notice, to effect the
sale of the Target Shares pursuant to either of the following alternatives:

            (i) sale or other disposition of some or all the Target Shares to
     the third-party offer or identified in the Disposition Notice, but in full
     compliance with the requirements of Section 7(d), as if the Company did not
     exercise the First Refusal Right; or

            (ii) sale to the Company of the portion of the Target Shares which
     the Company has elected to purchase, such sale to be effected in
     substantial conformity with the provisions of Section 7(c). The First
     Refusal Right shall continue to be applicable to any subsequent disposition
     of the remaining Target Shares until such right lapses.

        Owner's failure to deliver timely notification to the Company shall be
deemed to be an election by Owner to sell the Target Shares pursuant to
alternative (i) above.

        (f) RECAPITALIZATION/REORGANIZATION.

            (i) Any new, substituted or additional securities or other property
     that is by reason of any Recapitalization distributed with respect to
     Common Shares shall be immediately subject to the First Refusal Right.

            (ii) In the event of a reorganization of the Company, the First
     Refusal Right shall remain in full force and effect and shall apply to the
     new capital stock or other property received in exchange for Common Shares
     in consummation of the reorganization.

        (g) LAPSE. The First Refusal Right shall lapse upon the earlier to occur
of (i) an Initial Public Offering or (ii) the acquisition of the Company by an
entity that is traded on a stock exchange or the Nasdaq Stock Market. However,
the Market Stand-Off shall continue to remain in full force and effect following
the lapse of the First Refusal Right, in the case of a transaction described in
clause (i) above.

        8. MARKET STAND-OFF.

        (a) In connection with the Company's Initial Public Offering and any
underwritten public offering by the Company of its equity securities pursuant to
an effective registration statement filed under the Securities Act within two
years after the effective date of the Company's Initial Public Offering, Owner
shall not sell, make any short sale of, hedge with, loan, hypothecate, pledge,
grant any option for the purchase of, or otherwise dispose or transfer for value
or otherwise agree to engage in any of the foregoing transactions with respect
to, any Common Shares without the prior written consent of the Company or its
underwriters (the

                                       5
<PAGE>

"MARKET STAND-OFF"). The Market Stand-Off shall be in effect for such period of
time from and after the effective date of the final prospectus for the offering
as may be requested by the Company or such underwriters; PROVIDED, HOWEVER, that
such period shall not exceed 180 days.

        (b) Owner shall be subject to the Market Stand-Off provided and only if
the officers and directors of the Company are also subject to similar
restrictions.

        c) Any new, substituted or additional securities that are distributed
with respect to Common Shares by reason of any Recapitalization or
reorganization of the Company shall be immediately subject to the Market
Stand-Off.

        (d) In order to enforce the Market Stand-Off, the Company may impose
stop-transfer instructions with respect to Common Shares until the end of the
applicable stand-off period.

     9. NO EMPLOYMENT RIGHTS. Nothing contained in this Agreement or the Plan
shall confer upon the Optionee any right with respect to continuance of Service
by the Company or any Subsidiary, nor limit or affect in any manner the right of
the Company or any Subsidiary to terminate the Service or adjust the
compensation of the Optionee.

     10. NO STOCKHOLDER RIGHTS. The holder of an Option Right shall have no
stockholder rights with respect to the Common Shares subject to the Option Right
until the Optionee shall have exercised the Option Right.

     11. WITHHOLDING. To the extent that the Company shall be required to
withhold any federal, state, local or foreign taxes in connection with the
exercise of the Option Right, and the amounts available to the Company for such
withholding are insufficient, it shall be a condition to the exercise of the
Option Right that the Optionee shall pay such taxes or make provisions that are
satisfactory to the Company for the payment thereof. The Company will pay any
and all issue and other taxes in the nature thereof which may be payable by the
Company in respect of any issue or delivery upon a purchase pursuant to this
Option Right.

     12. COMPLIANCE WITH LAW. The Company shall make reasonable efforts to
comply with all applicable federal and state securities laws; provided, however,
notwithstanding any other provision of this Agreement, the Option Right shall
not be exercisable and the Company will not be obligated to issue any Common
Shares pursuant to this Agreement if the exercise and issuance thereof would
result in a violation of any such law.

     13. ADJUSTMENTS. This Option Right is subject to any adjustments which may
be made pursuant to the Plan.

     14. AVAILABILITY OF COMMON SHARES. The Company shall at all times until
expiration of the Option Right reserve and keep available, either in its
treasury or out of its authorized but unissued Common Shares, the full number of
Option Shares deliverable upon the exercise of this Option Right.

     15. MANDATORY NOTICE OF DISPOSITION. Without limiting any other provision
hereof, the Optionee hereby agrees that if the Optionee disposes (whether by
sale, exchange, gift or

                                       6
<PAGE>

otherwise) of any of his or her Option Shares within two years of the Date of
Grant or within one year after the transfer of the Option Share to the Optionee,
the Optionee shall notify the Company in writing of the disposition within 30
days after the date of such disposition. The written notice shall state the
principal terms of the disposition and the type and amount of consideration
received by the Optionee for the Option Shares. Nothing contained in this
Section 13 shall be deemed to relieve the Optionee of complying with the
transfer restrictions set forth in the Plan.

     16. RELATION TO OTHER BENEFITS. Any economic or other benefit to the
Optionee under this Agreement will not be taken into account in determining any
benefits to which the Optionee may be entitled under any profit-sharing,
retirement or other benefit or compensation plan maintained by the Company or a
Subsidiary and will not affect the amount of any life insurance coverage
available to any beneficiary under any life insurance plan covering employees of
the Company or any Subsidiary, unless provided otherwise in any such plan.

     17. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is applicable
hereto; provided, however, that no amendment shall adversely affect the rights
of the Optionee under this Agreement without the Optionee's consent.

     18. SEVERABILITY. In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.

     19. AGREEMENT SUBJECT TO PLAN. The Option Right granted under this
Agreement and all of the terms and conditions hereof is subject to all the terms
and conditions of the Plan. In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern. The Board
acting pursuant to the Plan shall, except as otherwise expressly provided
herein, have the right to determine any questions which arise in connection with
this Option Right or its exercise.

     20. SUCCESSORS AND ASSIGNS. Subject to the restrictions on transfer set
forth in the Plan, the provisions of this Agreement shall inure to the benefit
of, and be binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Optionee, and the successors and assigns of
the Company.

     21. GOVERNING LAW. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of [Delaware], without
giving effect to the principles of conflicts of laws in that State.

     22. NOTICES. Any notice necessary under this Agreement will be addressed to
the Company or the Board at the principal executive office of the Company and to
the Optionee at the address appearing in the personnel records of the Company
for such Optionee, or to either party at such other address as either Party may
designate in writing to the other. Except as otherwise provided herein, any
written notice shall be deemed to be duly given if and when delivered
personally, by overnight courier or by facsimile (receipt confirmed) or three
days after

                                       7
<PAGE>

it is deposited in the United States mail, first class certified or registered
mail, postage and fees prepaid, return receipt requested, and addressed as
aforesaid. Any party may change the address to which notices are to be given
hereunder by written notice to the other party as herein specified.

     23. INTERPRETATION. Any reference herein to a statute, rule or regulation
shall also include any successor provision thereto. [The grant made pursuant to
this Agreement is subject to the approval of the Plan by the stockholders of the
Company within 12 months after the date the Plan is adopted by the Board. If the
Plan is not so approved, the grant and this Agreement shall be null and void and
of no further effect.]

     This Agreement is executed as of the ______ day of ______, 200__.

                                            HEMOBIOTECH, INC.

                                            By:        ________________________
                                               Name:      ______________________
                                               Title:     ______________________

     The undersigned Optionee hereby acknowledges receipt of an executed
original of this Nonqualified Stock Option Agreement and accepts the Option
Right subject to the applicable terms and conditions of the Plan and the terms
and conditions of this Agreement.

                                            ____________________________________
                                            Optionee

                                       8
<PAGE>

                                                                       EXHIBIT A

                   FORM OF EXERCISE OF INCENTIVE STOCK OPTION

                       GRANTED UNDER THE HEMOBIOTECH, INC.
                      2003 STOCK OPTION/STOCK ISSUANCE PLAN

                                                       Date: ___________________
Hemobiotech, Inc.

[__________________]
[__________________]

Attention: [__________________]
           [__________________]

     The undersigned optionee (the "OPTIONEE") hereby exercises the right,
granted as of _____, 200___ pursuant to that certain Incentive Stock Option
Agreement between Hemobiotech, Inc. (the "COMPANY") and the Optionee, to
purchase from the Company ______________ Common Shares at an exercise price of
$______ per share. Capitalized terms used herein and not otherwise defined shall
have the meaning given to that term in the Hemobiotech, Inc. 2003 Stock
Option/Stock Issuance Plan (the "PLAN").

     In payment of the Option Price of $ ___________ the Optionee has:

____ enclosed herewith a certified or official bank check in the amount of
     $_____________

____ enclosed herewith certificates representing _________ unrestricted Common
     Shares, as set forth below, of which the Optionee hereby surrenders to the
     Company and directs the Company to apply toward payment of the Option Price
     that number of full Common Shares which, when multiplied by the Fair Market
     Value per Common Share, will come closest to but will not exceed $_______
     (enter portion of the Option Price to be satisfied with Common Shares).

____ arranged with _______________ to sell on the date of exercise a sufficient
     number of Common Shares being purchased hereunder so that the net proceeds
     of the sale transaction will at least equal the Option Price, such proceeds
     to be delivered to the Company not later than the date on which the sale
     transaction will settle in the ordinary course of business. (1)

_____________________________

(1) This payment option is not available unless the Common Shares may be sold
without restriction under applicable securities laws and the terms of the Plan.

<PAGE>

Hemobiotech, Inc.
Date ___________

Page 2

                          UNRESTRICTED STOCK DELIVERED

        Certificate Number                  Number of Shares Represented

        __________________                  ____________________________

        __________________                  ____________________________

        __________________                  ____________________________

     The use of registered mail for transmittal of Common Shares certificates is
recommended. All unrestricted Common Shares surrendered hereby for payment of
the Option Price have been owned by the Optionee for (i) more than one year
prior to the Exercise Date and for more than two years from the Date of Grant,
if originally acquired by the Optionee pursuant to the exercise of an incentive
stock option" (within the meaning of Section 422 of the Code), or (ii) more than
six months prior to the Exercise Date, if originally acquired by the Optionee
other than pursuant to the exercise of an incentive stock option.

     All unrestricted Common Shares surrendered hereby for payment of the Option
Price will be valued at their Fair Market Value on the Exercise Date, as
determined under the Plan. Unless otherwise instructed, the Company will deem
the unrestricted Common Shares represented by the certificates enclosed herewith
to be surrendered in the order that the certificates are listed above.

     The Optionee understands that certificates representing Common Shares
purchased hereby cannot be delivered until the full amount of the Option Price
and applicable withholding taxes have been paid, and immediately upon
notification hereby agrees to pay in cash any additional funds that may be
required. The Optionee understands that, to the extent unrestricted Common
Shares are surrendered hereby in payment of the Option Price, the certificates
representing the Common Shares purchased hereby will include certificates
representing unrestricted Common Shares delivered herewith, and that such
certificates will mirror, in number and holder or holders of record, the
unrestricted Common Shares surrendered hereby.

     Except as provided above, a single certificate representing the Common
Shares purchased hereby should be issued in the name of:

_____ the Optionee

_____ the Optionee and __________________ as joint tenants with a right of
survivorship.

     The stock certificates representing the Common Shares purchased hereby
should be delivered to the Optionee:

_____ in person at the office of the Company or its Subsidiary,

_____ by mail at the address shown below.

<PAGE>
Hemobiotech, Inc.
Date____________
Page 3

                                            ____________________________________
                                            Signature-Optionee*

                                            Address:____________________________
                                            ____________________________________
                                            Social Security No.:________________

                                            ____________________________________
                                            Signature-Registered Holder*

                                            Address:____________________________
                                            ____________________________________
                                            Social Security No.:________________

                                            ____________________________________
                                            Signature-Registered Holder*

                                            Address:____________________________
                                            ____________________________________
                                            Social Security No.:________________

_________________________

* Each registered holder  (including the Optionee) of any of the  certificate(s)
delivered  herewith  must sign this form exactly as his, her or its name appears
on such certificate(s).

<PAGE>

                                                                       EXHIBIT B

                  FORM OF EXERCISE OF NONQUALIFIED STOCK OPTION

                       GRANTED UNDER THE HEMOBIOTECH, INC.
                      2003 STOCK OPTION/STOCK ISSUANCE PLAN

                                                              Date: ____________
Hemobiotech, Inc.

[__________________]
[__________________]

Attention: [__________________]

           [__________________]

     The undersigned optionee (the "OPTIONEE") hereby exercises the right,
granted as of _________, 200__ pursuant to that certain Nonqualified Stock
Option Agreement between Hemobiotech, Inc. (the "COMPANY") and the Optionee, to
purchase from the Company _____ Common Shares at an exercise price of $_______
per share. Capitalized terms used herein and not otherwise defined shall have
the meaning given to that term in the Hemobiotech, Inc. 2003 Stock Option/Stock
Issuance Plan (the "PLAN").

     In payment of the Option Price of $___________ the Optionee has:

____ enclosed herewith a certified or official bank check in the amount of
     $__________.

____ enclosed herewith certificates representing _______ unrestricted Common
     Shares, as set forth below, of which the Optionee hereby surrenders to the
     Company and directs the Company to apply toward payment of the Option Price
     that number of full Common Shares which, when multiplied by the Fair Market
     Value per Common Share, will come closest to but will not exceed $_______
     (enter portion of the Option Price to be satisfied with Common Shares).

____ arranged with __________ to sell on the date of exercise a sufficient
     number of Common Shares being purchased hereunder so that the net proceeds
     of the sale transaction will at least equal the Option Price, such proceeds
     to be delivered to the Company not later than the date on which the sale
     transaction will settle in the ordinary course of business. (1)

________________________

(1) This payment option is not available unless the Common Shares may be sold
without restriction under applicable securities laws and the terms of the Plan.

<PAGE>

Hemobiotech, Inc.
Date __________

Page 2

                          UNRESTRICTED STOCK DELIVERED

        Certificate Number                  Number of Shares Represented

        __________________                  ____________________________

        __________________                  ____________________________

        __________________                  ____________________________

     The use of registered mail for transmittal of Common Shares certificates is
recommended. All unrestricted Common Shares surrendered hereby for payment of
the Option Price have been owned by the Optionee for (i) more than one year
prior to the Exercise Date and for more than two years from the Date of Grant,
if originally acquired by the Optionee pursuant to the exercise of an "incentive
stock option" (within the meaning of Section 422 of the Code), or (ii) more than
six months prior to the Exercise Date, if originally acquired by the Optionee
other than pursuant to the exercise of an incentive stock option.

     All unrestricted Common Shares surrendered hereby for payment of the Option
Price will be valued at their Fair Market Value on the Exercise Date, as
determined under the Plan. Unless otherwise instructed, the Company will deem
the unrestricted Common Shares represented by the certificates enclosed herewith
to be surrendered in the order that the certificates are listed above.

     The Optionee understands that certificates representing Common Shares
purchased hereby cannot be delivered until the full amount of the Option Price
and applicable withholding taxes have been paid, and immediately upon
notification hereby agrees to pay in cash any additional funds that may be
required. The Optionee understands that, to the extent unrestricted Common
Shares are surrendered hereby in payment of the Option Price, the certificates
representing the Common Shares purchased hereby will include certificates
representing unrestricted Common Shares delivered herewith, and that such
certificates will mirror, in number and holder or holders of record, the
unrestricted Common Shares surrendered hereby.

Except as provided above, a single  certificate  representing  the Common Shares
purchased  hereby  should be issued in the name of:

____ the Optionee

____ the Optionee and ___________________ as joint tenants with a right of
     survivorship.

     The stock certificates representing the Common Shares purchased hereby
should be delivered to the Optionee:

____ in person at the office of the Company or its Subsidiary,

____ by mail at the address shown below.

<PAGE>

Hemobiotech, Inc.,
Date ___________

Page 3

                                           _____________________________________
                                            Signature-Optionee*

                                            Address: ___________________________
                                            ____________________________________
                                            Social Security No.: _______________

                                           _____________________________________
                                           Signature - Registered Holder*

                                           Address: ____________________________

                                           _____________________________________

                                           Social Security No.: ________________

                                           _____________________________________
                                           Signature - Registered Holder*

                                           Address: ____________________________

                                           _____________________________________

                                           Social Security No.: ________________

_______________________
* Each registered holder  (including the Optionee) of any of the  certificate(s)
delivered  herewith  must sign this form exactly as his, her or its name appears
on such certificate(s).

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